Tax increases won't fix Illinois. | Time for trustees to fix the campuses. | Freedom of association makes school choice valuable. | Time to end the Export-Import Bank. | Trump stands with the Poles. |
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July 8, 2017 |
Illinois is once again trying to fix its budget woes with tax increases. That didn’t work the last time. It’s time for college trustees to take ownership of the madness on their campuses. Freedom of association is one of the things that makes school choice valuable. Time to end the Export-Import Bank once and for all. President Trump stands with the Poles, declares “We will never back down.” |
Tax increases were supposed to fix Illinois’s budget woes in 2011. On Thursday, the Illinois House overrode Governor Rauner’s vetoes of a budget plan that raises the personal income tax by 32 percent. From Ted Dabrowski and John Klingner, here is a reminder of what happened last time Illinois tried to fix its budget mess with tax increases: “In 2011, Illinois politicians enacted a record 67 percent income tax hike on individuals and a 46 percent corporate income tax hike. Springfield politicians promised the additional revenue would stabilize the pension crisis, pay down the state’s unpaid bills and help the economy. “The tax hike took an additional $32 billion from taxpayers’ wallets from 2011 through 2014. Yet none of the politicians’ promises came true. “The state’s bills weren’t paid off. Instead, they were reduced by less than $2 billion. The state still had $6.6 billion in unpaid bills to go when the tax hike expired. “Illinois also suffered one of the weakest economic recoveries in the nation. The state’s manufacturing base collapsed and never recovered as in neighboring states. In fact, Illinois still has fewer jobs now than it did in the year 2000. “And Illinois’ pensions didn’t get any better. The debt taxpayers owe worsened by more than $20 billion over the four-year tax hike period. “That $20 billion-plus increase occurred despite the fact that most, if not all, of the tax hike went to pay for Illinois’ growing pension costs. “Prior to the tax hike, politicians had put off dealing with the state’s growing pension crisis by borrowing. Blagojevich issued a massive $10 billion pension bond in 2003 to paper over the problem. “Quinn then borrowed a total of $7 billion to pay for pensions in 2010 and 2011. Required pension contributions jumped from 2007 to 2009, putting even more pressure on the budget in the absence of reforms. “And when borrowing was no longer an option, the General Assembly passed the temporary income tax hike under the pretense it would fix many of Illinois’ woes. “According to Senate President John Cullerton, at least 90 percent of the tax hike revenues – out of a total of $32 billion – went to fund the state’s growing pension obligations.” [Illinois Policy Institute]
Who is to blame for the madness on campuses today? Walter Williams calls it like he sees it and offers a reform: “The primary blame for the incivility and downright stupidity we see on university campuses lies with the universities’ trustees. Every board of trustees has fiduciary responsibility for the governance of a university, shaping its broad policies. “Unfortunately, most trustees are wealthy businessmen who are busy and aren’t interested in spending time on university matters. They become trustees for the prestige it brings, and as such, they are little more than yes men for the university president and provost. “If trustees want better knowledge about university goings-on, they should hire a campus ombudsman who is independent of the administration and accountable only to the board of trustees.” [The Daily Signal]
Freedom of association is one of the things that makes school choice valuable. Requiring private schools to accept all applicants in order to participate in government voucher programs threatens to undermine what makes those schools valuable options. Neal McCluskey writes: “It now seems clear that equality and pluralism necessitate that communities be able to offer schooling on an equal footing with public schools. But the question remains: Does this also require that private schools be able to exclude some students? “For a school to truly stand for things central to the community it serves, those who enter the community must share those values. For instance, being forced to accept a large influx of families hostile to a community’s views on, say, the role of Mexican-Americans in the United States, or marriage, would threaten the demise of such a school. “It could also smother a school academically. As sociologist James Coleman famously surmised after studying Roman Catholic schools, the key to their success was their high level of social capital; essentially, their internal cohesion from administrators, teachers, and families all voluntarily accepting the same norms and values. That enabled them to teach clear, rigorous curricula, and uphold well-delineated norms of behavior. “There is one last consideration when it comes to communities deciding whom they will and will not accept: freedom of association. “While prohibiting schools from turning some families away is utterly understandable given our history, it may be counterproductive, essentially creating unsustainable tolerance theater. As social psychologist Patricia Devine has noted, coercing prejudiced people to act in unprejudiced ways can fuel ‘anger and resentment, and sadly, this anger fuels their prejudice and their tendency to show a backlash against the pressure.’” [Cato Institute]
