China is going to become the world’s number one economic superpower, we were told. And as China takes off economically, they said, she is going to become just like the rest of us.
This is what I call the China fallacy, and neither of the assumptions that underpin it are true.
China has indeed had three decades of double-digit growth. Her take off has been so spectacular, China went from being a largely agrarian economy that accounted for less than 2 percent of world output in 1980 to almost a fifth of output now.
But far from becoming more like us, China under President Xi seems to be becoming not just un-Western, but increasing anti-Western.
Twenty years ago, when China was admitted to the World Trade Organisation and President Clinton talked of China as a ‘strategic partner’, all the clever people in Washington said China would move our way.
By letting China join the international system, the experts said, China would become part of it. Think of all those tens of millions of middle class Chinese, they assured us. Soon, like the middle classes in America and Europe, they would be demanding all the trappings of liberal democracy.
Two decades later China is busy trying to subvert the international order. Chinese foreign policy seems to be all about creating rival structures and processes. Chinese government agents engage in the kind of espionage activities you might expect from a hostile foe.
Those that perpetuated the China fallacy used to tell us that following the British handover of Hong Kong, China would grow to become more like Hong Kong. Instead, the opposite has happened. Hong Kong has been brought into line with the rest of China, and what limited freedoms her people had have been taken away.
Far from taking her place at the international table, China behaves as if she wants to overturn it. China amasses troops in the western Pacific, bullying Taiwan and making little secret of her plan to invade the island. This would be the moral equivalent of the United States threatening to annex Vancouver Island.
Rather than becoming more Western, China’s government continually seeks new ways to restrict her citizens from accessing the internet. Digital technology has been harnessed to monitor the day to day activities of her own people. The autocrats that preside over China are so thin skinned and morally bankrupt, then actively clamp down on the Falun Gong movement. This would be the moral equivalent of the US government trying to shut down yoga classes.
The assumption that China, under the communist party, is ever going to emulate the West is wrong. Wrong, too, is the other side of the China fallacy – the assumption that China is destined to be a great superpower.
For as long as I can remember, highbrow magazines have been publishing articles forecasting that China’s economy will overtake America’s. At one time, we were told this would happen in the 2020s. Then it was the 2030s. Now I read it is supposed to happen before 2050.
I predict that China’s economy will never overtake America’s. Only last year, China ceased to be the most populous country on the planet, as India overtook her. China’s demographic future looks ominous.
Today there are 1.4 billion people in China. By the end of this century, some estimate that China’s population will have fallen about 40 percent to 800 million.
The next few years will see a significant fall in China’s economic growth, I suspect.
It is relatively easy to produce big gains in economic output when you move farm workers into factories (see Soviet Russia in the 1950s for details).
China was able to accelerate economically as a consequence of Deng Xiaoping’s reforms. Deng’s policies were not only market-friendly. Under Deng, decision-making was relatively decentralized. Maritime provinces had lots of autonomy. Beijing did not try to pre-empt every decision.
Under Xi, China has abandoned the Deng reforms, and reverted to what you might call the Ming tradition of top down control. It is not an encouraging precedent.
Far from being an economic dynamo, China is on course to becoming the next Japan. Like China, Japan was once supposed to overtake America. Instead, a previously thriving, export-driven economy has been reduced to stagnation by demographics and debt.
China may not become the world’s economic superpower, but this does not mean that China is not a threat. Quite the opposite.
Just over a century ago, a recently industrialized power, Germany, started to challenge the international order. Economically and militarily powerful, Germany nonetheless sensed that other powers were not so far behind. Among German’s leaders there was a sense that if Germany was serious about rearranging the furniture in Europe, she had a limited window of opportunity to do so. The consequences of that mindset were catastrophic.
My fear is that China under the communist party sees herself caught in a similar window of opportunity. Her demographic calamity, coupled with slow growth, mean that her relative power will only decline.
America is right to be strengthening her fleet in the Pacific (Three cheers to Mississippi Senator, Roger Wicker, for providing such leadership on this – America will be safer for it). It is also important that America works with an alliance of countries, including Australia and Japan to ensure the security of the Pacific.
China might not be the world’s number one economic power, but I suspect she will be the world’s biggest geopolitical headache for the foreseeable future.
