Yesterday, the governor signed a new immigration bill that, among other things, stiffened penalties for employers who knowingly hire illegal immigrants. Reporting on the bill, the Joplin Globe notes:

We realize there are workers willing to do work and businesses who need those workers. Those workers stimulate our economy by buying goods and services from local sellers.

But there is no reason for that work, and the economic side effects, to occur outside the law.

Agreed. Forcing immigrants to operate outside of the law has several undesirable consequences. First, and foremost, in my opinion, it hurts the illegal immigrants, who tend to be extremely poor people looking for a better life. By being forced to operate outside of the law, illegal immigrants can’t expect the same degree of police protection and contract enforcement as legal citizens. As a result, they are more likely to be subject to violence.

Second, it increases the likelihood that an immigrant will commit a crime in two ways. Immigrants who would rather obey the law are less likely to immigrate if it means they have to break the law, while law breakers see immigration as potentially more attractive. So, their illegal status changes the composition of immigrants to include more law breakers. Also, once immigrants arrive in the United States, they are more likely to break other laws, because they are already here illegally. Violence may even be used as a contract enforcement mechanism, because recourse to the courts is out of the question.

Finally, the illegal status for most immigrants decreases the overall amount of immigration, because preventative measures increase the costs of migration. This means the U.S. will have less of the most valuable resource on the planet: the human mind. Not only does an increase in population through immigration help our economy for the reasons the Globe lists, but more minds leads to a better chance for technological innovation.

So, it seems natural to conclude that the governor made a mistake, and should instead petition federal legislators for an easing of immigration restrictions. Instead, the Globe concludes:

[The bill is] a big improvement over current state law, which simply takes away tax credits and abatements as a penalty. Combine those with federal punishments, and employers now have severe consequences to fear.

Wait … what? The Globe seemed to agree that immigration benefits the U.S. economy, which includes Missouri. And an increase in legal immigration would entail more open borders. Here is the author’s rationale:

People who work in the United States should be paid a fair wage and granted certain workplace rights. Employers should not be able to take advantage of a worker’s legal status by paying substandard wages and offering no benefits.

Apparently, the author has never been to Mexico. There is a reason so many Mexicans migrate here illegally in order to work for employers “paying substandard wages and offering no benefits.” In Mexico, the wages are even lower and the benefits are worse. Simply by moving here, they improve their lot. If the issue is a concern for the welfare of the illegal immigrants, letting them come here illegally is much better than not letting them come at all.

Missourinet reports that the federal farm bill has increased the maximum loan under the Beginning Farmer Loan Program from $250,000 to $450,000. The rationale for this? According to Tony Stafford, director of the Agriculture Business Development Division within the State Department of Agriculture:

[...] too many young people are leaving the farm. He hopes the enhancement of the program will lure more Missourians to return to farming.

Au contraire; it is more likely that not enough young people are leaving the farm. There is nothing intrinsically important about farms. Farms are valuable because they do one thing: produce food. If we can produce more food with fewer farmers, great! Then people — the most important resource we have — are freed to work on something else of value.

Throughout the 20th century, U.S. farm output has increased despite the fact that fewer people have chosen to be farmers. According to the Federal Reserve Bank of Dallas:

Since 1948, agricultural production has doubled, while total input use, including labor, land and machinery, declined slightly. [...] Between 1948 and 1996, agricultural labor productivity increased more than eightfold. The number of people fed by one farmer has jumped from 15 in 1950 to 128 in 1995, including 34 outside the United States.

Because production doubled and productivity increased by a factor of eight, fewer people are working in agriculture despite this doubling of production.

In A.D. 1000, almost everyone was a farmer. Now, almost no one farms in industrialized nations. A quick comparison of living conditions seems to favor present times. You might object that the driving factor here is technology, not the amount of farmers we have. But you would be missing my point: The fewer people we have farming, the more people we have working on other things, like technological advances.

Farm subsidies such as the Beginning Farmer Loan Program only serve to slow down the tremendous gains in prosperity we have been achieving during the past couple of centuries. And for what? According to Stafford, to get a few Missourians back on the farm. Why, exactly, do we want them on the farm again?

