CCTA MAY 16, 2012--MEETING REVIEW

May 16, 2012
For Immediate Release:

Brian Balfour with the Raleigh based Civitas Institute was in New Bern last evening to speak at the monthly meeting of the Coastal Carolina Taxpayers Association. Brian who has a masters in economics from Wayne State University spoke on "Economics in One Lesson," and amazingly achieved the lofty goal of his topic.

Brian explained to the approximately 50 people attending the meeting that humans take action designed to reach their goals, and since they need to produce a good or service to exchange for a good or service they desire, they work to get the most reward they can. This pattern enables one to predict outcomes.

Brian used a glass factory in the former USSR as an example. The central planning committee rewarded the factory for the amount of glass it produced by weight, and they produced glass that was very thick, heavy, and difficult for builders to work with. After much time had gone by, the central committee finally understood that there was a problem and changed what they rewarded. This time the rewards were based on the square footage of glass produced. What happened? The factory began to produce masses of glass that was very thin, fragile, and broke easily.

Contrast that with a free market economy in which builders will only buy from manufacturers who produce glass that's easy to work with, and most producers get it right immediately.

Brian tackled a number of economic myths from this prospective and added the notion that some economic causes and effects can be quickly seen while others cannot be seen so easily, but must be thought through. For example, when a machine is invented that can quickly do the work of many people, it's easy to see that workers are fired as a result, but it takes time and thought to realize that more people are hired to produce the machines, make the raw materials that are used to build them, sell them to end users, transport the machines to end users, and so forth.

One economic myth Brian exposed was the myth of public works as a job creator. If the government builds roads and bridges, one can see workers working on them. Obviously jobs have been created (or saved). However, when the government sets out to build things to create jobs it's not a lot better than the USSR's central committee at discerning what to reward, and is apt to end up building a bridge to nowhere which is not necessarily very productive. Then there's what's not seen. To build the bridge, the government had to get the money by taxing people. What would those people done with their money if they'd been permitted to keep and use more of it themselves? Would they have spent it on goods and services? Invested it in bank savings (enabling the bank to make loans)? Or invested it in a business that created jobs? Humm, sounds like jobs were destroyed, or failed to come into existence, because of removing tax money from the economy. The same sort of case can be made about the materials used to build the bridge. Since the steel and concrete went into the bridge to nowhere, it cannot be used to build a factory, office building, or apartment building.

Another economic myth Brian tackled was that raising the minimum wage helps workers attain a "living" wage. He used restaurants as an example and referred to several specific cases. In point of fact, raising the minimum wage causes the restaurant owner's expenses to go up. He or she cannot print money, so other changes are made. Perhaps evening workers are scheduled to come in later to cut hours. Perhaps menu prices are raised slightly (too large a raise will chase customers away). Perhaps one or more workers are laid off and the owner does more of the work. In any case, each of the options open to the owner tends to be detrimental to the work force by either reducing their income or raising the amount they'd have to pay if they should buy a meal in the restaurant in which they worked.

Brian went on to point out with heavy doses of logic that profit is not a dirty word (firms making profits are those that solve the most urgent needs and wants of society efficiently), and consumer spending does not drive the economy (businesses' purchases of goods needed to produce consumer products does). In sum, Brian Balfour made a most thought provoking presentation.

During the business meeting, it was announced that purchases made at www.ccta.myshaklee.com will result in commissions being paid to CCTA's Hillsdale College Scholarship Fund.

Hal James, Watchdog Committee Chairman, introduced Stevie Bennett who attends New Bern Board of Aldermen meetings regularly. Stevie gave a brief report which included focusing attention and ire on "special appropriations" in the city budget. Special appropriations are taxpayer monies spent by the city on private charities. Stevie is particularly annoyed by the city's giving taxpayer money to the Religious Community Services (RCS). While RCS does much good work, it is only supported by roughly 20% of the churches within the area it serves while 100% of the taxpayers are forced to support it.

When he gave his own report, Hal had much the same complaint about the Craven County Board of Commissioners. He pointed out that the government has no ethical right to use its power of forced compliance to give taxpayer money to charitable institutions. He pointed out that RCS and similar organizations find it easier to make a pitch to 7 Commissioners who have the power to take money from citizens than it is to raise money from their members and supporters voluntarily.

Hal had praise for the Board of Commissioners in three areas. When the Board of Education made it's budget request for just over $24 million from the county (out of a total budget of about $125 million), Scott Dacey inquired whether their current "rainy day fund" of $5 million is not excessive in these times of stress on the taxpayers. Considering that the Board of Education is requesting an increased budget contribution from Craven County of almost $600,000 over last year, this was an excellent question.

The second bright spot Hal mentioned is that the solid waste franchise hauler bids the Board of Commissioners sought resulted in a bid that would enable the price of a sticker for a bag of garbage to be reduced to $2.25 per bag, and the Board accepted that bid thus saving money for Craven County citizens.

The third bright spot occurred when a resolution was presented to explore having a bus collector service for our area to take passengers to Amtrack stations was voted down. Scott Dacey pointed out that Amtrack is loosing money, and asked why, if such a service is needed and is economically feasible, is a private bus company not providing the service.

Nancy Murdoch, Chairman, made two exciting announcements at the end of the meeting. CCTA will sponsor a discussion group beginning at 7 PM on Thursday, May 24 on "The Original Argument." This discussion will follow a modern "translation" of the Federalist Papers (copies of the book are available for $7), and a different person will serve as the facilitator for each weekly session. Call 444-7272 for more information.

Dr. Earl Taylor who appears on the videos used in CCTA's recently completed "5,000 Year Leap" constitution class series is coming to New Bern from Arizona to do a constitution seminar at the Bridgepointe Hotel from 6 to 9 PM on June 20th.

Information provided by
Raynor James, Public Relations Chairman, Coastal Carolina Taxpayers Association
252-288-6228 home (message machine says "FSBO America")
252-626-2804 cell