A GOP cave on Pa. minimum wage (& other public policy matters)

The Associated Press reports that some legislative Republicans in Harrisburg are open to a minimum wage increase. Simply put, that’s daft.

The Pennsylvania minimum wage is $7.25 an hour. Democrat Gov. Tom Wolf is seeking a $12 hourly wage floor. The AP says the GOP could accept a minimum wage hike “but at a much lower figure.”

But even “at a much lower figure,” entry-level jobs will be lost.

The wire service story cites “years of pressure by Pennsylvania Democrats” for what, by any standard, represents a caving in by the GOP. After all, Republicans control the Pennsylvania General Assembly.

There are many ways to improve the economy. Raising the minimum wage is not one of them.

It’s not everyday that you see this headline: “New coal mine to bring 70 jobs or more to Pennsylvania.”

But that’s the plan by Corsa Coal Corp with its new Acosta Deep Mine in Somerset County’s Jenner Township, beginning in May.

The Tribune-Review reports the mine is expected to produce 400,000 tons of metallurgical coal annually which would be used, hopefully, by the steel industry.

Corsa CEO George Dethlefsen tells the Trib the Trump administration’s plan for roads, bridges and other public infrastructure should boost demand for steel — and the kind of coal needed to make that steel.

We shall see, of course. But there can be no doubt that having confidence in the economy is a critical component in the economic health of a state and nation. And the best way to fill tax coffers is economic growth.

Speaking of energy, the Beaver County Times reports that plans for the Falcon Ethane Pipeline are progressing.

That’s the 94-mile pipeline that will carry ethane from and through three states (Ohio, West Virginia and Pennsylvania) to supply “feedstock” to Shell’s coming “cracker” plant in Beaver County’s Potter Township.

Property rights-of-way are being assembled and necessary permits are being acquired. Construction is expected to begin in 2019.

Coupled with the recently approved Mariner East 2 cross-state pipeline, the fortunes of the tri-state region’s shale gas industry certainly appear to be looking up.

Here’s a hypocrisy we see all too often from “progressives” entrenched in bureaucracy, and at all levels of government: They questions the motives of others as “extreme” but dismiss their own motives — motives that oftentimes redefine “extreme.”

To wit, The Washington Times reports that some within the U.S. Environmental Protection Agency are expressing concerns about newly confirmed EPA Administrator Scott Pruitt’s “ties” to the oil and gas industries.

Pruitt is the former Oklahoma attorney general who pulled no punches in challenging EPA regulations he thought exceeded the agency’s congressional and/or constitutional warrants.

Critics, however (including many Democrats), argue that Pruitt is too cozy with energy industry players. Among their concerns, The Times reports, is “a letter sent by Mr. Pruitt to the EPA, raising questions about the agency’s conclusions regarding harmful emissions from natural gas wells.”

The majority of the language came directly from an Oklahoma energy company, critics complain. It is nothing less than “collusion,” they charge.

But where are these same critics when the environmental regulatory agencies, federal and state, parrot (and apparently without much vetting) the talking points of envirocrats?

Or, in Pennsylvania’s case last year, a top state environmental official imploring the environmental lobby to strike back against the shale gas and oil industries?

One of the great champions of capitalism, and a Western Pennsylvania icon, has died. Michael Novak passed away Friday in his Washington, D.C., home. He was 83. Novak was born in Johnstown and grew up in both Indiana, Pa., and McKeesport.

It is this quote that best embodies his philosophy:

“Capitalism forms morally better people than socialism does,” Novak said in 2007. “Capitalism teaches people to show initiative and imagination, to work cooperatively in teams, to love and to cherish the law; what is more, it forces persons to not only rely on themselves and their own moral qualities, but also to recognize those moral qualities in others and to cooperate with with others freely.”

Re-read that quote several times and let its import sink in.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Envirocrats are it again (& other business matters)

It took no time at all for envirocrats to appeal the Pennsylvania Department of Environmental Protection’s approval of the critical cross-state Mariner East 2 natural gas pipeline.

The $2.5 billion pipeline would transport natural gas liquids from Western Pennsylvania, Ohio and West Virginia to a Sunoco refinery in Marcus Hook, southwest of Philadelphia. The product will be shipped to Scotland for making plastics.

