I have no idea what kind of corporate citizen Alcoa is, or how it ranks compared to its competitors in employee safety or protection of public health. But my guess is, aluminum smelting is a pretty messy business that is also pretty strictly regulated (at least over the past 40 years, when we started paying a lot more attention to those matters).
Meantime, North Carolina remains home to a lot of other environmentally suspect and safety-challenged industrial practices, including hog and chicken farming, pork and poultry processing, and (to a lesser degree as time goes by) textile manufacturing.
I'm not defending the corporate practices of any of these industries, either.
It just seems to me, after witnessing a year's worth of complaints about Alcoa's safety practices -- as many of the same characters gripe about the company's decision to close its smelting operations in Stanly County — that if, by some bizarre set of circumstances, Alcoa were to announce that it planned to reopen its smelter in Badin and restore the 900 to 1,000 jobs that were lost about a decade ago, that a lot of the folks who are most incensed about Alcoa's corporate citizenship would tell the Yadkin Riverkeeper and the other environmentalists who are want to run Alcoa out of town on a rail to pound sand.
In a bit of fast action, State Sen. Fletcher Hartsell, R-Cabarrus, pulled the provision in House Bill 1973 (Section 8) establishing the Yadkin River Trust and replaced it with a Uwharrie Regional Resources Act that's somewhat similar to the Mountain Resources Commission that became law last year ... with a few notable exceptions. (PDF of amendment here.)
The big ones: Unlike the Mountain Resources Commission, the Uwharrie Commission could "exercise the powers of a body corporate, including the power to sue and be sued, own or lease property, and adopt and use a common seal and alter the same." It also could "enter into contracts and execute all instruments necessary or appropriate to achies the purposes of the Commission."
It also sets up a "Uwharrie Regional Resources Fund" that could accept appropriations from taxpayers, along with grants or donations.
The commission's powers aren't quite as expansive as those of the trust. As far as I can tell (I'm no lawyer), it would not have eminent domain authority. But it's a close call. And a future session of the General Assembly could grant it even greater powers.
What Hartsell's amendment does is set up a skeleton operation that could become a vehicle for an eventual takeover of the dams and adjacent property owned by Alcoa for the better part of a century.
The amendment passed the Senate 45-2, the wider economic incentives bill by a similar margin.
So the takeover is not quite dead. The question is, will the state House, which rejected the Yadkin River Trust by a 66-39 vote in last year's long session, kill it this time for sure?
Finally, has UNC-TV squandered any editorial independence it may have claimed for nothing?
Republican candidate Wesley Meredith is leading Tony Rand's replacement in the state Senate 42-38 percent, according to a new Civitas poll.
Margaret Dickson, a former House member, was appointed in January to complete Rand's term after he resigned. The district compromises Bladen and Cumberland counties.
The poll found good numbers for Meredith among "most likely" voters in November:
Support for Meredith increases to 49 percent of voters polled, who are most likely to vote in November, while 35 percent of likely voters said they would vote for Dickson. Additionally, 44 percent of Independent voters said they would vote for Meredith, while 17 percent said they would likely cast their vote for Dickson.
“Unaffiliated voters are trending toward voting Republican this year,” said Civitas Institute Senior Legislative Analyst Chris Hayes. “Meredith benefits and can win if this trend continues through Election Day.”
This is the final week of the 2010 legislative short session, so get ready for crazy stuff to happen!
Issues that we are closely watching are: video sweepstakes ban, taxpayer funded campaigns, ethics reform, Alcoa licensing takeover, collecting DNA samples upon arrest, charter schools, economic incentives, and of course those things that just pop up.
Municipal bonds could face more scrutiny and higher interest rates as fears mount that local governments have spent themselves into a corner. The concern is especially great for "parts of California, as well as towns and cities in Illinois, Michigan and New York state" where local governments may seek bankruptcy protection from "onerous labor contracts and pension obligations."
Particularly troubling for North Carolina local governments is the higher interest demanded by investors in Build America Bonds.
Writing in the Wall Street Journal, George Melloan explores the consequences of the Fed's policy of keeping interest rates very low in this article.
Here's the big trade-off: the Fed feeds big government and harms middle-class savers. The governmental leviathan engorges itself, but tough for prudent savers and investors.
Like trying to sustain a drug high indefinitely, this policy is both harmful and unsustainable. Naturally, Beloved Leader Obama likes it.
For years, outside observers have had no way of judging the quality of North Carolina public schools' end-of-grade and end-of-course tests.
Now that the 2009 tests have been available for public review, a new John Locke Foundation survey of North Carolina college faculty members raises questions about the quality of economics and history test questions.