The shame of it! Mississippi has found itself in the humiliating position of being compared disobligingly to the United Kingdom. Just last week, the Financial Times ran a column asking, “Is Britain really as poor as Mississippi?”
Most Mississippians do not spend much time worrying about comparisons to Britain. The same cannot be said about those on the other side of the Atlantic. For Brits—and I am one, though now based in Jackson, Mississippi—the issue of whether they are more or less prosperous than Mississippi has become a thing. Indeed, the Financial Times now calls it “the Mississippi Question.”
It was nine years ago that Fraser Nelson, the editor of The Spectator, first suggested that the U.K. was poorer than any U.S. state but Mississippi. This came as an uncomfortable shock for many in Britain for whom the word Mississippi conjures up clichés about the Deep South, as a byword for backwardness. Every time anyone has made the comparison since, there has been an indignant outburst from Britons keen to denounce the data.
In practice, when it comes to trying to provide a definitive answer to the Mississippi Question, no uniform, up-to-date set of data exists. But if you take the most recent U.S. figures for GDP per state, divide it by the population of Mississippi, you get a pretty accurate figure for GDP per capita in current dollar values. Make the same calculation for the U.K., with total GDP data divided by the population, and you end up with two comparable numbers.
Last year, by my math, the U.K.’s output per person was $45,485; Mississippi’s was higher, at $47,190. If Britain were invited to join the U.S. as the 51st state, its citizens would be at the bottom of the table for per capita GDP. Some might say that for Mississippi, that is still disconcertingly close.
“That’s not fair!” the critics would counter. “When you compare the wealth of nations, you need to look at how far the money goes. Things cost more in the U.K. than in Mississippi.” To adjust the raw numbers, the argument goes, you need to use an economist’s tool called Purchasing Power Parity. Sure enough, when you consider differences in the price of things in Britain and America, the U.K. does appear richer than Mississippi. Thus, after such PPP adjustments, the Financial Times analyst suggested that for 2021 Mississippi’s per capita GDP was a mere $46,841 to the U.K.’s $54,590 (though conceding that, without the London effect, much of Britain was relatively poorer than the Magnolia State).
“Hold on!” we on Team Mississippi retort. “Why adjust the numbers for our state using U.S. national data?” Here, a dollar goes a lot further than it would in New England or on the West Coast. To produce PPP-adjusted numbers for Mississippi that reflect the buying power of a dollar in places like New York or San Francisco, we say, is absurd. And sure enough, tinkering with the numbers to reflect purchasing power in Mississippi itself makes it doubtful that the U.K. would still come out ahead.
Perhaps more interesting, however, than how you cut the numbers for any given year is the fact that the gap between Mississippi and Britain seems to be growing. Never mind PPP. Just run the numbers for GDP per capita in current dollars for the first part of 2023, rather than 2022, and see that Mississippi’s output is rising at a faster rate than Britain’s.
Over the past 30 years, several southern states have seen rapid economic growth. States like Texas and cities such as Nashville have become economic hubs to rival California or Chicago. North Carolina, Georgia, Tennessee, and even Alabama have all flourished. Mississippi was missing out. Until now.
Historically, business in Mississippi was highly regulated. Licenses used to be mandatory in order to practice many of even the most routine professions. The state has now lifted a lot of these restrictions, deregulating the labor market. According to a recent report by the American Legislative Exchange Council, a group representing conservative state legislators, the size of Mississippi’s public payroll has been pared back. In 2013, there were 645 public employees per 10,000 population; today, the number is down to 607. Last year, Mississippi also passed the largest tax cut in recent history, reducing the income tax rate to a flat 4 percent.
How did this come about? Policy makers here have drawn inspiration from the State Policy Network, a constellation of state-level think tanks, borrowing ideas that have worked well elsewhere. We got the idea for labor-market deregulation from Arizona and Missouri. Tennessee inspired us to move toward income-tax elimination. Florida’s success stands as an example of how we could reduce more red tape.
What was once just a trickle of inward investment has turned into a steady flow. Growth is up, visibly: The areas of prosperity along the coast and around the state’s thriving university towns are getting larger, even if pockets of deprivation in the Delta remain.