Environmental groups allege the DEP bowed to “heavy political pressure” and accuse the agency of “lacking all the information it needed to make a reasoned and reasonable decision.”

Two points:

First, the DEP hardly has been a rubber stamp for Pennsylvania’s shale gas industry. In fact, many of its past comments and delaying tactics have been considered decidedly anti-industry.

Second, DEP points to not only the five public hearings it held on the pipeline project but to the 20,000 hours it required to review permit applications and 29,000 public comments.

To call the review “utterly inadequate,” as the envirocrats allege, defies credulity.

Word out of Eastern Ohio is that PTT Global Chemical Public Ltd. has postponed until later this year a decision to build a multibillion-dollar ethane cracker plant near the village of Shadyside.

A decision had been expected in the next few weeks.

It appears the company needed more time to further vet the engineering and economics of the project, though reports have it that PTT already has spent tens of millions of dollars developing the site. The facility would “crack” Utica shale gas into “feedstock” for plastic products.

Some have characterized the delay as good news for a similar cracker plant now under construction by Dutch Royal Shell in Beaver County, also along the Ohio River, about 70 miles to the north. That is, the Beaver County facility, which would “crack” Marcellus shale gas, will have something of a head start.

That might be. But could the delay also be signalling something else? Could it be fears of yet another softening of the shale gas industry, one generally believed to have been on the rebound? Or is it that another cracker plant so close presents too much of a competitive problem?

These are the times that try Westinghouse employees’ souls.

Parent company Toshiba is looking to unload all or part of the iconic electric-turned-nuclear company. It — meaning Toshiba — might even file for bankruptcy protection.

Beset with billions of dollars in debt — largely blamed on the foibles of a Westinghouse nuclear construction subsidiary — the Japanese conglomerate says it will write off more than $6 billion and leave the business of building nuclear power plants, The New York Times reports.

That could place the very future of Westinghouse in doubt. What happens to its Cranberry Township headquarters in Butler County? What happens to its more than 2,200 employees?

And just as significant, what does this portend for the future of nuclear-generated electricity in the United States, if not the world?

WITF Radio in Philadelphia calculates that Gov. Tom Wolf’s proposed Fiscal 2018 budget contains “about a billion dollars in new taxes.” It’s not exactly an austerity budget, now is it? And so much for the governor’s claim of no new “broad-based” tax hikes.

As Gene Barr, executive director of the Pennsylvania Chamber of Business and Industry, reminds, many of the tax hikes target commonwealth businesses.

“We can’t sit here and say, ‘That’s a great tax’ or ‘That’s a great approach,’” Barr told the station. “I mean, all those things are just going to make Pennsylvania less competitive moving forward if we adopt them.”

It remains this fundamental: The more you tax business, the less you get of it.

A letter writer takes issue with the Allegheny Institute’s position on the governor’s budget blueprint.

First she says it’s contradictory to criticize state government for attempting to raise the minimum wage while saying that the economy is not being stimulated by low wage earners.

But it’s not contradictory at all. Wages should not be set by government fiat but based on market conditions and productivity. Government wage floors are nothing more than a tax on labor; the more you tax it, the less you get of it.

The better way to raise wages is to reduce onerous taxes and regulations on business. That frees up more money for investment, leads to business expansion, creates more jobs and leads to competition among businesses for workers, which is the natural way to increase wages.

By the correspondent’s illogic, all we need to do to sufficiently stimulate the economy is to raise wages by government fiat; the higher the government-mandated wage, the healthier the economy will be. But it would be quite difficult to have a healthy economy if you have no commerce to power it.

The same letter writer claims that Pennsylvania is the only state not to collect taxes from companies extracting shale gas. That’s simply not true; they long have paid an “impact fee,” which, of course, is a tax by any other name. And they already pay the kinds of business taxes that every other commonwealth business pays.

“Something reasonable and logical needs to be done to increase revenue to the state coffers without burdening those who can least afford it,” the letter writer continues, noting she is retired and that her pension is fixed.

But raising the cost of labor through minimum wage floors and adding taxes upon taxes for businesses (which only serves to decrease revenue to state coffers) certainly is neither “reasonable” nor “logical.”

