More socialists are showing support for a socialist

Kelly Cohen reports for the Washington Examiner on Vermont Sen. Bernie Sanders‘ recent uptick in Democratic presidential primary polls.

Bernie Sanders continues to gain on Democratic presidential front-runner Hillary Clinton.

Among Democrats in Iowa, Clinton leads the independent Vermont senator 52 percent to 33 percent, according to a new Quinnipiac University poll. Though the former secretary of state still maintains a double-digit lead over Sanders, the lead has shrunk. In the last poll of Iowa Democrats, conducted in May, Clinton had a commanding lead of 60 percent to Sanders’ 15 percent.

“[S]en. Sanders has more than doubled his showing and at 33 percent he certainly can’t be ignored, especially with seven months until the actual voting. Iowa Democratic caucus-goers are generally considered more liberal than primary voters in most other states, a demographic that helps his insurgency against Secretary Clinton who is the choice of virtually the entire Democratic establishment,” Peter A. Brown, assistant director of the Quinnipiac University Poll said. …

… Meanwhile, in Wisconsin Wednesday, Sanders supporters packed the Veterans Memorial Coliseum in Madison, filling its 10,000 seats. The crowd was his largest to date.

“Tonight we have made a little bit of history,” the 73-year-old self-described socialist told the crowd. “Tonight, we have more people at any meeting for a candidate of president of the United States than any other candidate.”

Speaking to supporters in the reliably liberal capital, Sanders took shots at the state’s governor, Scott Walker, who is set to soon announce his campaign for the 2016 Republican presidential nomination. Sanders also spoke of the economy Wednesday night, touching on a $15-an-hour minimum wage, raising taxes on the rich and expanding infrastructure spending and building.

Chicago mayor isn’t letting teacher pension crisis go to waste

Blake Neff reports for the Daily Caller on Chicago Mayor Rahm Emanuel’s response to a local teacher pension funding problem.

About 1,400 Chicago public school teachers and staff are expected to lose their jobs in order to finance a pension debt of $634 million, the city announced Wednesday.

The layoffs are part of an aggressive $200 million budget cut to help finance the pension payment, which is required of Chicago Public Schools by Illinois law. The rest of the pension payment is coming from heavy borrowing, as the district already has a massive $1.1 billion budget deficit.

In announcing the layoffs, Mayor Rahm Emanuel blamed the rest of the state for not picking up the slack, saying the rest of Illinois doesn’t pay its fair share for pensions. …

… Chicago’s public schools have seen repeated mass layoffs in recent years thanks to a budget situation that is in perpetual crisis. In 2014, about 1,100 employees were laid off, and over 3,000 lost their jobs in 2013. …

… Angry educators, though, might consider pointing a finger at the pension benefits received by their retired colleagues. Thousands of retired Illinois teachers receive a six-figure pension, and the typical teacher received more in pension payments than they personally paid in within 20 months of retirement. Most teachers retire at age 59 or younger, and the lifetime pension cost per teacher in the state is estimated to exceed $2 million. Not helping things for the state is an annual 3 percent cost of living adjustment that is fully guaranteed and totally untethered from actual inflation rates.

Jindal’s not so into film tax credits any more

Jon Hartley reports for National Review Online on Louisiana Gov. Bobby Jindal‘s change of mind about film tax credits.

Last week, before Louisiana governor Bobby Jindal declared himself a 2016 presidential candidate, the governor quietly signed legislation into law that caps state tax credits for film in the state at $180 million per year that will save the state $77 million annually — a wise move, given that the Louisiana government currently faces a $1.3 billion budget deficit. In response, Hollywood producers have threatened to take their film projects to states that offer larger film tax credits, such as Georgia.

Capping film tax credits is a new position for Governor Jindal. He has largely been supportive of tax credits, which were originally introduced in the state in 2002. Becoming a 2016 Republican presidential candidate may have given him a new view on special-interest tax credits and how they can threaten a state’s fiscal outlook.

While Louisiana is not as well known as Los Angeles for its film industry, New Orleans in recent years — since Louisiana’s generous tax credits were introduced in 2002 — has become a popular location for filming some of Hollywood’s highest budget films. …

… Until now, there have been no limits on credits extended by the Louisiana Motion Picture Tax Incentive Act, which provides a 30 percent tax credit on all qualified motion-picture expenditures, with no project or program cap and a 5 percent credit for payroll expenditures on Louisiana residents.

The Greeks’ largest problem? Math

Kevin Williamson of National Review Online explains why the numbers look so bad for Greece.

It is as though the Muses came to an agreement: In the here and now, mankind is subject to rhetoric, but mathematics gets the final say. In Athens, in San Juan, in Detroit, in Sacramento, in Springfield, and, soon enough, in Washington, Mathematics is arousing herself from her torpor, and she is cranky as hell.

The long term is here.

Greece has defaulted on its sovereign debt, and its banks have been shut down. Television viewers accustomed to watching a few odd ducks cheerfully prepare for Armageddon on Doomsday Preppers are now seeing a disorganized version of the same thing as panicky Greeks storm empty ATMs and attempt to stockpile food and fuel. Puerto Rico has announced that it cannot pay its debts. A half-dozen Illinois cities and the Chicago public-school system have spent 2015 teetering on the edge of bankruptcy, with the state legislature considering a new bankruptcy law to handle what is expected to be a deluge of insolvency.

The words and the numbers have long told very different stories. Let’s stay, for the moment, with the case of Greece.