Perhaps many in Britain find it hard to accept that Mississippi has overtaken them economically because they still think of Mississippi as cotton fields and backwoods poverty, peopled by folk who subsist on God, guns, and grits. But what if Britons’ reluctance to face changing economic realities comes from an outdated perception of themselves?
Most of my fellow Brits like to think that they live in a prosperous free-market society. They have not fully grasped the way in which their country has been sleepwalking toward regulatory regimentation. Stringent new regulations on landlords have seen thousands of owners pull out of the market, resulting in a dire shortage of rental accommodation. New corporate diversity requirements have imposed additional costs across the financial-services sector, with little evidence that bank customers are getting a better deal. Restaurants are required to display a calory count for each serving on their menus.
Individually, none of these restrictions matters all that much. But together, this relentless micromanagement inhibits innovation and growth. And Brits have become so accustomed to government red tape, they no longer seem to see the crimson blizzard that blankets so many aspects of their economic, and even social, life.
To be fair to them, for many years it did not seem to matter that taxes rose and the regulatory burden grew heavier. Thanks to the use of monetary stimulus in place of supply-side reform since the late 1990s, the country’s economy seemed to defy gravity, engineering the sort of growth that high tax and tight regulation might otherwise preclude. Few in the U.K. seemed to notice as ever more aggressive doses of monetary stimulus were required to stave off a downturn. Only now that the option of further monetary stimulus has been exhausted are the cumulative consequences of 30 years of folly becoming apparent.
To recognize that one’s country has been run on a false premise for three decades is difficult. To have to acknowledge that Britain is now poorer than the poorest state in the Union could prompt a moment of self-reckoning that many Brits seem determined to postpone.
Britain’s recurrent fixation with the Mississippi Question tells us as much about the country’s state of mind as it does about GDP. Rather than confront uncomfortable truths, my countrymen dispute the data. Instead of facing up to the consequences bad public policy in Britain, many blame Brexit, or Ukraine.
Putin’s war on Ukraine might have caused higher energy prices, but it alone does little to explain Britain’s poor economic performance. As for Brexit, though opinion formers who originally opposed it love to blame the country’s woes on it now, they never seem to ask why, if leaving the European Union was the cause of Britain’s lack of growth, Britain has still managed to outperform much of Europe.
Since Britain voted to leave the EU in 2016, the U.K. economy has grown by 5.9 percent. German GDP has only increased by 5 percent. Unlike Germany, the U.K. has so far also managed to avoid recession. Far from a reduction in trade, Britain has seen a boom in exports, especially in the service sector, since withdrawing from the EU trade block. Service exports grew by nearly 18 percent in real terms from 2016 to 2022—the strongest growth in this sector among the G7 countries, according to OECD data, and far more than in neighbors such as Italy, Germany, and France.
In any case, Nelson posed the Mississippi Question nearly two years before Britain voted to leave the EU. The country’s lackluster output, productivity, and growth were apparent long before Brexit. Leaving the EU should have been a perfect opportunity to correct course, but little has been done to address the problem. In fact, after leaving the EU, Britain has been hit by a succession of disastrous policy choices.
Having rushed to impose a lockdown in the early stages of the coronavirus pandemic, British ministers insisted on ever more draconian measures long after it was apparent that such steps were disproportionate, as well as ruinously expensive. Then, in the name of achieving Net Zero targets on “decarbonizing” the U.K. economy by 2050, successive governments have made rash commitments to move to renewables. Higher energy costs have helped price British industry out of world markets.
Instead of changing course, ministers have stuck stubbornly to their dogma—even though the latest moves to outlaw the internal combustion engine and new emissions regulations are making car ownership unaffordable for millions.
Mississippi has managed to borrow good ideas proven to work elsewhere. Britain, by contrast, has preferred to pioneer its own bad ideas. The former approach helps explains why Mississippi is emerging as part of a wider southern success story. The latter approach accounts for why a once successful country is really struggling.
Why are so many companies "woke"? Because of the ESG – or environmental, social and governance – agenda that many money managers are pursuing, which is forcing many big businesses to focus on combating climate change and promoting "diversity" ahead of delivering for their customers.
