The Newsletter of the Mackinac Center for Public Policy • www.mackinac.org • Summer 2008 Show Michigan the Money
homas Jefferson wrote that the finances of Tgovernment should be “as clear and intelligible as a merchant’s books” allowing leases even come with notations for the names “any man of any mind” the of the employees and landlords receiving the ability to “comprehend payments. them, to investigate abuses “The Mackinac Center is performing a valuable and consequently to Michigan Secretary of State service by working to empower taxpayers with Terri Lynn Land responded control them.” to a Mackinac Center request useful knowledge about their government,” Land This vision of to post her department’s said of her decision to comply with the Center’s government transparency expenditures online. request. “I’m proud of the Department of State’s took a leap forward in ongoing commitment to stretch every dollar while Michigan on April 23 when Secretary of State offering high-quality, efficient customer service. Terri Lynn Land, in response to a request from the We hope this initiative can serve as a model of Mackinac Center, posted online the Department of government openness.” State’s first detailed quarterly expenditure report. The announcement of this success led to drive- The 84-page report covers spending for fiscal time radio interviews with Kenneth M. Braun, year 2007 and details the department’s payments director of the Center’s Michigan Transparency to the penny for everything from pizza to office Project, on WJR in Detroit and WMKT in supplies. Spending lines for travel and building see “Michigan Money” Page 5 Regulations That Lead to Ruin
Contents ne of the biggest of the Mackinac Center’s President’s Message 2 deterrents to economic Property Rights Network, he is Powering the Debate 3 growthO in Michigan often in daily contact with home and Essay Contest Winners 3 escapes the attention of the business owners who lost the Media Highlights 5 media and policymakers. value of their property, endured Best and the Brightest 6 Taxes, energy policy, education bureaucratic nightmares, faced A Humble Influence 8 funding and other issues prolonged legal action or suffered generate legislative debates and other indignities at the hands of Lessons from Mutants? 8 consume vats of newspaper ink. state and local regulators. Awarding Innovation 9 Not as much public attention In order to raise the profile of Free-Market Fundamental 10 is given to a regulatory climate this critical issue and bring some Free-Market Library 11 Charlie Curtis, left, and Alan Taylor shared their that harms existing property of these injustices to light, the regulatory ordeals at a forum sponsored by the Center’s Cooler Heads 12 owners, prevents business Property Rights Network on Property Rights Network. expansion and discourages June 4 held a Lansing Issues who found their livelihoods, investment in the state. & Ideas panel discussion on businesses, employees and Russ Harding hears these property rights. Three of the personal liberty jeopardized stories every day. As the director panelists were Michiganders see “Property Rights Network,” Page 9
“I would encourage you to all be a member of the Mackinac Center’s property rights initiative.” — Property owner Charlie Curtis, who is entangled in a regulatory dispute with the Michigan Department of Environmental Quality, speaking www.mackinac.org www.mackinac.org at a property rights| | Summer Springforum in2008 Lansing, 1 Mackinac June 4, 2008. Center IMPACT Pr e s i d e n t ’s Me s s a g e Bo a r d o f Di r e c t o r s D. Joseph Olson, Chairman Rodney M. Lockwood Jr. Senior Vice President and General President, Lockwood Counsel, Amerisure Companies Construction Company, Inc. Lawrence W. Reed, President Joseph P. Maguire Mackinac Center for Public Policy President, Reaching Tomorrow’s Leaders Wolverine Development Joseph J. Fitzsimmons Corporation Retired President, University Microfilms Richard D. McLellan Attorney, Dykema Gossett Hon. Paul V. Gadola wenty years ago when there were only two Mackinac Center U.S. District Court Judge John E. Riecker of Counsel to Braun, Kendrick, employees, we asked ourselves, “How can we reach young Kent B. Herrick Finkbeiner, PLC T President and CEO, Thermogy people with our message?” We knew we didn’t want to focus James M. Rodney Richard G. Haworth Chairman of the Board, Chairman of the Board, Detroit Forming Inc. only on media or legislators. We wanted to shape the future by Haworth, Inc. identifying tomorrow’s leaders today. We also knew that it would Linda K. Rodney Phil F. Jenkins Attorney at Law, Law Offices Chairman, Sweepster Inc. be hugely inefficient to simply provide a speaker to an occasional of Linda K. Rodney, P.C. Edward C. Levy Jr. Lawrence W. Reed friendly high school without an obvious incentive for the President, Edw. C. Levy Co. President students to listen, learn and stay in touch. The outgrowth of that thought process is our annual high school debate Bo a r d o f Sc h o l a r s program, through which about 9,000 students have passed since 1988. Last Dr. Donald Alexander David Littmann year we branched out to college audiences Western Michigan University Mackinac Center for Public Policy Dr. William Allen Dr. Dale Matcheck with a very successful, new program called Michigan State University Northwood University Students for a Free Economy, which you Dr. Thomas Bertonneau Dr. Paul McCracken Writer and Independent Scholar University of Michigan (ret.) can read about on Page 9. Dr. Brad Birzer Charles Meiser Sometimes I watch what we older Hillsdale College Lake Superior Dr. Peter Boettke State University (ret.) folks say and do in places like Lansing, and George Mason University Glenn Moots Dr. Theodore Bolema Northwood University it makes me want to invest in youth all the Central Michigan University Dr. George Nastas III more. How many times have you also been Some 9,000 Michigan high school students have Dr. Stephen Colarelli Marketing Consultants participated in Debate Workshops, the Mackinac Central Michigan University Dr. John Pafford frustrated that old dogs just can’t seem to Center’s longest-running program. Andrew Coulson Northwood University learn new tricks? Cato Institute Dr. Mark Perry Robert Crowner University of Michigan - Flint We never give up on anybody Eastern Michigan University (ret.) Gregory Rehmke Dr. Richard Cutler Economic Thinking/ so we won’t quit working on anyone of any age. But we increasingly believe University of Michigan (ret.) E Pluribus Unum Films at the Mackinac Center that more emphasis must be placed on the younger Dr. Richard Ebeling Dr. Steve Safranek Foundation for Economic Ave Maria School of Law generations. They have inquiring minds, more open to new ideas and especially Education Dr. Howard Schwartz ideas they weren’t exposed to in the classroom. Reaching 60-year-old legislators Dr. Jefferson Edgens Oakland University Morehead State University James Sheehan is still important, but putting too much focus there can be like locking the Dr. David Felbeck Deutsche Bank Securities proverbial barn door after the horse has already gone. (First dogs, now horses. University of Michigan (ret.) Rev. Robert Sirico Dr. Burton Folsom Acton Institute for the You’re probably wondering what’s next.) Hillsdale College Study of Religion and Liberty Dr. Wayland Gardner Dr. Bradley Smith Among the very good reasons for