British historian Johnson worries his own country might follow France’s lead

Historian Paul Johnson‘s latest column for Forbes spells out some key problems plaguing France. Johnson worries his home country might follow suit in the not-too-distant future.

AT PRESENT FRANCE IS a good example of how not to run a country. President François Hollande says he’s a socialist, but he has an upper-class lifestyle and refers to the working class as “the toothless ones,” by which he means people who cannot afford to go to a dentist.

Hollande has raised France’s income tax to 75%, and the result is an exodus of the hardworking and efficient. There are at present some 300,000 French young people living in London, where they can escape their nation’s horrifying levels of unemployment–11% overall, about 25% in their age group.

The great majority of French people who are employed work 35 hours a week and enjoy six weeks of paid holiday. The bureaucratic obstacles to starting a new business there are pretty well insuperable. France’s deficit is enormous and growing, and half of those employed work for the state and cannot be fired. Economic growth is nil or negative, and investment is at its lowest level in a generation.

France, in fact, is in danger of joining the “southern tier” of the euro zone–Greece, Italy, Portugal and Spain–countries that are chronically unable to pull their economic weight and teeter on the edge of national bankruptcy. Indeed, Germany is the only major economy in the euro zone that is still expanding, though it’s doing so at only 1% a year.

France’s appalling state should act as a dire cautionary example, especially to parties on the Left. Yet the British Labour Party–which, if polls are to be believed, will oust the Tories from government at next year’s elections–seems bent on following in France’s footsteps. Its leader, Ed Miliband, leads an impeccable private life, so England would be spared a similar embarrassment to Hollande’s constant public rows with his mistresses. But Labour’s electoral platform shows that in other respects the party has learned nothing from the French socialists’ glaring errors.

Forbes laments the Fed’s reaction to recent news about the dollar

Steve Forbes explains in the latest issue of Forbes magazine why he worries about the Federal Reserve’s recent reaction to a stronger dollar.

THE FEDERAL RESERVE is reportedly upset about the dollar’s recent strength, fearing this will foil its desire to create a certain amount of inflation and thereby retard economic growth. In the Fed’s mind a more muscular greenback will also hurt exports, which will be another growth dampener. The result, the central bank is muttering, may be the postponement of previously hinted-at increases in interest rates, starting in mid-2015.

The Fed’s new fears are bad news, because acting on them will bring about that which Janet Yellen & Co. is purportedly worrying about: a weaker economy. It never occurs to the central bank that its actions after the 2008–09 panic have been the biggest barrier to a vigorous economic rebound.

Credit is critical for commerce, from financing inventories and purchases to expanding existing businesses and starting new ones. The depth and breadth of U.S. capital markets has been a huge advantage in our ability to nurture new companies and provide the lubrication for business’ everyday needs. The Fed’s unending schemes for “stimulating” the economy–from Operation Twist to all the variations on quantitative easing–have had the unintended consequences of seriously distorting and hindering the functioning of our credit markets and, hence, our economy’s ability to expand.

Interest rates are the cost of credit. Suppressing these prices clogs the arteries of commerce. The federal government has had easy and cheap access to money (deficits without tears), as have most large companies. For other commercial enterprises, however, the situation has been a lot more difficult and uncertain. For example, the size of credit lines is reduced, the conditions under which money is loaned more stringent and personal guarantees far more frequently demanded. …

… The Federal Reserve has sucked up vast amounts of cash to finance its purchases of long-term government bonds and mortgage-backed securities. The private sector has been hurt correspondingly.

This weekend on Carolina Journal Radio

North Carolina’s elections are proceeding under rules set out in a 2013 election law, thanks to a recent ruling from the U.S. Supreme Court. Rick Henderson analyzes that ruling during the next edition of Carolina Journal Radio.

Becki Gray takes on left-of-center political activists’ definition of “women’s issues.” Jim Geraghty of National Review shares highlights from his recent novel, The Weed Agency.

Plus you’ll hear highlights from recent legislative debates about the future of North Carolina’s Medicaid program and the State Bureau of Investigation’s move from the N.C. Department of Justice to the N.C. Department of Public Safety.

New Carolina Journal Online features

Evelyn Howell profiles for Carolina Journal Online the N.C. House District 115 election.

Jon Ham’s Daily Journal blasts media outlets that allowed the federal government to review and edit their stories.

A tale of two satires

The New Yorker’s Andy Borowitz spoofs the UNC athletics/academic fraud scandal. The satire, published under the title “U.N.C. Boosters Outraged That Some Athletes Took Real Classes,” concludes with:

“As a university, it is our sacred duty to protect our athletes from education,” the university spokesman said. “We can—and we must—do better.”

