Bluegrass Beacon: Storms squeeze the best out of us

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Storms bring out the best in our country and commonwealth while introducing us to heroes like Houston Police Sgt. Steve Perez, who made the ultimate sacrifice while serving his community.

Perez, a 34-year law enforcement veteran, could have called it in during Hurricane Harvey’s assault on South Texas.

Instead, he left home, as always, determined to report for duty on Aug. 27.

This dedicated officer didn’t make it, drowning in 16 feet of water while trudging toward his post.

Firefighters unfurled a large American flag outside Co-Cathedral of the Sacred Heart in downtown Houston, while Perez’s son, Maverick, told hundreds of funeral mourners inside that his father was someone “we knew … was doing something big. He had a calling.”

Irma hero Sister Margaret Ann also was “doing something big” and wasn’t about to let downed trees stand in her way.

CBS Miami’s cameras caught up with the nun dressed in full habit, chainsaw in hand, clearing trees from the roadways around Archbishop Coleman Carroll High School, where she serves as principal.

The best part isn’t that Sister Margaret Ann grabbed a chainsaw, but that, as word of her efforts spread – a Miami-Dade Police tweet of the sister has garnered nearly 12,000 likes and more than 5,000 retweets and 442 comments as I write this column – it “spurred others in the community to pitch in clearing debris as well,” the station reported.

When America’s squeezed, it doesn’t run and hide. It reports for duty, grabs a chainsaw and stirs others to act.

When squeezed, what’s really inside spills out.

Statues, shootings and racial anger dominated the front pages … until America was squeezed, really squeezed.

Have you noticed that when America’s really squeezed, racism’s dividing lines and cynicism get replaced by courage, sacrifice and a caring spirit for all people come out and spill over in the face of the storm?

Squeezing isn’t limited to hurricanes in the South, either.

Sometimes it’s storms striking families in the North, like the DeKlyens of Wyoming, Michigan.

Before their storm, Nick and Carrie DeKlyen planned to grow old together while watching their five children grow up and start families.

Then, Carrie DeKlyen was diagnosed in April with an aggressive form of cancer.

DeKlyen enrolled in a clinical trial at the University of Michigan before discovering she was pregnant.

Doctors told her the pregnancy would have to be terminated if she wanted to receive cancer treatments.

She made her choice, giving birth on Sept. 6 via cesarean section while in a coma to Life Lynn DeKlyen before dying.

A storm may have squeezed the life out of Carrie DeKlyen, but what spilled out was, as a friend at her funeral described, “a legacy of love.”

Sometimes economic cyclones hit border states, like Kentucky, where a $40 billion-plus pension threatens our entire economic health and future.

As the squeeze tightens, what’s really on the inside of this commonwealth will manifest.

Asked during a recent Facebook Live Q&A session whether teachers concerned about potential future changes in their pension benefits might retire en masse, Gov. Bevin said: “If you happen to be a teacher who would walk out on your classroom in order to serve what’s in your own personal best interest at the expense of your children, you probably should retire.”

Bevin took heat for that part of the statement from many who ignored what he added: “And yet I know for a fact that almost all of you teachers that are watching this don’t think that way.”

The governor’s convinced and we should be hopeful that with a full pension-squeeze underway, the unity and willingness to work together for the common good we know in our spirit is at the heart of Kentucky will push out, be unfurled and on full display in the days to come.

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

News Release: BIPPS CEO introduces Bevin at conservative gathering

BIPPS Logo_pick

For Immediate Release: Thursday, May 11, 2017                                                                                         

(COLORADO SPRINGS, Colo.) – Bluegrass Institute president and CEO Jim Waters introduced Gov. Matt Bevin here at Wednesday’s opening luncheon of the Heritage Foundation’s 40th annual Resource Bank meeting, noting free-market solutions combined with Bevin’s principled leadership played critical roles in the historic accomplishments during this year’s Kentucky General Assembly.