appealing to youth is this: Their character Western Michigan University (ret.) Capital University Law School is still being formed, and how it shakes out will likely define them for the rest John Grether Dr. John Taylor Northwood University Grand Valley State University of their lives. If the Mackinac Center can help young people understand the Dr. Michael Heberling Dr. Richard K. Vedder direct connection between character, liberty and sound policy, we will provide a Baker College Ohio University Dr. Ormand Hook Prof. Harry Veryser Jr. profoundly important service to our state and nation. Mecosta-Osceola Intermediate University of Detroit Mercy School District John Walter Jr. Chief among the elements that define strong character are these:honesty, Robert Hunter Dow Corning Corporation (ret.) humility, responsibility, self-discipline, self-reliance, optimism, a long-term focus Mackinac Center for Public Policy Dr. William Wilson Prof. Harry Hutchison Economic Consultant and a lust for learning. A free society is impossible without them. For example: Wayne State University Mike Winther A dishonest people will lie and cheat, and they’ll become even bigger liars Dr. David Janda Institute for Principle Studies Institute for Preventative Dr. Gary Wolfram and cheaters in elected office; people who lack humility become arrogant, Sports Medicine Hillsdale College Annette Kirk condescending, know-it-all central planner-types; irresponsible citizens blame Russell Kirk Center for others for the consequences of their own poor judgment; people who will not Cultural Renewal discipline themselves invite the intrusive control of others; those who eschew self-reliance are easily manipulated and demagogued by those on whom they are dependent; pessimists dismiss what individuals can accomplish when given the freedom to try; myopic citizens will mortgage their future for the sake of a short- term “solution”; and close-minded, politically-correct or head-in-the-sand types will never learn from the lessons of history and human action. Young people are the future. The time to engage them is now. I Mackinac Center for Public Policy 140 West Main Street • P.O. Box 568 Midland, Michigan 48640 989-631-0900 • Fax 989-631-0964 www.mackinac.org • [email protected]
Mackinac Center IMPACT is a quarterly publication of the Mackinac Center for Public Policy, a nonprofit, nonpartisan, tax-exempt research and educational institute classified under section 501(c)(3) of the IRS code. Michael D. Jahr Daniel E. Montgomery Joseph G. Lehman Editor Graphic Designer Associate Editor Mackinac Center IMPACT 2 Summer 2008 | www.mackinac.org Powering the Electricity Debate
t a time when energy costs are on the rise Among other things, the authors and Michigan’s economy is in a slump, it’s recommended: encouraging competition in Anot surprising that the Legislature would visit energy supplies; eliminating subsidies of one the issue of electricity service. What is surprising customer class by another; rejecting purchase — and ultimately troubling — is that legislative quotas for renewable energy, such as solar, wind packages in the House and Senate would decrease and hydroelectric power; and amending state law competition among electricity suppliers, increase to allow yard waste in landfills for conversion to regulation and mandate the use of “renewable electricity-generating methane. Diane S. Katz energies” according to a policy brief by Mackinac Following the release of the brief, Katz Center adjunct scholars Diane S. Katz and and Bolema heard from both state and local Theodore Bolema, Ph.D. officials who said they appreciated the detailed “Proposals to Further Regulate Michigan’s analysis. The Customer Choice Coalition, Electricity Market: An Assessment,” published an alliance of schools, small businesses, on May 16, concluded that new regulations and manufacturers, associations and other restrictions on competition would raise prices groups, requested 150 copies of the brief for for consumers and businesses without improving distribution to state legislators. Dr. Theodore Bolema services or benefitting the environment. The brief Members of the media also expressed interest can be found at www.mackinac.org/9467. in the findings. Katz appeared on Michigan Public Tracing the history of electricity legislation, Radio, The Frank Beckmann Show on WJR 760 Katz and Bolema documented how the partial AM, the Morning Show with Greg Marshall and deregulation of electricity generation in 2000 led Bob White on WMKT and the Ron Jolly Show to increased competition and lower prices. They on WTCM. Bolema was interviewed on WKLA noted that a better approach than the legislation in Ludington, quoted in Central Michigan under consideration would be the removal of all University’s CM-Life and had an Op-Ed in the obstacles to a fully competitive electricity market. June 15 Lansing State Journal. I
Essay Contest Winners Take Home $1,000 Scholarships
record number of Michigan high school your thoughts,” she said. debate team students participated in the Nikhil Chivali, a sophomore at Saginaw AMackinac Center’s 2007 High School Debate Heritage, was that school’s second consecutive Workshop essay contest. The winning authors winner. His post-graduation plans include were announced in late May, with each one attending the Massachusetts Institute of receiving a $1,000 college scholarship. Students Technology. who attended one of four workshops in the fall Nathan Kemper, a junior at Lenawee Christian of 2007 were invited to write a commentary on School, wrote that microfinancing would be a the 2007-2008 national debate topic, “Resolved: more effective way to assist sub-Saharan Africa
Nathan Kemper, one of three winners The United States federal government should than federal aid. of the Debate Workshop essay contest, substantially increase its public health assistance to All three students focused on the need to receives a scholarship from workshop coordinator Kendra Shrode. Kemper's sub-Saharan Africa.” increase free trade in order to improve the debate coach, Colleen Averill, is at right. The contest was highlighted by its first ever public health and overall economic well-being of two-time winner, senior Jessica Wilson from the region. Grand Rapids Forest Hills Central. Wilson, who About 450 students from 30 Michigan plans to attend Denison University and study pre- high schools attended the 2007 workshops in med, also won as a junior with an essay on the 2006 Livonia, Adrian, Grand Rapids and Traverse topic, mandatory public service. City. Some 9,000 high school debaters have Wilson said she recommends debate for all honed their skills over the 20 years the Center high school students, regardless of what career has been holding workshops. I path they plan on pursuing. “It teaches you to think things out and organize
www.mackinac.org www.mackinac.org | | Summer Spring 2008 3 Mackinac Center IMPACT Michigan Money from Page One