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

A red-letter development for shale gas

Meanwhile, back at The Great War Against Shale Gas, some major and refreshing news from the Pennsylvania Department of Environmental Protection:

Not only has the DEP approved a final water quality permit for the $1 billion PennEast Pipeline, which will primarily deliver natural gas from Northeast Pennsylvania to New Jersey utilities, it has approved the final water-crossing and sedimentation permits for the $2.5 billion Mariner East 2 pipeline, which will carry natural gas liquids across the commonwealth.

Both projects have undergone exhaustive vetting — envirocrats did their darnedest to scotch them — and their importance to developing this state’s much-needed pipeline infrastructure cannot be overestimated.

As The Philadelphia Inquirer reminds, the Mariner East 2 pipeline will link shale gas producers in Western Pennsylvania, West Virginia and Ohio with Sunoco’s Marcus Hook Industrial Complex, about 23 miles southwest of Philadelphia.

Indeed, this is a red-letter development for an industry that long has garnered little respect from the regulatory regimen of “The State.” Let’s hope it’s the beginning of a new day.

Ford’s planned $1 billion investment in Pittsburgh certainly is nothing to sneeze at. The auto giant says it would like to make the erstwhile Steel City an engineering and test center for autonomous vehicles.

Uber, the ride-sharing company, already uses Pittsburgh as a testing ground for driverless vehicles. Ford will team up with Argo AI, an artificial intelligence company.

It’s not yet clear how many jobs will be a part of the investment. But an Allegheny County official told the Tribune-Review that “thousands” of jobs could be created over the next five years. We shall see.

While the news is encouraging, more details are needed to better evaluate the plan.

Are there tax breaks for Ford? If so, how are they structured?

Are there any direct public subsidies? If so, how much?

Will tax-increment financing (TIF) be sought to help Argo AI build a Pittsburgh headquarters? If so, will Pittsburgh Public Schools, which would have the largest share of tax receipts to lose, be consulted or merely asked to rubber stamp the deal?

The Pittsburgh Business Times quotes a local regional development official as saying it’s “fair to say that almost every major car company has had some conversation about Pittsburgh.”

The intimation is that other major car makers might be considering locating research and development operations here.

That’s great — if it’s truly a testament to Pittsburgh’s universities-based high-tech acumen. But, past being prologue, we also have to wonder if any part of it is based on what public subsidies these companies can extract.

Public subsidies for public infrastructure are appropriate. And TIFs can be structured to dedicate tax dollars to the new infrastructure for which such projects create a demand.

But if tax-increment financing merely turns taxpayers into venture capitalists — which is not its or their role — then a major re-think of the respective projects’ value should be in order.

Stay tuned.

The Urban Institute is touting its new study showing how the repeal of ObamaCare would “cost” about $13 billion in lost tax credits and subsidies over the next decade in Pennsylvania.

OK. But playing the same numbers game, there’s another side of this equation that too few are too loath to discuss: That means about $13 billion in tax credits and subsidies won’t be given.

Thus, “cost” becomes a “savings,” does it not?

Think of this in the same vein as gambling. “The State” often touts how much it’s “making” from legalized gaming. But, a like amount of money was lost by gamblers.

Of course, when it comes to health care, one cannot ignore the equation’s variables. The study also predicts nearly 1 million additional Pennsylvanians won’t have health insurance should ObamaCare be repealed.

Unless, of course, ObamaCare is replaced by more market-based insurance that embraces competition and lowers cost.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Wage Floors, Taxing Shale & Alien Lawlessness

The Wolf administration claims that increasing the state-mandated minimum wage from $7.25 to $12 an hour — a nearly 66 percent increase — will generate $95 million for state tax coffers.

Now, that might be the case in some strange parallel universe in which the fundamental laws of economics are bent like light through a prism. But it’s not the case in real world.

Mandating higher wage floor by government fiat is nothing more than a state-imposed higher tax on labor. And the more you tax something, the less you get of it.

What’s more likely to happen — if adopted by the Pennsylvania Legislature (and that appears to be an unlikely outcome) — is that the entry-level jobs pool will shrink. It’s hardly a positive outcome for those seeking their first jobs, especially minorities.

But this outcome is par for the course for “progressives.”