Time to end Ex-Im once and for all. What’s up with the Export-Import Bank since July 1, 2015—after which point it lost the ability to extend loans above $10 million? Veronique de Rugy reports that the limits on Ex-Im have not hurt either Boeing or U.S. exports: “First, companies on the top 10 beneficiaries list haven’t been doing any better or worse without Ex-Im. Take Boeing, for example. It is the No. 1 beneficiary of the bank and has continued to prosper and sell commercial planes all over the world. No surprise here, because 90 percent of Boeing planes were sold without any help from Ex-Im. Boeing’s market cap has also grown from $99 billion in June 2015 to roughly $120 billion. […] U.S. exports in general don’t seem to have been affected by the end of Ex-Im, either. Monthly trade numbers from the U.S. Commerce Department show a downward shift in U.S. merchandise exports beginning in January 2015—six months before the bank’s charter expired. The slowdown also seems to affect service exports, which would indicate that Ex-Im funding was not the explanatory variable. Also, the 2017 data, when compared with the data from the same period in 2016, show exports rebounding without any change in the status of Ex-Im. As my colleague Dan Griswold, the co-director of the Mercatus Center’s Program on the American Economy and Globalization and the who gave me this data, noted, ‘the bottom line is that U.S. export growth was decelerating beginning in 2012 and has picked up again in 2017, driven mostly by global growth rates. The Export-Import Bank’s status was simply not a factor.’ [Reason]
“We will never back down.” Some excerpts from Presidents Trump’s remarks to the people of Poland on July 6, 2017: “We are confronted by another oppressive ideology – one that seeks to export terrorism and extremism all around the globe. America and Europe have suffered one terror attack after another. We’re going to get it to stop. “During a historic gathering in Saudi Arabia, I called on the leaders of more than 50 Muslim nations to join together to drive out this menace which threatens all of humanity. We must stand united against these shared enemies to strip them of their territory and their funding, and their networks, and any form of ideological support that they may have. While we will always welcome new citizens who share our values and love our people, our borders will always be closed to terrorism and extremism of any kind. “We are fighting hard against radical Islamic terrorism, and we will prevail. We cannot accept those who reject our values and who use hatred to justify violence against the innocent. “Today, the West is also confronted by the powers that seek to test our will, undermine our confidence, and challenge our interests. To meet new forms of aggression, including propaganda, financial crimes, and cyber-warfare, we must adapt our alliance to compete effectively in new ways and on all new battlefields. “We urge Russia to cease its destabilizing activities in Ukraine and elsewhere, and its support for hostile regimes – including Syria and Iran – and to instead join the community of responsible nations in our fight against common enemies and in defense of civilization itself. “Finally, on both sides of the Atlantic, our citizens are confronted by yet another danger – one firmly within our control. This danger is invisible to some but familiar to the Poles: the steady creep of government bureaucracy that drains the vitality and wealth of the people. The West became great not because of paperwork and regulations but because people were allowed to chase their dreams and pursue their destinies. […] “We write symphonies. We pursue innovation. We celebrate our ancient heroes, embrace our timeless traditions and customs, and always seek to explore and discover brand-new frontiers. “We reward brilliance. We strive for excellence, and cherish inspiring works of art that honor God. We treasure the rule of law and protect the right to free speech and free expression. “We empower women as pillars of our society and of our success. We put faith and family, not government and bureaucracy, at the center of our lives. And we debate everything. We challenge everything. We seek to know everything so that we can better know ourselves. “And above all, we value the dignity of every human life, protect the rights of every person, and share the hope of every soul to live in freedom. That is who we are. Those are the priceless ties that bind us together as nations, as allies, and as a civilization. […] “Our citizens did not win freedom together, did not survive horrors together, did not face down evil together, only to lose our freedom to a lack of pride and confidence in our values. We did not and we will not. We will never back down.” [The White House]
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