School Choice Can Create Jobs for South Carolina
The first lesson of Campaigning 101 is that during an economic downturn you talk about jobs. Everything a politician does during a bad economy is apparently to create jobs. Thus, in the name of job creation, we’ve seen an $800 billion dollar federal stimulus package that has debased the dollar, saddled our children with debt, and funneled billions in pork to special-interest groups – all in the name of job creation.
Except the government can’t create jobs and isn’t even very good at pretending to do so. As the French economist Frederic Bastiat argues in a famous essay, everything the government does comes with a price. Bastiat would thus compare government job creation efforts to breaking perfectly good windows for the sake of giving work to the window industry. In other words, Cash for Clunkers.
The government can’t create jobs because, government, by definition, is not a productive enterprise. At best, government exists to facilitate and protect its citizens who themselves should engage in productive enterprises. Thus government should be about the business of sustaining those institutions necessary for people to become prosperous. These include providing for the national defense, discouraging crime and enforcing contracts.
It is important to recognize, however, that even these limited functions of government have a cost. And economists have identified this cost as somewhere between $1.60 and $1.82 in lost economic productivity for each tax dollar collected. All this is to say that every job the government claims to create actually leads to more private sector job loss.
There is one policy, though, that state leaders could implement that would create jobs in South Carolina – especially in struggling rural counties. That reform is school choice.
Before your eyes glaze over, check out this new report from the Policy Council on how school choice can create jobs in the counties of Clarendon, Hampton, Lee, Marlboro and Williamsburg. Jobs created, not by the government, but by young, homegrown entrepreneurs.
The real news here is not how school choice can improve student performance or save the state money, but that school choice changes lives by creating a culture where innovation and self-reliance thrives. As the report concludes, drawing upon the work of economists Russell Sobel and Kerry King:
School choice programs create an atmosphere of competition, innovation, and risk-taking within the administrative infrastructure of schools. These are also precisely the qualities that must be embraced and learned by individuals wanting to become entrepreneurs. Our hypothesis is that the entrepreneurial environment created within schools by school choice programs fosters a sense of competition and innovation among the administrators and teachers in the school that is infectious, being witnessed and copied by their students in their own personal lives.
School choice, in other words, is a key component of the free market revolution underway as reflected in the Tea Party movement as well as the Policy Council’s new Unleashing Capitalism campaign. The message: we need to change the culture – and education reform is the key to doing that.
Fuzzy Math Fuels Skepticism of Stimulus Spending
Increasingly, editorials and news reports are calling into question not only the accuracy of the federal government’s stimulus spending and jobs allegedly created, but the fundamental wisdom of massive government spending, instead of reducing the tax burden on individuals and businesses to fuel economic growth.
“As the nation looks at the prospect of continued high unemployment despite a modest economic recovery, some economic policy choices made by President Obama and senior congressional Democrats at the beginning of the year have become apparent political traps,” said the Post & Courier in a November 23 editorial. “Among these was the decision to emphasize government spending over tax cuts in the fiscal stimulus bill and to call it a ‘jobs bill’ to ‘create or save’ 3.5 million jobs.”
A November 22 story in The Herald reports that a debate “over phantom congressional districts and the number of jobs created by the $787 billion economic-stimulus plan… is raging across South Carolina among private-sector recipients of stimulus money and among state government officials tracking the funds and their impact.”
The Herald reported that, as South Carolina unemployment reached 12.1 percent, South Carolina Comptroller General Richard Eckstrom said “the true number of stimulus-related jobs in South Carolina is likely half the number claimed by Obama.” Even boasts by South Carolina politicians about saving teachers’ jobs is “demagoguery,” Eckstrom charged in an article in The State. “We’re not going to fire teachers,” he said. “We never have, at least not in my lifetime.”
Although the Obama administration has changed the recovery.gov Web site so that it no longer lists nonexistent congressional districts, the embarrassment and damaged credibility continue. In ZIP code 29211, for example, recovery.gov reports stimulus spending of more than $640 million, and zero jobs created. In downtown Columbia, ZIP code 29201, the government says it created 5,186.7 jobs with just under $400 million in stimulus spending.
“Accurate reporting on the jobs bill’s impact may not be possible,” said the Post & Courier, adding that “controversy over stimulus jobs undermines the expectation that government can lead a way out of the ‘jobless recovery’ by spending more.”
If aggregate numbers for both for spending and job creation are unreliable and inflated, at least you can drill down to see specific example of what your tax dollars, by way of stimulus money, are buying.
Visit Stimulus Watch 2.0 to find and rate stimulus projects in your area. Here are a few examples, according to the most recent data available from Stimulus Watch:
- The South Carolina Research Foundation received $264,491 for research on “Damped and Sub-damped Lyman-alpha Absorbers: What Are They, and What Do They Tell Us About Galaxy Evolution?” Jobs created: 1. (The South Carolina Research Foundation has received more than $15 million in stimulus dollars for research funding.)