Buttressing this point is a new study — by American Action Forum, a nonpartisan think tank — that predicts minimum wage hikes this year alone in 14 states will lead to the demise of 383,000 jobs. Ultimately, 2.6 million jobs will be lost, the think tank says.

As Investor’s Business Daily editorializes, “(T)hose who now push minimum wages as the answer to ‘wage inequality’ will instead (soon) push for more welfare — while vehemently denying that they had anything to do with killing millions of jobs.”

Then there’s the governor’s renewed push for a severance tax on the extraction of natural gas. The 6.5 percent impost he seeks in the next budget is higher than the tax he sought last year. Such a tax — if passed (and, again, that’s not likely) — would be the highest in the nation.

Supporters are quick to contend that Pennsylvania is the only state in the nation without such a tax. But it does impose an “impact” tax that local jurisdictions use (or at least they are supposed to use it) to pay for any deleterious effects from natural gas extraction.

The ups and downs of the commonwealth’s shale gas/oil industry are well documented. And it at least appears that the industry’s fortunes are beginning to recover. The last thing that’s needed is for “The State” to arbitrarily attempt to raise the cost of doing business here.

Market forces should determine the fate of such industry, not governments seeking to bail out their own decades of fiscal irresponsibility on the backs of those who actually produce something other than broken bureaucracies.

And here’s a most salient point regarding Gov. Wolf’s proposed FY 2017-18 budget, missed by most media:

Despite projected billions of dollars in savings through government “reforms,” spending will continue to increase.

As Allegheny Institute President Jake Haulk adroitly notes (in Policy Brief Vol. 17, No. 8):

“There is little question that the goal” (in budget austerity) “is to save as many taxpayer dollars as possible. But in this case, the savings proposed and hoped for are not being allowed to do what they should do, which is to lower actual spending.”

Further notes Haulk:

“(T)he government needs to look at major government expenditure drivers as well as laws that add costs to business and inhibit growth. Prevailing wage laws, teacher strikes, overly aggressive regulators, a history of kicking the pension crisis down the road, high taxes and a business climate that leads to very slow new business formation and expansion must all be addressed. Those rectifiable problems will, unless addressed forcefully and successfully, continue to produce perennial budget angst.”

Lawlessness soon could come back to slap the City of Pittsburgh and Butler and Westmoreland counties.

As reported by the Pittsburgh Business Times, an analysis by the Pennsylvania Senate Appropriations Committee says those jurisdictions’ defacto and infacto status as “sanctuaries” for illegal aliens shows they could lose millions of dollars in state subsidies if a proposed bill to punish them becomes law.

Pittsburgh could lose $9 million. Butler County could lose $25 million. Westmoreland County could lose $50 million. And the government subsidy holdbacks would skyrocket if federal penalties become law.

Taxpayers should take note: Thumbing one’s nose at the rule of law has costly consequences.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Taxing Follies

From “The Department of This is Rich”:

The superintendent of the Fox Chapel School District is panning a proposal to shift school funding away from property taxes and toward sales and income taxes.

As the Post-Gazette reports, Gene Freeman calls the tax shift a “money grab” and “a way to break the teachers’ union.”

And a group calling itself the Fox Chapel District Forum says the move would mean a loss of local control and the end of quality public education.

Group president Elizabeth Klamut says her organization is obligated to act in the best interests of children. Such a tax shift would not be, she says.

Well.

The real issue here is that Pennsylvania school districts for far too long have had a free hall pass on jacking up school taxes. It’s a matter of school boards simply voting to do so

Yes, those boards are elected by taxpayers. But it seems that too often the voices of those who elected these boards are ignored when tax-hike time comes ‘round.

Yes, there are limits. But districts routinely are granted waivers by the state to raise taxes in excess of annual increase limits. (Ironically, however, that’s at times to cover the increased contract expenses negotiated by school boards with teacher unions.)

There’s a better way, of course, to check ever-rising school taxes. And that’s by putting school taxes — increases and renewals at the same rates — before the voters.

Critics claim that would jeopardize continuity in school funding; voters (you know, the people who foot the public school bill) will routinely vote down such ballot levies.

But that’s certainly not been the case in neighboring Ohio.

Data from the Ohio School Boards Association show Buckeye State voters approved 85 percent of ballot levies in 2015. And in the period between 2006 and 2015, school tax levies were approved by a majority of Ohioans in all but one year (in 2008).