“Sound policy ideas coupled with strong, principled political leadership has brought change to Kentucky — from being a state of frustration, where each time a policy that advanced our vision of moving Kentuckians from dependency to prosperity got passed by our Republican Senate only to die before it traveled the 1,000 feet to the other end of the Capitol — to today, where you can drive from east to west through this entire commonwealth and never touch a county that went blue in the last election,” Waters said in prepared remarks, referring to the changes brought about by November’s election in the Kentucky House of Representatives, where Republicans went from having 44 seats and being in the minority to having 64 seats and a supermajority.

Bevin in his remarks challenged hundreds of conservative policy and political leaders and activists gathered from around the nation at the historic Broadmoor Hotel to be unflinching in their approach.

“Step up and be bold; never have a spirit of timidity in anything,” he said. “If you believe in our founding principles … go forward and lead.”

The governor praised House Speaker Greg Stumbo and Senate President Robert Stivers for their work in passing seven historic bills, including right-to-work, prevailing-wage repeal, pension transparency and “paycheck protection” for workers, during the first week of this year’s legislative session.

Because “the pendulum goes both ways,” he said it was important to “seize the day” and get as much done as possible as quickly as possible.

For more information, please contact Jim Waters at, 859.444.5630 ext. 102 (office) or 270.320.4376 (cell).



Bluegrass Beacon — Kentucky to the ‘trade deficit’: You’re fired!

BluegrassBeaconLogoConsidering the Bluegrass State last year exported $30 billion worth of goods and services – more than 33 other states – Kentuckians should vigorously oppose anything remotely associated with a “war on trade.”

American Enterprise Institute scholar Mark Perry rated the share of Kentucky’s economy in 2015 linked to imports and exports fifth-highest in the nation, comprising 34 percent – or $66 billion – of the commonwealth’s $193 billion GDP.

Perhaps Kentucky Gov. Matt Bevin, who recently conducted a trade mission to Japan, could find a way to strike up a cordial conversation with his good friend President Donald Trump to put the commander-in-chief at ease about this whole “trade-deficit” matter.

Bevin could even share some wisdom from flyover country by passing on Indiana University Southeast economics professor D. Eric Schansberg’s reason for claiming the trade deficit remains “the most misunderstood concept in economics.”

Schansberg, Ph.D., says the discussion about international trade often focuses heavily on the downside – which tends to be more visible in terms of some individuals losing out in a global economy – while nearly completely missing out on its subtle but significantly important benefits for an entire state or nation.

“Trade is good for the aggregate if not always for the individual,” he says.

Schansberg, who’s also a Bluegrass Institute scholar, notes that “exports lead to imports” and warns that attempting to artificially narrow the so-called “trade deficit” could result in fewer dollars invested in America’s economy.

“Everybody talks about the difference in goods and services exported versus imports when what really matters is investment surplus,” Schansberg says.

Shallow-thinking protectionists rarely dig deep enough to reach this important component in making their own determinations about the success or failure of free-trade relationships.

Why, these shallow paddlers must wonder, would Bevin travel to Japan to tout the commonwealth as an attractive investment option instead of chastising that nation because last year it only spent $1.1 billion in direct purchases from Kentucky while we as a state imported $5.1 billion worth of Japanese products?

Consider the rest of this trading-partnership story.

Not only are imports critical to keeping Kentucky at – or near – the top in the automotive, aerospace and pharmaceutical industries, but Japanese-owned companies now operate more than 180 facilities in our commonwealth.

And while Kentucky is the fifth-largest importer of Japanese goods – Japan is the No. 1 international investor in the Bluegrass State, having created 44,400 full-time positions in those facilities.

“Investment surplus,” anyone?

An important teaching moment could occur if our governor explained to the president why Kentucky exporting nearly $30 billion while importing almost $40 billion is worthy of replicating rather than punishing, which would only bring us more harm, anyhow.

Schansberg notes the last time America had a trade surplus was not during an uptick but when the economy tanked during the late 1970s.

“It’s because investors were looking at our economy and they didn’t see it as a great investment,” he said.