ESG means that money managers on Wall Street are able to impose their political preferences on businesses in which they invest. As Florida Governor Ron DeSantis recently put it, "ESG is an attempt to impose, through the economy, an ideological agenda that could not win at the ballot box."
The trouble is that the ESG agenda is winning. Billions of dollars of professionally managed assets are now used to impose ESG targets on corporate America – and on those that work for them.
Whatever your own personal political preferences, surely we can all agree that investment managers should not be using other people’s assets to promote ideology?
Quite apart from the politics, the problem with ESG is that it is not objective. There are different methodologies that various companies use to evaluate their use of ESG. Many of these businesses, it seems, rate their ESG scores on feelings rather than facts, making the process arbitrary
For example, one might assume that Tesla, a maker of eco-friendly electric vehicles, would have a high ESG rating. False. Tesla has been marked down by many of those that devise various ESG metrics, while various oil-producing businesses are rated highly.
We believe that it is up to those that own private capital to decide how best to invest it. Whether or not fund managers, who are merely the custodians of other people’s money, should be free to prioritize investment choices based on their own personal political preferences is perhaps a little less clear-cut. One thing we should absolutely insist on is that when it comes to allocating public money, investment should be made on the basis of maximizing returns, not promoting political beliefs.
To that end, several states across the country have implemented policies that prohibit investing on the basis only of ESG. Pension fund managers in states such as Texas, Louisiana and Florida are now required to invest in companies that would generate the best financial outcomes for growing pension funds, instead of ESG-driven objectives and exposing taxpayer dollars to potentially harming risks. This is what we would like to see in Mississippi.
Currently, Mississippi has no such legislation in place. In our state, it is up to the state’s ten-strong Public Employees’ Retirement System (PERS) board to oversee the investment strategy on behalf of around 325,000 PERS beneficiaries.
We would like to see legislation put in place to ensure that PERS funds are invested in order to maximize returns for those that have paid into the system, rather than promote fashionable causes.
ESG is, according to Elon Musk "a scam". Masquerading as a noble cause, "it has been weaponized by phony social justice warriors." ESG investing will not only cause long-term distortions in the marketplace. We fear it will ensure lower returns for pensioners whose savings have been managed by the scammers. Given the already precarious position of Mississippi’s public employee pension system, we believe ESG is something we simply cannot afford.
A potential bill we would like to see passed during the session calls on the state’s asset managers to comply with the highest standard of integrity to funds and their investments. Due to the ever-changing definition and standards of ESG, Mississippi should take its trust funds, specifically retirement fund money, fiduciarily seriously, and therefore, should act solely in the interests of participants and beneficiaries and invest in funds in a manner that prioritizes the highest return.
Big Tech has had a wave of complaints leveled against it in recent years, and perhaps rightly so. From assertions of censorship, to excessive digital control, the companies have come under increasing scrutiny. In light of these tensions, some have called for Big Tech companies to be broken up all together, using a policy lever known as antitrust. But is this the best approach?
Many of the grievances against Big Tech carry a lot of weight. Yet, at the same time, Big Tech companies have achieved their large market shares by offering services that have benefitted consumers. Using the power of emerging technologies, consumers have been able to grow their businesses, connect with friends, and engage with society.
This brings in the question of whether or not antitrust is the best way to address the Big Tech challenges. Is an antitrust breakup of Big Tech companies the answer? Isn't there an ever-slight possibility that Big Government solutions could turn out to be worse than the problems with Big Tech itself?
What is antitrust?
In order to understand this debate, it is crucial to define antitrust. At the foundation, antitrust is a collection of laws that seek to ensure competition in the open market. How these laws are interpreted and applied has been a hinge point of the debate.
When antitrust was first instituted in the early 1900s, it was meant to break up the industrial monopolization practices that affected market competition, especially in the oil, rail, and steel sectors. Many of the companies engaged in practices that deliberately sought to corner the market, and then they would charge consumers higher prices for lower quality.
Initially, a company's size and market dominance were often key factors in whether it could be broken up. However, as antitrust law developed, the "Consumer Welfare Standard" became the key litmus test. Under this standard, antitrust action to break up a company can only occur if a company engages in monopolization practices that actually harm consumer welfare.
