Bluegrass Beacon – Government broadband: Money pit or silver bullet?

BluegrassBeaconLogoThe City of Pikeville recently raised its restaurant tax by a full percentage point just to finance a government-owned broadband network.

If history is any guide – and it usually is – this tax increase won’t be the only one city officials will claim they need to keep a municipal broadband network functioning.

While local politicians keep trying to find ways to add to taxpayers’ tabs, they will never be able to raise taxes fast – or high – enough to pay for such pork-laden boondoggles.

Just ask taxpayers in the 11 cities in Utah which in 2002 got together to build a $500 million regional broadband system called (no joke) UTOPIA.

Here we are, 15 years later and the network still isn’t complete, has barely a quarter of the subscribers it promised to attract and runs a multimillion-dollar deficit annually.

UTOPIA cities trying to make government-owned broadband work have turned more tricks than Houdini attempting an underwater escape, including raising property taxes and increasing utility fees to cover yearly shortfalls.

It hasn’t worked.

Now, local officials are stuck with the failing network after unsuccessful attempts to sell it.

Other cities, including Marietta, Georgia, Provo, Utah, and Groton, Connecticut, managed to shimmy their way out of failing municipal-network deals but lost millions of dollars in the process.

Still, getting out was a wise move – even at a loss.

If you remember the 1986 movie “The Money Pit,” you know what I’m talking about when I claim that government-owned broadband networks would make Tom Hanks and Shelley Long cry, too.

Revenues are rarely enough to cover these projects’ operating costs; fiber networks require constant upkeep and upgrades to stay on the cutting edge and attractive to subscribers.

Like Pikeville, the cities of Marietta, Provo and Groton counted on municipal broadband to bring new jobs and investment to town.

However, studies from New York Law School’s Advanced Communications Law and Policy Institute, George Mason University’s Mercatus Center and Phoenix Center for Advanced Legal and Economic Public Policy Studies all conclude: at best, these networks are a wash economically.

Not only is there no conclusive evidence that such municipal networks reduce unemployment rates or attract new business, but they actually deter investment by telecommunications companies forced to compete on such an unlevel – and thus unfair – playing field.

No firm in its right mind wants to compete with a municipal network with government benefactors standing by to raise taxes to bail it out during tough times, which is what Pikeville residents will be asked to do when its project can’t make ends meet.

The bills will keep increasing; a higher restaurant tax now, increased utility fees – like what was proposed to pay for Utah’s UTOPIA – later.

Advocates who want this municipal system cite Chattanooga, Tennessee’s government network as an example Pikeville should emulate.

Experts from the New York law school mentioned above took an in-depth look at Chattanooga’s network and admitted the system is making some money but only because of a unique set of factors that cities like Pikeville can’t even come close to replicating.

Chief among them is that the federal government supplied more than $100 million from the 2009 stimulus scheme to finance that city’s system, which was more than twice the city’s entire fiscal 2016 budget.

And $100 million was just the federal government’s share of the network’s $390 million price tag.

There’s no question Pikeville and all of eastern Kentucky struggle to attract new businesses and investment.

But success in these endeavors will require innovative leadership and approaches – not shiny new toys.

There are no easy answers with this exception: municipal broadband isn’t a silver bullet.

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

 

Bluegrass Beacon: A Shakespearean take on an Amish farmer’s tragedy

BluegrassBeaconLogoTo try, or not to try, that is the question: 
Whether ‘tis nobler in the mind to suffer  
The slings and arrows of FDA noncompliance

Is this how Shakespeare might have rendered a current version of “Hamlet” were he writing in these days of out-of-control government agencies, including perhaps the most McCarthy-like of them all: the Food and Drug Administration?

In the case of Sam Girod, an Amish farmer in Bath County, the FDA suffered him not – nor the labels on his herb-rendered skin salves, for that matter.

It all started a few years ago when Girod ambitiously claimed in labeling and promotional materials that his ointments concocted with chickweed and bloodroot could cure skin cancers along with less-serious ailments.