Approval percentages were 59 percent in 2006; 54 percent in 2007; 45 percent in 2008; 67 percent in 2009; 59 percent in 2010, 2011 and 2013; 73 percent in 2012; and 69 percent 2014.

Back to Gene Freeman.

If he was quoted accurately, and if his quote was presented in context, the Fox Chapel School District has a problem: It suggests he’s more concerned about the teachers union than taxpayers — or, for that matter, students.

From the “Department of Let’s Yet Again Tax Our Way to Prosperity”:

VisitPittsburgh, the city’s tourism agency, once again is pushing for a 1.25 percentage point hotel tax increase (and the ability to increase it by a full 2 percentage points). The impost now stands at 7 percent. That’s on top of a 6 percent state sales tax and the 1 percent Regional Asset District tax.

And as the Tribune-Review puts it, agency boss Craig Davis says the tax increase “could spur tens of millions of dollars in new economic activity.”

Do tell.

VisitPittsburgh wants to use some of the new money — about $1.4 million out of $4.6 million — to create a brand new bureaucracy — the Pittsburgh Sports Commission — in hopes of attracting more major sporting events to the region.

This, we are told, would free up VisitPittsburgh to better concentrate of its mission of attracting conventions to town. And, of course, the new commission would have its own staff and board of directors.

Can you say “featherbedding,” class?

VisitPittsburgh already is known for its salary excesses; rest assured this new Pittsburgh Sports Commission would be no different.

VisitPittsburgh also is known for something else: Rattling off fantastical “multiplier effects” to justify spending taxpayer dollars; the new commission surely would be a chip off the old, and inflated, block.

The key to attracting businesses and events to Pittsburgh is to make the cost the lowest possible for those you’re inviting. Attempting to yet again tax our way to prosperity shows just how out of touch those “leading” Pittsburgh remain.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Around The Public Policy Horn

The policy quote of the week comes from state Sen. Guy Reschenthaler, R-Jefferson Hills.

He’s the sponsor of a new bill that would bar the Pennsylvania Department of Environmental Protection from enacting any methane-control regulation on energy drillers that is stricter than those of the federal EPA.

Reschenthaler, who represents the 37th Senatorial District, says the measure would eliminate unnecessary and burdensome duplicative regulations. Envirocrats predictably are attacking the measure as an assault on the environment.

But Reschenthaler put the debate into perfect perspective for the Beaver County Times:

“Methane is an easy one because companies already have an economic incentive to not have methane escape. Having a methane regulation is like telling a dairy farmer how much milk he can spill. It doesn’t make any sense. They already have an economic incentive not to spill any milk.”

Well put, Senator. Well put.

Pittsburgh City Council has unanimously passed legislation banning the city from withholding public services based on a person’s immigration status.

Translation: This council has no qualms about using your taxpayer dollars to enable illegal behavior.

The usual suspects — they call themselves “public interest groups” — closed out January by rallying for a deeper dive into the public’s pockets from a higher platform.

Pennlive.com reports the group — including “some of the state’s most powerful public sector unions” — is seeking:

A new tax on Marcellus shale natural gas production; a higher income tax rate of capital gains, dividend payments, royalties and business profits; and broadening the base of Pennsylvania companies paying the commonwealth’s corporate net income tax.

Good grief. Pennsylvania already has a reputation for being a lousy place to do business. So, what do these “public interest groups” propose? More onerous imposts that raise the cost of doing business in this commonwealth across the board.

Of course, the greater the tax on business, the less business you get.

This latest call for the State of Taxapalooza is far more than being tone deaf. This is reckless public policy that will only further retard Pennsylvania’s economy. Those who propose such nonsense do not have the public’s interest at heart but their own groups’.

By all indications, Gov. Tom Wolf is expected to yet again seek a severance tax in this month’s budget address. Exactly what tax rate he’ll seek, however, continues to be the subject of great speculation; prior proposals had no legs.

Proponents of such a tax say the proceeds could pay for all manner of things, returning something akin to “prosperity” to myriads budget sectors.

