In 2019, the Mississippi legislature passed the Broadband Enabling Act. This legislation gave Electric Power Associations (EPAs) the legal permission to use their existing infrastructure to bring broadband service to their ratepayers. While this has seen some success in expanding broadband access in the state, some key accountability reforms could cause better outcomes.
To grasp how broadband services are being brought to citizens via the EPAs, it is important to understand how they are structured. Most of the EPAs in Mississippi were founded in the 1930s and 1940s to bring electricity to rural areas. These entities are non-profit organizations operating under the direction of elected board members. They are also known as “electric cooperatives” or “electric co-ops.” They have a monopoly over their service areas, and the costs of operation determine the electricity rates that members pay.
This provides the context for the broadband rollouts authorized by the Broadband Enabling Act. Before the Act, EPAs were not permitted by law to operate as broadband service providers for their members. In the wake of the law’s passage, several of the state’s EPAs began conducting feasibility studies to determine the cost of broadband integration and the effects of such integration on electricity rates.
Upon review of the cost, some of the EPAs opted not to integrate broadband operations directly within their organizations, many due to cost concerns. Instead, some EPAs opted to enter into collaborative agreements with private sector internet service providers that permitted the use of electrical infrastructure for broadband deployment.
However, some EPAs did decide to become internet service providers for those in their services areas. The funding for these operations has been provided through a combination of federal, state, and local grants, along with the revenues generated from the electricity rates themselves.
Because individuals within an EPA’s service territory are subject to potential rate increases because of broadband network operation costs, accountability is important. Unlike a typical free-market context in which there is the element of consumer choice, electricity is different. In Mississippi, the government permits consumers to acquire electricity only from the entity that has been granted that particular service territory.
Thus, in the case of EPAs operating as electricity providers and internet service providers, mismanagement of the EPA’s broadband program can lead to increased costs for electrical consumers if a broadband program cannot sufficiently pay for itself.
This establishes the necessity that EPAs are accountable in the way they finance these broadband operations. While EPAs are required to regularly report to the state’s Public Service Commission regarding the legal compliance and financial records of electrical operations, the law is less clear on the extent of oversight for broadband services. Broadband service is not quite the same.
The Broadband Enabling Act does require an annual compliance audit for broadband-offering EPAs. However, financial and performance audits are not currently required by law. This presents potential issues for the citizens in the service territories of these electrical cooperatives. An EPA might be technically in compliance with the law, but that does not fully account for the finances of the broadband program that could ultimately lead to higher rates for those in the service territory.
In order to see a more financially sustainable future for the citizens who live in service territories under EPAs providing broadband, the state should consider enacting broadband financial auditing policies that will ensure more accountability. Such reforms would help ensure that mismanagement does not lead to electrical consumers paying for unreasonable utility bill increases because of EPA broadband buildouts. Broadband growth has immense potential for Mississippians, and the state should ensure that this growth through EPAs does not lead to unreasonable increases when it’s time to pay the electric bill.
Why is Bitcoin worth as much as it is? For the same reason that anything is worth what it is.
The price of Bitcoin reflects the extent to which people want it relative to the amount of it out there. With the total supply of Bitcoin fixed, the massive rise in the price of the world’s first cryptocurrency – from a few cents to over $50,000 in a few years - is a reflection of soaring demand.
The fact that one Bitcoin is worth tens of thousands of dollars, however, seems to offend some folk. Why is it, they want to know, that a piece of software code should be worth so much?
There are no shortage of those that have compared the Bitcoin boom today with the 17th century Tulip bubble in Holland. Tulip mania saw vast sums invested in tulip bulbs, which ultimately proved to be more or less worthless.
Bitcoin, the skeptics often point out, has little utility. It’s just a piece of code – you can’t use it for anything. So why are so many people pouring so much money into it? Its not even a very effective method of payment, given that the value of Bitcoin is so volatile.
But surely many of the same things could also be said about gold?
Gold, too, has limited utility. Beside jewelry and a little electronics, you can’t really do a lot with it.
