Here’s an encouraging observation from a Bloomberg dispatch last week:
“Natural gas futures have climbed 51 percent this year. Prices gained 6.6 cents per million British thermal units (on Dec. 15) to settle at $3.54 in New York, bolstered by cold weather that’s stoked demand and fueled speculation that a glut of shale supplies will disappear by the end of the year.”
Speaking of energy, when a small group of public school teachers asked Pennsylvania’s Public School Employees’ Retirement System (PSERS) to consider fully divesting from those fossil fuels, the terse, but spot-on, reply was this, from spokeswoman Evelyn Williams:
“Using the system’s assets to advance a policy agenda against fossil fuel investments could violate PSERS’ fiduciary duty. Historically, PSERS has taken the position that investment and divestment based on moral, political or social grounds generally violates the board’s fiduciary duty.”
“Fiduciary duty” is a concept lost on too many of today’s social re-engineers placed in positions of financial trust.
The administration of Pennsylvania Gov. Tom Wolf says it will eliminate thousands of unfilled positions in state government. That’s in response to projections of a multibillion-dollar budget gap as the fiscal year enters its second half.
While that’s encouraging news, one can only hope that such an austerity movement is not a temporary thing and that it serves as a catalyst for other badly needed reforms across the government apparatus.
One of the most enduring (and damaging) myths in modern economics thought is that government can, by fiat, set wage floors without negative consequences. But no matter the spoonfuls of sugar, and no matter how often “progressives” can convince their acolytes to beat the drums for such command economics, the fallacy cannot be whitewashed.
Perhaps the best and most accessible explanation of the proper way — the only way — for wages to be set came from great Wall Street Journal reporter Henry Hazlitt in his 1946 classic “Economics in One Lesson”:
“We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.
“The best way to raises wages … is to raise marginal labor productivity. This can be done by many methods: by an increase in capital accumulation — i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of the employers; by more industriousness and efficiency on the part of the workers; by better education and training.
“The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers and, hence, to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees,” Hazlitt said.
Pity that so many people cannot grapple, or refuse to grapple, such a fundamental truth of economics. Worse, how tragic it is that so many people are bent on leading them astray.
Short takes:
The New York Times, in a Tuesday editorial, called for an end to the Electoral College. “This outdated institution undermines participatory democracy … ,” it lamented.
Of course, the only problem with The Times’ contention is that we are not a “participatory democracy.” We are a representative democracy, which, of course, is what the Electoral College represents.
In another Tuesday editorial, the Pittsburgh Post-Gazette pans a new Ohio law that lifts a ban on carrying concealed weapons on college campuses. (However, individual institutions can implement a ban if they so choose.)
“No college that cares for the safety of students should allow a proliferation of guns on campus,” the newspaper opines.
But as a matter of public policy, “gun-free” zones have proven to be a murderous failure time and time again. No college that cares for the safety of students should allow them to be sitting ducks for would-be killers handed a road map to shooting galleries.
Some members of the Pittsburgh Public Schools board are upset that the board has had little input when it comes to development projects that receive tax-increment financing (better known as a TIF).
Indeed, the board must vote to authorize participation in TIFs, in which taxes generated by the new development are used, ideally, to pay for public infrastructure for which these projects create a demand. The district’s portion of the TIF invariably is the largest share of the subsidy. But some board members complain they have little say in the selection process.
Which brings us to an interesting quote from Kevin Acklin, the chief of staff to Pittsburgh Mayor Bill Peduto who also serves as the chairman of the Urban Redevelopment Authority of Pittsburgh (which should be considered a gross conflict of interest, by the way).
In announcing that the URA would meet with the school board before a second vote is taken on a TIF for a Strip District redevelopment project,
Acklin said (as reported in the PG):
“We have tools at our disposal to … promote the right kind of development — not like the old days to just saddle development and put money in developers’ pockets.”
Indeed, some development is more appropriate for TIF use than others. To wit, redeveloping a brownfield site is an appropriate use. Using tax-increment financing for retail typically is not.
But Acklin’s statement points to the continuing hubris of government officials who believe they can command the marketplace. They most often are slapped by a marketplace that shows it is in command.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org