The Lincoln County Journal reports that a team of bureaucrats has descended upon Winfield, Mo., to assess and remedy the damage caused by the now-receding Mississippi flood waters:

The question of the day for the state and federal officials seemed to be how the government could help area farmers as the water begins to recede out of their crop fields.

If this is the question, the mistake has already been made. Disaster relief programs often come with nefarious long-term consequences. When government agencies bail out the victims of a disaster, we all feel good in the short term. It’s easy to see the repairs for the farmer’s damaged barn, for example. But, in the spirit of Bastiat, I have to point out what we can’t immediately see.

By consistently sending relief to disaster-prone areas, the government insulates them from some of the risk of living, working, and operating businesses there. This is essentially the same as a government subsidy for areas that are more likely to experience a disaster. As a result, there is more investment in and migration to these areas than there would be otherwise. Because this shifts people and businesses away from areas that experience relatively fewer disasters, the disaster-prone areas come to contain more stuff that can be damaged — and, thus, the average disaster causes more damage than it would have without the existence of government bailouts.

Paradoxically, disaster relief literally sets us up for catastrophe. Of course, once the catastrophe occurs, it leads to an increased demand for even more disaster relief, which, in turn, sets us up for even worse disasters, which … well, you get the idea. Very quickly, this turns into a rather vicious cycle. Let’s hope Missouri voters and politicians choose not to perpetuate the cycle.

Blogging about 120 miles away from me, in the Columbia office, fellow intern Audrey Spalding claims that we should offended by a Missouri superintendent’s decision to put a biblical quote at the bottom of his emails. Imagine for the moment that, instead of placing a religious quote at the bottom of his emails, the superintendent had a pet philosohpical quote with no religious relevance. For the sake of concreteness, consider this quote from David Hume:

Actions may be laudable or blameable; but they cannot be reasonable: Laudable or blameable, therefore, are not the same with reasonable or unreasonable. The merit and demerit of actions frequently contradict, and sometimes controul our natural propensities. But reason has no such influence. Moral distinctions, therefore, are not the offspring of reason. Reason is wholly inactive, and can never be the source of so active a principle as conscience, or a sense of morals.
— A Treatise of Human Nature, book 3, part 1, section 1

This quote is bound to be controversial. Other philosophers would surely disagree — e.g., Kant — and I’m sure the average Joe would take issue with calling morality “irrational” in any sense, which is essentially what Hume is doing. Should we be offended if a school superintendent includes this in his emails? I don’t see why. Sure, the belief is controversial, but we shouldn’t be offended by beliefs merely because they are controversial. There is nothing in the quote to suggest that people who believe otherwise are stupid, immoral, evil, or anything else of that nature.

Including the quote in emails may be motivated by a desire to convert others to the same belief. I have a hard time seeing how this is objectionable, though, considering that the purpose of schools is to do essentially the same thing. Do we not desire to convert children to the belief that 2 + 2 = 4? Perhaps it’s the desire to convert someone to this type of belief that is at issue. Perhaps moral issues should be left out of the classrooms, then. But, first of all, I don’t think a school can function without addressing moral issues. What are we doing when we tell kids that it is wrong to hit each other? Second of all, if this were the issue, it is relatively minor compared to other forms of ideological indoctrination happening inside the classroom.

The method of conversion isn’t objectionable, either. No one is forced to read the quote; they are merely given the opportunity to do so. The same can’t be said for ideological peddling, which goes on inside the classroom.

The only thing that seems to be different is that the superintendent’s quote refers to a deity, and my quote does not. Should it really be offensive to simply to hear about a deity?

Someone might argue that the Constitution has specific language regarding religion, but not regarding meta-ethics — and that is why religion is special. While completely true, this is irrelevant to the question of whether we should get offended about such a quote. This argument ignores the possibility that the Constitution simply got something wrong.

I agree that the superintendent shouldn’t have included the quote in his emails, but not because we should be offended, or because it is intrinsically immoral. The problem is that some people will be offended, which will only cause problems for the school district.