Petoskey. Other governmental units took notice. “By putting our financial records online, our MichiganVotes: citizens now can examine our budget and spending anonymously from the comfort of their home,” said Spreading Sunshine Across Caledonia Township Supervisor Bryan Harrison, the Land announcing that he would put that local government’s Thanks to a happy confluence of events, the Mackinac spending data online. “When the idea was brought to my Center’s pioneering MichiganVotes.org Web site is being attention by the Mackinac Center, the question wasn’t replicated in a growing number of states by our sister free- whether we should do it, the question was, ‘Why haven’t market think tanks. Currently, Votes.org sites are live in we been doing this all along?’” Kansas, Kentucky, Maine, New Mexico and Washington. By The Michigan Transparency Project, established the start of the 2009 legislative calendars, sites will be up in Hawaii, Illinois, Iowa, Pennsylvania, Rhode Island and most in March, seeks to persuade state agencies, municipal likely several other states. governments, school districts and other units The expansion is being led by the Mackinac Center’s of government to place detailed reports of their senior legislative analyst Jack McHugh. Over the expenditures and other activities on the Internet for past several months, McHugh has traveled to Maine, New public viewing. Mexico and Kansas to train site managers and erect the Promoting government transparency is nothing new basic architecture. That travel schedule will accelerate in the for the Mackinac Center. In 2002, the Center launched second half of this year. MichiganVotes.org, where every action of a legislative MichiganVotes.org is a free, searchable, sortable session and every vote of every legislator is described database containing objective, concise, plain-English in plain English and recorded in a searchable database descriptions of every vote by every state legislator, plus (see accompanying article). Revenue and expenditure all the bills and amendments introduced in the Legislature. reports, categorical grant reports and collective It enables residents to quickly and easily uncover the real bargaining agreements for Michigan’s school districts voting record of any legislator on any issue. It’s been said were also compiled by the Center and published online. that sunshine is the best disinfectant, and Votes.org sites When the Center announced the posting of the can shed light on this critical branch of government. In setting up the sites, McHugh is getting a fascinating school union contract database in April, the story was overview of diverse political and legislative cultures. picked up by the Associated Press and featured in “Every state is different,” he observes, “but the tendency USA Today, the Chicago Tribune, the Detroit Free of legislators to dodge accountability and obfuscate their Press and other newspapers, as well as on numerous record remains a constant. Without a Votes.org site, television and radio stations around the state. Within ordinary residents don’t have a chance to penetrate the days, the database had more than 13,000 page views smokescreens; with it, it’s easy.” and was accessed by local and intermediate school districts, news outlets, companies that provide support services to school districts, the Michigan Education license plates and run elections can readily provide a Association and the Michigan Education Special detailed expenditure report, then it is reasonable for Services Association (the MEA’s third-party insurance the Center’s Transparency Project to ask the same of administrator). every other agency. The Department of Corrections, When the Michigan Transparency Project the Department of State Police and the Department of announced in March an initiative aimed at opening Human Services are next on our list. Each revealed in the check registers of Michigan’s public school late 2006 that they had unconstitutionally overspent districts and placing them on the Internet, a Royal their budgets for the preceding fiscal year. While the Oak Daily Tribune editorial said the Center “should directors of these departments insist that this was an be praised for its efforts.” An editorial in The Saginaw isolated incident, putting their expenditures on the News said the Center is “on to something good.” One Internet for public scrutiny would be a more concrete state representative prominently posted a link to the source of reassurance. Michigan School Databases on her legislative Web page. Using technology to tear away the filters between All the databases and resources are posted at residents and their government is the objective of the www.michigantransparency.org, which will serve as a Michigan Transparency Project. Long gone are the days general clearinghouse for new transparency initiatives as when a handful of news outlets were the sole watchdogs they become available. over the public purse and the policymakers. Very soon, The Department of State’s degree of openness millions of Michigan residents may be able to monitor should now become the minimum standard for all the actions of their public servants from the comfort of state agencies. If a department diverse enough to mint their homes. I
Mackinac Center IMPACT 4 Summer 2008 | www.mackinac.org Me d i a Imp a c t
Scholars Promote Transparency, Expose Fallacy
The Mackinac Center’s comprehensive film industry will produce economic ben- April 21 and he was quoted in the April and continuing efforts to make govern- efits for the state were debunked in a com- 16 Detroit News regarding the North- ment more transparent received state mentary co-written by Jack McHugh, west-Delta airline merger. and national media coverage. In March, senior legislative analyst, and James M. the Center announced it would seek to Hohman, fiscal policy research assis- Paul Kersey, director of labor policy, post on the Web the checkbook registers tant. Their commentary ran in the March wrote an Op-Ed on union account- of every public school district in Mich- 31 Lansing State Journal, April 9 Lan- ability that appeared in the April 17 igan, drawing coverage in the March sing City Pulse and April 17 Oakland Detroit News and the April 24 Grosse 11 Macomb Daily, March 20 Zee- Business Review, and was cited on Pointe News. Kersey was cited in a May land Record, March 21 Saginaw Press, March 31 by the Associated Press and 15 Lansing State Journal story about March 24 Dowagiac Daily News, March Crain’s Detroit Business, and on April 1 union strikes. 21 Port Huron Times-Herald and by the Detroit Free Press. March 26 Saginaw News. The relationship (or lack thereof) A bill that would force home-school between spending on higher education, The Transparency Project expanded families to register with local school job creation and economic growth was its scope in April with the Web post- districts was addressed in a com- the topic of a Viewpoint commentary ing of every collective bargaining con- mentary by Mackinac Center adjunct written by McHugh and Hohman that tract for every public school district in scholar Marc Holley and ran in the ran in the April 12 Niles Daily Star, the Michigan. This story received cover- April 20 Lapeer County Press. Holley April 24 Straitsland Resorter and the age in the April 17 Chicago Tribune also discussed the issue on April 11 April 27 Ann Arbor News. McHugh and the April 19 USA Today, as well on “The Frank Beckmann Show” on was also quoted on the state of Michi- as the April 16 Battle Creek Enquirer, WJR 760 AM, and was cited in the April gan’s economy in the March 26 Grand April 17 on WSGW News Radio 790 10 Grand Rapids Press. The Center Blanc News. AM, April 17 on WJRT-TV, April 18 was cited in a story about school enroll- on WEYI-NBC 25, WLAJ-TV and ment figures in the April 21 Detroit Russ Harding, director of the