Terry Stoops explains the issue here and in the video clip below.
CQPolitics.com has a terrific story on Harold Johnson's hopes of unseating U.S. Rep. Larry Kissell in North Carolina's 8th Congressional District.
The story lends a couple grafs to an idea explored by Carolina Journal in June — the impact of centrist Democrats' votes for Nancy Pelosi as House Speaker:
[W]hile Democrats say Kissell’s voting record will play well in his battleground district, Republicans are convinced there’s one vote in particular that will prove to be Kissell’s undoing: his vote to elect Nancy Pelosi as Speaker.
“The message is very clear,” Johnson said. “If you’re happy with the direction of the country right now, if you’re happy with Nancy Pelosi as Speaker, vote for Larry.”
Today's WSJ has an excellent piece on "The Government Pay Bonus."
Government employees tend to be paid more than are comparable private sector workers, but that's not the whole story. Many of them are paid well for doing things that shouldn't be done at all. The bureaucrats in the Department of Education don't educate; if anything, the regulations they enforce get in the way of more effective education.
The great libertarian writer Frank Chodorov said during the McCarthy era, "If you're worried about communists in government jobs, get rid of the government jobs." I'd update that to, "If you're worried about overpaid workers in government jobs, get rid of the government jobs."
While Illinois continues to delay payment on $4.5 billion of bills and New York Gov. David Paterson works his way through 6,900 vetoes of spending measures, the cost of stimulus money is getting clearer.
E.J. McMahon writes that New York has a structural deficit equal to "15 percent of state-funded expenditures" thanks in part to federal stimulus rules that increased spending.
Universities claim that they are paying more administrative cost for the federal bailout research grants they received.
OK, I don't know if that's true, but he's got to be impressed seeing his policies implemented right here in North Carolina.
North Carolina legislators (from both parties) and led by Republican Senator Fletcher Hartsell are taking unprecedented steps to undermine property rights.
The push to seize the Alcoa dam isn't just any ordinary eminent domain issue. In fact, it is a mistake to think of it as simply an eminent domain issue.
Hartsell and other legislators want to seize the dam so that the state can run the dam for itself. This is called nationalization of industry, something Chavez have recently done (as I discussed here). NC would be using the same tactics as the socialist Hugo Chavez.
From the Venezuala Information Office regarding Chavez's nationalization plan:
Though often mischaracterized as a government expropriation campaign, Venezuela’s nationalization plan involves due respect for property and investor rights. According to a Houston Chronicle article, "Chavez… is not nationalizing the entire economy without compensation to companies… but rather is buying back a few key strategic utilities such as the CANTV telecommunications company or taking a majority government share in four heavy oil projects in the eastern Orinoco River basin…[Chavez] insisted Venezuela does not plan to copy the Soviet or Cuban model of complete state dominance of the economy. "
It therefore is important to clarify that this Alcoa takeover is not like Cuba or the Soviet model of complete state domination--nor is it expropriation. There's a real respect for property rights! BTW: I wonder if we can call Chavez a socialist since he isn't fully in favor of state control of every industry.
Here's what Hartsell said regarding the need to seize control of the dam for the state:
"I think it's important for us as North Carolinians to be able to
control our water, clean up our environment and encourage appropriate
economic development in the area," said Sen. Fletcher Hartsell,
R-Cabarrus. "The dams are going to be run, but the first thing they're
going to be run for is for the people of this state."
I don't want to give all the credit to Chavez for showing that government should takeover utilities--there are others besides Chavez and many in the NC legislature that believe in nationalization. There also is Socialist Bolivia that was nationalizing its hydroelectric dams.
There certainly is recent precedent for nationalization of industries, and specifically utilities. From Caracas to La Paz to Raleigh, nationalization of industries is on the march.
As is so often the case, the editorial page of The Wall Street Journal exposes what liberal duplicity hath wrought. This time it’s the Senate Judiciary Committee’s contingent of Democrats who used the Elena Kagan confirmation hearings to harangue the Roberts Court as wildly right of center. That’s hardly the case.
Yes, the Citizens United (corporate campaign donations) and McDonald (gun rights) cases are controversial, but such examples haven’t dominated the high court’s agenda. As the WSJ argues:
[T]he Roberts Court is really a centrist Court that swings left and right depending on the subject. It also routinely decides cases on narrow grounds that pull a larger majority. In the 2006 term, some 70% of the Court's cases were decided unanimously, and this term saw 56% of the cases decided either unanimously or by an 8-1 margin. While that number has ebbed and flowed depending on the term, there's no question Justice Roberts has proven to be a pragmatic jurist who is wary of overturning precedents without ample legal and historical justification.
