Here are excerpts from recent editorials in Oklahoma newspapers:
The Journal Record, April 14, 2014
No tax cuts
Oklahoma’s outlook is bright.
Our state’s unemployment numbers remain much lower than the national average. Events, tourists and creative young people flow into the revitalized downtown areas of Tulsa and Oklahoma City. And a grass-roots effort stopped a plan that would have damaged the arts community across our state.
But we still face challenges and problems, especially when it comes to the state budget. And one persistent political idea could darken our days.
Our roads are in terrible shape. A bridge that connects two communities is closed for months, and the experts say other pieces of critical infrastructure are in bad shape.
Our state mental health agency only has enough money to help the most desperate people, while thousands go without care.
Our teachers aren’t paid at the regional average, despite lip service about how important they are to our children.
Even our state Capitol, with its gorgeous new dome, is crumbling and festering.
With all these needs, Gov. Mary Fallin’s plan to cut taxes seems ill-timed at best, and unwisely focused on ideology over practicality.
We know few state agencies would ever say, “Yes, we have just the right amount of funds.” Money is power in politics and bureaucracies. Human nature, and natural cost increases, usually lead to larger budget requests. But Oklahoma doesn’t face a crisis of secretaries and executive directors trying to grab a bigger slice of the pie. We see administrators trying to hold the line and provide basic, critical services to our state.
Cutting taxes during times of surplus is a good idea that can help energize an economy, and fuel growth and opportunity. But cutting now, when the state already faces a deficit, means cutting services. Instead of opening up the playing field for new opportunities, it means leaving more people and more needs behind.
It means more dangerous roads, more violence in prisons, more people with illnesses left untreated. And all these conditions mean more problems in the future, even if the average family has a few more dollars in their pocket.
We hope that our state legislative leaders will look for ways to prudently balance our budget, not sacrifice beneficial services on the altar of a philosophy that says every tax cut is a good tax cut.
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Tulsa World, April 14, 2014
Time to move on - Sebelius exit right choice
From the moment it became obvious that healthcare.gov wasn’t working, Health and Human Services Secretary Kathleen Sebelius became damaged goods for the White House.
It matters little that the website eventually became easier to navigate and that 7.5 million Americans have signed up for health care, ahead of Office of Management and Budget projections.
The president has defended Sebelius, saying she wasn’t sitting at a computer screen, monitoring the creation of website software. She was far more focused on whether there would be enough insurance options for people to choose among.
In short, Sebelius focused on the product but not how to deliver that product to the people efficiently and effectively. But she was responsible for both product and delivery.
The botched rollout poisoned Sebelius’ reputation. It would taint any future effort so long as she remained.
It was time to move on. The president’s new choice is OMB Director Sylvia Mathews Burwell.
If confirmed, it will be up to Burwell to set a new tone and show leadership in making “Obamacare” effective. She cannot do it alone. If the administration and congressional supporters cannot help her prove that “Obamacare” is desirable and workable, it matters very little who is in charge.
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The Oklahoman, April 15, 2014
Price hikes hurt the poor, middle class
Combining their “income inequality” obsession with business bashing, some liberals are blaming supposed corporate greed for the financial challenges of the poor. Such theories are only plausible in the abstract. Under scrutiny, they fall apart.
A recent video produced by Slate, a liberal website, argues that Walmart could raise wages and ultimately save taxpayer money because fewer of its workers would qualify for food stamps. Currently, Slate says, cashiers are paid an average wage of $8.81 per hour. To raise that sum to $13.63, Slate argues, Walmart could raise prices 1.4 percent. A 68-cent box of macaroni and cheese would instead cost 69 cents. Slate claims this would keep many Walmart employees off food stamps.
This sounds like a win-win. But Robert VerBruggen, editor of RealClearPolicy, notes the plan has some major flaws. For one thing, it requires some poor people to pay more for goods so other equally poor people can get a raise. This isn’t Robin Hood robbing the rich to give to the poor. It’s robbing the poor to give to the poor.
Research from the University of California at Berkeley has concluded that if Walmart raised prices to fund a higher minimum wage, 28.1 percent of the price increase would be borne by consumers in families with incomes below 200 percent of the federal poverty level. Many other Walmart customers facing higher prices are thoroughly middle-income families who aren’t exactly rolling in dough.
“Transferring $100 from Walmart customers to the lowest-paid Walmart employees is like taking $28 from some poor people and giving it to other poor people, taking $59 from some nonpoor people and giving it to other nonpoor people, and taking $13 from nonpoor people and giving it to poor people,” VerBruggen writes.
Even if that doesn’t bother you, the plan has other problems. For one thing, about half of that cashier’s raise would be immediately lost thanks to the perverse incentives of welfare.
Jeffrey Dorman, a Forbes contributor, has noted that those on welfare could face a huge effective tax rate if their minimum wage was increased to $10.10 per hour. Dorman wrote that “a hypothetical single mom with one kid would see more than half of the proposed minimum wage increase offset by a reduction in benefits from the federal government and increased taxes.” The hypothetical mother would face a reduction in her federal Earned Income Tax Credit and in food stamp support. She would now have to pay employment taxes on her increased earnings.
“Essentially, these workers face the equivalent of a 50 percent or higher tax rate,” Dorman wrote. Critics have long noted such features are one reason why welfare programs can discourage work and upward mobility.
The Slate plan also ignores the harsh realities of market competition. Walmart and other large retailers operate in a low-margin environment. A 1.4 percent price increase might not sound like a lot, but it could easily lead customers to make purchases at places that aren’t (yet) targets of a liberal witch hunt. That in turn could lead to layoffs at Walmart.
In the abstract realm of liberal economics, businesses can simply raise prices at will and everyone benefits; no one gets seriously hurt. But reality remains stubbornly resistant to liberal nostrums. Those pushing a minimum wage hike in Oklahoma City should keep this lesson in mind.
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