One of the most basic principles of economics is that there is no such thing as a free lunch; however, some people buy into the lie that the government can provide just that.
The Covid-19 pandemic has changed many aspects of the American way of life, but a major component of that change is how people respond to temporary economic hardship, cultivating an expectation for the government to solve their problems. In the midst of the pandemic, the government-imposed lockdowns brought about job losses, decreased spending, and economic hardship. As a short-term effort, the federal government issued direct payments to Americans. But many wanted this short-term effort to become permanent. In 2020, a Change.org petition arose, gaining support for making stimulus checks a permanent monthly occurrence. This demonstrates the apparent ignorance of what stimulus checks actually do and how they affect the economy.
As Brad Polumbo of the Foundation for Economic Education contends, stimulus checks really do not stimulate anything. Instead, all that stimulus checks do is redistribute wealth that the government has already attained because it does not have the power of a mystical Santa Claus to grant money for everyone out of thin air. It has to come from somewhere, and it just so happens that taxpayers, the very people that receive the stimulus check, are the ones responsible for paying for it. However, the truth of how “free” money from the government really is not free typically gets overlooked. The immediacy and novelty of the concept of receiving the money you did not have to earn somehow entices people enough to want to continue.
The irony is that despite the intention of stimulus checks to stimulate the economy, they never actually did so. A report by the Opportunity Insights Economic Tracker predicted that households earning more than $78,000 would only spend $105 of the $1400 stimulus check they receive. The whole purpose of the program was to get people to spend more so that the economy would continue to function at a somewhat normal capacity. However, many people took the stimulus check and instead saved it as the future of the pandemic remained uncertain at the time.
Thus, in effect, all that the stimulus check program provided was an immediate security blanket that will likely cost us much more down the road with inflation and other factors. In fact, Wayne Winegarden of the Pacific Research Institute released a study indicating that the economic trajectory will likely lead to higher pressure on interest rates, higher inflation, and growing economic distortions, especially as the Biden Administration pushes for higher taxes and increased regulation.
This evaluation of the stimulus program gives us insight into how government and free markets operate. Whenever a national crisis arises, the government’s automatic reaction is to bring itself into the situation and try to remedy the problem with some artificial solution.
Long-term prosperity does not come from stimulus checks. Prosperity comes when free markets are permitted to ebb and flow. Instead of imposing economically restrictive lockdowns, and then redistributing taxpayer dollars when economic breakdown ensues, government should allow people to fix problems themselves as they create new and innovative ways to meet new challenges, build markets, and improve their lives.
California once epitomised all that was good about the United States. Those living in the Golden State enjoyed a standard of living and quality of life that was the envy of America, if not the world. It was a state of opportunity in a land of opportunity.
Silicon Valley in the 1960s was the cradle of the digital revolution. It was there that computers went from something owned by a handful of hobbyists to the smartphone in your pocket. The Golden State saw social revolution, too. From same sex marriage to billion dollar tech start-ups, things that might be regarded as outlandish elsewhere began in California before going mainstream everywhere else. It was a magnet for talent, and one of the most dynamic places on the planet. Where California led, America – and the world – followed. Or at least aspired to.
Let us hope that this is no longer the case because, if California is indicative of where the rest of America is going, the US is heading towards disaster.
California has been catastrophically mismanaged by a succession of Leftist leaders. Its personal state income tax is now the highest in America. While southern states like my own Mississippi are planning to abolish income taxes entirely, Leftist politicians in California have drawn up plans for a new wealth tax.
Once full of freewheeling entrepreneurs, California is now the most regulated state in the country, according to the Mercatus Center. Permits and licensing are required for almost everything. It is not just big name entrepreneurs, like Elon Musk, who have had enough. Hundreds of thousands of ordinary people and businesses are fleeing, moving to Texas, Utah, Arizona and elsewhere. Last year, California’s population fell for the first time in recorded history.