Nor is gold, even in coin form, a very good way to pay for things.
Not so long ago, the economist John Maynard Keynes dismissed gold as a ‘barbarous relic’. It was, according to this Cambridge-educated technocrat, absurdly old fashioned that a base metal should serve as a reserve currency.
Twenty years ago, British finance minister Gordon Brown, thought something similar when he ordered the Bank of England to sell off its gold reserves.
But, of course, what Keynes called a relic retained its value long after he had passed on. When Brown began to sell off Britain’s gold reserves, he did so for $275 per ounce. Gold today is worth over $1,700 per ounce.
Gold, like Bitcoin, is not valuable because it does something. It is valuable because lots of people want it, and there isn't much of it about. That is all.
With neo-Keynesians running many of the world’s central banks, I suspect that demand for an alternative to their paper fiat currencies will only increase.
Certifications and training are a key part of occupational regulations. Amid the pandemic, many occupational licensing authorities have allowed applicants to take required education courses online instead of exclusively in-person. While online courses are a good step in the right direction, additional technologies could also carry potential.
Many occupational licensing structures require individuals to take certain courses to get certified and then take additional continuing education courses. In the not-so-distant past, applicants would have to take required education and certification courses at the physical places and time determined by government authorities. In addition to the licensing fees and other burdens, such courses often required individuals to set aside time away from their usual course of business for travel. Sometimes they had to drive many hours to attend a class or take a test.
This can change in the context of online courses and certification. While some licensing, certification, and continuing education generally still occur in an in-person context, there has been an expansion in online courses, particularly after the pandemic. Facing the pandemic reality that many individuals would not be able to meet continuing education and/or licensing requirements without online accommodations, several regulatory boards were all but forced to allow for online integration.
These advances suggest that additional technologies could also carry the potential for occupational licensing reform. For instance, virtual reality (VR) headsets are already being used in a variety of extremely technical contexts, with a great degree of success. The military has used VR to prepare soldiers for the battlefield. The medical sector has used VR training for emergency scenario simulation. Industrial and manufacturing sectors have incorporated VR into technical training, and first responders have utilized it for emergency preparedness.
These technologies, such as online learning and VR have expanding adoption, and there has been real-world success -including in some high-intensity fields. It would make sense for government regulatory agencies to incorporate such technologies as an option in their approval processes. Of course, not all applicants would prefer to use such technologies for their licensing or continuing education requirements, and legacy options should remain available. Yet, having new technologies also approved as an acceptable option for occupational certification and education could encourage occupational participation from tech-savvy citizens -especially the younger generation. Mississippi and other states would do well to consider incorporating emerging technologies into its regulatory licensing systems. New technologies are continually proving their value for training and certification. Occupational licensing is already a big enough burden. The government should make every effort to incorporate effective technologies so that its citizens have greater flexibility in their occupational certification and education.
“Flatten the curve” is a phrase that Americans who lived through the COVID-19 pandemic will never forget. Its arrival in our collective lexicon marked the moment that our daily lives were dramatically changed for months on end. As COVID patients overwhelmed our hospitals, the goal was to lessen the strain by slowing transmission of the virus to levels that hospitals could handle. Those efforts were not enough, so we were forced to face the virus without enough hospital beds and medical personal to treat the sickest among us.
As we appear to be pulling out of the most recent Delta variant, it’s worth asking: why did it take so little to overwhelm Mississippi’s healthcare system to begin with?
Like most public policy issues, there isn’t just one answer to that question. But there is one answer that stands out as the most obvious and easily fixable one: our state’s “Certificate of Need” (CON) laws.
After all of the efforts to conserve and increase the number of hospital beds – going so far as to set up temporary tent hospitals – would you believe that Mississippi went into the pandemic with a policy of intentionally limiting the number of hospital beds in our state? Shockingly, we did.