Girod agreed to remove “skin cancer” from the label and call the product “Chickweed Healing Salve.”

The FDA wasn’t satisfied.

They now objected to “healing” in its name, so he renamed the ointment “Chickweed Salve.”

But the agency’s regulatory brutes wouldn’t be content until they made an example out of Girod.

The FDA bullied its way to a felony conviction against this simple Amish farmer who’s now staring at a possible 48-year prison sentence when he’s sentenced in June – all for such scary activity as misbranding labels and the fact that his farm was “an establishment not registered with the Food and Drug Administration” and on arbitrary charges of “impeding” a federal investigation.

I doubt Farmer Sam will be contemplating Shakespeare’s writings while finishing out his life behind bars. And it certainly doesn’t seem like the FDA, judge and prosecutors in this case will be feeling the “oppressor’s wrong” or “the insolence of office” anytime soon, as Will might have observed.

In fact, they might even be assembling a new SWAT team to save future Kentuckians from the perils of Amish farmers’ skin salves.

Plenty of avenues exist to resolve these types of cases without such harsh tactics.

Customers could have returned Farmer Sam’s products, boycotted his business or even sued him for financial damages if they believed he defrauded them.

Even the fact that Girod twice relabeled his ointment wasn’t enough to satisfy the zealotry of the FDA and a small-town court obsessed with carrying out its skin-salve witch hunt.

Wouldn’t it have been cheaper for the town just to burn poor Farmer Sam at the stake like in Shakespeare’s day?

“Aye, there’s the rub,” as Will writes in “Hamlet.”

If Sam were forced to “shuffle off his mortal coil,” what political lesson of intimidation would exist to warn other Amish farmers, raw-milk producers, farm-to-table hosts and every producer of natural remedies and herbal cures found on shelves in all sorts of establishments – from the shelves of Walmart to your local holistic grocery store?

Producers of these natural products should all prepare ultimately to feel the slap of the heavy-handed FDA enforcement regime.  

But what happens in a few years after a lifetime of “the thousand natural shocks that flesh is heir to” when the judge, his prosecutors and FDA tyrants along with their enablers – and perhaps even the jurors who took only four hours to condemn an Amish father of 12 – find themselves with an odd spot on their hand that stubbornly persists and won’t go away?

Maybe they’ll be informed by a doctor: “it’s cancer.”

They’ll try chemo; it won’t work.

Maybe they’re given a devastating sentence that the little skin spot could cost them their life.

Now they’d give anything to have access to a 100 percent natural chickweed salve produced by an Amish farmer who by then may have shuffled off his mortal coil and took his recipe – and their right to try it – with him.

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

Bluegrass Beacon: Fearmongering fails with free-market reforms

BluegrassBeaconLogoEditor’s note: Senate Bill 10, which moves forward with properly deregulating the telecommunications industry in Kentucky passed the Senate 35-1 and the House of Representatives 75-13 and awaits Gov. Matt Bevin’s signature.

The political left’s preferred pattern is to consign conservatism to the wilderness with obituaries of its much-ballyhooed demise abounding, signaling: it’s time to bury all hope of returning to the constitutional republic our founders intended.

When that doesn’t work – like when disruptors of the status quo took over the Kentucky House in November and began resurrecting ideas about returning this commonwealth to a free-market economy and the Constitution for which it stands – the preferred tactic of the left also resurrects: fearmongering.

The scaremongering was on full display throughout Betsy DeVos’ confirmation process as Education Secretary.

Senators and celebrities alike, many of whom attended – and send their own kids to – elite private schools, predicted gloom, despair and agony for public schools because DeVos wants to give all parents the same opportunity to choose a better education for primarily at-risk students that these hypocritical school-choice opponents’ rich kids enjoy.

I was reminded why I quit watching Comedy Central when I saw actress Ilana Glazer’s tweet: “It’s heinous, the school system was already so broken – this is murdering it.”