Having served as an emblem of modernity, there is something almost pre-modern about the California that progressive politicians have created.
For a start, the lights sometimes go out. In pursuit of a renewable energy policy, California has not built enough power generating capacity. This has made energy prices among the most expensive in America. The supply is often so unreliable that the state government has been reduced to pleading with residents to switch off the power to avoid blackouts. (Boris, please take note).
Around one in ten Americans are Californian, yet the state has about a third of the country’s welfare recipients. San Francisco might be the richest post code in the country, but outnumbering the tech zillionaires is a growing army of low paid menial workers who can barely get by. The kind of wealth inequalities that exist in parts of California today are the kind you might have expected to see in Medici Florence or Tsarist Russia, not in a modern Western society.
Progressive politicians have managed to restrict the supply of new housing and at the same time imposed state-wide rent controls. The result is that California is now “home” to about a quarter of America’s homeless population. Iconic Venice beach has hundreds of people living in makeshift shelters.
California is also a warning of what happens when “woke” politicians are put in charge. Yes, they pursue policies that inhibit innovation and economic growth. Far worse is the effect they have on what it means to be American.
The United States was founded on the idea that each of us is defined as an individual in possession of what Thomas Jefferson called “inalienable rights”. Those that run California today would rather that we were defined instead by our immutable characteristics. Instead of being free individuals, equal before the law, Californians are increasingly governed by a woke elite that has an almost apartheid style obsession with not merely race, but gender and sexuality. The danger is that this will tear America apart.
“But why”, I hear you ask “if things are really that bad don’t Californians do something about it?”
Last week, Californians were given the opportunity to sack their current governor, Gavin Newsom, in a recall election. The motion to eject Newsom was not only defeated. Faced with a Trumpish Republican challenger to the incumbent, Californians elected to keep him by an overwhelming margin of two to one.
A Left-wing incumbent with a disastrous record was, it seems, preferred to a Trump-type alternative. If California shows us how Left-wing politicians can destroy a state, it also shows us how a certain type of conservatism can unwittingly let them get away with it.
Douglas Carswell is the president and chief executive of the Mississippi Center for Public Policy, one of the leading free market advocacy organisations in the US.
This opinion piece originally appeared in The Telegraph
Happy Constitution Day! As we celebrate one of America’s founding documents, it’s worth asking: what made America so great?
When we declared our independence in 1776, America was just a fledgling experiment in self-government which the rest of the world expected to fail miserably. All of the wealth and power was in the Old World, with its palaces, empires, and powdered wig-wearing aristocrats. America was considered the boondocks, full of log cabins and fur cap-wearing farmers, trappers, and frontiersmen.
A few years later, America had fielded a Continental Army that defeated the largest military power in world history, and had become the freest and most prosperous country in the world.
America became great because the Constitution limited the power of government and empowered individuals to lead their lives as they saw fit. The framers of the Constitution did not know what America would look like 230 years in the future. But they knew they were tired of being subject to the whims of a king. They carefully constructed a government that had just enough power to impose civil order, protect citizens from foreign invaders, and secure individual rights to life, liberty, and the pursuit of happiness, but not enough power to violate those rights itself. To achieve this, the framers confined the powers of the federal government to those specifically listed in the Constitution and divided that power among three branches of government.
The framers also took a belt-and-suspenders approach to protecting the rights of the people. They added a Bill of Rights to the Constitution to ensure that certain important rights were never violated, even though the framers themselves said that the Constitution had not granted the federal government the power to violate those rights to begin with. Additional amendments were later added to the Constitution to extend its protection of rights to all people, regardless of race or gender, and to keep state and local governments from violating the people’s rights.
If you don’t recognize this strictly limited government, you would be forgiven. Today, politicians say they can do just about anything they want, except what is explicitly forbidden by the Bill of Rights, and even that is up for debate. When asked where the Constitution authorized a proposed law, one congressman admitted, “I don’t worry about the Constitution on this to be honest.”