All those current imports mean more choices and better prices for consumers and industry. It means foreign investors look at today’s Kentucky and America and they like – really like – what they see.

Frenchman Frédéric Bastiat, a 19th-century champion of free-market economics, proposed reversing “the principle of the balance of trade and calculate the national profit from foreign trade in terms of the excess of imports over exports.”

Bastiat called this “excess” the “real profit,” and challenged the contemporary protectionists of his day to produce evidence showing otherwise.

“Even if our imports are infinite and our exports nothing, I defy you to prove to me that we should be the poorer for it,” he said.

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 He can be reached at and @bipps on Twitter.

Kentucky: ‘Polish that jewel’

“Kentucky is a beautiful jewel in the mosaic that is the United States of America. Unfortunately, years of bad policy and crony politics have allowed that jewel to gather dust. Our administration is going to unite with Kentucky voters of both parties to polish that jewel until it shines like a beacon of excellence for all the world to see. The election of 2016 will be written about as a victory for the GOP. It was more than that. A victory was won for the people of Kentucky and the people of America. The roar is coming through loud and clear.” –Gov. Matt Bevin in this op-ed

Quote of the day: The contrast between Obama’s and Bevin’s executive orders ‘could not be starker’

“I’ve heard the Courier-Journal call out Kentucky Republicans for applauding Gov. Bevin’s actions after having criticized President Obama’s executive orders over the past seven years. The flaw in this argument is there is a statute on the books in Kentucky specifically authorizing Gov. Bevin’s actions. There is no such federal statute to authorize the president’s actions. The contrast could not be starker: Gov. Bevin’s executive orders reorganizing various boards and commissions have been issued pursuant to statutory authority, while President Obama’s attempts to rule by executive fiat are often directly contrary to statutory authority.” –Rep. Phil Moffett, R-Louisville, in his op-ed in today’s (Louisville) Courier-Journal

BIPPS on KentuckyWired’s downsizing

[resized] Watchdog

Bluegrass Institute president Jim Waters, who attended the recent Shaping our Appalachian Region (SOAR) summit in Pikeville, is quoted on Waters points out that Gov. Matt Bevin’s announcement that the duplicative and costly KentuckyWired project had been scaled back is a ‘partial victory’ for taxpayers.

Read the complete article here.

The Bluegrass Institute also is quoted in a separate article found here, here, here, here, here and here covering Federal Communications Chairman Tom Wheeler’s announcement at the SOAR gathering that the feds would waste more taxpayer dollars on government broadband projects.

Bluegrass Beacon: More pension funding means more accountability

BluegrassBeaconLogoNontransparent state budget conference committee meetings aren’t the only places that armed state troopers can be found in the capitol these days.

They also showed up at a recent monthly meeting of the Kentucky Retirement Systems (KRS) board of trustees to help enforce Gov. Matt Bevin’s decision to prevent, bapparently by arrest if necessary, its now former chairman Tommy Elliott – who was in attendance – from participating.

Elliott had refused to leave and the board defiantly snubbed Bevin’s appointment of Madisonville dermatologist Dr. Bill Smith, who understands as well as any Kentuckian how the pension systems work.

While no one was arrested and Smith withdrew, my bet is there hasn’t been the potential of as much excitement at a meeting of excitement at a KRS board meeting since the state pension system was created in 1956 during Gov. A.B. “Happy” Chandler’s second stint as the commonwealth’s chief executive.

Much has changed since the state’s first known actuarial evaluation in 1957 revealed 16,000 participating employees in a Kentucky Employees Retirement System (KERS) with assets of $2.8 million.

Today, the state’s entire retirement system includes nearly 350,000 employees and retirees and nearly $20 billion in unfunded pension and insurance liabilities.

Add in the financial woes of the Kentucky Teachers’ Retirement System and the commonwealth faces a massive $37 billion in unfunded liabilities – the cost of benefits already earned by state workers that aren’t covered by the systems’ assets.