Cen- WZZM-13, April 22 in the MIRS Cap- News and May 1 Ann Arbor News, and ter’s Property Rights Network, wrote an itol Capsule, April 23 in the Romeo in stories about high school graduation Op-Ed for the March 31 Grand Rapids Observer and April 24 in the Detroit requirements (April 2, Port Huron Press about how smog regulations will Free Press and Saginaw News. Times-Herald) and school board elec- negatively impact the economies of west tions (May 9, Flint Journal). Michigan counties. Harding also was In late April, Michigan Secretary of State quoted in a May 29 Detroit News story Terri Lynn Land agreed to a request from Senior Economist David Littmann’s about climate change legislation pending the Mackinac Center to post online a Op-Ed on knowledge-based industries in Congress. detailed account of the Department of ran in the March 25 Oakland Press, State’s spending. This transparency victory March 26 Dearborn Times-Herald and Diane S. Katz, adjunct scholar, was was noted on WDIV-NBC 4 on April 23 March 30 Utica Advisor. Littmann dis- interviewed on “The Frank Beckmann and in the Detroit Legal News on April cussed the issue on radio station WSJM Show” on WJR May 19 and WTCM 25, in the Midland Daily News on April on April 2. He was also quoted in stories 1270 AM May 22 about an electric- 26 and in Gongwer News Service on May regarding Michigan’s future energy needs ity brief she co-authored with another 14. In the May 28 Grand Rapids Press, in the March 19 Petoskey News-Review, adjunct scholar, Dr. Theodore Bolema. Caledonia Township Supervisor the March 20 Detroit Legal News and For more details, see related story on Page 3. Bryan Harrison said he was the March 22 Bay City Times. “inspired” by the Center’s Paul Chesser, an adjunct scholar with call for transparency and Michael D. LaFaive, director of the the Center and director of Climate Strat- decided to post the Center’s Morey Fiscal Policy Initia- egies Watch, wrote on Op-Ed about the township’s budget and tive, was quoted on three consecutive out-of-state groups funding the Michi- monthly financial reports days — April 1 in National Review gan Climate Action Council that ran in on the Web. Online and April 2 and 3 in The Detroit The Detroit News on May 14. Chesser News — about the myriad economic also spoke on the matter at an Issues Claims by legislators and the problems facing the city of Detroit. and Ideas Forum that was covered in the governor that targeted sub- LaFaive wrote an Op-Ed about job cre- May 5 Gongwer News Service. For more sides and tax breaks to the ation that ran in the Niles Daily Star on details, see related story on back page. I
www.mackinac.org | Summer 2008 5 Mackinac Center IMPACT The Best and the Brightest
ew things in life are as rewarding as shaping the Daniel Smith, also of Midland, served two minds and character of young people. As the internships at the Center. Smith went to GMU to study FMackinac Center celebrates its 20th anniversary, one economics in its graduate program last fall. He is a of the more enjoyable walks down memory lane has graduate of Northwood University and, in a small twist involved the myriad of first-rate interns who have passed of fate, an assistant to Peter Leeson. through our doors. Many have gone on to labor for the At the Center, Daniel was responsible for freedom movement directly or indirectly. conducting two different summer surveys of school Since 1987, the Center has employed more than support service privatization. With these findings he 80 interns in various capacities. One summer alone co-authored the “Michigan School Privatization Survey saw a brigade of 15 students serving internships in our 2007.” In the five different summers in which the Center Midland headquarters. While most have been from conducted surveys of the more than 550 Michigan Michigan, the Center has hosted interns from far-flung public school districts, only twice did we achieve a 100 places like Ireland, the Czech Republic and Texas. percent response rate. Smith was at the helm both times. Most assisted on specific, finite research projects, but This bull-dog tenacity helped him achieve an “A” in some worked as editors, graphic designers and Web microeconomic theory from famous professor, author programmers. A consistent trait among the interns is and radio host Walter Williams. Williams is reputedly that they seem to have enjoyed their time at the Center parsimonious with high grades, but Smith’s exceptional and look back on their experience as useful and positive. ability put him over the top. After receiving his Ph.D, The Mackinac Center does too. As much as we gave Smith hopes to return to Midland to work as a professor to these interns in terms of job and life experience, we at Northwood University and an adjunct scholar with received back in top-flight assistance that resulted in the Mackinac Center. real impact. For instance, David L. DiGiuseppe, the very first research intern ever employed by the Center, Shawn Miller, a two-time intern with the Mackinac contributed to a privatization profile of Ann Arbor that Center, earned an undergraduate degree in mechanical prompted real privatization efforts in the city. engineering and a law degree from Notre Dame. After Below is a sampling of the successes Mackinac practicing law in southern California, Miller decided Center interns have gone on to achieve. to pursue a Ph.D. in economics at GMU. Miller says he wants to dedicate the remainder of his working life Peter Leeson of Midland served to advancing sound policy using a marriage of law and four consecutive internships at the economics. Ultimately, Miller sees himself litigating for Mackinac Center beginning in 1997. liberty as part of a public interest law firm or market- The Center discovered Leeson after friendly think tank. He plans to write, debate and teach our president, Lawrence W. Reed, about the importance of free markets and free people. read a letter to the editor Leeson had written to the Midland Daily News Tara (Thelen) Velting came to us Peter Leeson critiquing a writer’s economic analysis. in a less-than-traditional manner. In Leeson went on to receive an undergraduate degree in 2000, Center Fiscal Policy Director economics from Hillsdale College and a Ph.D. from Michael LaFaive received a call from George Mason University in Virginia. a Michigan resident who admired Leeson is now a professor for the study of capitalism our work and advanced Tara’s name in the Department of Economics at GMU and is widely as an intern prospect — without published in academic journals. His first book, “The Tara Velting actually having discussed it with Tara. Invisible Hook,” examines the economics of piracy Impressed by the caller’s description, LaFaive contacted and is scheduled for release in 2009. “Interning at the her and asked her to apply. She did and became a Mackinac Center was one of the most enjoyable and significant contributor to Center work. After earning her intellectually stimulating times of my life,” said Leeson. law degree from GMU, she returned to Michigan and “I learned tremendously from the Center’s superlative has twice performed pro bono legal work for the Center: employees and recommend Center internships an analysis of statutory changes involving the Michigan to anyone interested in learning about liberty and Economic Growth Authority program and a Viewpoint advancing its cause.” commentary on Medicaid.