On property rights this term, the Court ruled 8-0 against property owners in a case called Stop the Beach Renourishment v. Florida. On antitrust law, it ruled unanimously against the National Football League in a case that would have significantly loosened antitrust restrictions. In one of the term's final decisions, Justice Roberts himself voted with the Court’s liberal bloc in a case that ruled out life sentences for juvenile criminals in non-murder cases.
Kagan, wisely, refused to enter the partisan fray by criticizing the court. It wouldn’t have been political suicide if she had, because Democrats will vote for her regardless, but it would have made the case against her that much more compelling for Republicans. That’s why Kagan didn’t go there.
Here’s the rub, though. Democrats are very uncomfortable with a court that isn’t solidly left leaning, because anything else puts their social agenda, won primarily over the decades by judicial fiat, at risk. Indeed, the lion’s share of liberals’ domestic agenda is reliant on friendly judges in the court system. It’s the principal reason they’re whining about the Roberts Court.
Joel Kotkin, one of the nation’s leading urbanologists, hits a home run in today’s WSJ (subscription required). He has bad news for all of Raleigh’s downtown boosters: The vast majority of Americans don’t want to live there. Instead, they want to live in the suburbs in a single-family home with a yard and travel around the urban area in their private vehicles.
Even the most rabid supporters of downtown urban living at Smart Growth America find that only 13 percent of the people want to live in an urban environment. And the condo market has taken a bigger hit in the housing bubble than single-family homes in Miami, Las Vegas and even in LA where single-family homes have rebounded 10 percent, but downtown condos have lost 18 percent of their value. Witness the empty condos in downtown Raleigh and the recent bankruptcy of The Hue condos on Dawson Street.
But these and other facts presented by Kotkin will not deter Mayor Meeker, City Planning Director Silver and most of the City Council members. They know what is best for us and are not timid about using governmental force and the taxpayer’s money to implement their plans to "save" downtown.
They are about to approve draconian land use ordinances that will implement Raleigh Comprehensive Plan. These ordinances will use zoning to force more “compact development” (read: high density housing that about 80 percent of the people don’t want.) not only downtown but in several designated areas throughout Raleigh. See A Planners’ Glossary for full explanation of the Orwellian terms used by planners to hide their real agenda.
Kotkin concludes:
The condo bust should provide a cautionary tale for developers, planners and the urban political class, particularly those political “progressives” who favor using regulatory and fiscal tools to promote urban densification. It is simply delusional to try forcing a market beyond proven demand. (emphasis added)
Among the latest batch of opinions from the N.C. Court of Appeals:
A unanimous three-judge panel reversed a lower-court ruling and will allow two Yancey County residents to pursue a suit linked to their ejection from seats on the county's Department of Social Services board of directors.
A three-judge panel has dismissed an appeal that attempted to toss a defamation suit from a former Haywood County Council on Aging executive director who was fired and charged in 2006 with embezzlement. After the charges were dropped, the former executive director filed suit against members of the council's board of directors. The appellate ruling allows that suit to move forward.
A unanimous three-judge panel has affirmed the Department of Health and Human Services' final ruling in a complicated certificate-of-need dispute involving an Asheville oncology treatment center.
A unanimous three-judge panel affirmed a trial-court ruling allowing Wrightsville Beach to block Four Seasons Management from building a four-story parking deck at its hotel without amending its conditional-use permit.
A unanimous three-judge panel affirmed a lower-court ruling favoring the state in a dispute over more than $50,000 in Medicaid bills for a Guilford County woman who died in 2004.
The Senate Judiciary II Committee promised fireworks in a hearing today. Instead, we got a dud.
Chairman Fletcher Hartsell, R-Cabarrus, with the unanimous support of the committee, subpoenaed materials from UNC-TV for several news segments it was preparing to air on its "North Carolina Now" program on the debate surrounding Alcoa's hydroelectric dams in central North Carolina and a bill in the General Assembly that would allow the state to seize the dams. The plan was to air footage at a 9 a.m. hearing.
You can read about the controversy involving the subpoenas here, and Carolina Journal's full coverage of the Alcoa story here.
The hearing room was packed. A separate bill was discussed and approved, and then Hartsell announced a 7-minute recess. Which quickly stretched to 15. And then, Hartsell said that we would not see the video right away because, even though UNC-TV had voluntarily turned over 13 DVDs worth of materials (or possibly 13 hours worth of materials), and reporter Eszter Vadja had provided a single, edited disc containing the footage for broadcast, the committee didn't have the technical ability to show the footage. (Note to the General Assembly: Betamax lost the format wars long ago.)
