The Tyranny of Big Government

This past Friday I was a guest on WGBH’s TV program Basic Black, a show that non-profit-basic-black3seeks to give the Black perspective of social issues and current events.   During the show the point was made that the Republican Party does not believe in government.  I, of course, counter that viewpoint and stated what the GOP in fact stands for is not “no government”, but government that is smaller, leaner, and most importantly smarter.

My friends on the left (yes, I have many friends on the left!) will say there is nothing wrong with government growing; after all, when government grows it does so out of necessity, the necessity of helping people.  Therefore if you are against big government you are against helping people who need help.  In other words you are an uncaring, selfish, brute of a human being.  However the reality is republicans do not like big government because it does the opposite of helping people; it in facts limits opportunities.  It does this mostly through its drive to fund its ever growing self.

pile of paper   I often point out to my left of center friends that I believe it is the government’s job to make life easier for its law abiding citizens and harder for the law breakers amongst us.  However if you wish to open up a legitimate business in any major city, the permitting and licensing requirements alone will most like keep you from opening your business anywhere from 8 months to a year.  Meanwhile a drug dealer, a pimp, or car theft ring can open for business immediately.  With all of the talk about our economy and high unemployment, one might think government might look to make things a little easier for entrepreneurs.

A real easy one should be for anyone who wants to start a cab company.  After all, it does not require any advance degrees in education; all one needs is a driver’s license and reliable car and liability insurance, right?  WRONG!  Taxi licenses, called medallions, that are given out by city government in order for an individual to “legally” own a taxi are outrageous!  In 2011 New York City broke all records by selling two medallions for a million dollars apiece! Here in Boston the medallion cost $285,000 apiece and the numbers are like this in big city after big city.

How about this for irony? The IRS recently imposed a sweeping new licensing program that forces tax preparers to get IRS permission before they can work.  The IRS by the way, in doing this, is exercising a power never granted to them by congress. IRS The burden of compliance will, of course, be hardest for all the independent operators and the Mom and Pop shops.  Of course the H & R Blocks of the tax world, the big boys support the new program whole-heartedly. Why not, as the Wall Street Journal explained, “Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop competitors out of business”.

          Another big government tool that chokes business is the “Certificate of necessity”, CONs.  CONs’ laws were first used in Massachusetts to regulate railroads and public utilities.  From Massachusetts, they have spread across the country. Basically what these laws do is allow potential competitors who already operate business in the particular area you are seeking a license to operate in to object to you obtaining said license, therefore blocking you from even starting your business.  All your competitors need to say at your hearing is that your services are not needed; after all they are already offering them. And you are denied the certificate of necessity you need to operate your business.  If this sounds too farfetched look up the case of St. Louis businessman Michael Munie in the article by Timothy Sandefur “CON Job” published by the Cato Institute (Summer 2011).  Mr. Munie decided he wanted to expand his moving business to operate throughout Missouri. He had a federal license to ship from state to state already.  But when he filed his application he ran headfirst into a CON law.  The Missouri Department of Transportation was required to notify all the other moving companies in the state and allow them the opportunity to object to the application.  Four of them did indeed object, at which point he had two choices: withdraw his application or go to a public hearing and prove there was a public need for his business.  If he did manage to prove need he was told it may still take six months to a year for a final decision.

          Just think there used to be a time in this country when a business would open and the public would decide if there was a need for it by either shopping there or not.  Maybe, just maybe, if we want to start fixing our economy, we should go back to that model.store

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All My Babies’ Mamas

          Bill Cosby is an American icon. In my opinion he is the most dominant African-American TV personality and arguably the most accomplished entertainer of any race for all time. cosby show He was a positive presence for African-Americans for decades on TV, starting with I-Spy in the Sixties, Fat Albert in the seventies, and the Cosby Show in the eighties and nineties.  Cosby’s shows and performances have won numerous awards and recognition worldwide bringing pride and joy to millions.  For Blacks, Cosby’s work and accomplishments have always been a deep reservoir of racial pride.