Even more shocking are the problems that CON laws were originally designed to solve: a facepalm-worthy fear of too much investment in the healthcare sector. The idea was that competition might lead health care businesses to build too many facilities, and that those facilities would be too large and too fancy, and then patients would receive subpar care and be overcharged for that care to cover the extravagance. Never mind that in every other industry competition increases quality, lowers prices, and spurs innovation.
Just describing the way that CON laws actually work makes it easy to see what is really behind them: protecting established businesses from competition with newcomers. First, a would-be healthcare startup (or even an existing hospital that just wants to add more hospital beds or medical equipment) must complete an application to try to prove to the state government that there is a need for the new facility, beds, equipment, or services. The fees for filing that application can be as high as $25,000, while the cost of paying the lawyers and consultants needed far exceed that amount. The application can take months to complete and years to go through the approval process.
Once the application has been filed, the applicant’s competitors get to take them to court in an effort to prove that the new facility, beds, equipment, or services are not needed, and that the current market participants have patients taken care of just fine, thank you very much.
After all of that time, money, and effort, the application can easily be denied, making all of it a waste. It’s not exactly a business-friendly system, to say the least.
So how did having CON laws work out for Mississippi during the pandemic? According to the Reason Foundation, states with CON laws have exceeded 70 percent of their ICU capacity for an average of 14.99 days per month during the pandemic, while states without CON laws have done so for only 8.65 days per month. Cutting the length of our hospital bed shortages nearly in half during the pandemic likely would have saved lives and spared us from a lot of economic pain.
Mississippi’s CON laws made the pandemic more difficult, but they will continue to lower the quality of our health care, increase the cost of health care, and reduce our access to care well beyond the pandemic. This legislative session, Mississippi should join the twelve other states that have repealed their CON laws and be done with it.
Aaron Rice is the Director of the Mississippi Justice Institute, a nonprofit, constitutional litigation center and the legal arm of the Mississippi Center for Public Policy.
Recent months have seen an economy that is continually struggling with supply chain driven shortages. As the world grapples with these challenges, the evidence suggests that much of these shortages are because of central economic planning based on Covid-driven public policy.
In the complex world of the pandemic, Americans have been inundated with information on the possible causes. Fires in key factories, natural disasters, and the like have been propounded as contributing factors in combination with the “effects” of the Covid pandemic. Yet, the question must be asked how much of these factors are attributable to the effects of people actually falling ill. While the tragedy of these cases is very real, the pandemic's effects have been grossly aggravated by central government planning that determined “essential” and “non-essential” businesses.
Lessons from the Soviet Union Show that Central Planning Leads to Shortages
In order to understand how central government planning causes chronic supply chain shortages, it is helpful to heed the lessons of the Soviet Union. While the concept of shortages is relatively new to Americans, the Soviet Union saw consistent shortages, primarily for consumer goods. Long lines had many Soviet citizens waiting for simple items ranging from clothing to toilet paper. Shortages were so common, that when Soviet Parliament member Boris Yeltsin visited Houston in 1989, he was astonished by how well the grocery stores shelves were stocked, almost convinced that it all must have been staged just for his visit.
There was a reason that a shortage of consumer goods was a way of life in the Soviet Union. Using the Socialist economic model, the Soviet government engaged in centralized economic planning that prioritized certain sectors over others. The Soviets did this via 5-year plans that gave specific priority on outputs for certain sectors. While the plans were made to look good for paper and propaganda, such plans failed to account for unexpected circumstances and were determined by the minds of bureaucrats instead of being informed by the market.
Supply Chains Have Had Disruptions Before, Without Such Widespread Impact
In 2021, a casual read of the headlines could lead one to believe that many of the economic disruptions brought about by Covid just so happened to occur along with other unprecedented supply chain disruptions occurred that were unrelated to Covid. Yet, it is important to note that factory fires, hurricanes, labor shortages, blockages of shipping canals, geopolitical instability, and other factors are not new. These challenges have consistently occurred over the course of modern history.