The danger of government not using the consumer welfare test for antitrust
Contrasted with this consumer welfare test is when the government simply goes after "big" companies if they have a large market share. This carries the presumption that if a company outperforms most competitors, it must be engaging in anti-competitive behavior. Such actions go against the purpose of antitrust. After all, antitrust is meant to help consumers, not competitors.
Thus, if antitrust is indiscriminately used as a cudgel to hit large technology companies without having a consumer-grounded reason, this sets a dangerous precedent. In a capitalistic society, companies exist to serve customers and generate capital. Companies growing to be large and serving millions of consumers is a trophy of free-market success. This should be celebrated, not punished.
The Big Tech issue is complex
Yet we return to the question of how to address bad actors within the companies collectively known by many as Big Tech. The issues are complex, and like most complex issues, a broad and heavy-handed government bureaucracy is not the answer.
Rather, specific issues within the Big Tech context should be addressed within the confines of that specific issue. This is critical. While blanket approaches to solving problems may carry political weight, a broad expansion of government power is dangerous. In the words of Ronald Reagan: "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help."
In most cases, companies that provide poor services will decline because consumers will not support them with their spending money. The forces of consumer choice have the ability to damage bad actors and poor-performing companies far more than a policymaker ever could. Whether it likes or not, every company is ultimately accountable to the market.
However, this is not to say that policymakers should abdicate their responsibility to address the public policy questions surrounding Big Tech. Rather, they should consider these issues with calculated precision.
If the issue is far-reaching social media censorship, then policymakers should carefully consider that specific issue. If the issue is algorithmic election interference, then policymakers should specifically consider that issue as well. Contrasted with addressing these specific questions, a broad application of antitrust just to "cut down tech companies to size" is not the solution.
Free market growth should not be jeopardized
An antitrust policy that seeks to break up a company because of its size and market share is tantamount to punishing the success it achieved through consumer choice. Rather than using the paradigm that "big is bad," antitrust policy should stick to the consumer welfare standard that takes this consumer choice into account.
A key free-market principle is that economic freedom and consumer choice should be the basis for economic policies. Mississippi’s House Bill 833 is a bill that goes against these principles by creating a regulation that vehicle manufacturers must use a third-party franchise dealership to sell their cars. The bill recently passed the House and has been referred to the Senate finance committee.
In the wake of innovative technologies, innovative business models have emerged with them. The car industry is no exception. As electric cars are being developed, manufacturers have sought alternative ways to lower costs for consumers. One way that manufacturers accomplish this is by selling their vehicles directly to consumers instead of using the traditional dealership franchise model.
Why has the government gotten involved in auto dealerships in the first place? To better understand the root of this debate, it is helpful to consider the historical background. Instead of selling their cars directly to consumers, manufacturers have historically sold their cars through third-party franchises.
By the middle of the 20th century, the car market had consolidated to only a few manufacturers. Since there were only a few manufacturers, dealers were concerned that manufacturers would leverage their market dominance as a way to force dealers into one-sided franchise contracts. To push back against this, the dealers successfully lobbied for franchise laws that set minimum standards for the contracts between manufacturers and dealers.
Under current law, a car manufacturing subsidiary is not prohibited from obtaining a license to operate a dealership. Some have argued that this violates the franchise laws that govern agreements between manufacturers and franchisees.
However, the original purpose of the franchise laws was to regulate contracts between manufacturers and actual third-party dealers, not to require that all car manufacturers use the franchise model. Suppose a company does not use the franchise model. In that case, it should not be pushed out of the market by laws that are intended for franchise contract regulation.
Should the government decide that because cars have historically been purchased through franchises, that this must be the case indefinitely? Ultimately, the issue boils down to consumer choice. If a consumer decides that they do not want to have a dealership involved in their vehicle purchase, government policy should not force them to.
Some consumers may prefer the dealer franchise experience over purchasing a vehicle straight from the manufacturer. Yet, it is anti-free market policy for the government to force all citizens everywhere in the state to only purchase a vehicle exclusively from franchisees.
Comparable to the issue of mandating car dealership franchises is a consideration of other goods in the market. For instance, imagine if Mississippi required all restaurant chains to operate as a franchise. Chick-Fil-A, Subway, and other franchise restaurants chains would still be options on the table for consumers. Meanwhile, Mississippians could not enjoy a meal from Cracker Barrel, Chipotle, Panda Express, or other non-franchise restaurants.