No, that’s not an oxymoron. Seriously. …

When political units are small and decentralized, competitive pressure can create market-like outcomes. It’s imperfect, because consumers — i.e., citizens — have to purchase bundles of services rather than purchasing each service separately. However, it’s much better than a large, centralized polity. The key is that the cost of switching to a new political jurisdiction is low. The smaller the polity, the smaller the cost when everything else is equal.

The Post-Dispatch reports on this sort of competition at work in Missouri. The small town of Albany has passed an ordinance legalizing the use of golf carts within city limits. Each golf cart must have an attached seven-foot orange flag, and an annual permit costing $15. Why, exactly was this ordinance passed? Well…

City Administrator Derek Brown said several residents asked the city to legalize the use of golf carts, saying the practice would be cheaper than traveling around town in a car.

It seems gas prices have played a large role in this, but the point is that residents asked for it, and got it. Sure, this sort of thing happens on the federal level, too, but the difference in this case is that residents who don’t like it can leave at a much lower cost. If they do leave, the city’s coffers will begin to dwindle, pressuring city officials to change the law — or, perhaps, become a niche city for golf carr lovers.

This sort of system is exactly what the founders had in mind with federalism. A central government is better apt to provide a few things like defense and dispute resolution between the smaller political units. At the same time, smaller competing polities, like states, counties, and municipalities, provide a somewhat competitive market for government. This does a better job of providing each citizen with the bundle of policies they want. The problem seems to be preventing the transfer of political power from state and local governments to the national government.

Prime Buzz reports:

Missouri 6th District congressional candidate Kay Barnes today released a major policy stance on energy, a 5-point plan to deal with rising gas prices.

Naturally, I have a point-by-point response.

The 5 points of her new plan are:

• Increasing domestic drilling, by compelling oil companies to use the leases they currently have to drill on federal lands.

Increasing domestic drilling is a good idea to help alleviate the effects of the high price of gas in the short term. However, compelling oil companies to drill more is the wrong way to go about this. I’m not sure about the details of the leases to these federal lands, but I can suggest one way to structure them: If the leases were tradeable commodities (perhaps they wouldn’t be leases anymore) then we can expect whoever values the lease the most to purchase it — which probably would be whoever is willing to drill now. On the other hand, the oil companies may be betting that there is no end in sight, and holding oil in the ground until the price rises even more. If that is the case, a bit of pain now is much better than extreme pain later.

• Repealing tax breaks and subsidies for big oil companies, or redirect such subsidies toward renewable energy sources such as biofuels.

I’m all for making the tax system less complicated by removing exceptions, and I’m in favor of eliminating subsidies — but redirecting them toward biofuels is a bad idea. The incentive to develop alternatives is already huge, and not likely to be affected by government action. Attempts to manipulate the market may end up doing more harm than good.

• Supporting House-passed legislation directing the Commodity Futures Trading Commission to curb speculation in the energy markets. A so-called “Enron loophole” had previously exempted electronic energy traders from U.S. regulation.

Speculation actually eases the pain of economic change. When speculators bet on future price changes, they either prematurely increase or decrease the price, depending on what they think the future holds. This eases the pain of economic change because it makes price changes more gradual, rather than arriving as sudden shocks. These speculators also probably know more about future price movements than anyone else. After all, they are the ones with money on the line.

• Lowering federal trade and budget deficits, which would strengthen the value of the dollar when buying foreign oil, thus indirectly lowering the cost of oil.

A surefire way to strengthen the value of the dollar would be to raise interest rates by slowing the growth of the money supply. Barnes wouldn’t have control of that, however, so it’s hard to fault her for leaving this out. However, the high price of oil isn’t the only concern when it comes to manipulating exchange rates. A more favorable exchange rate means less foreign investment in the U.S., and fewer exports.

• Increasing fuel economy standards for cars and trucks, something that Congress started doing again for the first time in three decades when it passed higher fuel economy standards six months ago.

This will either be irrelevant or raise the cost of cars for the average consumer. It will most likely be irrelevant, because consumers are voluntarily choosing to buy more fuel-efficient vehicles. It’s amazing how well markets coordinate action.

This policy bundle seems rather questionable to me. There is some merit to at least part of some of the five points, but I have trouble throwing my hat behind any single policy on the list. I wonder what Kay’s opponent, incumbent Sam Graves, is proposing.

