I am a huge fan of Minnesota’s NFL Vikings.
I am not a fan of Minnesota’s tax system.
On the SBE Council “Business Tax Index 2009,” Minnesota ranked a pathetic 44th among the 50 states and District of Columbia, with only New Jersey and D.C. inflicting more costly tax systems for entrepreneurship and small business.
Unfortunately, the Democrats in Minnesota are trying to make matters even worse on the state tax front. As reported by Inforum.com, Democratic state legislators are ready to pass a $1 billion tax hike that includes pushing the state’s top personal income tax rate to 9 percent, while also jacking up taxes on alcoholic beverages and slapping a tax on credit card companies that push interest rates above 15 percent.
Fortunately, Governor Tim Pawlenty (R) has pedged a veto, and if Republicans in the state legislature hold in support of the veto, an override should fall short.
Stay tuned.
In the meantime, what’s the deal with Brett Favre and his flirtations with the Vikes? Sorry, I digress.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Friday, May 08, 2009
Thursday, May 07, 2009
Obama and Competition in Education
Talk to small business owners about the state of education in this nation, and you’re bound to get an earful from many about how hard it is to find employees with basic reading, writing and math skills. It speaks volumes to the failure of our public education system.
If one understands economics, consumer control and competition, then it becomes clear that control over education must be taken away from the politicians and government bureaucrats running a public school monopoly, and handed over to parents, allowing them to choose the best education for their children.
A small, but important school voucher program helps students in the District of Columbia. But it has been placed in peril since the Democrats took over Congress and the White House.
The May 7 Washington Post noted that President Obama has offered a small compromise that would allow current voucher students to remain in private schools, but the overall program would be sentenced to a gradual death as no new students would be added.
The Post noted:
As for the actions by the President and Congress, the Post reported:
While continued funding for existing vouchers would be good news for students already benefiting from them, it would be bad news for all other children in the District receiving a poor education stuck in government schools.
If we want the best education possible for our children, and for a productive, educated workforce, then politicians need to stop empowering the teachers unions and the government education establishment, and start empowering parents. The answer is not to keep feeding more resources to a government monopoly, but instead to spur choice and competition – and therefore excellence – in education.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
If one understands economics, consumer control and competition, then it becomes clear that control over education must be taken away from the politicians and government bureaucrats running a public school monopoly, and handed over to parents, allowing them to choose the best education for their children.
A small, but important school voucher program helps students in the District of Columbia. But it has been placed in peril since the Democrats took over Congress and the White House.
The May 7 Washington Post noted that President Obama has offered a small compromise that would allow current voucher students to remain in private schools, but the overall program would be sentenced to a gradual death as no new students would be added.
The Post noted:
More than 8,000 District students have applied for scholarships since the program's inception, and about 3,000 have received the grants of as much as $7,500 a year for private or parochial schools. Of the 1,716 current scholarship recipients, about 1,400 are in pre-kindergarten through eighth grade. The largest cohort, 211 students, is in second grade, according to figures provided by the Washington Scholarship Fund, which administers the voucher program.
As for the actions by the President and Congress, the Post reported:
President Obama will propose setting aside enough money for all 1,716 students in the District's voucher program to continue receiving grants for private school tuition until they graduate from high school, but he would allow no new students to join the program, administration officials said yesterday…
Congress voted in March to cut off funding after the 2009-10 academic year unless the entire program is reauthorized by lawmakers, a dim prospect in the Democrat-led body. The White House proposal would revise the law and secure grants for the coming school year, but Obama has to persuade Democratic lawmakers to support a gradual phaseout by continuing to include grant funding in future appropriation bills.
While continued funding for existing vouchers would be good news for students already benefiting from them, it would be bad news for all other children in the District receiving a poor education stuck in government schools.
If we want the best education possible for our children, and for a productive, educated workforce, then politicians need to stop empowering the teachers unions and the government education establishment, and start empowering parents. The answer is not to keep feeding more resources to a government monopoly, but instead to spur choice and competition – and therefore excellence – in education.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Wednesday, May 06, 2009
Where Do We Get Our Energy?
As the debate over energy policy – most certainly including the consideration of a cap-and-trade regulatory scheme – proceeds, it pays to keep in mind exactly where the U.S. gets its energy. That is, from what energy sources?
According to the Energy Information Administration, primary energy use in 2007 broke down as follows:
• 39% from petroleum,
• 24% from natural gas,
• 23% from coal,
• 8% from nuclear power,
• 7% from renewables.
By the way, when looking at solar and wind within the renewables category, solar power accounted for 0.07% of U.S. energy usage in 2007, and wind for 0.35%.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
According to the Energy Information Administration, primary energy use in 2007 broke down as follows:
• 39% from petroleum,
• 24% from natural gas,
• 23% from coal,
• 8% from nuclear power,
• 7% from renewables.
By the way, when looking at solar and wind within the renewables category, solar power accounted for 0.07% of U.S. energy usage in 2007, and wind for 0.35%.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Tuesday, May 05, 2009
Kansas Coal Plant and Energy Uncertainty
With former Governor Kathleen Sebelius off to serve in the Obama administration, the new governor of Kansas, Mark Parkinson, a Democrat, changed the energy game in the state.