So we'll be back this afternoon, 15 minutes after the Senate session ends, to try it all again. I hear Best Buy has great prices on DVD players.
For all you tweeps, I'll be tweeting the action, as it were. Follow me @Deregulator.
A Republican-aligned polling firm gives a 16-percentage point lead to state Rep. Lorene Coates, D-Rowan, over her Republican foe Harry Warren. The poll is significant because Coates' district, House 77, is in the "swing" category this year.
Analysis from Carolina Strategy Group:
While the initial ballot looks encouraging for Rep. Coates, political observers should expect this race to tighten as the year progresses. The strength of Coates’s support can be found among self-described liberal and moderate voters. She leads Warren by a margin of 78 percent to 9 percent among liberals and 59 percent to 18 percent among moderates.
These numbers flip among conservative voters. Warren outpaces Coates by a margin of 63 percent to 23 percent. Overall, 39 percent of voters described themselves as conservatives, 34 percent said they were moderates and 20 percent said they were liberals.
For Carolina Journal's coverage of the House 77 Republican primary, click here.
OK, not exactly. But this is the second time a candidate for state office has withdrawn in the last week, after Annette Carter jumped ship in state Senate District 43.
The Person County Courtier-Times reports that Republican Larry Yarborough has dropped out of the House District 55 race against incumbent Democrat Rep. W.A. "Winkie" Wilkins.
That leaves no GOP challenger in the district. Maybe Yarborough saw the writing on the wall, as the district is strongly Democrat (it went for Obama, Hagan, and Perdue by nearly 60 percent margins in 2008). Even more, Wilkins has run opposed there his last two re-election outings.
Kyle Trygstad at RealClearPolitics.com writes that N.C.'s 8th Congressional District match is one to watch.
U.S. Rep. Bob Etheridge's opponent, Renee Ellmers, said she felt “pity” for the 2nd Congressional District Democrat after a video of him manhandling a student emerged.
The Washington Posthighlights a Harold Johnson video ripping Nancy Pelosi. Johnson is the Republican candidate in the 8th Congressional District against incumbent Democrat Larry Kissell.
Speaking of the Kissell-Johnson match-up, it's getting more national attention, this time from TownHall.com.
Eager for a rematch? A Civitas poll shows 2008 GOP gubernatorial candidate Pat McCrory leading Gov. Bev Perdue 46-37 percent if the election were held today. McCrory lost to Perdue 50-47 percent in ’08.
Another Civitas poll finds similar standing for Richard Burr and Kay Hagan in voters' minds. There's a big difference, though: Burr is up for election this year. Hagan isn't.
Almost one-fourth of registered voters in North Carolina are now unaffiliated.
Former Steve Henion foe Brian Tinga joins his debate preparation team. Henion is the GOP nominee to face Democrat Grier Martin in N.C. House District 34.
Thomas Sowell uses the often repeated football routine from Peanuts to explain the Democrats strategy on the debt. He casts the Democrats as Lucy and the Republicans as the sucker Charlie Brown.
There is a similar routine that has been repeated many times in
Washington, over the years, with the Democrats playing Lucy and
Republicans playing Charlie Brown.
It goes like this: Democrats
start spending money wildly, handing out goodies to a wide range of
people who they want to vote for them, while Republicans complain about
deficits and the national debt. Then, when the public becomes alarmed
about the debts that are piling up, the Democrats get the Republicans
to vote for higher taxes to deal with the debt crisis, in the name of
"fiscal responsibility."
Sometimes the deal is sweetened by the
Democrats promising to make spending cuts if the Republicans vote for
higher taxes, so that there can be one of those "bipartisan" solutions
so beloved by the media. But, after the Republicans vote for the tax
increases, and come running up to find the spending cuts, the Democrats
snatch away the spending cuts and the Republicans fall right on their
backsides, just like Charlie Brown.
Nicole Gelinas is a senior fellow with the Manhattan Institute, which promotes ideas “that foster greater economic choice and individual responsibility.”
But statists have no reason to cheer Gelinas’ recommendations. While many fans of free-market mechanisms might differ with Gelinas’ specific policy prescriptions, most are likely to agree with the conclusions offered on the main text’s final page:
Despite elite concerns about a public backlash against capitalism, it has been the public, not Wall Street or Washington, that has supported capitalism all along. Financiers were disconcertingly quick to run straight into the government’s arms, while the public has stuck up for markets and fought against taxpayer subsidy of failure. The hope for free markets is “political constraint,” says former St. Louis Fed president William Poole.