While the effects of such challenges do have a real impact, the ability of the supply chain to respond to these challenges is the real test of strength. In former days, supply chain shortages in the free world were usually short-term and relatively isolated to specific sectors.
The laws of supply and demand were generally able to alleviate the pressures. As the demand for certain products went up, the cost went up as well. In turn, these additional revenues helped alleviate supply chain challenges. Lower then return as the supply chain system adjusted to the new demand. But as the lessons from the Soviet Union demonstrate, this can only happen when a free market is permitted to operate and respond quickly to unexpected challenges.
“Disaster Socialism” is a Prelude to Supply Chain Disaster
With Covid, many at the highest levels of government decided that the circumstances justified central economic planning based upon a model that many admittingly called “disaster socialism.” “Disaster socialism” is the idea that the free market cannot operate properly in a time of disaster and that government must implement economic controls. Under this application of “disaster socialism” certain businesses found themselves being labeled as either “essential” or “non-essential.” Meanwhile, the federal government did a massive welfare expansion program and moved America forward towards a more thorough economic reset.
Initially, the long-term effects of such policies were not as easily detected. The government simply pumped out money and mailed out stimulus checks to keep the economy afloat. But it wasn’t long before the realities of this arbitrary central planning began to take effect, particularly on the supply chain.
The Model of Covid Central Planning
The federal, state, and local governments adopted a two-pronged model of central economic planning during Covid. While not all jurisdictions applied this model in the same way, the basic tenets were the same. This economic planning model employed:
- Simultaneous ban on the operations of certain businesses that were arbitrarily deemed “non-essential.”
- Pouring federal funds into the economy through unprecedented government spending.
In the area of sector-specific planning, governments determined what elements of the economy would operate based on their priorities. For instance, if a state government could determine that liquor stores should be open (note, a large source of tax revenue) while restaurants should be closed.
While state governments were primarily responsible for lockdowns and the closure of “non-essential businesses,” the federal government stepped in. It provided the additional element of central planning that called for an influx of funds in the economy. This was accomplished through massive spending plans.
The primary effects of such spending plans brought about inflation combined with a decrease in active workforce participation. Regardless of whether or not they had been directly labeled as a “essential” or “non-essential,” all businesses now had to grapple with the consequences of inflated prices and a labor shortage.
The Effects of Central Planning on the Supply Chain
All of these factors come full circle back to the principle of supply and demand and its impact on the supply chain. The logistics sector has now been hit by the same collateral effects of central planning that other sectors have been impacted by. Furthermore, the logistics sector had to deal with additional challenges due to government restrictions on movement and a lack of raw materials.
As the demand for products increases to at or above pre-pandemic levels, the logistics sector has to deal with that demand while still attempting to address the backlog brought about by the effects of lockdowns and a decreased workforce. Like the failed socialism and central planning of the Soviet Union, the American economy is seeing what happens when those in power attempt to orchestrate the economy.
Yet there is a contrast to such failure, in 1776, the economist Adam Smith referred to the forces of the free market as an “invisible hand” that brings about the best outcomes for the economy and consumers. Such a belief in the free market has driven America forward. The whims of central government planning have failed the test of history. To see an effective supply chain in the future, America would do well to return to the free market principles of its past.
The Chinese government recently clamped down on cryptocurrencies. Owning or brokering Bitcoin is now frowned upon, and mining digital money has been outlawed all together.
This isn’t the first time that China has acted to keep out digital innovation. For years, China has blocked her citizens from using many of the social media platforms and search engines – Facebook, Google, Twitter – that are ubiquitous elsewhere.
The actions of the Chinese government might impact these digital innovations in the short terms. But in the longer term, the behavior of the Chinese government does more to hinder China.
Following the move against cryptocurrency, the price of Bitcoin plunged. But, as of writing this, Bitcoin has bounced back. China might have developed her own indigenous alternative to Google and Facebook. Like all state approved monopolies, China’s clunky social media giants might not find it as necessary to innovate.
China has a long history of keeping innovation out. Whatever effect this might have had on the outside world, it ensured China fell behind. I suspect we are seeing the start of something similar today.