The rest of Congress appears to feel the same way. Every detail of our lives is subjected to government rules. The Federal Register, which contains all proposed and final regulations issued by federal agencies, has published over 3.2 million pages. If it were printed and stacked, it would be taller than the Washington Monument. This does not take into account all the laws passed by Congress, or by state and local governments.
Because of all these rules, the cost of doing business in America is staggering, and startups and small businesses are at a competitive disadvantage to big businesses that can easily afford it. Those large companies can also afford to pay lobbyists to convince lawmakers to pass even more laws that keep new competitors at bay. All the while, countless Americans are prevented from pursuing their version of the American Dream.
Where did we go wrong? The framers envisioned the judiciary as the guardians of individual rights. But over time, the courts have become more interested in picking and choosing which rights to protect or neglect. In the process, they have invented government powers that do not exist. The result is that our government is far more powerful than the founders ever intended. You may have heard the term “activist judges.” We certainly don’t need those. But we do need an engaged judiciary that takes seriously its role in the system of checks and balances so carefully designed by the framers.
The good news is that we can all play a part in restoring the American vision. Courts will only take our constitutional rights seriously if we do. We need citizens who are willing to stand up for their rights, and attorneys who are willing to advocate for those people, simply because it is the right thing to do. At the Mississippi Justice Institute, we have made that our mission.
Economics policy and strong political leadership are not different worlds but rather two sides of the same coin. Political leaders must use wisdom to strike the right balance.
In 2011, a study was conducted by J. Brian O’Roark and William C. Wood that found that when it came to discussing (and eventually voting on) topics like the minimum wage, “members who majored in economics…were less likely to vote for the minimum wage increase than their colleagues. No other major had a consistent influence.”
It is interesting to consider this theory that ideas that Congress comes up with as a whole may not even be supported by the ones that are trained in that particular sphere. This is especially truth with handling economic policy like taxes, wages, tariffs, and the like.
The truth of the matter is that most politicians that support flawed changes to our economic system are likely not skilled in understanding or communicating the reason for the change. Rather, they simply stand as puppets for those that supposedly know how economics works. While advice is certainly a welcome help, following such instructions blindly can only lead to disaster.
Many leaders not very adept at learning about complex economic principles and communicating the rationale of their policy decisions. Perhaps the reason for this is that the theoretical world of economics is somehow conflicting with the pragmatic pursuit of politics. The reality is that many politicians just simply do not know or do not care about how various economic principles operate within the purview of their profession.
The issue is that economics and studying the language of markets is critical to run any political system. Markets are the backbone of any society. If someone is running a government structure and is not literate in how various policies like tax reform, tariffs, and other issues affect these markets, there can be damaging effects. Economic literacy is a key ingredient to establishing good policy.
Imagine how effective the government would be if most of our leaders were economically wise with their decisions and were able to communicate that wisdom with clarity and poise. The current situation is quite alarming, especially on the federal level, as politicians make decisions and spend money without any fiscal restraint as to how they might impact the economy and individuals down the road.
Economic literacy in the political sphere cannot inherently be achieved by some government policy. Rather, it is up to voters to elect leaders that are fiscally wise and understand the repercussions of their actions.
In fact, if good economic policy is what people want, there’s no better policy than allowing the free market to just grow the economy on itself through Reaganite trickle-down economics. The economy will boom if government just stands out of the way. That does not take any rocket science.
Mississippi’s defense industry is in a position for growth. However, as the industry grows, it is important to consider the landscape of this sector and consider the key public policy reforms that can help it move forward.
According to the Department of Defense, Mississippi has the 10th highest defense spending as a percentage of state GDP. This works out to about 5.3 percent of the state’s total GDP. Some of the top entities to be awarded this spending include Huntington Ingalls, Olin Corporation, Seemann Composites, and Mississippi State University.