The public intuitively grasps unfairness when it sees it. In poll after poll, citizens have opposed bailout after bailout, not just for the banks but for their own neighbors. The opposition is not a reflection of heartless and mindless populism. Oridnary people understand that bailouts have perversely punished individuals and companies that acted responsibly, creating an incentive to act irresponsibly in the future. They can perceive the difference between a government that acts as an honest, transparent refereee of competitors and one that acts as a guarantor of perceived favorites.
What does Gelinas think of Barney Frank and Chris Dodd’s efforts to reform the financial industry? Not much.
What happens when government goes too far in protecting workers from changes in the market economy? Ask Spain.
The Polos are a typical Spanish family — unfortunately for them and for the European economy. Jesús, 59, has worked as an accountant at an electrical-parts supplier for 20 years. His job is protected by the extensive rights awarded to the Spanish permanent employee. By his estimate, his employer would have to shell out as much as $120,000 in mandated severance payments to lay him off, a prohibitive expense that likely gives him a job for life. Jesús' daughter Maria, 28, works for a Madrid hotel chain, on a series of temporary contracts, some of which have lasted as few as six days. When each one expires, she can be sent off with next to nothing. Maria says her employer has told her outright that it would be too costly to offer her a contract similar to her father’s.
As the TIMEarticle containing that passage suggests, employers unable to adjust their work forces to market changes are less likely to add employees.
Those pushing for increased unionization in the American economy might want to keep this example in mind.
You’ve read in Carolina Journal that some North Carolina lawmakers want government to have an even greater role in determining what kids can eat at school.
It probably won’t surprise you to read a new TIMEarticle detailing the interest legislatures across the country have in taxing soda.
The average American drinks a gal lon of soda a week, which delivers roughly 1,000 calories and no nutrition. The average American is also overweight or obese. Could changing one of those things help change the other?
A growing number of elected officials think so, which accounts for a spate of proposed new taxes on soda as a way to discourage consumption while at the same time raising money to fund other obesity-fighting initiatives.
Left unexplored? Debate about why government has any business caring about whether people are overweight or obese.
Also untouched is the soda tax advocates’ argument that revenue raised from the new tax would help fight obesity. As we know, raising new revenue always allows government to pay for its next-lowest priority — not for its highest priorities.
After learning about Alberto Alesina, it was disappointing to read James Warren’s piece in Bloomberg Business Week extolling the virtues of federal stimulus spending.
Rich DeNormandie is the fifth generation of his family to run a South Side Chicago commercial laundry—and the first to take a government handout. Since April he's used federal stimulus funds to hire six workers at $10 an hour each, even though business from key restaurant and hotel clients is down. He doesn't follow politics closely and didn't vote in the 2008 Presidential election. When money was offered via the state's "Put Illinois to Work" program, he felt hiring the six unemployed women was the right thing to do. "I got some new faces in here and introduced them to the business," says DeNormandie amid the drone of industrial washer-dryers and folding machines. "If the economy comes back, two or three may stay for good."
Note that Warren makes no mention of the fact that DeNormandie was able to “do the right thing” only because government took money away from the private sector for use in the stimulus package.
In other words, while DeNormandie was able to hire six unemployed workers for jobs that might not be necessary (especially if only two or three of them “may stay for good”), the government prevented money from flowing through free-market processes to the business ventures where it would have done the most economic good.
Roy Cordato has explained for us the problem with stimulus spending.
The latest Bloomberg Business Week offers some encouraging news from — of all places — Europe:
Alberto Alesina is a new favorite of fiscal hawks like former President George W. Bush's chief economic adviser, N. Gregory Mankiw. A professor of economics at Harvard University, the 53-year-old Italian disputes the need for more government spending to prop up growth and advocates spending cuts instead.
This is Alesina's hour. In April in Madrid, he told the European Union's economic and finance ministers that "large, credible, and decisive" spending cuts to reduce budget deficits have frequently been followed by economic growth. He backed his proposal with historical research on rich countries' experiences since 1980. Later, at the Group of 20 summit in Toronto on June 26-27, the presidents and prime ministers of the advanced economies agreed to shrink their budget gaps by half or more by 2013.
The problem is government overspending? It seems as if I’ve read that somewhere before.
The latest Carolina Journal Online exclusive features Sarah Okeson's report on the rising number of six-figure government pension payouts in North Carolina.
John Hood's Daily Journal focuses on the biases that lead to economic illiteracy.