- Aiken has received the most stimulus money, more than $1.634 billion, most of which will be spent to decommission two nuclear reactors at the Savannah River site.
- In Rock Hill, $399,195 for salary increases and longer hours for Head Start employees. Job creation: none.
- When in doubt, pave. Statewide, $440,991,384 has been funneled to the Department of Transportation for road resurfacing, vehicles, maintenance, and other projects.
South Carolina has its own version of stimulus dollars: special-interest tax breaks to a few businesses in the state, while the vast majority of businesses struggle under high corporate taxes and burdensome government regulation. Research published this month by the Policy Council in Unleashing Capitalism: A Prescription for Economic Growth and Prosperity in South Carolina, shows how dramatic growth in government and corresponding decline in free market forces have stalled economic growth in the state, increased unemployment, and made South Carolina one of the poorest states in the nation.
South Carolina’s bloated tax-and-spend government, like the federal stimulus dollars that are fueling even more government control over state and federal economies, stifles the economic freedom necessary for meaningful, long-term economic growth.
It’s not economic theory; it’s a drain on all citizens of South Carolina that’s playing out every day.
What’s Happening in SC on Monday, 11/23
Local Government
Spartanburg County to spend more than $80,000 for tourism consultants
Newspaper demands more fiscal accountability in Oconee County
http://www.upstatetoday.com/news/2009/nov/21/more-fiscal-accountability-needed/?opinion
Many Charleston County students are far behind in reading when they enter high school
http://www.postandcourier.com/news/2009/nov/22/some-likely-graduates-lack-reading-skills/
Federal Stimulus Watch
Stimulus funds used to hire reading specialists in Charleston schools
http://www.postandcourier.com/news/2009/nov/23/specialists-work-to-raise-reading-skills/
Simpsonville builds new walkway on Main Street with stimulus funds
Fountain Inn receives $21,000 in stimulus funds to hire traffic officer
Family Health Centers Inc. in Orangeburg will fund new building and equipment with $1.18 million in stimulus funds
http://www.thetandd.com/articles/2009/11/23/news/doc4b073e745fca8388876272.txt
Stimulus money provides key funding for Sandy Island ferry project
http://www.gtowntimes.com/local/Key-funding-approved-for-Sandy-Island-ferry-service
Note to Big Business: ‘Profit’ Not a Bad Word
Given the myriad benefits of capitalism – modern medicine, the automobile and personal computers to name just three – one wonders why representatives of big business continually downplay its significance.
This is particularly evident when one watches Corporate America swoon over the “green movement.”
Around the world, major corporations, particularly those in so-called dirty industries such as oil exploration and power production, are practically falling all over one another in an effort to tout their environmentally friendly activities.
Unfortunately, though, instead of being honest and admitting that profit played a role in their decision – whether through improving their bottom line or their public perception – they choose to cloak themselves in the amorphous aura of social consciousness.
Take Santee Cooper, the state-owned utility that is offering a program that allows customers to pay a small surcharge to boost renewable energy production.
According to the utility’s Web site, Santee Cooper offers “green power” to residential customers in 100 kilowatt-hour blocks, with each block costing customers an extra $3 a month.
“We do it because it’s the right thing for the environment,” Santee Cooper spokeswoman Laura Varn told The State newspaper. “The more we can use our natural resources the better for the state and the environment.”
Of course, this is the same company that spent $242 million in recent years on a proposed coal-fired plant in the Pee Dee before pulling the plug on the project in August.
One could argue that if Santee Cooper really wanted to do “the right thing for the environment” it would shut down all its coal-fired plants and rely exclusively on renewable energy. That’s not economically feasible, of course, but neither is the premise that any corporation’s actions are motivated solely by the idea that “it’s the right thing for the environment.”
If Santee Cooper is interested in benefitting Mother Nature perhaps it could offer its green power to customers at no extra cost. That’s not as fiscally impractical as shuttering coal plants, but the company has obviously decided that the surcharge is needed to remain financially healthy.
What the utility either can’t or won’t admit is that there’s nothing wrong with this strategy.
Making money by honest means isn’t a crime. Turning a profit is the reason companies such as Santee Cooper are able to employ many hundreds in high-paying jobs and provide power directly and indirectly to millions of South Carolinians. It’s also why the utility can offer renewable energy through green power programs.
Capitalism enables people to lead healthier, longer lives. It provides for increased family stability, safer neighborhoods and a better-educated populace, as the Policy Council pointed out in its recently released book Unleashing Capitalism.
The reality is bankrupt companies not only can’t offer lucrative jobs or needed services, they also can’t put forward innovative programs and technologies.
It’s just too bad so many businesses can’t own up to the fact that making money is good for all of society.