While the defense industry is unique in that it services a very specific market, the industry does not operate in a vacuum. Much of the defense industry is directly affected by the policies of the states they operate in. Like other industries, the defense industry is subject to regulatory policies, labor laws, business filing requirements, taxes, environmental regulations, and many other elements.
Thus, it is important for public policy to directly recognize the economic importance of the nation’s military-industrial complex. But at the same time, one of the most significant ways that states can support the development of the defense industry is to pass industry-agnostic policies that encourage free-market productivity and growth. Lower taxes, a lower regulatory burden, and a friendly business climate all contribute to the development of states so that they are better prepared to encourage defense companies to come to their states.
Currently, California has the highest level of total defense spending, followed closely by Texas. But the amount of companies willing to stay in California’s high tax and regulation environment is shrinking. The defense sector is no exception. One glaring example is Lockheed Martin, which has the highest amount of defense spending of any company in the nation. The company’s Fleet Ballistic Missile Headquarters, formerly based in Sunnyvale, California, moved to Titusville, Florida. On a smaller level but still significant level, Mississippi has also seen some defense sector migration from California. OceanAreo, an underwater drone development company with work in the defense and commercial sectors, recently announced its relocation from San Diego to Gulfport.
Mississippi has made many great strides in creating a friendlier business climate, but much work remains to be done. According to the Fraser Institute, Mississippi still ranks 41st for economic freedom. While states larger populations and financial investments might have more reasons for companies to relocate to them, Mississippi does not always have that same negotiating power. If the state wants to get more competitive and see defense industry growth, economic freedom reforms through lower taxes and regulatory reform are key ingredients to creating that environment.
The defense industry is the economic foundation for America’s defense of liberty against its enemies. Mississippi has an opportunity to see the growth of this sector in the state, but in order to see stronger growth in the sector that helps defend liberty, the state should start by expanding its own economic liberty. That’s the American way.
The housing market is booming. Median prices are reaching a record high, and economists are suggesting that these trends are not looking to cool off anytime soon. But some government real estate policies are still in need of reform.
Many might guess that real estate commission rates paid to agents might fluctuate with the increase in housing prices, especially in a free-market competition system. However, amidst this housing boom, the rates of commission fees for real estate agents rarely fluctuate below 6 percent. Many may consider this to be not much of an issue. However, a closer look at the government policies instituted to maintain this system goes against the very notion of a competitive free market.
The real issue is that various states throughout the United States have passed what are called “anti-rebate” laws that essentially create a system in which a pre-determined percentage is placed for a commission when services like real estate are offered. Even if a real estate agent or broker wanted to give a buyer or seller a rebate for the brokerage commission, such laws would prohibit them from doing so.
If free-market principles are truly the aim of good policy, anti-rebate laws need to be removed, or at the very least, strongly reformed. The Cato Institute has conducted substantial research on this issue, finding that the practice of government “steering” the real estate market is, in effect, a tax on mobility: “It penalizes a worker who wants to move for a better job or parents who want to relocate to build a better life for their family.” The system stands against those who desire to relocate, purchase a home, find better lives, and, in essence, the American dream.
This problem has also seen legal ramifications as various companies have either filed lawsuits against these laws or supported these legal claims. For example, the Consumer Federation of America and the Oregon State Public Interest Research Group have supported REX’s lawsuit against anti-rebate laws arguing that they stifle competition and ultimately harms consumers that are seeking to sell their homes. In REX’s lawsuit, in particular, an online brokerage firm that had a 2-3 percent commission fee, challenged Oregon’s policy that banned the firm from refunding commissions back to the buyer when they exceeded the desired amount.
While the outcome of cases like these is still to be determined, the seriousness of the issue in protecting the interests of companies and consumers cannot be overestimated. The Department of Justice has spoken to this issue in recent years and highlighted the anti-competitive nature of anti-rebate laws.