Mackinac Center IMPACT 6 Summer 2008 | www.mackinac.org Nathan Russell served two her internship. Davis went on to co-author a student housing internships with the Mackinac Center privatization study for the Los Angeles-based Reason (2004 and 2005) before beginning a Foundation. She is currently working in Turkey. Ph.D. program in economics at GMU. Two of our interns went on to Harvard and Yale Law. He earned a master’s degree there in Another, Erin De Pree, earned a Ph.D. in theoretical particle 2006 and is set to receive his doctorate in physics in June. A few years ago she told us that she took 2009. He currently works as an adjunct lessons she learned at the Mackinac Center back to school with Nathan Russell professor of economics at Patrick Henry her. She said the practice of debriefing every “performance” College in Virginia. He intends to continue teaching and helped her avoid repeating errors that may have cropped working with think tanks. up in her work or that of colleagues. Her sister Joann, also a former intern, works as a prosecutor in Washington state. Ryan Oprea served an internship Matt Wilczek, now an executive with Mitsubishi Caterpillar in 2000 along with Peter Leeson and in Texas, also credits Mackinac training for some of his together they pursued doctorates in success. “The Mackinac Center rounded out my education; economics at GMU. Oprea is now an it was the perfect finishing school,” he said. “I can’t think of a associate professor at the University better way to transition from an academic environment to the of California Santa Cruz. His areas of business environment. Even after 10 years I still draw from the research include experimental economics leadership examples I experienced at the Mackinac Center.” Ryan Oprea and industrial organization. Unfortunately, space prevents us from highlighting every intern success story. Fortunately, every summer Of course, there are many other former interns of whom brings to the Center a new crop of students, along with their we are extremely proud. Sean Lewis and Laura Davis went energy, passion, character and scholarship. We delight in on to earn law degrees from the University of Michigan. their successes, especially when we see so many of them While working for the Center, Lewis began the necessary but involved in the freedom movement. I arduous task of describing Michigan laws in plain language • for the Center’s popular MichiganVotes.org Web site. He Another former intern, Valerie Crain, is a student at Delta is considering a position at the U.S. Justice Department. College. Crain works part time in the Mackinac Center Davis worked in the fiscal policy department and has Graphics Arts Department and contributed to the design of authored several articles on privatization during and after this newsletter.
Future Hall of Famers The Mackinac Center’s 2008 summer interns, from left to right: Kahryn Rombach, Wesley Reynolds, Joshua Rule, Lauren Ruhland, Jim Vote, Hannah Mead, Kurt Bouwhuis and Will Freeland. Not pictured: Sara Grether.
www.mackinac.org | Summer 2008 7 Mackinac Center IMPACT Ad v a n c e m e n t Imp a c t Bernard Baltic: A Humble Influence
n April we learned that Bernard Baltic, a influenced numerous organizations and cherished friend, had passed away at the age individuals. His devotion to urban youth and his ofI 71. He was a quiet man with a bullhorn for belief in the principles of free enterprise led him to liberty. He was an alumnus of the Case School help organize the Granville Academy of Cleveland of Engineering, a managing partner in Baltic- at John Carroll University. During a memorial Gustafson and Associates, and though a native resolution presented by the Granville Academy, of Ohio, he was one of Michigan’s greatest Bernie was recognized as a loyal board member, champions of freedom. faithful volunteer and mentor to students. Bernie founded the Center’s biannual Most importantly, Bernie was a great friend Leadership Conference. The three-day program and individual. Kendra Shrode, Mackinac Center provides think tank executives with intensive assistant to the president, said: “He was fun — I Bernard Baltic, center, with Mackinac Center President Lawrence W. Reed and instruction in management practices, strategic treasure pictures of him walking the Great Wall. Assistant to the President Kendra Shrode planning, fundraising, financial management My first trip to China and Mongolia was made all at the Great Wall of China in 2005. and media relations. With his help, the Mackinac the more special because of his delight in the trip. Center has trained more than 500 people from 43 He was thoughtful — my car still carries the road countries and nearly every state. flares he gave me because he was worried about all Bernie would travel to the Mackinac Center the driving I do myself. He was humble — never for each conference and make a presentation, did a man do so much for others without wanting “Correcting Donor Faux Pas.” Bernie was never to be thanked.” comfortable being in the spotlight and his The Mackinac Center, like everyone who knew presentation always caused him considerable him, will miss Bernard Baltic, a selfless promoter of stress. Yet his passion for ideas overrode his liberty and a dear friend. I anxiety and his quiet charm consistently won over each audience. Bernie’s compassion and generous spirit
Policy Lessons … from Mutants?