All of which makes me curious about why Jim Carroll of the Kentucky Government Retirees, a group advocating for pension reform, opposed replacing Elliott as KRS chairman while claiming the board needs “stability.”

Actually, it’s past time to shake the board up with qualified trustees who have the right kind of experience, will hold the system accountable for how it handles taxpayer dollars and won’t use their seat to raise funds for favored political causes or simply to protect the status quo.

Why would Carroll or anyone concerned about the survivability of these ailing pension funds favor protecting a status quo that has resulted in digging the pension hole much deeper than it was even when Elliott first took his seat on the board in 2011?

As that hole gets deeper, the news gets worse for taxpayers.

A new Pew Charitable Trusts report reveals that Kentuckians experienced the nation’s largest growth of unfunded-pension-liabilities-to-personal-income between 2003 and 2013. The amount of pension debt as part of our personal incomes rose from less than 3 percent in 2003 to nearly 15 percent in 2013.

Carroll, retirees receiving benefits and those who soon will be retired give Bevin enthusiastic high fives for increasing pension funding by more than $1 billion in the new state budget.

Achieving such funding without a huge tax increase means that other entites in the state budget, including colleges and universities, will be forced to endure significant cuts.

However, by defending Elliott’s presence on the board and calling for Bevin to back down from removing him, Carroll sends mixed signals.

To believe such massive increases in retirement systems’ funding forcing serious belt-tightening in Frankfort must not also be accompanied by attempts to bring more accountability to a board that’s been largely ineffective in addressing the nation’s ugliest pension crisis is unrealistic.

Bevin’s doing his part by appointing highly qualified board members like David Eager, a Louisville investment consultant, and John Farris, interim vice president for investments and chief financial officer at Centre College, and the state’s former Finance and Administration Cabinet secretary.

It’s past time for those pleased with more funding to show the same kind of interest in more accountability from Kentucky’s ailing and chaotic public retirement system.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: Don’t know a lot about pensions? See a doctor

BluegrassBeaconLogoI recently stood in Philadelphia’s Independence Hall, where 55 delegates gathered in May 1787 to create the U.S. Constitution and form a new government.

While that hallowed room is filled with desks and other period fixtures, the only original piece of furniture is the chair occupied by the future President George Washington while presiding over the convention.

Businessmen, merchants, shippers, farmers, scientists and physicians were framers of the document that would set their new nation on a path toward unprecedented freedom and prosperity.

If doctors were included in framing the foundation of this nation’s success, you will have a hard time convincing me that Madisonville dermatologist Bill Smith, M.D., is somehow unfit to serve on the board overseeing the troubled Kentucky Retirement Systems.

Smith, who served his country for nine years, rising to the rank of lieutenant commander in the U.S. Navy, full commander in the Navy Reserve and served a tour as a flight surgeon with the Marine Corps, founded his practice in 2000 and has grown it into a multimillion-dollar operation.

Smith while building his practice has studied state and local retirement systems, including helping Madisonville successfully address challenges that threatened that city’s firefighter pension plan a few years ago.

For Smith, the solutions to saving and fixing arguably the nation’s worst government-run pension fund are not political. Rather, they involve doing the math and abiding by Kentucky’s Constitution and its statutes.

He strongly believes that decades spent ignoring Kentucky law requiring actuarial analyses of proposed benefits and benefit enhancements before they’re granted to employees or retirees has been a primary contributor to the decline of the state workers’ retirement fund – from being 74 percent funded a decade ago to currently containing only about 17 percent of the funding needed to cover future retirement benefits.

KRS bureaucrats want you to believe that the major contributor to Kentucky’s pension crisis is underfunding by the legislature and – as they occasionally admit – unproductive investments.

They vehemently oppose Smith’s appointment by Gov. Bevin to their board because the doctor’s made it known that the malady is the result of overspending in the form of enhancing benefits beyond available funding or a strategy to develop one beyond the biennial budgetary shakedowns of the General Assembly.

When it comes to enhancing benefits, for instance, the potential purchaser of a house or car must demonstrate he’s got funding – either in terms of up-front cash or the ability to make payments – before he’s allowed to move in or drive off the lot.