“Avengers” director Joss Whedon claimed DeVos and her supporters “declared war on our children.”

Liberal senators responded with similar vitriol. Washington Sen. Patty Murray, a Democrat, called the Michigan philanthropist’s nomination “a slap in the face.”

But America’s had charter schools for a quarter-century yet Chicken Little isn’t showing up on Public Education Street.

In fact, the best research shows that once students attend charter schools for at least three consecutive years, they usually begin to academically outperform their peers in regular public schools.

There have been no reported sightings of C.L. on other streets, either.

It wasn’t that long ago, for instance, that the rhetoric of fear could be heard clanging up and down Telecom Reform Street claiming regulatory improvements passed by the legislature in 2015 would leave vulnerable Kentuckians in rural regions without basic phone service.

“They won’t even be able to call 911,” Chicken Little clucked.

I put a call into C.L. on my new LG phone – at least where I could locate a signal – asking him to find me a single Kentuckian who lost basic phone service because of the 2015 reforms.

“Well, at the very least,” clucked C.L. Fearmonger, “they will harm, not help, Kentuckians.”

Tell that to entrepreneurs in Louisville now able to start home-based businesses or to students doing major projects online who now have access to larger and faster residential gigabit service. With increased investment, similar access will soon be coming to other parts of Kentucky.

Yet while Kentucky’s telecommunications reforms in 2015 were a good start, three years is a lifetime in technology.

The commonwealth must follow the example of every other southern state by fully updating its telecom regulations.

Otherwise, we will continue losing out on very large investments by telecommunications companies less interested than ever in diverting resources toward maintaining old technology to satisfy rotary-dial regulations instead of building advanced, next-generation networks for all Kentuckians.

Other states, including neighboring Indiana and Tennessee, long ago eliminated onerous regulations like those that remain wrapped like anvils around the ankles of Kentucky’s progress.

This year’s legislative session can make history by removing the regulatory fetters and providing incentives to accelerate increased investment in Kentucky’s telecom infrastructure and making certain all Kentuckians – whatever their street – have access to the information superhighway.

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read his weekly Bluegrass Beacon column at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

Former Kentucky Chief Justice comments on Trump’s Supreme Court nominee

BIPPS LOGO

For Immediate Release: Tuesday, January 31, 2017

Contact: Jim Waters @ 859.444-5630 (office) 270.320.4376 (cell) 

(BOWLING GREEN, Ky.) — President Donald J. Trump’s decision to nominate Tenth Circuit Court of Appeals Judge Neil Gorsuch as the next Associate Justice of the Supreme Court is receiving high marks from legal experts in the commonwealth.

Former Kentucky Chief Justice Joseph Lambert said he was “very pleased” about the Gorsuch decision

“The selection of Judge Gorsuch is outstanding,” Lambert, who was a member of the state’s highest court for 22 years and as chief justice from 1998-2008, said in a statement to the Bluegrass Institute. “His entire career has been characterized by excellence. If any judge could replace Justice Scalia, this is the person.”

Gorsuch graduated with honors from Harvard Law School and Columbia University, and received his Doctorate in Philosophy from Oxford University. He was appointed by President George W. Bush to the Tenth Circuit in 2006 and clerked for current Justice Anthony Kennedy and former Justice Byron White.

“Based on his past rulings, it’s abundantly clear that Judge Gorsuch understands and accepts that the role of judges is to interpret the law, not impose personal policy preferences, priorities or ideologies on their fellow citizens,” Bluegrass Institute president Jim Waters said. “Considering the tremendous cost of Washington’s heavy bureaucratic hand on Kentucky coal miners and small businesses during the Obama administration and the fact that our state has one of the nation’s fastest growing incarceration rates, Kentuckians will appreciate Judge Gorsuch’s obvious distaste for policies that overregulate and over-criminalize.”

Judge Gorsuch’s intellectual seriousness and stellar qualifications make him the kind of jurist that everyone on both sides of the political aisle should support.