hat a time to be a Michigan sports fan. The be the politician’s answer, but even the children Red Wings went all the way, returning the understand it is a losing strategy. WStanley Cup to Hockeytown. The Pistons made While politicians, lobbyists and me-first special it again to the Eastern Conference Finals despite interests squabble over the biggest slice of the pie facing teams with higher-profile stars. And the in Lansing, the Mackinac Center for 20 years has Mutants — the youth soccer team I coached this highlighted the plays that produce success. At spring — won its season-ending game 5-1. times — like on the right-to-work issue — we have Yet they didn’t always win. My Mutants lost been a voice in the wilderness. But this steadfast JustinW.Marshall, Director of very early in the season. The players were upset commitment to core fundamentals, like freedom Advancement about their first loss, and I had to adjust our and civil society, allows us to score key victories efforts. At our next practice I pointed out areas when others’ playbooks have failed. where we could improve. To be more Mackinac Center ideas shape debates, competitive, we had to pass more, be inspire the heart, challenge proponents of big more aggressive toward the ball and government, encourage entrepreneurship and take advantage of our speed. create opportunity for liberty to take root. These Not a single player could ideas are based on economic principles that have complain about the referees — never been compromised. they understood the rules On Nov. 11, 2008, the Mackinac Center for and that they applied equally Public Policy will celebrate its 20th anniversary Your estate plans reflect the values to everyone. They didn’t argue (see ad on Page 10). Details are forthcoming, but you hold dear and hope to perpetuate. for an offside exemption or a player please save the date now and join us at the Kellogg Join the Mackinac Center’s Legacy Society by calling Justin W. Marshall at 989-631-0900 subsidy, nor did they encourage Hotel & Conference Center in East Lansing to and including the Center in your bequest today. the recreational league to provide recognize the importance that principles, not Mutants with special favors. This may politics, will play in Michigan’s future. I
Mackinac Center IMPACT 8 SummerSpring 2008 2008 | | www.mackinac.org www.mackinac.org Atlas Foundation Honors SFE Innovations
he innovative, multimedia understanding of the free and Human Prosperity.” campaign that has attracted college society.” Atlas received about As one Fisher Award Tstudents from around the state to 60 submissions from dozens judge commented, “the Students for a Free Economy has also of countries. For a state- nicely designed booklet… garnered accolades from the leading based think tank to win this provides brief, reliable institute devoted to developing free- prestigious international summaries of the core market think tanks around the world. prize is rare, according to principles and values of a In late April, the Atlas Economic Fisher Award coordinator free society.” Thousands of Research Foundation recognized the Yiqiao Xu. these booklets have reached Mackinac Center’s campus outreach Working with Mackinac the hands of Michigan program for its unique efforts in Center award-winning college students, who, as the The Mackinac Center won an promoting the principles of individual graphics designer Daniel Atlas Foundation 2008 Sir Antony judge emphasized, are “an liberty to young people. Noting SFE’s Montgomery, SFE Director Fisher Award in the Innovative absolutely crucial group.” Projects category for its Students “thoroughly modern approach to Isaac Morehouse employs for a Free Economy campus Mackinac Center the task of enticing Michigan college a wide range of media — program. Pictured is SFE director President Lawrence W. students to learn about free market from videos to T-shirts — to Isaac Morehouse. Reed considers the honor ideas,” Atlas awarded the Mackinac succinctly and persuasively promote the well-deserved: Center its 2008 Sir Antony Fisher principles of economic freedom. Taking “In barely a year, Isaac Morehouse International Memorial Award in free-market ideas beyond the realm of has created a lively forum for free market the “Innovative Projects” category. textbooks, Morehouse presents these ideas across Michigan campuses and The Fisher Awards “honor think concepts in new, exciting ways. generated more excitement among tank publications that have made the SFE’s basic message is set forth students than we had thought possible in greatest contributions to the public in the booklet “Economic Freedom such a short time.” I
Property Rights Network from Page One because of decisions they made about the “If the state of Michigan prevents me the Wind Farms in Macomb Township, use of their own property. from expanding my business, I will be told the audience about the difficulties One of the panel members, Alan forced to relocate,” he told the audience. that she and her family experienced with Taylor, owns the very type of business “I thought I was alone when I first had local government and DEQ officials over that Michigan needs in order to diversify this problem two years ago, but I find the construction of an equestrian facility its economy. Hart Enterprises Inc. is a out that it’s pandemic across the state of and a composting operation. high-tech medical device manufacturer Michigan.” “These people make this stuff up as headquartered in Sparta. The business Another panelist, Charlie Curtis, they go along,” Michaels said about the provides good-paying jobs for more than said he is being unfairly prohibited inspectors and regulators who visited her 100 Michigan residents and continues from developing a 1.1 acre parcel of property more than 100 times, issued to grow. More than 90 percent of commercially zoned property he owns stop-work orders and brought criminal its revenues come from out of state. in Lakeview due to the DEQ continually charges against her. “I wasn’t going to let But when Taylor wanted to expand moving the bureaucratic goal posts. them run over the top of me.” his parking lot to accommodate this The expenses incurred by bringing the The final panelist was state Rep. Jack growth, he ran up against the Michigan property into compliance with DEQ Hoogendyk, Vice Chair of the House Department of Environmental Quality, requirements would likely exceed the Government Operations Committee, which said the lot would impact a one- value of the property, he said. who brought a legislative perspective on acre wetland on his property. Taylor “They (DEQ regulators) create the protecting private property rights. pointed out that the land was rarely wet, condition