Smith posits the system is unsound because its leadership has performed like a buyer who purchases a house he can’t afford then goes to his employer and demands a raise because he’s “underfunded.”

This seems the model of choice for too many Frankfort politicians, who’ve offered new and increased benefits without either the funding or the required actuarial analysis. Instead, they just add the benefits’ increased costs to the funding to the state’s annual Actuarially Required Contribution (ARC). Then, when Frankfort doesn’t meet that obligation, detractors claim the system is underfunded.

It’s appalling that William Thielen, the retirement system’s overpaid and ineffective executive director, dismisses the statutorial requirement for solid analysis of what benefits cost before they’re granted as no longer acceptable.

I sat on the second row at the most recent meeting of the state’s Public Pension Oversight Board during which Sen. Jimmy Higdon, R-Lebanon, tried to impress upon Thielen that the legislature can no longer vote for benefit enhancements without at least an estimate regarding their future costs.

Thielen claimed such costs are “indeterminable.”


He knows that Smith, once he’s seated, will ask the questions, do the math and figure out what’s really going on in that huge retirement system.

No wonder Thielen obsessively opposes Smith’s appointment to the board to whom he answers.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at


Bluegrass Beacon – Detangling hair-braiding rules: Detour averted

BluegrassBeaconLogoAlong with his recently created “Selfie of the Week” contest, Gov. Matt Bevin’s Facebook page includes a video of the commonwealth’s 62nd governor going where most Kentuckians have never ventured – up to that little round enclosure at the Capitol’s pinnacle above the dome.

Bevin and his kids celebrated Spring Break by climbing myriad groups of stairs to get a bird’s eye view of Frankfort.

His video shows not only how small objects on the ground outside the Capitol seem but also offers a real perspective on how much smaller the floor of the rotunda under that dome appears from 200 feet high versus how it feels when you’re standing in that same spot surrounded by multitudes of self-serving politicians with an overinflated view of their own importance.

Perhaps the governor will consider climbing those steps again and inviting some of his fellow Kentucky politicians who’ve lost sight of why they were sent to Frankfort in the first place to tag along.

Rep. Hubert Collins, D-Wittensville, would be a good candidate for such a climb.

Collins, who’s occupied space in the General Assembly for more than a quarter-century, tried during this year’s legislative session to wreck a bill filed by fellow Democrat and state Sen. Perry Clark from Louisville detangling the commonwealth’s onerous regulations of natural hair braiding.

Bevin eventually signed the bill after it was passed by the legislature, but not before Collins did his best to replace the now-former obstacles of entry into what’s known as the “African style” hair-braiding industry with new, equally thick regulatory barricades that shut out entrepreneurs wanting to open businesses providing this service.

The level of irrationality imposed by both the former regulations and Collins’ replacement amendment reach even higher than those “walls.”

Kentucky law previously required natural hair braiders to spend 1,800 hours and thousands of dollars – anywhere from around $5,000 at the Paducah Beauty School to nearly $20,000 at the Empire Beauty School locations in Elizabethtown and Louisville – just to obtain the required license, even though the practice is totally natural and includes no dyes or chemicals.

“To add insult to injury, this training never even breaches into the braiding areas,” Clark said.

Yet after his fellow legislators voted to tear down these barriers, Collins proposed a floor amendment with several new requirements, including a $1,500 fee, which would trip up the dreams of immigrants – many from West Africa – who came to America legally and are willing to work their fingers to the bone while building a new life.

This nonsense of replacing one set of onerous regulations with another reminds me of British Prime Minister Winston Churchill’s quip: “I may be drunk, Miss, but in the morning, I will be sober and you will still be ugly.”

What’s really ugly – no matter the angle from which it’s viewed – is that Collins’ amendment would have sent the $1,500 fee straight to the Kentucky Board of Hairdressers and Cosmetologists, which is chaired by none other than the lawmaker’s wife, Bea Collins.