From the late 1970s until about 2015, China seemed to have escaped her authoritarian trap. Under Deng Xiaoping, Chinese rulers placed limits on their own authority. The politburo stopped trying to run everything, turning a blind eye when farmers gradually abandoned collectivized farming. China began to grow.
For three fleeting decades, maritime provinces were given more autonomy and special economic zones allowed to decide their own rules. After 1997, with Hong Kong once again Chinese, there were even two distinctive legal systems. Chinese output soared.
But under President Xi many of these reforms have been reversed. Hong Kong’s autonomy has been treated as an affront and eradicated. Deng’s term limits have been cast aside. Officials in Beijing have become increasingly interventionist and authoritarian.
This same mindset has now been applied to cryptocurrencies. Rather than let crypto develop, the Chinese state seems determined to nationalize the innovation, introducing a state digital ledger, and banning the non-state alternatives.
In the manner of a Medieval monarch, China’s government is becoming increasingly hostile towards its own entrepreneurs, as Jack Ma and co have discovered. As often happens when you attack the wealth creators, you begin to get less wealth creation.
For as long as anyone can remember, we have been told that China is the coming power. China would, it was often said, eclipse America and the West. I doubt it.
China seems to me to be in a trap of her own making. Far from being the Chinese century, I suspect future historians writing about the early twenty first century will note how China under Xi cut herself off from outside innovation and fell behind.
China might not be the rising power we once imagined. I am not sure that that makes her any less dangerous. Wannabe great powers that aren’t quite as powerful as they would like to be are often far more threatening to the international order than those that actually are.
Many across the state have advocated for the expansion of Medicaid with assertions that the state will “come out better” with expansion than without it. Despite these assertations, it is important to remember that while the federal government provides a match to state funds, it is ultimately the state that foots the bill.
Medicaid is a joint state and federally funded program initially created to provide government health care for limited portion of the population. With the passage of the Affordable Care Act, better known as “ObamaCare” the states were given the option to further expand eligibility for their Medicaid programs and have that expansion “matched” by the federal government.
Mississippi has wisely opted not to expand Medicaid. The federal government matches Medicaid expansion, but it is ultimately the responsibility of the state to pay a portion of the costs of the program. Time and time again, Medicaid expansion is pitched as “free money” from the coffers of Washington, but this money is not free.
In the midst of the debates surrounding matching rates, federal funding, and expansion enrollment projections, many often forget Medicaid expansion's influence on increasing private health insurance costs. This would only be heightened in the event of Medicaid expansion.
Since Medicaid reimbursement rates are often much lower than private-sector rates, many doctors then pass on the extra costs by charging even more for private sector insurance. These extra costs lead to higher premiums for private health insurance. In turn, more individuals leave private health insurance and go to “cheaper” government programs like Medicaid. This cycle repeats, and the more people that leave private health insurance, the more expensive it becomes as doctors try to recuperate costs through the private sector. This coincides with an analysis conducted by the Heritage Foundation on an Ohio Medicaid expansion proposal.
Many new Medicaid enrollees would also find that doctors are less likely to accept Medicaid than the private coverage the enrollee might have had. In a study done by the Medicaid and CHIP Payment and Access Commission (MACPAC), the data concluded that as little as 66 percent of doctors accepted Medicaid in many states.
Thus, rather than expanding healthcare access, Medicaid expansion could actually cut down healthcare access as more and more individuals are forced to move to coverage that is not as widely accepted as private insurance. Despite this lower-quality health insurance, many individuals would have little choice in their leaving private health insurance due to the inflated premiums that would be influenced by Medicaid expansion in the first place.
When considering the question of Medicaid expansion, state leaders should take more into account than just the raw numbers that determine how much “free money” would come to Mississippi through Medicaid. Even if the Mississippi government “came out better” on a short-term basis, the long-term effects of government expansion ultimately interfere with the private sector and increase the cost of health insurance.
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.