Today, the Bluegrass Institute partnered with the Mercatus Center at George Mason University for the second time in as many years to host its Citizen Education Seminar. The event took place at the spacious Crowne Plaza Hotel where both Bluegrass Institute and Mercatus scholars discussed some of the most pertinent issues facing Kentucky today.
Speakers at the event included Mercatus’ distinguished visiting scholar, Maurice P. McTigue, their senior research fellow, Matthew Mitchell, as well as the chair of the Bluegrass Institute’s Board of Scholars, John Garen, Ph.D., an economics professor at the University of Kentucky.
Garen’s talk was especially timely as Kentucky now faces a cross-roads in its efforts to recover from financial instability, due to a $34 billion pension crisis. According to Garen, there are two routes Kentucky can take in an attempt to attain real economic recovery and competitiveness with its neighboring states: focus on productivity, or focus on making Kentuckians – and the commonwealth itself – increasingly dependent on bigger government.
As Garen notes, becoming more competitive with our neighboring states is a hugely important issue for Kentucky. In almost any relevant category one can think of – levels of education, health, GDP per capita, or even transfer payments – Kentucky only outranks West Virginia. Kentuckians expect and deserve more.
The feds are not much help here as they’ve lured Kentucky into what Garen described as a “dependency trap.” As the feds continue to offer services to Kentucky – and every other state in the nation – for far less than Kentuckians could purchase them otherwise, denizens of the commonwealth rush to consume them. The only problem is that the feds are doing the same thing for each and every other state in the union, and Kentuckyians are paying for that too.
The end result of this trap, according to Garen, is that we’re “flushing ourselves right down the toilet.”
All speakers focused on the same message: economic recovery is not attained by states out-lobbying each other, but by increasing productivity – a true positive sum-game.
As legendary economist F.A. Hayek famously wrote,
“The economic problem of society is thus not merely a problem of how to allocate ‘given’ resources—if ‘given’ is taken to mean given to a single mind which deliberately solves the problem set by these ‘data.’ It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know.”
And that’s the key to Kentucky’s economic recovery.
Stay tuned as the Bluegrass Institute will soon post exclusive video of the event.