“Financial incentive offered for vets to treat cows, not kittens”

That’s the headline from Missourinet, which brings us this detail:

Half a million dollars has been set aside in the state budget to lure six vet students into a large animal practice, an appropriation to get the Large Animal Veterinary Student Loan Program off the ground.

And why do we need this little subsidy? According to the acting state veterinarian, Dr. Taylor Woods:

[...] it would take at least ten years to ease a critical shortage of veterinarians to serve Missouri’s farms as well as its livestock markets.

Assuming that the wages of veterinarians are allowed to freely adjust to market forces, the subsidy is completely unnecessary. In the short term, the vets who are qualified to treat livestock can charge a premium. As a result, anyone who needs this sort of service is encouraged to seek alternatives, and to purchase these services only when they are absolutely necessary. Also, anyone who can provide treatment for livestock is encouraged to spend more time doing just that. In fact, this is exactly what is happening:

Woods says some [livestock markets] are staffed by elderly vets who have come out of retirement to help out.

Elderly vets certainly aren’t a long-term solution, but market forces take care of that, too. Because the shortage of livestock vets raises their wages, it becomes more attractive for people to become trained in the field. As this happens, the price of livestock vet services comes back down.

This isn’t a novel chain of reasoning, of course; it’s merely the operation of supply and demand applied to the caretakers of our animals.

Of course, the vets don’t really want to hear all of this — but you wouldn’t want to hear it either if the government was offering you free money.

The Post-Dispatch reports that Chrysler is closing its minivan plant in Fenton, laying off 2,400 workers. Political Fix has the responses of several prominent politicians, including this from Missouri Rep. Sam Page:

My sympathies go out to the employees who lost jobs today and their families. These men and women were hard workers, who made a good product. But they, like many Americans, have fallen victim to higher gas prices and a bad economy. They have suffered because of a government unable or unwilling to fix this problem.

We must now look forward at bringing new industry to our state. Missouri has given Chrysler $32 million in tax incentives to keep its plants operating here. After the loss of up to 2,800 good-paying, benefit-providing jobs, it is clear that that investment has not been returned. Instead, we need to be welcoming companies committed to investing in Missouri’s economy.

I have to commend Page for admitting that the government is perhaps incapable of fixing a problem. All too often, this lesson seems to be lost in political matters. In this particular case, it is very unlikely that the government can fix the problems posed by the increasing scarcity of energy. In fact, the cure is likely worse than the disease. Any incentives that the government can muster to spur innovation in energy provision are likely to be minuscule in comparison to the incentives already in the marketplace for such innovations, and the marketplace doesn’t discriminate based on politics.

Another lesson is to be learned from Page’s quote: Tax incentives for individual businesses are a bad idea. There is no guarantee that the business will stay in the area once the tax incentives are granted and no guarantee that the state will pick the best candidate for the incentive. Furthermore, a lower tax rate for everyone is a much more effective means of stimulating growth because it encourages greater productivity and attracts entrepreneurs that the state might not have even been aware of, let alone tried to pursue. Rather than handing out tax incentives, lowering taxes would be a great way to “welcome companies committed to investing in Missouri’s economy.” Hopefully, this is what Page has in mind.

According to the Post-Dispatch, experience is not the sole factor to consider when hiring teachers:

That’s the conclusion of a new study released Wednesday that looks at the quality of public school teachers in Illinois.

The 44-page report from the Illinois Education Research Council found the highest percentage of academically talented teachers were at schools in the Champaign area, with those in suburban Chicago and west-central Illinois close behind.

I know this isn’t really shocking news for anyone who has given the subject serious thought. It seems fairly obvious that experience is only one of many factors that need to be taken into account when hiring mechanics, doctors, financial analysts, stock brokers, farmhands, dishwashers, sales clerks, and, yes, even teachers. So, surprise! This study confirms the obvious.

The reason this study is necessary at all is that unions have strong incentives to favor policies that benefit current workers at the expense of future workers. The result is an overemphasis on experience relative to other merits in the workplace. So it really shouldn’t be surprising when teacher unions favor experience-based pay and oppose merit-based pay — even when both common sense and science contradict them.