But as Winston Churchill once reminded, trying to tax yourself into “prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

It once was written that in levying taxes and shearing sheep “it is well to stop when you get down to the skin.” Or put another way, when you kill the goose that’s already laying golden eggs, golden egg production comes to a halt.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org

Oaths, Competitiveness & Bogus Holidays

What part of the “rule of law” does Pittsburgh Mayor Bill Peduto not understand?

In response to President Trump’s executive orders cracking down on illegal aliens — authorizing construction of wall along the Mexican border and withholding federal dollars from “sanctuary cities” that harbor illegal aliens — the mayor issued a statement talking about how Pittsburgh is “a welcoming city and a diverse city” that “will continue to show everyone the respect and compassion they deserve — regardless of who they are, where they’re from … or how they found their way to our beloved city.”

Even illegally, it would seem.

He also broke out the old boilerplate line about how Pittsburgh was built by immigrants, etc., et.al and blah-blah-blah. Those would have been legal immigrants, Mr. Mayor.

But most striking was Peduto’s claim that the cracking down on illegals “will not make us safer.”

“It will not advance the principles upon which our nation and our cities were founded,” he said.

Since when was our nation, and when were our cities, founded on the notion that the rule of law should be a dead letter? And didn’t this mayor take an oath to uphold the law when he was sworn in? Of course, he did. It’s time for Mayor Peduto to abide by that oath of office.

 
The news out of Harrisburg is sobering:

Pennsylvania’s budget gap now is projected to be nearly $3 billion through next summer. That’s the latest assessment of the commonwealth’s Independent Fiscal Office.

Blamed? Virtually no economic growth. Flat tax collections. Flagging corporate profits. A declining, and aging, population. It’s a familiar story in Pennsylvania.

Fiscal Office Director Matthew Knittel calls the lack of economic growth “puzzling.” Really? That’s usually what happens when layers upon layers of regulations are combined with taxes on top of taxes.

The Republican-controlled Legislature is resisting calls for sales and/or income tax hikes. Tom Wolf, the Democrat governor is, too. So far. He’s been working to cut and/or to consolidate some government services.

That’s all well and good. But Pennsylvania remains in dire need of a regulatory and tax “re-set.”

Consider the shale gas and oil industry. As one wag with whom I regularly confer reminds, it can take more than 200 days to obtain operating permits from the state Department of Environmental Protection. But other states — Louisiana and Texas are cited — have a permitting process of about 10 days.

And Pennsylvania, the wag notes, isn’t even in listed on Site Selection Magazine’s “Top 10 Competitive States.”

That’s pretty damning for a state with such rich shale energy resources.

“Excessive regulation … suffocates a market,” Steve Forbes often reminds. Pennsylvania could be a textbook case.

Kraft-Heinz Co. is spearheading an effort to make the Monday after the Super Bowl a national holiday.

The great maker of condiments, among other things, cites statistics suggesting that 16 million American workers don’t show up for work that day.

“(W)e as a nation should stop settling for it being the worst work day of the year,” says the company, now featuring dual headquarters in Pittsburgh and in Chicago.

Perhaps Kraft-Heinz should dock those who don’t show up, and who don’t have personal or vacation time to take the day.

Kraft-Heinz says all of its salaried employees will be given the day off.

If Kraft-Heinz wants to give some of its employees the day off after the Super Bowl, that’s its business, of course.

As it should be the business of every private enterprise to make its own decision on such matters — sans some national holiday decree from the federal government that had its genesis in a Madison Avenue publicity stunt.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

The Problem With ‘Buy American’

Lost in all the rah-rah-sis-boom-bah-ing of President Trump wanting to use American steel only in the Keystone XL, Dakota Access and other U.S. oil pipelines is this fundamental economic fact:

The price of that steel will be higher. In some cases, markedly so. And we all will be made poorer. Not in effect, but actually.

How so?

As Hoover Institution scholar David R. Henderson once explained it:

“Almost all economists say (‘Buy American’ is) nonsense. And the reason is: We should buy things where they’re the cheapest. That frees up more of our resources to buy other things, and other Americans get jobs producing those things.”