where the costs to fight them More than 70 people attended the was not adjacent to any body of water and are greater than the project that you’re forum, including several legislators, was contained within an industrial park. doing,” Curtis said. “And they know DEQ representatives, legislative staffers, Yet he faces civil and criminal charges and that you’ll quit. …. Anybody that owns reporters, local elected officials and is considering moving his business out property in this state and runs against concerned property owners, many of of state. (For more information on the these people has a big, big problem. What whom had firsthand experience with Hart Enterprises case and to learn about the Mackinac Center is doing with their regulatory abuses similar to those legal and regulatory reforms that would property rights division is absolutely discussed by the panel. I strengthen the rights of property owners, critical to restoring property rights.” visit www.mackinac.org/9504). Dolores Michaels, owner of King of
www.mackinac.org | Summer 2008 9 Mackinac Center IMPACT Character, Liberty and Economics By Lawrence W. Reed
Following is an edited version of a for opposing ethanol subsidies. Because they seek the truth, have slipped badly in recent commentary that will appear in Does he not understand basic statesmen are more likely to years. Though everybody an upcoming issue of The Freeman, economics? I’ve known him do what’s right than what may complains about politicians published by the Foundation for for years, and I believe he does. be politically popular at the who pander, perhaps they do Economic Education. But that understanding melted moment. They do not engage it because we are increasingly a away with the corrupting lure in class warfare, race-baiting panderable people. Too many Over four decades, I’ve of a handout. His extensive or other divisive or partisan are willing to look the other way written scores of articles, economics knowledge was not tactics. They do not buy votes when politicians misbehave, essays and columns on enough to keep him from the with tax dollars. They don’t as long as they are of the right economics, taught the subject public trough. We are losing make promises they can’t keep party or deliver the goods we at the university level, and given the sense of shame that once or intend to break. They take personally want. hundreds of speeches on it. In accompanied the act of theft, responsibility for their actions. Our celebrity-drenched recent years, the nexus between private or public. A statesman doesn’t try to culture focuses incessantly on the economics of a free society The missing ingredient pull himself up by dragging the vapid and the irresponsible. and individual character has here is character. In America’s somebody else down, and he Our role models would make increasingly worked its way first century, we possessed it doesn’t try to convince people our grandparents cringe. To into my writing, speaking and in abundance and even though they’re victims just so he can many, insisting on sterling thinking. I believe that nexus there were no think tanks, very posture as their savior. character seems straight-laced is the central issue we must little economic education and When it comes to managing and old-fashioned. We cut address if our liberties and free even less policy research, it public finances, statesmen corners and sacrifice character economy are to be restored and kept our liberties substantially prioritize. They don’t behave all the time for power, money, preserved. intact. People generally as though government deserves attention or other ephemeral Activists in the free-market opposed the expansion of an endlessly larger share of gratifications. movement over the past 25 government power because people’s money. They exhibit Yet character is ultimately years have stressed the need for they placed a high priority on the courage to cut less important more important than all the sound public policy research character. Using government expenses to make way for college degrees, public offices or and basic economic education. to get something at somebody more pressing ones. They keep even all the knowledge that one Think tanks and new media else’s expense, or mortgaging government within its proper might accumulate in a lifetime. have sprung up to provide both. the future for near-term gain, bounds and trust in what free It puts both a concrete floor Though important, they are seemed dishonest and cynical and enterprising people can under one’s future and an iron proving to be insufficient to to them, if not downright sinful accomplish. Politicians think ceiling over it. Who in their overcome statist trends that are and immoral. that they’re smart enough right mind would want to live in eroding our liberties. W i t h i n g o v e r n m e n t , to plan other people’s lives; a world without it? Economic education is character is what differentiates statesmen are wise enough to Bad character leads to bad certainly needed because young a politician from a statesman. understand what utter folly economics, which is bad for minds are not typically getting Statesmen don’t seek public such arrogant attitudes really liberty. Ultimately, whether it in conventional schools. But office for personal gain or are. Statesmen, in other words, we live free and in harmony even if economic education attention. They often are possess a level of character that with the laws of economics or were dramatically improved, people who take time out an ordinary politician does not. stumble in the dark thrall of a free society wouldn’t from productive careers to By almost any measure, the serfdom is a character issue. I necessarily follow. Just like temporarily serve the public. standards we as citizens keep public policy research, it can be They don’t have to work for and expect of those we elect undone by harmful themes in government because that’s all popular culture (movies, music, they know how to do. They literature and even sports) and stand for a principled vision, Save the Date in the standards of conduct not for what they think citizens • and behavior people practice will fall for. When a statesman Mackinac Center for Public Policy as adults. gets elected, he doesn’t forget 20th Anniversary Gala Even among the most ardent the public-spirited citizens supporters of free-market causes who sent him to office and with John Stossel are people who “leak” when become a mouthpiece for • November 11, 2008 • it comes to their own bottom the permanent bureaucracy Kellogg Hotel and Conference Center lines. A recent example was the or some special interest that East Lansing, Michigan corn farmer who berated me greased his campaign.