In the run-up to the 2008 financial crisis, Greek leaders lied to bond investors and the bosses at the European Union, claiming that they were complying with EU restrictions on the size of government deficits and national debt. In reality, the Greeks had been scheming with their bankers — notably Goldman Sachs — to keep excess debt off the books. Financial crisis or not, that book-cooking was always going to be revealed: Greece maintained an excessively liberal pension system (Greeks could retire after 35 years of work at 80 percent of their working income; for Germans, it’s 45 years and 46 percent); it is publicly and privately corrupt, with jobs in its bloated public sector being handed out as political patronage and tax evasion running rampant; workforce participation is low, and private-sector workforce participation — i.e., engaging in genuine economic production — is very low.

The Greek economy takes the form of an inverted human pyramid, which is inherently unstable.

This weekend on Carolina Journal Radio

With new candidates emerging regularly in the 2016 presidential race, North Carolina’s earlier placement in the nomination process could lead to a more important role for the Tar Heel State. Rick Henderson dissects the latest presidential election news during the next edition of Carolina Journal Radio.

Terry Stoops recaps his recent testimony for the state academic standards commission that’s studying potential replacement of Common Core. George Mason University economist Peter Boettke pans so-called “emergency room economics.”

Freshman U.S. Sen. Thom Tillis outlines ongoing concerns about problems at Veterans Affairs hospitals. Plus you’ll hear highlights from a news conference announcing the end of a long-running legal battle over replacement of the Bonner Bridge at North Carolina’s Outer Banks.

Just how utterly dependent is the solar industry on government cronyism?

The Asheville Citizen-Times pulls back the curtain on the patient that’s been hooked up to life support apparently for 38 years (i.e., “a solar tax incentive has existed in the state since 1977″):

The N.C. Senate in its budget proposal has eliminated solar tax credits, which for years have helped make North Carolina a leader in solar energy use. The state House includes a provision that would extend the credits for another two years. …

[I]f the tax credits disappeared, “I wouldn’t be surprised if a number of solar companies just closed up shop,” said Dave Rogers, state director of Environment North Carolina, a Raleigh-based nonprofit organization.”There would be a drop in the number of installations, which would mean less solar coming onto the (power) grid,” Rogers said.

“Layoffs — of sales people, site developers, installation crews — would follow pretty quickly.”

The paper tries the old reliable super-industry followup:

The Pew Charitable Trusts, using 2013 data, reported in an October study that North Carolina was No. 3 in the country in both new capacity and private investment, which was measured at $1.2 billion.

That same paper found the state placed fourth in total capacity and fifth in solar-powered homes. North Carolina came in 10th with 3,100 solar industry jobs, according to the Philadelphia-based nonprofit public policy organization.

Recall that that same report by Pew found that when just the federal tax credit for solar investment expires, annual solar investment here will fall by 75 percent. Again, that’s only counting the effect of the federal investment tax credit expiring.

An energy economist was blunt in his assessment:

One economist who has analyzed solar tax credits said it’s simple to understand why some lawmakers take a dim view of the subsidies.

“I’m not aware of one solar project that has had a positive impact on a state budget,” said Loren Scott, an economist based in Baton Rouge, Louisiana. He is professor emeritus of economics at Louisiana State University, where he served on the faculty for three decades.

“There’s no place the solar industry is making it on its own,” said Scott, who also runs an economic consulting firm. “If you take away its subsidy and tax credit, it can’t make money and it’ll go away.”

Scott predicted that North Carolina’s solar sector would vanish if the General Assembly eliminated the tax credit.

Here, again, is how the state (35%) and federal (30%) investment tax credits and accelerated state (5%) and federal (30%) depreciation schedules, in the words of the N.C. Dept. of Environment and Natural Resources:

return almost all of their investment within six years.

NCDENR solar tax incentives
Source: N.C. Dept. of Environment and Natural Resources

An Ensemble Performance by the Texas Supreme Court

Last Friday, the Texas Supreme Court ruled in favor of the plaintiffs in Patel v. Texas Department of Licensing and Regulation. This was another great win for the Institute for Justice, which described the case in a press release:

The case began in 2008, when TDLR suddenly decided that eyebrow threading—a traditional South Asian practice that uses only cotton thread to remove eyebrow hair—required the same license that conventional cosmetologists need for techniques like waxing, makeup and chemical peels. TDLR issued $2,000 penalties to threaders across the state and ordered them to quit their jobs until they completed coursework in private beauty schools costing between $7,000 and $22,000. None of this coursework is required to address eyebrow threading and the state’s cosmetology examinations do not require any knowledge of threading.

“Today’s decision is crystal clear: The government can’t make you do useless things to keep your job,” said lead attorney Wesley Hottot…. “The Texas Constitution protects everyone’s right to pursue the occupation of their choice without unreasonable government interference. State officials can’t just meddle with people’s ability to go to work and support their families. Regulations must have reasons.”

“I am overjoyed,” said Ash Patel, a plaintiff in the case and the owner of an eyebrow threading business that was forced to close its doors…. “All I ever wanted was a fair chance to pursue my American Dream, … and now I can.”

In addition to being a good result for the parties and for the cause of freedom, the Court’s opinion is noteworthy because of the way it deals the “due course of law” provision of the Texas Constitution. Taken together, the majority’s opinion and the various dissents and concurrences provide a fascinating dialogue in which the history and the future of economic rights and their protection under federal and state law are thoroughly discussed. Read more

Why not use government power to keep wages down?

Writing on the AEI blog, economics professor Mark Perry suggests rewriting an Obama speech calling for an increase in the minimum wage to $10.10 so that it calls for a maximum wage of half that. The logic is no different — or any better. Here’s his piece.

Government should no more dictate maximum wages than minimum wages — or any other price.  Prices should be a matter for the parties to a proposed contract to settle upon, not for politicians to write into law.