Continued Henderson, an economist of some repute:

“If it’s good to ‘Buy American,’ why isn’t it good to have ‘Buy Alabaman’? And if it’s good to have ‘Buy Alabaman’, why isn’t it good to have ‘Buy Montgomery, Ala.’? And if it’s good to have ‘Buy Montgomery, Ala.’ … “

Or as economic scholar Nicholas Freiling put it a few years ago:

“Many organizations advance the belief that buying American-made products help the American economy more than buying foreign-made products. They believe that by keeping American dollars ‘here at home’ they prevent jobs from going overseas, (thus keeping unemployment low), reduce the trade deficit and promote the development of American manufacturing.”

But it’s just not true.

Continued Freiling:

“While it may seem that such a claim is true on the surface, a deeper investigation into just what happens when consumers pay more to ‘buy American’ shows that not only does doing so not help the economy but it actually limits economic growth.”

But, but, but foreign countries are dumping steel in the United States and that’s simply unfair, many “Buy American” proponents argue.

But as Tori K. Whiting, a trade and economics scholar at the Heritage Foundation, reminded in September:

“In response to alleged unfair trade practices, domestic steel producers are advocating for broad import restraints and immediate action by the U.S. government to protect the domestic industry. …

“The U.S. manufacturing and construction industries rely on domestic and foreign steel to create finished products. Tariffs on steel imports limit choices and increase costs for these industries. Those costs are ultimately borne by American consumers and act as a tax on everyday goods made from steel,” she reminded.

And as fellow Heritage legal scholar Alden Abbott added, “(A)nti-dumping is in fact a form of special interest cronyism that imposes high costs on Americans and thwarts beneficial competition.”

“Buy American” makes for great political rhetoric. But the reality is that most Americans would find their pocketbooks heavily pinched if the practice became pervasive and America’s overall standard of living would fall.

By all means, let’s build not just those oil pipelines but pipelines for the more efficient transport of shale natural gas, too. But let’s not charge ourselves an unnecessary, uneconomic premium with a misguided, blind form of nationalism that will do more to harm our great republic than to help it.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Folly By Government

There he goes again. Philadelphia Mayor Jim Kenney, who never met a government intrusion he didn’t embrace, says he will sign something called the “Wage Equity Law.”

The measure, passed by Philadelphia Council in December, prohibits employers from asking about a job applicant’s wage history. Employers also are barred from discriminating against applicants who refuse to divulge that history.

This, supposedly, will bridge the “pay gap” affecting women and minorities, reports The Philadelphia Inquirer. But there seems to be no empirical evidence suggesting such a result.

What it actually will do is rob employers of one tool used to gauge a prospective employee’s value.

To wit, years of stagnant wages might indicate an uninspired worker with questionable productivity while regular raises could indicate an inspired and productive person.

Philadelphia’s “Wage Equity Law” is the latest in a long line of “progressive” feel-good measures that will intrude on a company’s right to hire those it feels will best serve its needs. Surely, such a law will dissuade new companies from locating in the City of Brotherly Love and might even force existing companies to consider leaving it.

The sheer folly of turning taxpayers into venture capitalists for retail development has come into stark relief (again) with news that the Pittsburgh Mills mall in Frazer sold for $100 in foreclosure on Jan. 18.

No, that’s not a typo. It wasn’t meant to be $100 million. One hundred dollars in the correct amount of the foreclosure sale. The banking institution that foreclosed on the mall was the only bidder, which gives you an idea what the marketplace thinks of the value of this sinking/sunken enterprise.

What was touted as a “super-regional shopping mall” when in opened in 2005 never lived up to expectations. It cost $226 million to build, subsidized with $50 million in tax-increment financing.

TIFs, as they are known, use all or a portion of the expected increased tax revenue from a redeveloped site to pay for a bond or bonds that pay for infrastructure and other site improvements needed for the project to succeed.

I first sounded the dangers of TIFs at the Tribune-Review back in the 1990s. And I was roundly pooh-poohed by those who called me a “naysayer,” against any and all “progress.”

This institute long has warned of their dangers as well. Because retail is an industry with little or no multiplier effect, it’s not a very good bang for the public buck.

And as Frank Gamrat, the Allegheny Institute’s senior research associate, reminded last fall, retail tends to do nothing more than shift dollars from one part of the community to another as shoppers pursue the next new strip, outlet or mall development.

The future of the Pittsburgh Mills mall — its formal name is the Galleria at Pittsburgh Mills — remains a large question mark. It is a shell of its much ballyhooed debut.