Mackinac Center IMPACT 10 Summer 2008 | www.mackinac.org Fr e e -Ma r k e t Li b r a r y
Vi e w p o i n t s Gas Accord would drive up state energy. This report details the drawbacks State Should Adopt Health government spending, increase energy for consumers and the economy of Savings Accounts prices and result in the loss of Michigan substituting political forces for market April 2008 V2008-10 jobs, all without producing much in the forces in electricity service. Michigan could save millions of dollars way of environmental benefits. by adopting increasingly popular health Hart Enterprises: A Privatization Rolls on Despite The Property Rights Network of the Mackinac Center for Public Policy presents Wetland Case Study savings accounts for state employees. H A R T Rhetorical Opposition ENT ERPRISES S2008-04 Putting the University’s Cart A W E T L AN D June 2008 V2008-18 C by RussA HardingS E STUDY This study analyzes before the Economy’s Horse Mackinac Center research and writing a property dispute April 2008 V2008-11 on school support service privatization between Hart Enterprises Reforming Michigan’s tax, labor and appears to have opponents spooked. Inc., a medical device regulatory climate, rather than spending But privatization remains a popular manufacturer headquartered in Michigan, more on higher education, is the key to management technique statewide. and the Michigan Department of restoring the state’s economy. Environmental Quality. Author Russ Jo u r n a l s My Union Dues Paid for That? Harding summarizes the conflict and proposes several reforms to that law to April 2008 V2008-12 Capitol Confidential ensure that personal property rights are Union members who feel ill-served or MCC2008-02 respected and that homeowners and cheated by union leaders are forced Key stories: Fees on businesses can plan for the future without by law to pay dues anyway. A right- businesses, legislative fearing a surprise discovery of a wetland on to-work law would introduce greater recalls, automotive their property. union accountability and transparency, production, tourism taxes. improving the standing of the workers they Capitol Confidential A Teacher Quality Primer represent. MCC2008-03 S2008-05 As Time Goes By Key stories: Wetland The fourth book in the Mackinac Center School May 2008 V2008-13 regulations, Wage Management Series, this Michigan would be better served by a part- Fairness Commission, primer examines the most time legislature that focuses on just the bus fares, state spending. important input into the necessities of state government. St u d i e s & Re p o r t s educational system that schools can control MEDC Rejects Development A MACKINAC CENTER REPORT Mackinac Center — teachers. To improve teacher quality Bird-in-the-Hand Amicus Curiae Brief in in Michigan, the primer evaluates market- May 2008 V2008-14 Michigan Department of based reforms such as merit pay, differential The Michigan Economic Development Transportation vs. Tomkins pay and alternative certification. M D Corporation should support a right-to- T . T An AmicusCuriae Brief tothe S2008-02 Michigan Supreme Court Sp e c i a l Pr o j e c t s work law for Michigan if it is serious about Patrick J. Wright A Mackinac Center “friend of the court” filing to the Michigan Supreme Court in a case involving a partial taking of private land On November 16, 2007, the wanting to increase employment. Mackinac Center for Public Why Bureaucracy Grows Free Trade a Boon to Michigan’s Policy filed a brief of amicus curiae with SP2008-03 Ailing Economy the Michigan Supreme Court in the case of Why does bureaucracy, May 2008 V2008-15 Michigan Department of Transportation which causes harm, wastes High taxes, an unfriendly labor climate and v. Tomkins. The legal dispute involves the resources and generates burdensome regulations — rather than amount of compensation a property owner widespread derision, seem free-trade agreements — are what is wrong should receive from state government to inevitably grow and with Michigan’s economy. when the state uses eminent domain to grow? The insightful answer is revealed take part of the owner’s property. in this 15-page monograph, excerpted The Worst Legislature in from the book “America by the Throat.” Michigan History? Proposals to Further June 2008 V2008-16 Regulate Michigan’s Higher taxes, more regulation and Electricity Market: An overspent budgets could lead observers to Assessment view the current Michigan Legislature as S2008-03 How to order the state’s worst ever. More than a dozen All publications are available at www. bills are pending in the mackinac.org. For telephone orders, please call the Greenhouse Gas Accord Will Further Michigan Legislature to expand regulation Damage Michigan’s Economy Mackinac Center at 989-631-0900. The of the electricity industry and to impose Center accepts Visa, MasterCard and June 2008 V2008-17 new environmental requirements on Discover/NOVUS for your convenience. A carbon dioxide cap-and-trade regime energy production and sales. As a group, Please have your card and item titles handy contained in the Midwestern Greenhouse these legislative proposals assume the when calling. necessity of government intervention in the production and distribution of
www.mackinac.org | Summer 2008 11 Mackinac Center IMPACT Cooler Heads
t the international and national levels, the politics year, according to the governor’s executive order. The of global warming alarmism usually produce council’s recommendations are to include suggested Apolicy measures that stifle economic growth and legislation for reducing greenhouse gas emissions in expand government control. With Michigan lawmakers the state. Chesser pointed out that identical processes setting the stage for similar policies at the state level, by councils in other states indicate that Michigan can the Mackinac Center decided it was time to shine some expect a predetermined outcome. sunlight onto a little-noticed government entity known The Michigan Climate Action Council is supported as the Michigan Climate Action Council. by a Harrisburg, Pa.-based group called the Center for Climate Strategies, according to Chesser. The CCS is funded by well-heeled global warming alarmist foundations and advances state policies that increase consumers’ energy costs while diminishing property rights. Chesser explained to the audience that the Climate Action Council is far from an objective commission engaged in a deliberative process. While the council’s message is that everyone is invited to the table, the reality is that the Center for Climate Strategies runs the meetings, keeps the minutes, determines the voting procedures, selects the options that will be considered and writes the reports, Chesser said. Climate Studies Watch Director Paul Chesser exposes the agenda of the Michigan The Issues & Ideas Forum was attended by several Climate Action Council at an Issues & Ideas Forum in Lansing. legislators, many of whom stayed to speak with Chesser When Gov. Jennifer Granholm signed the executive after the event. One state representative encouraged him order creating the Climate Action Council last to “get the message out everywhere.” November, few details were provided about the genesis Chesser worked with the Center to do just that. Over of the organization or how it would be funded. So we the next 24 hours, he and Mackinac Center Director invited Paul Chesser, director of Climate Strategies of Communications Michael D. Jahr shared the same Watch, to an April 29 Issues & Ideas Forum in Lansing, message with a number of active Michigan bloggers where he could inform legislators, reporters and and addressed the Center-Right Coalition, a loose-knit residents about the council’s origins. For more than a Lansing group that includes several state legislators. year, Chesser had investigated the history, agenda and Chesser also discussed the Climate Action Council backing of similar councils established in other states. with WJR radio talk host Frank Beckmann and wrote an Michigan’s council will issue a comprehensive Op-Ed that appeared in The Detroit News on May 14. I “climate change plan” for the state by the end of the
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THE MACKINAC CENTER’s Students for a Free Economy Winner Sir Antony Fisher International Memorial Award
Mackinac Center IMPACT 12 Summer 2008 | www.mackinac.org