Government Stimulus Figures Still Don’t Add Up
Just days after a national uproar regarding the apparent funneling of stimulus dollars to non-existent congressional districts – news the Policy Council broke in South Carolina – the U.S. government has revised its data related to Recovery Act spending.
However, the new information raises still more questions.
For example, in the category of Jobs Created/Saved by ZIP code, Recovery.gov lists 5,186.7 jobs having been created or saved in the 29201 ZIP code (Columbia). This is correlated with $399,700,409 in stimulus funding.
By comparison, in the 29211 ZIP code (also Columbia), $640,467,845 is listed under stimulus funding, but zero jobs have been created or saved in that area, according to Recovery.gov.
In fact, more than 90 South Carolina ZIP codes that have stimulus money associated with them but have no jobs created or saved listed, according to the government’s Web site.
Dozens more have had fewer than 10 jobs created or saved. Among those: ZIP code 29801 (Aiken) where $191,270,648 is listed but just three jobs have been created or saved.
It’s unclear whether the government is just counting money already handed out or is also adding in money scheduled to be handed out. It’s also unclear if the job numbers being touted are for jobs already created or saved, or projected to be created or saved, said R.J. Shealy, spokesman for the South Carolina Comptroller General’s Office, which is tracking the stimulus dollars flowing through state agencies.
“The only thing that’s clear is that you can’t have faith in these job numbers,” he said.
Earlier this week, the Policy Council reported that the government claimed to have allocated $40.75 million in stimulus money and created or saved 52.4 jobs in South Carolina’s 7th, 12th, 16th, 32nd, 43rd and 45th districts, along with District 00. The problem is none of those districts exist.
Nationwide, the Franklin Center reported that $6.4 billion had been spent in 440 phantom districts.
That was followed by a series of reports nationwide on the flawed information relating to the $787 billion economic stimulus package.
Thursday, a congressional committee tried to determine whether the flawed data was the result of a propaganda effort meant to show that the Obama administration’s economic policies are working, or were they simply clerical errors?
What’s Happening in SC on Friday, 11/20
Federal Stimulus Watch
Along with phony statistics and phantom districts, stimulus funds have apparently brought death threats, abuse and corporate retaliation
http://www.aikenstandard.com/Local/1119SRS
Local Government
Move over greenbacks, Sumter Dollars are now the preferred form of currency in the community
http://www.theitem.com/article/20091120/ITNEWS01/711209953
Santee Town Council holds retreat to discuss economic development, other issues
http://www.thetandd.com/articles/2009/11/20/news/doc4b05cd91c4a18325619740.txt
Florence County Council selects architects for new museum, approves a slew of economic development measures
Education
Orangeburg Consolidated District 4 plans a two-day furlough for teachers and other employees to account for budget cuts
http://www.thetandd.com/articles/2009/11/20/news/doc4b05c7687f3ca753554932.txt
Another Bad Bill Looms: Cap and Trade
The Kerry-Boxer bill currently in the U.S. Senate calls for reductions by 2050 to 17 percent of the quantity of United States greenhouse gas emissions in 2005.
Interesting. But what does that really mean? What exactly is 17 percent of 2005 emissions levels?
Turns out that figure is about 2.4 tons of CO2 per person.
The last time the U.S. greenhouse gas emissions were 2.4 tons of CO2 per person was more than 100 years ago.
1875, to be precise.
Think of what the technology was like in 1875 to have 2.4 tons of CO2 per person. No cars. No televisions. No air conditioning. And a life expectancy of 49.
In 1875, the per capita income in the U.S. was $3,180.
Is this what Congress wants? To sacrifice all of the economic advancements of the past 125 years?
Any cap and trade tax legislation that goes through Congress will be extremely damaging to the economy.
Read here, here, and here to see how cap and trade will hurt South Carolina
What’s Happening in SC on Thursday, 11/19
SCPC in the News
SCPC Director of Research Jameson Taylor questions cities’ quest for government dollars
http://www.midlandsconnect.com/news/story.aspx?id=379272
Transparency
Post and Courier: Why did the Charleston County Council slip a vote on Boeing incentives onto its agenda at the last minute?
http://www.postandcourier.com/news/2009/nov/19/boeing-a-last-minute-council-topic/
Local Government
Town of Lexington plans to hire taxpayer-funded lobbyist
http://www.thestate.com/local/story/1034597.html
City of Columbia makes a multiyear, $1 million commitment to State Museum
http://www.thestate.com/local/story/1034589.html
Oconee County to spend up to $20,000 for a hotel feasibility study
http://www.independentmail.com/news/2009/nov/17/oconee-county-fund-hotel-feasibility-study/
Kevin Dietrich
Geoff Pallay
Jameson Taylor
Jamie Cordova
SC Policy Council
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