“His great respect for Congress, the Constitution and the rule of law have earned him an up-or-down vote,” Waters said. “As he has written, ‘statutes are a product of compromise’ and their text must be respected.”

For more information, please contact Jim Waters atjwaters@freedomkentucky.com, 859.444.5630 (office) or 270.320.4376 (cell).

Bluegrass Beacon — Regulating’s first rule: Help, don’t harm

BluegrassBeaconLogoAmericans of all political persuasions want safe working conditions, clean air and unpolluted water.

But reform is clearly needed when government begins to regulate for the sake of regulating, and when doing so harms – even endangers – those citizens it’s called to protect.

For example, while the Food and Drug Administration was created to help safeguard the food supply and ensure reasonable protocols for drug safety, it too often uses its regulatory power to shield monopolizing companies from competition, which can block the path to lifesaving generic drugs.

Competition, on the other hand, reduces costs and increases access to many groundbreaking drugs and medical miracles.

It’s been just the opposite with EpiPen, a lifesaving anti-allergic reaction device, the cost of which has risen from $60 a few years ago to now $600 for a pack of two, even though the epinephrine included in the EpiPen costs less than $10 to manufacture.

This price tag forces some to ask: “Are we going to pay the mortgage or ensure our kids have this life-saving drug available should they get stung by a bee or suffer some other potentially fatal allergic reaction?”

Drastic choices like this could be avoided if regulators remained true to the fact that their agencies were created to help, not harm.

U.S. Sen. Rand Paul in a speech on the United States Senate floor recently highlighted the Clean Water Act as an example of the morphing of well-intended regulations that protect against the discharge of pollutants in navigable streams into job-killing “monsters that emerged from the toxic swamp of big-government bureaucrats at the EPA.”

Paul pummeled courts and regulators who “came to decide that dirt was a pollutant and your backyard just might have nexus to a puddle which has a nexus to a ditch which was frequented by a migratory bird that might have flown from the ditch to the Great Lakes. Ergo, the EPA can now jail you for putting dirt on your own land.”

Such morphing is helped along by the lack of serious, consistent reevaluation of well-intentioned rules that originally served useful purposes but now are enforced only because they remain on the books.

Former Indiana Gov. Mitch Daniels, whose Reaganesque reforms led to a dramatic economic turnaround in the Hoosier State, required proposals for new regulations to demonstrate favorable benefit-to-cost ratios and sunset provisions allowing reevaluation of their continuing usefulness every few years.

Daniels also demanded agencies search for an existing rule that could be updated before creating a new rule.

This approach could be helpful in Kentucky, where more than 3,500 of the 4,700 regulations in the regulatory code have never been reviewed.

Still, it’s rare for regulations – like taxes – to actually go away.

Instead, they swell to the point where the Competitive Enterprise Institute estimates it now costs each American household $15,000 annually just to comply with federal regulations.

Plus, state regulatory codes too often emulate Washington by mutating into ugly opponents of individual liberty and economic growth.

According to the Mercatus Center at George Mason University, while the U.S. Code of Federal Regulations grew from 71,000 pages in 1975 to 178,000 pages in 2015, the Kentucky Administrative Regulations Service (KARS), as it’s known, grew by a whopping 250 percent in the last four decades – from just four volumes in 1975 to currently 14 books.

The commonwealth’s regulatory code has become so large that it takes 367 hours – reading 40 hours a week at a rate of 300 words per minute for nine weeks – just to read it.

Large, increasingly complicated regulatory codes make it difficult for businesses and citizens to comply, which ultimately defeats any positive purpose of regulation by reducing compliance and incentives to improve safety while increasing uncertainty and frustration.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon – Overtime rules: Swan song in ‘fairness’ fiasco

BluegrassBeaconLogoWhen President Obama first proposed new overtime rules last year, comedian Jodi Miller joked that “aides say after six and a half years in office, Obama feels he hasn’t killed enough jobs.”