With all due respect to Borowitz, it’s been done. Back in January, readers of my newsletter read “Shocking claim: Some top college students read like adults, play like kids,” which concluded:

“The issue for me is clear,” she said. “What kind of athletic institution do we want UNC to be?”

 

How High is NC’s Gas Tax? and why….

How high is the gas tax in North Carolina?  Well, for starters, lets go back to 1980 when the tax was only 9 cents per gallon.  If we adjust that for inflation, that is 26 cents today.

Today the state’s gasoline tax is 36.5 cents per gallon.  The difference between 1980 and today in real terms is 10.5 cents per gallon, that’s a real increase of 40%.

In 1986, the legislature decided to move away from a flat excise tax and add a variable portion to the tax.  Today, North Carolina’s gas tax is calculated with a flat rate of 17.5 cents plus 7% of the wholesale rate of gasoline.

While the legislature decided to cap the gas tax in 2006, it really hasn’t saved the taxpayer that much at the pump.  Since January 1st 2014, the cap has only saved taxpayers 0.03 cents per gallon at the pump.

Below is a graph showing the gasoline tax since 1980.  I point out the major legislative changes that have had an impact on the gasoline tax.  The last time the gas tax rate was changed was in 1992.  The first cap was imposed in 2006, and when it expired, the tax rate was at 29.9 cents per gallon.  By the time the next cap was enacted, the rate had risen to 37.5 cents per gallon, a 7.6 cent increase.  The gas cap that is currently in place will be a topic of debate during the 2015 legislative year because it is set to expire on June 30.

Screen Shot 2014-10-23 at 3.56.39 PM

These very rich Americans support Kay Hagan

I’m talking about trial lawyers. Timothy Carney reports that Hagan (and other Dem candidates) have raised more from them than any other group, and more than their opponents have raised from any industry.

Of course, some trial lawyers help to right wrongs, as in the Duke lacrosse case. Carney’s point is that as an interest group, the trial bar knows that it benefits from having the Democrats in control because they are more apt to expand the regulatory state and consequently create new cases for them than if the GOP is in control. What few Democratic voters realize is that the steady expansion of regulation and litigation gets in the way of their efforts at improving their lot in life.

Hagan spin team hopes TV stations can’t use a dictionary

webster-logo

Remember: Businesses owned by family members of Kay Hagan received more than $400,000 in direct federal stimulus funding, tax credits, and other renewable energy payments and Team Hagan wants you to believe no one in the family benefited from the free cash.

This helps explain the latest installment in the ad war saga involving those payments and Hagan’s high-powered ethics team. Kate Sawyer Keane, an attorney with Perkins Coie LLP, the Democratic law firm that has worked for Hagan’s campaign since at least 2009 and found no problem with the Hagans’ involvement with the stimulus grant, is now strong-arming television stations with a warning letter hoping to silence a political ad on the controversy.

Dome reports that Keane is saying an ad from the Koch brothers-founded super PAC Freedom Partners Action Fund is “inflammatory and unsubstantiated,” and they’d better not run them any more. WLOS-TV in Asheville has succumbed to the pressure. “Quite simply, JDC Manufacturing could not have profited from the stimulus because the stimulus funds did not cover the entire cost of the project,” says the letter.

Let’s visit Mr. Webster, shall we? From my dog-eared Random House Websters College Dictionary (1997 edition), the first definition for profit as a transitive verb is

to gain an advantage or benefit

As I wrote earlier this week, there are many ways JDC Manufacturing, Plastic Revolutions, and Solardyne/Green State Power the companies co-owned by some combination of Kay Hagan’s husband Chip, their son Tilden, and Chip’s brothers John and David “gain[ed] an advantage or benefit” aka profited from taxpayer largess:

• JDC received $250,644 from the feds to offset the cost of making energy improvements and install a solar array at its building in Reidsville. It subsequently received an additional $137,000 in tax credits by making the upgrades.

• JDC’s tenant, Plastic Revolutions (also owned by the Hagans) expected to reduce its energy bills by $100,000 a year resulting from the upgrades. No stimulus, no energy savings.

• Solardyne/Green State Power owners Chip and Tilden performed at least some of the work at the facility; Tilden invoiced a solar company in Vermont for nearly $160,000 in equipment. No stimulus, no project, no job for Tilden.

• JDC’s building operates more efficiently and has a modern heating and cooling system, making the building more valuable to a potential tenant or potential buyer. No stimulus, no upgrades, no added capital value.

Maybe a $500-an-hour (pure guess here) lawyer can’t understand that this is profiting, but most people who aren’t being paid to think otherwise — including the general managers of television stations — might.

And if Ms. Keane or someone from her firm thinks I have this wrong, I’d be delighted to speak with her. There are a lot of questions the Hagan folks haven’t answered about this arrangement.