Thankfully government overreach has not gone that far yet, but House Bill 833 would impose such a rule on car choices. Mississippians could take the car by the drive-through at as many non-franchise restaurants as they pleased. But buy that new electric car from a non-franchise dealer? No indeed not.
Personal preferences and choices are the lifeblood of a free economy, not a system where individuals are forced to comply with heavy-handed government regulations. House Bill 833 is bad for consumers, the free market, and the state of Mississippi. Free people should have the ability to make free choices without a nanny state forcing them to buy certain items in their state through a third party.
To confront Bidenomics inflation and devalued currency, many citizens have invested in precious metals to protect their investments and savings. Despite this, Mississippi imposes a sales tax on precious metals.
Thankfully, Representative Jill Ford has introduced House Bill 426 to remove this tax, and it passed the House of Representatives today. The bill now moves to the Senate for consideration.
To grasp the importance of House Bill 426, it is vital to grasp the current state of affairs regarding precious metal taxation. The citizens of other states can purchase gold as a protection from “the hidden tax of inflation” without getting a sales tax on top of it.
According to analysis produced by the Sound Money Defense League, Mississippi is one of only nine states in the nation that imposes sales tax on bullion. In addition, of the states that impose sales tax on bullion, Mississippi has among the highest state-level sales tax of the nine states that impose sales tax on bullion.
This means that even when compared to the few states that also impose sales tax on precious metals, Mississippi has the least competitive rates. Furthermore, of the four states that neighbor Mississippi, three of them do not charge sales tax on the purchase of bullion. This means that those seeking to purchase precious metals are far better off with Mississippi’s neighbors.
It is easy and accurate for Mississippi leaders to justly point fingers at Washington for the inflation that has eaten away at American savings and investments. Yet, the state of Mississippi is to blame if its citizens are hesitant to exchange the inflating dollar for gold when the gold is 7 percent more expensive just because of a state-level tax.
When Mississippi imposes a sales tax on gold, this can heavily impact the growth potential of gold as a protection against inflation. Consider the following scenario. A Mississippian might have bought $5,000 in gold in 2018 at the average price per ounce of $1,268. This would have given them a tax bill of $350. This would mean that the total investment cost would be $5,350.
If the sales tax was not there, the entire $5,350 could be used to purchase gold. This would mean that in 2021 the $5,350 investment cost would have been worth an average of $7,089 with the sales tax. Without the sales tax, this $5,350 investment cost would be worth $7,569. That $350 sales tax would ultimately cost the taxpayer $480 in gold value. It’s time for Mississippi to repeal this burdensome tax that discourages investment and places a sales tax penalty on those who seek to protect their money from inflation. Hats off to the legislature for working to remove this tax that works against Mississippians seeking to protect their savings and investments with precious metals.
Agricultural regulations can be among the most burdensome regulations in the entire economy. This is especially true for innovative agricultural technologies and business models. Thankfully, Mississippi legislators are leading the charge for a reduction in red tape. Representatives Jansen Owen and Kent McCarty introduced House Bill 1055 to create a pathway for innovators to be exempt from onerous regulations.
It’s no secret that removing regulatory burdens is a catalyst for economic growth, and this bill seeks to accomplish just that in the agricultural sector. In an interview with Mississippi Center for Public Policy, Representative Owen noted: “Reducing regulatory burdens is key to growing our economy. This legislation will make it easier for farmers across Mississippi to earn their living, feed their families, and feed Mississippi’s families.”
According to the Mississippi Department of Agriculture and Commerce (MDAC), the agriculture sector directly or indirectly employs approximately 17 percent of the state workforce. Thousands of agricultural businesses have seen great success in the Magnolia State. Yet, many of the regulations in the state were written in the 1970s and 1980s and do not quite account for the innovative agricultural technologies and business models of the 2020s.
To address this problem, House Bill 1055 gives agricultural innovators the option to be exempt from certain regulations that do not have an effect on health or safety. Known as a “regulatory sandbox,” this regulatory relief model that exempts innovators from unapplicable regulations has seen success in several states and sectors, including financial technology, insurance, blockchain, property technology, and others.