He also feels some abstract notion of “fairness” is more important than actual consequences.

This is obvious in most of his policies – from tax hikes to Obamacare to environmental directives – where, in all fairness (pun intended), this president’s delusional ideas about forced equality offer unfavorable, even devastating, outcomes.

Obama was asked by newsman Charlie Gibson during a presidential primary debate with Hillary Clinton when he first ran in 2008 why he favored raising the capital gains tax when doing so actually would result in less revenue.

“Well, Charlie,” he responded, “what I’ve said is that I would look at raising the capital gains tax (starts at 1:03:40 of the video) for purposes of fairness.”

So, does this make the actual consequence of a policy change irrelevant if some unrealistic notion of “fairness” is met?

Who cares if tens of thousands of coal miners are unemployed or health-care premiums skyrocket or young people lose out on opportunities because the employment ladder’s first rung being cut off?

After all, we have fairer EPA regulations, fairer health-care policies and a fairer minimum wage – even if they all wrap a fragile economy in a straight-jacket.

Obama’s swan song in this whole fairness fiasco is changing labor rules designed to go into effect Dec. 1 that will make millions of more salaried individuals eligible for overtime pay by raising the threshold from its current $23,660 annually to nearly $47,000 per year.

While the stated reason for this change is ensuring management-level professionals are properly compensated for their work, the Department of Labor concedes that only one-fifth of the 5 million workers who suddenly become eligible for overtime pay will actually see larger paychecks.

Instead, many more workers will likely be adversely harmed as retailers and small businesses, in particular, look for ways to cut costs and avoid lawsuits.

The Kentucky Chamber of Commerce warns the rules will cost commonwealth businesses nearly $20 million yearly and return 70,000 salaried workers to hourly pay. Nationally, they will cost businesses an estimated $600 million just to review and implement.

Workers will pay for 80 percent of those losses through cuts in their base wages, according to a recent report by Anthony Barkume, senior research economist at the Bureau of Labor Statistics’ Office of Compensation and Working Conditions.

Potential consequences extend far beyond these dollars and threaten to impose an outdated assembly-line approach on the whole smartphone work environment.

Technology joined with flexible scheduling makes it possible for greater achievements in the workplace, especially for the 20 million Americans who telecommute at least once a month.

These usually are among the most productive workers looking for new technology and tools that can help them successfully complete projects that don’t fit into a 40-hour, 9-to-5-time frame yet offer opportunities for promotion.

“It is hard to imagine a law intended for the workforce known to Henry Ford can serve the needs of a workplace shaped by the innovations of Bill Gates,” Michigan congressman Tim Walberg said. “Unfortunately, it is becoming increasingly clear that current federal labor standards have fallen short of the times.” But they’re fair, right?  They’re also unconstitutional, per a lawsuit filed by 21 states, including Kentucky.

Gov. Matt Bevin called the proposed overtime rule “an unfunded mandate by the federal government” that not only would “force many private sector employers to lay off workers” but also “encroach upon the rights of individual states” by forcibly increasing state and local governments’ employment costs as many more public workers – including 1,600 state employees in Kentucky – become eligible for overtime pay.

“Enough already,” Bevin rightly concluded.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon – Medicaid reform: Compassionate or cruel?

BluegrassBeaconLogoAn example of how the British government in the 19th century used the magic of incentives to improve survival rates of prisoners transported on ships to Australia could offer clues about how to right Kentucky’s listing Medicaid program.

For years, barely half the Australian-bound prisoners survived these voyages.

Despite ardent appeals from church, humanitarian and government leaders imploring ship captains to improve conditions, survival rates failed to change.

Finally, social reformer Edwin Chadwick recommended offering different incentives by adjusting how ship captains were compensated.

Chadwick suggested that instead of paying captains a fee for each prisoner who walked onto their ships in England, they would be paid only for prisoners who walked off ships in Australia.