Mississippi is not exempt from this issue. According to Mississippi’s real estate regulations, no individual can receive a rebate for the commission costs of buying or selling a home. This stands against everything a free-market system is supposed to accomplish and only aids in the government’s incessant compulsion to control such markets.
Mississippi needs to return to a simpler economic scheme of allowing competition to dictate the rates and prices of the marketplace. The beauty of the free-market system is that problems often fix themselves when given enough time. Unfortunately, Mississippi has not given the free market any opportunity to do so in this area. It would be beneficial to at least give the free market a fighting chance.
The primary purpose of a business is to generate capital through the production of goods and/or services. But big businesses have also become increasingly involved in the political and ideological battles of the day. Some have supported the foundational principles the nation was founded on, while others have chosen the path of "political correctness."
In recent years, there has been a reaction among some that big business itself poses a threat to the values and priorities of the common man. While some big businesses have caused a great deal of harm, big business itself is not the real problem. In fact, a large portion of Americans provide for themselves through employment at these large companies. The problem is when big businesses embrace bad ideologies.
On the fundamental level, the larger a business is, the greater its capacity is for good or for evil. This goes both ways. For instance, American industrial companies were so successful in their production for the World War II war effort that they became known as "the arsenal of democracy.” On the other hand, several big businesses in Germany used government-sanctioned forced labor. They justified it with the Nazi logic of "German superiority.”
While many may gasp at such complicity with evil, these German companies simply did the same thing that many companies do today. They bought into the “politically correct” ideology of their time and context. In the Germany of the 1930s and 1940s, this was the Nazi ideology of racism and world conquest. These companies then used their strength to generate profits in bad faith through forced labor. On the other hand, the American companies used their economic position in the market to rally behind the American ideals of liberty and patriotism while producing honest profits for their companies. The contrast is striking.
America is no longer at war with an evil foreign power set on taking over the world. Yet, the threat of certain ideologies in corporate America is more real than ever. History teaches us the immense danger of large corporations simply going along with whatever ideology of the day happens to be in fashion. But these lessons have not been learned by all.
While the politically correct corporations of today are not embracing the ideology of Nazism, many of them have embraced other evils that are popular in our day. Companies have supported the breakdown of society through critical race theory. Some have used their dominant market share to censor certain views that go against the orthodoxy of the Left. While others have leveraged their political and cultural clout to campaign against the rights of unborn children, contribute to the breakdown of the family, and support the election of political leaders that will expand government and oppose freedom.
Many of tomorrow's business executives are indoctrinated in schools and colleges with the tenants of the Left’s orthodoxy. So we should not be surprised when the companies they lead become more concerned about being “woke” than producing quality products. When a large company contributes to the breakdown of the nation, the fault does not lie in the size of the business. The fault lies with the decision of the company to mix “political correctness” with its profits.
Bad ideologies are damaging no matter where they are found, not just in big business. These ideologies have infiltrated into America’s government, media, corporate world, public opinion, and universities. To protect the nation from the dangerous consequences of such ideologies, America needs hearts and minds that are grounded in the principles it was founded on. This is the true key to victory against the assault on the nation’s founding ideals.
There is only one moment that has been forever seared into the collective memory of living Americans: the horrific terrorist attacks on our homeland twenty years ago on September 11, 2001.
We all know exactly where we were that day. We remember the feelings of confusion as the initial reports came in. The horror of watching fellow Americans jump to their deaths and the towers collapse. The anger at realizing that we were watching an intentional attack. The fear of what would come next. The acts of heroism we witnessed. The unity that followed. The resolve to prevail. The vows to never forget.
If we had known on September 11th that America would not suffer another terrorist attack during the next twenty years, we would have been relieved and even overjoyed. It’s easy to forget that now. Sometime during the past ten or fifteen years, the fear of another major terrorist attack receded. It wasn’t something that average Americans worried about at all. But twenty years ago, in the aftermath of the 9/11 attacks, the single biggest fear gripping America was the fear of another large-scale terrorist attack.