And while published reports seem to indicate that some public officials have come to recognize the error of past TIF ways, the public must continue to be on guard against such a dubious public policy that too often ends as a pig in a poke.

A surge in table games boosted Pennsylvania’s casinos to a record year, the state says.

According to the Pennsylvania Gaming Control Board, table game receipts increased for the seventh-consecutive year in 2016, to $853 million.

Add in slots receipts (flat for the sixth-straight year) and total gambling receipts in the Keystone State last year were $3.2 billion.

It’s a phenomenal number. But do remember this: This income represents money that gamblers have lost.

Noted Richard McGarvey, a spokesman for the gaming board, the growth in table games revenue “shows that there’s still a lot of unmet demand.”

“That speaks well for the future growth of table games in this state,” he told The Morning Call of Allentown.

But, again, let’s place this in perspective: “The State” is banking on more people losing even more money.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy. (cmcnickle@alleghenyinstitute.org).

Tone deafness at Pittsburgh Public Schools (& Other Matters of Public Policy)

Good grief. Pittsburgh Public Schools are in horrendous administrative and academic disarray, according to a recent report by the Council of the Great City Schools. But how is the vice president of the school board busying herself?

By introducing a resolution that would make the district the commonwealth’s first to declare itself a “sanctuary” campus, the Post-Gazette reports. That is, the district, on its grounds, would give protection, or “sanctuary,” to illegal student aliens from federal immigration authorities.

It’s considered a symbolic move. That’s because immigration authorities already typically shy away from enforcement actions at schools. And, as the P-G notes, the state bars the district from asking about immigration status when students are enrolled.

The “sanctuary” resolution was introduced on Jan. 18 by board vice president Moira Kaleida. It would bar immigration agents from school grounds without the permission of the district’s law department or the superintendent, the P-G reports.

Kaleida says her resolution comes “out of fear” that the Trump administration would — GASP! — start enforcing immigration laws.

What an outrage. What tone deafness. And from a district just roundly panned by the Council of the Great City Schools for having failed students and taxpayers for at least the last decade, academically and administratively.

Allegheny Institute President Jake Haulk has called on the state Department of Education to consider taking over the district based on the many failings outlined in the council’s report. Kaleida’s nonsense only punctuates the need.

All that said, legislation has been introduced in Congress to strip colleges and universities of federal financial aid that declare themselves to be “sanctuary campuses.”

The Pennsylvania Legislature should consider companion legislation for public schools in the commonwealth also attempting to thumb their noses at the rule of law. Pittsburgh Public Schools should be at the top of the list.

The New York Times editorialized that Oklahoma Attorney General Scott Pruitt should be rejected as the next head of the U.S. Environmental Protection Agency. “(He) has built his career attacking the very agency he would run,” The Times laments.

Well, if any agency needs to be “attacked,” it’s this rogue agency that repeatedly has exceeded its legal warrant, as prescribed (and proscribed) by Congress.

Of course, there should be environmental regulations. But the federal EPA for far too long has had a nasty habit of making its own rules out of whole cloth. The rule of law has been nothing more than an annoying bump in the road to environmental tyranny for the EPA. It must stop.

It’s more than a bit disconcerting to think that more than a few conservatives are having a difficult time understanding how the new president’s call for “insurance for everybody” does not involve what would be a disastrous single-payer system.

Cue the tutorial for “market economics.” But it appears Keith Rothfus won’t need it. The Western Pennsylvania congressman tells the Post-Gazette that ObamaCare must be replaced with a model featuring more choice and flexibility — and more competition. Good for him. And good for his constituents.

Despite what all those command, single-payer and government economists shout, it’s the competitive marketplace model that will lower costs.

Speaking of competition, Pennsylvania’s 1,200 beer distributors now can sell six-packs, growlers and single 32-ounce bottles.

Some had complained that the move to allow beer sales outside the distributorship system — think grocery and convenience stores — had put them at a competitive disadvantage (never mind their long monopoly on beer sales by the case and keg).

Now the playing field is being leveled. Or perhaps the better term is “re-leveled.”

There are media reports of distributors beefing up their physical plants — with new display racks and coolers, among other things — to better serve their customers and to attempt to regain, keep or better their market share.

This is how it should be in a market economy.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).