          Man, have we fallen since the end of Cosby’s reign. Now, coming to a cable station near you is the Oxygen network’s new reality show, “All My Babies Mamas,” staring rapper Shawty Lo.  Shawty Lo is a rapper from Georgia and the show will basically show him and his life dealing with his 10 kids from 11 different women! Wow. Forgive me while I pause for a moment because even though I first heard about this show a week ago I am still shocked to the point of speechlessness every time I think about it. Has it really come to this? Has the African-American family unit that helped us survive slavery and defeat Jim Crow disintegrated to this point?all-my-babies-mamas1

          I was in college when I began to notice a new phrase that was taking hold in Black vocabulary, “my baby’s mom” or “my baby’s father”.  These are terms that were used to replace wife or husband.  These terms are so prevalent in the Black community that I would be willing to have someone sit in a Black barber shop or beauty salon all day on a busy Saturday and pay them twenty dollars every time they heard someone refer to their wife or husband opposed to baby momma or baby daddy and I will have absolutely no fear of going broke.  With over 70% of Black children being born in single parent homes, the last thing we need is a show starring a popular rapper glorifying a shameful and harmful life style.  A show that will, of course, be watched in those very same homes that are over 70% single family.  And in those homes, the overwhelming majority of which are headed by single women, what will the message be to the boys and young men who live there from this show?

          Ironically it was Bill Cosby who received the most attention when he tried to sound the warning bell to the Black community and inspire us all to a call to action to take on the social challenges facing our community.  This of course was his famous “Dirty laundry” speech he gave in 2004 at a gala celebrating the 50 anniversary of the Brown versus the Board of Education Supreme Court decision.  In his speech Cosby called out Black America for not living up to what was fought for in the civil rights moment and that instead of blaming white America and racism for everything, we as a people need to look in a mirror and see that a majority of our wounds are self inflicted.  Cosby’s biggest issue that day was Black youth. He basically (and correctly) pointed out that far too many of them do not study, cannot speak proper English, use the ‘N’ word constantly, and wear their pants down below their butts.  Cosby of course was lambasted by every left-leaning, excuse-making, liberal pundits and poverty-pimps who could quickly make their way to a cosby by dysonmicrophone, blog post or Op-Ed.  Professor Michael Eric Dyson became a liberal super star by attacking Cosby on this topic; he even wrote a book.  Dyson’s point was that Cosby is out of touch and does not understand that what is going on with poor blacks really is the fault of white people.  Al Sharpton said he would not want Cosby’s remarks to take focus away from what he believes the majority in the country have done to the Black community.  Some folks even said Cosby should stick to selling Jell-O.  The pushback from the left was so loud and strong that Cosby’s message was lost.

So instead of shows like the Cosby Show that highlighted a two parent home of a successful Black family, we will have in its place Shawty Lo and his babies’ mommas.

What a shame!

Time For Tax Credits for K-12 Education Expenses!

January begins a new legislative session on Beacon Hill in Massachusetts and across the country. The new legislature will be filing all kinds of new legislation in an attempt to handle the challenges of our day.  In the new session I encourage our elected representatives to continue to lead the way on education reform.

mass constitution

The Massachusetts Constitution, the oldest living constitution in the world, directs our state to “cherish the interests of literature and the sciences,” and to encourage “private societies and public institutions” for the promotion of education.  Our state enacted the first compulsory school attendance law in America in 1852, and is home to the first state Board of Education in the country.  Today, however, the ideal of a free, public education from kindergarten through grade 12 has begun to recede beyond the reach of many Massachusetts families.

Increasingly, public schools impose “activity fees” as the price that students must pay to fully participate in the life of their schools.  Many families pay for tutoring to supplement their children’s education where a school’s instruction has been inadequate or unsuited for their child’s particular needs.  Other families make arrangements to educate their children entirely at their own expense out of concern for safety, educational quality, or services that are better provided by a private provider.  In short, Massachusetts’ parents are increasingly being asked to shoulder a burden that, in better times, was borne by state and local governments through taxes.

educationIn recent years, parents have been asked to pay for their children’s education twice; once through taxes, and again on an “a la carte” basis for activities that had previously been provided without additional charge.  One solution is Interest-Deferred Education Accounts (IDEA).  IDEA accounts would enable Massachusetts parents and others to save for near and long-term educational costs by: (i) creating a deduction for contributions to an IDEA account, and (ii) exempting interest income and dividends on monies invested in IDEAs from taxation.

The principal features of the law that would create IDEA accounts are as follows:

++ An individual could initially set aside up to $2,500 per year for each beneficiary of an IDEA account.  This amount would be indexed for inflation, so that if educational costs rise the program would adjust itself without further legislation.

++ The donor need not be the parent of the beneficiary, thereby permitting grandparents, guardians and unrelated donors to create IDEA accounts.