While the complexity of agricultural regulations is immense, the bill establishes a straightforward and business-friendly program within the MDAC for innovators to test their products in the open market. If an individual encounters an agricultural regulation that is not tied to health or safety, they could apply to the innovation program and request an exemption. If the exemption request is not found to be a threat to public health or safety, the innovator’s request would be granted, and they would be permitted to operate under the exemption.
The agricultural innovations that could benefit from such a program are numerous, but these innovations can be easily summarized into two categories: innovative business models and innovative ag-tech. On the one hand, there are innovative business models that don’t quite fit into the current regulatory structure, such as urban agriculture and direct farm-to-consumer sales.
Agricultural technology also carries promise for the use of an agricultural regulatory exemption program. For instance, under current regulation in the state, a pilot’s license would be required in order for a drone operator to use a drone to distribute pesticides on fields. This is because of an outdated provision implemented in the days when planes were the only way to distribute substances via the air. Mississippi has a chance to show that it is open for business, and become a destination for agricultural innovators. Thanks to the forward-thinking of Representatives Owen and McCarty, the state could see the fruits of agricultural innovation grow and expand, without the impediment of excessive government regulations.
The Mississippi Center for Public Policy approves of this legislation and will continue to update you as the 2022 Mississippi Legislative Session continues, and you can keep up with measures by watching our Legislative Tracker.
FOR IMMEDIATE RELEASE
(Jackson, MS): On Thursday, Federal District Court Judge Carlton W. Reeves handed a first-round legal victory to a Jackson physical therapist in his challenge to Mississippi laws that are preventing him from opening up a new home health care business in Jackson. Charles “Butch” Slaughter filed his lawsuit in December 2020, after a 40-year-old moratorium on new home health agencies prevented him from expanding his clinic to offer in-home physical therapy to homebound patients. Even if this ban didn’t exist, he still might not be able to provide in-home services, since his competitors could use Mississippi’s Certificate of Needs (CON) laws to force him to battle them in court over whether the community really needs a new home health agency. The Mississippi Justice Institute, a non-profit, constitutional litigation center and legal arm of the Mississippi Center for Public Policy, is representing Slaughter.
In his order denying the state’s motion to dismiss the suit, Judge Reeves notes that “It is no secret that significant financial interests are at stake when it comes to CON laws.” Judge Reeves explains that “Rent-seeking businesses make a sort-of ‘extra-legal’ contract with politicians: money and votes for the politicians, regulations that ensure a monopoly for the interest group. Meanwhile, consumers lose out. Without the market competition that normally regulates businesses’ behavior, the monopoly can charge otherwise unsustainably high prices for otherwise unsustainably mediocre products.”
“The home health moratorium and CON program are unconstitutional laws designed to protect health care monopolies from competition,” said MJI Director Aaron Rice. “We are thrilled that the court recognized that the government shouldn’t be in the business of reducing access to health care to line the pockets of powerful industry insiders, especially during a global pandemic.”
Slaughter saw a critical need for Mississippi patients to receive care in their homes, especially during the pandemic when many people are seeking alternatives to nursing homes and other care facilities that have been prone to outbreaks. His dream, though, was ended by the state’s moratorium and CON laws, which say that there is no need for new home health agencies in Mississippi, despite the fact that the number of patients seeking home care in the state has at least tripled while the moratorium has been in place. Rather than encouraging new businesses to respond to this increased demand, Mississippi’s laws allow large health care companies to monopolize home health services in the state.
Numerous studies have shown that CON laws do not reduce health costs and can serve as a barrier to patients getting the care they need. In 2004, the Federal Trade Commission and the United States Department of Justice issued a joint report, concluding, “CON programs are not successful in containing health care costs, and that they pose serious anticompetitive risks that usually outweigh their purported economic benefits.”
“No one should be banned from offering safe, cost-effective, and needed health care services just because other businesses don’t want competition,” said MJI volunteer attorney Seth Robbins. “Health care costs are already out of control and these laws only make that worse. Mississippi’s home health moratorium and CON laws are unconstitutional, and we’re looking forward to proving it at trial.”
For media inquiries, please reach out to Stone Clanton, [email protected].