Changing the incentives for captains immediately and dramatically improved survival rates to more than 98 percent.

Captains now protected prisoners’ health and well-being by providing them with better food and hygiene during their passage, as well as reducing the number of inmates crowded into each ship.

Incentives achieved what even appeals from the clergy failed to accomplish.

The right kind of inducements also can bring about some dramatic improvements in Kentucky’s health-insurance policy.

Adding hundreds of thousands of Kentuckians to Medicaid by expanding eligibility resulted in dangerously overcrowding the commonwealth’s Obamacare ship.

Close to 30 percent of Kentucky’s entire population is now crammed into this tilting vessel.

Supporters of the government-run plan brag about and receive nationwide acclaim for building such a beautiful, shiny sparkling ship.

Yet stroll through the lower decks and you will find an overloaded vessel with humiliating conditions from which too many enrollees may never exit – unless incentives are changed.

Plus, as degrading as the conditions on those British ships were, the captains always knew their destination.

However, a major point of confusion concerning Kentucky’s Obamacare ship is its true terminus.

Not everyone agrees that the anchor of government dependency should be lifted, allowing this ship to sail into a harbor filled with opportunities for able-bodied adult Kentuckians to find decent jobs and earn a good living in order to achieve the kind of lifestyle that allows them to purchase their own health-insurance plans and receive care from doctors they choose.

Opponents of Gov. Matt Bevin’s Kentucky HEALTH plan – which seeks to improve the chances of most of the recent Medicaid enrollees reaching a destination of dignity by paying a small premium, getting treatment for an addiction, training for a job or volunteering in their community – seem wholly uninterested in allowing anyone off the ship.

They go to great lengths to avoid confronting their antagonism toward teaching fellow Kentuckians to fish instead of keeping them dependent on government fish.

They also often attempt to change the conversation altogether by focusing on groups that will experience little, if any, change should Washington approve the Bevin administration’s proposed reforms.

Absolutely nothing in Bevin’s plan would, for example, change benefits for children, pregnant women, the disabled or poor.

Still, a letter writer in western Kentucky thinks I’m “mean-spirited” and “lacking compassion” because I support incentives designed to get prisoners off the ship, out of a defeated and miserable lifestyle into a victorious, productive life.

How compassionate is it to adamantly oppose incentives that will keep Kentucky’s Medicaid ship from sinking by sailing into the harbor and unloading able-bodied adults crammed onto its decks, giving them the opportunity to move into a place where they can contribute greatly to our society and maybe even help others?

If the Obama administration wants to show true compassion, it not only will approve the Bevin administration’s waiver request to implement the HEALTH plan’s thoughtful and reasonable incentives, it will do so immediately and enthusiastically.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon – Free employers: Reduce regulatory cesspool

BluegrassBeaconLogoOnly 15 states perform more poorly than Kentucky on CNBC’s annual ranking of business climates based on 10 categories, including workforce, infrastructure and education.

It’s not a coincidence that the two states ranking highest overall among Kentucky’s neighbors – Virginia (No. 13) and Indiana (No. 16) – also rate much higher than the Bluegrass State in “business friendliness.”

Only nine states are more unfriendly toward business.

For years, politicians from both parties have constructed growth policies centered on offering taxpayer-backed goodies – called “incentives” by economic-development bureaucrats – to companies they deem “winners” and able to improve Kentucky’s rankings.

It’s not working.

Kentucky rated in the bottom 13 states in six of the latest CNBC index’s 10 categories. Worse, we’re becoming even more business-unfriendly – sliding from No. 36 in 2014 to No. 41 in 2016.

Instead of more and bigger taxpayer-backed handouts, we must instead eliminate stifling and archaic regulations that discourage entrepreneurial Kentuckians from engaging in start-ups and expanding existing businesses if we’re going to rise in the rankings.

The Bevin administration’s Red Tape Reduction initiative has been created to call out costly, ineffective or outdated rules hiding among the commonwealth’s 4,500 administrative regulations – nearly 700 of which haven’t even been evaluated for close to a half-century to determine whether they actually help, harm or serve any purpose, for that matter.