++ An individual could establish any number of IDEA accounts, thus creating a vehicle to attract large-scale philanthropy in support of low-income students.

++ Students could establish their own IDEA accounts.

++ For taxpayers who are unable to take advantage of the IDEA account deductions because of low income, the bill would create a refundable tax credit for educational expenses.  Any refund must be deposited directly into an IDEA account and used only for educational expenses.

mass state houseAs our state government begins the process of putting out a budget, collecting revenue, funding health care, and all of its other responsibilities, it’s time for lawmakers to do whatever they can to empower individuals and families to make the decisions that will improve the quality of their lives.  Since no government could ever possibly know what is best for all of us individually, the more power we have to govern our lives the better off we will all be and the better off the state of our government institution will be.  Establishing IDEAs would be a step in that direction.

Where are the jobs for the Black Community?

            With all the talk this past week in Washington DC and around the country, concerning the fiscal cliff, and the danger to both our country’s economy as well as our personal economy if we were to go over that cliff,  I am left wondering why no one seems to notice or care that the economy in the African-American community went over the fiscal cliff a generation ago. And let’s be clear when I talk about people not noticing or caring, I am talking about the African- American community itself.  With African-American executives in the White House and the State House here in Massachusetts, both placed there with overwhelming Black support, one might hope that Massachusetts and this nation would finally make some progress towards closing the gap between black and white unemployment. 

            In good times and bad, the unemployment rate for blacks has historically been twice as high as it is for whites, and current conditions are no exception.  In May of this year the unemployment rate for white males over twenty stood at 8.4% according to the Bureau of Labor Statistics, while the rate for the comparable black population was 17%.   In 1910 Black males over 9 years of age saw employment at 71% compared to 51% for their white counterparts.  Things have steadily gone backwards ever since. 

            How is it that when racial discrimination was at its highest, Blacks saw some of their highest employment rates?  What changed?  Government intervention is what changed.  Starting in the 1930s with things like the Davis –Bacon Act which brought a minimum wage requirement to federally funded construction projects which resulting in the virtual disappearance of Black labor in the construction industry in favor of the higher skilled labor unions.   The 1930s also saw minimum wage requirements go into effect across a wide range of industries and similar declines in Black employment. 

            In the last few years we have seen The President and the Governor of Massachusetts support Project Labor Agreements on a wide scale.    A project labor agreement sets uniform terms between labor and contractors on a particular construction job—usually public–in exchange for “labor harmony.”  While “PLAs” sometimes contain encouraging words about open competition, at bottom they represent a trade-off: in exchange for an all-union job site, employers are protected against work stoppages by a no-strike clause. There are differences of opinion as to whether project labor agreements save money, but there is no groundswell of unemployed black men or minority contractors pushing to expand their use.  On the contrary, the National Black Chamber of Commerce and minority contractors and laborers across the country have recently taken firm stands against them.  No_PLAs_colorThe Philadelphia chapter of the National Association of Minority Contractors objected last fall to a union-only PLA covering the $400 million expansion of Graterford Prison.  “The result,” wrote John Macklin, the group’s president, was a “virtual lockout” of local minority-owned firms, since 98% of black-owned construction companies there are non-union.  In San Francisco, an unprecedented labor-business coalition of black construction workers and contractors formed the Bay Area Black Builders in 2009 to fight the historical under-representation of minorities in the construction trades.   One of the group’s founding principles is “We oppose project labor agreements,” because “the higher incidence of union labor in the construction industry, the lower African American employment is.”  In the District of Columbia, the publicly-funded Washington Nationals Park was built with a PLA that excluded 95% of minority-owned contractors.  Promises that residents of the largely-black District would work half of all journeyman hours and fill all apprenticeships were broken at a cost in lost wages of $12,325,000. 

            So if PLAs treat minorities so unfairly, why are black politicians so eager to embrace them? 

            Simply put, low-income black workers and minority contractors don’tbarack and deval make the campaign contributions—in cash and in kind—that their higher-paid union counterparts do.  When doctors take the Hippocratic Oath, they swear first to do no harm to their patients.  There is no similar oath for politicians, however, whose guiding rule, according to the public choice school of thought, is self-preservation:  Answer first to the constituency that got you re-elected, not those who need your help most.  I say it is high time for our nation’s first African-American President and the Commonwealth’s first African- American Governor  to return the loyalty that the Black community has shown them and craft an economic plan for the black community that will result in job growth and sustainable prosperity.