Sebelius had blocked two 700-mega-watt coal plants from being built in Kansas. Parkinson, however, moved quickly to reach a deal with Sunflower Energy to build one new 895-mega-watt coal plant, with Sunflower pledging more investment in wind turbines, pollution controls and energy efficiency, according to a May 5 report from the Kansas City Star.
That’s a positive step forward compared to the two-year political battle Sebelius waged against expanded energy production.
However, there is no reason why the building of a coal-fired power plant must become a political card as part of a play to get legislation passed that will mandate increased use of renewables.
The most economically sound, common sense energy agenda is to remove unnecessary government costs and obstacles, eliminate subsidies or mandates favoring one kind of energy source over another, and let the market work.
Unfortunately, that too often is not the case – in the states and at the federal level.
Indeed, the threat of increased regulation regarding emissions – i.e., cap-and-trade regulation/taxation – from the nation’s capital makes energy investments uncertain. As the Star report noted: “Also, new carbon regulations from Congress could steeply increase the cost of coal plants.” That is the clearest effect of the Obama energy agenda as it is being advanced.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Sebelius had blocked two 700-mega-watt coal plants from being built in Kansas. Parkinson, however, moved quickly to reach a deal with Sunflower Energy to build one new 895-mega-watt coal plant, with Sunflower pledging more investment in wind turbines, pollution controls and energy efficiency, according to a May 5 report from the Kansas City Star.
That’s a positive step forward compared to the two-year political battle Sebelius waged against expanded energy production.
However, there is no reason why the building of a coal-fired power plant must become a political card as part of a play to get legislation passed that will mandate increased use of renewables.
The most economically sound, common sense energy agenda is to remove unnecessary government costs and obstacles, eliminate subsidies or mandates favoring one kind of energy source over another, and let the market work.
Unfortunately, that too often is not the case – in the states and at the federal level.
Indeed, the threat of increased regulation regarding emissions – i.e., cap-and-trade regulation/taxation – from the nation’s capital makes energy investments uncertain. As the Star report noted: “Also, new carbon regulations from Congress could steeply increase the cost of coal plants.” That is the clearest effect of the Obama energy agenda as it is being advanced.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Monday, May 04, 2009
Free Trade Makes a Comeback
An April 2008 Pew Research poll raised a big concern about free trade falling out of favor with many Americans. But recent polls show a bounce back in favor of free trade.
Pew asked: “In general, do you think that free trade agreements like NAFTA, and the policies of the World Trade Organization, have been a good thing or bad thing for the United States?”
From 1997 to 2006, the “good ” response ranged between 44% and 49% -- but for one dip in December 2003 to 34%. The “bad” response ranged between 29% and 35% over this period. However, in November 2007, “good” and “bad” tied at 40%, and in April 2008, “good” came in at 35% and “bad” at 48%.
Fortunately, the new April 2009 survey reversed course away from anti-free trade views – with “good thing” climbing to 44% and “bad thing” falling to 35%.
Other polls on topic of trade experienced similar recent reversals. A CNN/Opinion Research April 2009 poll on whether foreign trade was more an opportunity through increased U.S. exports or a threat from imports (we’ll ignore the economic ignorance underlying the import aspect of this question) found 56% saying “opportunity” versus 40% saying “threat.” In June 2008, it was 51% “threat” and 41% “opportunity.”
And a CBS News/New York Times poll asked if trade with other countries was good or bad for the U.S. economy. In March 2008, 58% said “good,” and 32% “bad.” In April 2009, “good” climbed even higher to 66%, with “bad” falling to 23%.
These are positive signs for trade and our economy. Now, it’s time for the White House and Congress to shift from muddled or even protectionist leanings on trade to getting back to advancing free trade.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Pew asked: “In general, do you think that free trade agreements like NAFTA, and the policies of the World Trade Organization, have been a good thing or bad thing for the United States?”
From 1997 to 2006, the “good ” response ranged between 44% and 49% -- but for one dip in December 2003 to 34%. The “bad” response ranged between 29% and 35% over this period. However, in November 2007, “good” and “bad” tied at 40%, and in April 2008, “good” came in at 35% and “bad” at 48%.
Fortunately, the new April 2009 survey reversed course away from anti-free trade views – with “good thing” climbing to 44% and “bad thing” falling to 35%.
Other polls on topic of trade experienced similar recent reversals. A CNN/Opinion Research April 2009 poll on whether foreign trade was more an opportunity through increased U.S. exports or a threat from imports (we’ll ignore the economic ignorance underlying the import aspect of this question) found 56% saying “opportunity” versus 40% saying “threat.” In June 2008, it was 51% “threat” and 41% “opportunity.”
And a CBS News/New York Times poll asked if trade with other countries was good or bad for the U.S. economy. In March 2008, 58% said “good,” and 32% “bad.” In April 2009, “good” climbed even higher to 66%, with “bad” falling to 23%.
These are positive signs for trade and our economy. Now, it’s time for the White House and Congress to shift from muddled or even protectionist leanings on trade to getting back to advancing free trade.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Subscribe to:
Posts (Atom)