Getting rid of burdensome and obsolete rules for doing business in the commonwealth likely will do more in a year or two to improve Kentucky’s attractiveness to employers considering expanding or relocating here than overpaid, underperforming bureaucrats accomplish in decades.

Maurice McTigue, a former cabinet member in his native New Zealand, helped dramatically reform that country’s economy by reducing regulation and implementing pro-growth policies to the point the turnaround became known as the “New Zealand miracle.”

“Kentucky’s economy would be stronger if 1,000 local businesses hired an additional person than if the state created a tax handout to bring in 1,000 new jobs,” wrote McTigue, who advises state governments on streamlining their operations as vice president of outreach at George Mason University’s Mercatus Center.

Regulations were never intended to discourage employers from growing their businesses by keeping them neck-deep in cesspools of red tape and paperwork.

Instead, they were meant as common-sense measures to protect consumers, create a level playing field and help guide – and provide certainty to – business owners.

Paul Durbin, who’s owned and operated Judy’s Castle, a popular mom-and-pop diner in Bowling Green, for 22 years, says it helps him when the fire-department inspector comes twice a year to check his building and alert him to needed repairs involving wiring or equipment.

“They come in and actually help me,” Durbin said. “For example, they update their computer assessment of the building to make sure they know where the gas-shutoff switch, oven equipment and exits are so that if there’s a fire, they know what they’re getting into before they even get here.”

But he’s concerned about the costly effect some potential regulations – such as menu-labeling requirements – would have on his 13-employee operation.

“Someone would have to break down all the ingredients; I would have to print new menus and all of that would take up more space and it’s going to cost more money,” he said. “I’m either going to have to pass on the cost or eat it myself.”

Indiana, meanwhile, is knocking on the door of the top 10 business climates in the nation because its regulatory policies free employers from heavy-handed rules forcing them to decide between reducing current payroll, raising prices or just eating the cost.

The focus of Hoosier employers has become: “How many workers do we need to hire just to keep up with all of this new business?”

Are there any good reasons why similar results cannot be achieved south of the Hoosier State’s border?

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon: Unions’ wage-hike hypocrisy reaches dizzying heights

BluegrassBeaconLogoPresumptive Democratic presidential nominee Hillary Clinton backs a federal minimum-wage hike from the current $7.25 per hour to $12 per hour and praised the New York City Wage Board’s decision that fast-food workers should make $15 an hour.

This move was predictably divisive.

Retail workers wanted to know: “Hey, what about us? Why should only McDonald’s burger flippers get this raise?”

But the divide caused by such unilateral and arbitrary decisions extends beyond New York’s tussle between MeDonald’s order takers, who now will be paid $15 an hour – at least those lucky enough to keep their jobs will see the raise – and cashiers at Costco next door who remain at a $9 hourly wage.

Bernie Sanders, the sloppy Socialist and Clinton’s primary opponent, conveniently dodged any discussion about how his plan to raise the federal minimum wage to $15 an hour will threaten complete removal of the bottom rung of the employment ladder for young, inexperienced, low-skilled and less-educated workers.

The real head scratcher here is that those are the very same people who form the core of the Bern’s campaign constituency.

Heaping helpings of hypocrisy on the part of labor unions regarding minimum-wage hikes also accompany the head scratching.

The AFL-CIO wants the Los Angeles City Council to exempt unions from the city’s $15-an-hour minimum wage, even after it led a campaign earlier this year to force such an increase on the entire state of California while vehemently opposing any exemptions for restaurant workers, nonprofits or other small businesses.

The higher such hypocrisy rises here, the dizzier I get.

Some Kentucky big-government politicians are following Sanders’ strategy of avoiding any discussion about the unintended consequences of hiking the commonwealth’s minimum wage while offering preposterous positivity about such a move.