We saw daily warnings and color-coded terrorist threat advisories on our televisions. We worried about how easy it would be for a lone terrorist to detonate a dirty bomb in a crowded metropolitan area. We worried that attacks on our infrastructure could cripple us. We worried about becoming the next victim of terrorism anytime we boarded planes, trains, or even buses. We worried that every crowded sporting event might become a massacre.
For the past two decades, none of that has come to pass. Instead, thousands of our brothers, sisters, sons, and daughters fought the enemy overseas and prevented the fight from coming here. While most Americans returned to their normal lives after the shock of 9/11 wore off, our veterans paid the cost for that normalcy for the next two decades. Nearly 2,500 American veterans were killed in Afghanistan. Hundreds more were injured, and countless others still carry the hidden wounds of war.
Unlike many of America’s past wars, the war in Afghanistan was not supported by a military draft. The soldiers, sailors, airmen, and Marines who fought in Afghanistan were part of an all-volunteer force. Many of those veterans dropped their life plans and enlisted in the military after 9/11 specifically so they could join the fight to defend our nation, our values, and our way of life. They did this even though nobody asked them to and despite the fact that the overwhelming majority of their colleagues and peers did not.
Americans are blessed to have a unique generation of volunteer veterans in our families, communities, and workplaces. As we mark the 20th anniversary of 9/11 and take stock of the past two decades, we should be sure to honor their sacrifices.
Aaron Rice is an Iraq War veteran and a Purple Heart recipient. He is also the director of the Mississippi Justice Institute, a nonprofit, constitutional litigation center and the legal arm of the Mississippi Center for Public Policy.
Mississippi has been in a precarious constitutional problem for the last couple of months as it has tried to deal with ballot Initiative 65, an initiative that would allow the use of medical marijuana in the state. The initiative was passed by a wide margin. However, the Mississippi Supreme Court shot down the initiative due to a discrepancy in the Mississippi State Constitution.
During the 1990s, Mississippi passed Section 273, an amendment to the state constitution that establishes the ballot initiative process. The process requires that a certain number of signatures be gathered from each of the five districts in the state. The problem is that Mississippi no longer has those five districts. Due to the 2000 Census, Mississippi now has four districts, and the state legislature never passed anything to resolve the matter. Thus, when the issue came around as to the legality of the ballot initiative, the Supreme Court ruled that it was illegitimate. This did not happen on account of the people of Mississippi. Rather, it was a legislative oversight. This was a massive omission in Mississippi’s legal and democratic framework.
Many may ask, what’s the big deal? It’s not even a difference in the number of signatures but the number of districts. There ultimately is no mathematical difference when we analyze the situation. The nature of laws is that there is no room for exception, and if there is a bad law in place (or worse, a vague law), proper procedure must be in place in order to remedy it. The problem is that for the last 20+ years, the state legislature has neglected to do its job and come to a resolution regarding the nature of ballot resolutions, and due to their hesitancy, unintended consequences have arisen.
However, the situation may be even more sinister. The very nature of the legislature and supreme court keeping a technically erroneous ballot initiative system gives them the extra power to strike down any ballot initiative they dislike. And yet, who are the ones responsible for fixing the problem? The very people that have that power: the legislature. Regardless of personal views of marijuana usage, Mississippi's government should not portray itself as being accountable through ballot initiative and yet keep a technicality on the books that renders the process ineffective.
Last month, lawmakers claimed that they are soon to be resolving the issue with medical marijuana. However, what continues to be the discussion is how to resolve the problem with ballot initiatives and Mississippi’s constitutional discrepancy. Mississippi needs to decide if they want to be a ballot initiative state or not. Right now, it is simply in a state of limbo, acting like it is a ballot initiative state when in reality, it is not. Accountability needs to be in place at some level. Mississippi needs decisive action to settle on what that looks like.