"Rains clog sewer system, residents asked to limit toilet use," the Kansas City Star reports. The hilarity of this headline should be apparent to anyone with a bit of schooling in economics. According to the article:

The Kansas Department of Health and Environment issued a statement Wednesday urging Sublette residents to curtail water usage and use toilets as little as possible. The statement said sewers will remain shut down until further notice.

I sincerely doubt that this statement will have much of an effect on water usage. A much more effective way to curtail water usage would be to simply raise prices, much like a private provider would do when the costs of supplying water temporarily but dramatically increase. In response to the higher price, water consumers would cut back on consumption. Only when the benefit to the consumer outweighed the cost to the water producer would water be consumed.

Admittedly, this is an imperfect solution because, as the article alludes to, the primary problem is not in water usage per se, but in the sewers. Ideally, sewage companies would be able to charge for each flush independent of how much water it uses, but this may be impractical. If these services were privatized, they might be provided by different companies, but the sewage company would have a strong incentive to pay the water company to raise prices.

Under the current system, both Kansas and Missouri get bureaucratic proselytization about when they can and can’t flush, rather than actual results, and that just stinks.

Dr. Philip Anderson, Dean of the St. Louis University School of Medicine, calls for tuition assistance for students studying to be primary care physicians over at the St. Louis Post-Dispatch. His rationale is that there aren’t enough primary care physicians, and tuition assistance would provide an incentive for young bright minds to move into the field.

I suspect that the supply of doctors is relatively inelastic, and thus tuition assistance woouldn’t have much of an effect on the number of primary care physicians available. The problem is that the supply of doctors is fundamentally limited by occupational licensing laws. It’s no secret that it costs an enormous amount of both time and money in order to become a doctor in the United States. As a result, there are fewer doctors than there would be otherwise, and those who do become doctors enjoy much higher wages. In the end, this hurts the average family who has to pay more for medical services — particularly low-income families who are already strapped for cash.

The standard argument for requiring doctors to be licensed is that this protects the public from fly-by-night operations that only endanger the public’s health. There may be some merit to this argument when it comes to invasive surgery. When it comes to things like treating a cold or giving birth, however, the argument loses much of its force. You simply don’t need an M.D. to effectively do many of the things doctors do. What this argument ignores, though, is that fully functioning adults are capable of making their own decisions. It may be a useful service to warn the public about the dangers of not using a doctor for any given medical need, but requiring the public to use a doctor only limits the options available.

Speaking of midwifery, as Justin Hauke notes, the Missouri Supreme Court has just upheld a law to legalize the practice. Midwifery provides a textbook example of how occupational licensing hurts both the consumer and the competition. The Post-Dispatch reports:

Doctors’ groups have fought efforts to loosen the regulations, arguing that midwives lack training and that pregnancies can quickly become dangerous.

Even if this is correct — and it probably isn’t — this issue is fundamentally a matter of personal choice. We don’t allow the government to treat us like children when we decide what to wear in the morning; why shouldn’t we insist on autonomy when it comes to health care?

My fellow bloggers  have written quite a bit more about midwifery in Missouri — for example: here, here, here, and here.

James Fussel has an excellent article in the Kansas City Star detailing some of the potential avenues for combating rising fuel costs in the long term. If you take just one thing away from the article, it’s that there has been a flurry of innovation as gas prices have risen. From plug-in hybrid cars to pure electric cars to hyrdrogen fuel cell cars, small breakthroughs have been made across the board in attempts provide cheaper alternatives to conventional gas-powered cars.

This is precisely what we should expect from a well-functioning market. As the price of gas increases, it becomes more profitable to both conserve and seek out alternatives. The practical result is exactly what we’ve seen. Consumers are buying more fuel-efficient cars while producers are looking for ways to make cars more fuel-efficient, as well as seeking alternatives to gasoline.

This is all occurring despite misguided political efforts, such as Missouri’s E-10 mandate. I shouldn’t have to point out that ethanol was not mentioned in the Star’s article as one of the promising new technologies. A better strategy for lawmakers would be to cultivate the competitive environment that is necessary for the innovation we are seeing. In other words, enforce property rights and that’s it. Any attempt to "fix" the market is apt to cause worse problems than it solves.