Amazingly, even Rep. Reginald Meeks – also a Louisville Democrat who normally floats around in the outer reaches of the political sphere’s leftist regions – labeled Collins’ amendment “anti-business.”

He could have added “corrupt,” as well.

If Hubert and Bea Collins would ascend those stairs and glance back down when they reach the top, they would see what state government as enshrined in the Kentucky Constitution was meant to be: a miniscule part of our lives that serves its constituents, protects their liberties, provides a level playing field and removes barriers that prevent citizens from freely climbing as high as their dreams, dedication, abilities, hard work and destinies take them.

When that truly happens in Frankfort, watch Kentucky rise higher and go where it’s never gone before.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon – Needed: A budget process that’s ‘for the people’

BluegrassBeaconLogoIf you don’t believe satirical journalist P.J. O’Rourke’s quip that “giving money and power to government is like giving whiskey and car keys to teenage boys,” pay attention to what’s happening in Frankfort and Washington.

Better yet, try taking some of that money away or at least making politicians more accountable for how they spend it.

Be prepared for the incessant whining and excuse-making sure to follow your demand that they live within their current means, work harder, pay debts, prioritize spending and save for rainy days – just like responsible Kentucky families must do.

For years, fiscally sane Kentuckians have been astonished by the absolute defiance on display in Frankfort toward the right spending decisions or even just some restraint, especially in challenging times.

They must really be amazed at the approach taken regarding the new budget by House Speaker Greg Stumbo, a Prestonsburg Democrat, who moonlights as an ambulance chaser for a personal injury law firm marketing itself as “”

Stumbo’s been willing, for example, to hold up the commonwealth’s entire budget in order to force inclusion of free community college tuition for all Kentucky high-school graduates, despite the fact that more monies must be found to address the nation’s worst – and further worsening – public-retirement system.

Reasonable Kentuckians must also be amazed that as this column is released, the legislative session is in its final throes and still no budget’s been passed.

Lawmakers have found time to file some 940 other bills, including legislation requiring men to be married and receive approval from their wives before using Viagra and banning teens under the age of 18 from using tanning beds.

Yet the Speaker, as head of the majority party in the state House, has utterly failed to provide the leadership required to get House Bill 303 – the budget – passed and thus fulfill the House’s singular constitutional duty.

Even if some kind of spending plan gets approved by the time you read this, the process remains a frustrating failure and needs an overhaul built around accountability and transparency.

The Frankfort press corps – eager for drama and pitting sides against each other while being inexperienced at covering a conservative, decisive governor – drives a narrative that presents all spending plans as equal.

Plus, statehouse reporters frequently, if unwittingly, cover these final budget spasms in ways that portray political leaders sympathetically as really working hard “for the people,” willing even to eat take-out and burn the midnight oil in order to meet the constitutionally determined April 15 deadline for making final decisions about how to spend the $22 billion we taxpayers will be forced to give them during the next biennium.

Puh-leeze. They’ve had months to get this work done and have failed.

Gov. Matt Bevin, despite being brand new to the process and having just won an election weeks earlier, met his constitutional responsibility to present the executive branch’s budget proposal during the General Assembly’s opening days.

Bevin’s two-year spending plan calls for 9 percent cuts to most state-government agencies and programs, including universities.

Stumbo distorts the governor’s intentions, claiming Bevin wants to harm education simply because he challenged university presidents to find inefficiencies and tighten their collective belts as several already have. Controlling spending is absolutely necessary if our commonwealth is to start down the long road toward saving our public-pension funds and tucking money away to address future pension needs so we don’t repeat our retirement systems’ messy history.

Stumbo’s garbling is like big-spending politicians in Washington labeling Kentucky Sen. Rand Paul “weak on national defense” because he wants the military to quit spending $640 for new toilet seats and put the money toward paying down the national debt.

Such demagoguery – whether during a debate about national defense in Washington or an austere budget in Frankfort – is many things: a time-buster, resource-waster and confidence-diminisher.

“For the people” it’s not.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at