For instance, House Speaker Greg Stumbo, D-Prestonsburg, categorically denied that his bill during this year’s legislative session, which proposed an enormous 40-percent hike in the state’s minimum-wage rate, would hurt Kentucky’s unemployment rate, which currently stands higher than that of 30 other states.

Stumbo claims unemployment rates actually fall in states that hike their minimum wages.

However, recent research by Jeffrey Clemens and Michael Wither at the University of California San Diego on the effect that the minimum wage had on the employment and income trajectories of low-skilled workers during the Great Recession reveals how 1.4 million jobs were destroyed by the increase of the federal minimum wage during the late 2000s.

The study reports that the federal government’s minimum-wage increase from $5.15 on July 23, 2007, to $7.25 on July 24, 2009, caused the employment-to-population ratio to decline substantially – by 4 full percentage points among adults between the ages of 25 and 54 – and twice that amount among 15-to-24-year-olds.

Ben Gitis, American Action Forum’s labor market policy director, notes a 22.5 percent average unemployment rate in 2013 among teens in states with minimum wages above the federal $7.25 federal mark.

Gitis claims that in Oregon and Washington – states often held up as trend setters by those obsessed with raising government-mandated minimum wages – teen unemployment rates increased by 8 percent and 9 percent, respectively, in 2013 alone.

But Sanders and his naïve flock have little interest in, concern – or even knowledge about – the fact that when governments force businesses to pay a worker $15 to make a milkshake, the bottom rung of the employment ladder is removed and with it, the opportunity to give a greater number of young people the jobs and work experiences needed to help them climb the ladder of – and to –  success.

Shepherd Stumbo apparently doesn’t, either.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Ky. cities must not follow Austin on ousting Uber

Editor’s note: The following op-ed by Kelly Smith, Bluegrass Institute vice president of strategic partners, appears in today’s Lexington Herald-Leader.

SmithThe lessons for Kentucky coming from one Texas city involving Uber and Lyft would be sad and absurd if its actions hadn’t become such a joke.

Austin Mayor Steven Adler, who failed to provide the leadership needed to prevent his city from driving out the free-market ride-sharing companies, is now floating the idea of requiring a “validator badge” in order to force independent-minded local travelers to commute in the way local politicians and bureaucrats deem acceptable.

So what mode of travel would Austin’s government leadership accept? The most innovative transportation concepts offered by city governments within the past decade have been recreating the 1880s urban transit trolleys and free bicycle access — bicycles being that most modern and innovative of transportation ideas invented in 1817.

Thus you would think Austin would approve of anything it regulates, including its subsidized taxicab cartel. But you’d be wrong. With a black market for ride-sharing emerging, city officials now want to deregulate the local taxicab industry — the very cartel it regulated into power in the first place.

Speaking of power, why don’t the artistic and creative types who abound in Austin recognize when a city steals the ideas and innovative intellectual capital from people who turned one particular idea into the successful Uber enterprise?

Speaking of irony, Austin will host in June the Smart Cities Innovation Summit which, according to its online program, tackles such issues as “a dense network of public transit, carpooling and car-sharing services such as Carma, Car2Go and Zipcar …”

It’s clear that Austin wants to play at being the “invisible hand” of commerce and pick winners and losers. But if you’re the creative, artsy type and want to see real free-market innovation, skip Austin and head to Grand Rapids, Mich., where the power of the marketplace on the art scene is unleashed annually via the privately sponsored ArtPrize. The entire city for more than two weeks each year becomes an interactive art gallery with the largest publicly attended exhibit on the globe. You can even use Uber to hop from one exhibit to the next.

Let’s hope Kentucky does a better job of protecting the freedom of its artsy and creative entrepreneurs to pursue their dreams and grow successful — maybe with innovative craft beers, new distilleries and even more rideshare apps.

Kelly L. Smith is vice president of strategic partners for the Bluegrass Institute, a free-market think tank. Reach her at ksmith@freedomkentucky.com.