INSIDE THIS ISSUE: DEPARTMENTS Wos talks North Carolina 2 C A R O L I N A Education 8 optimisti- Local Government 10 From Page 1 14 cally about Higher Education 17 Medicaid Books & the Arts 20 Opinion 24 expansion/2 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION Parting Shot 28 JOURNALFROM THE JOHN LOCKE FOUNDATION November 2014 Vol. 23 No. 11 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org Hagan-Nominated USDA Official Scrubs Docs ‘Proprietary info’ Stimulus file shows about JDC company significant Hagan ‘redacted’ from file family involvement By Don Carrington Executive Editor By Don Carrington Executive Editor RALEIGH RALEIGH copy of the U.S. Department en. Kay Hagan, D-N.C., and of Agriculture’s file on a 2011 her representatives have main- $50,000 solar energy grant to tained that Solardyne/Green JDC Manufacturing was missing key A SState Power, a company co-owned documents that would clarify the roles by Sen. Hagan’s husband Chip and of various family members of U.S. Sen. son Tilden, did minimal work on so- Kay Hagan. Hagan lar installations funded by a stimulus family members grant for Plastic Revolutions at JDC own JDC Manufac- The Hagan family sought and received a $50,000 grant from the USDA to help fund Manufacturing in Reidsville. JDC is turing, along with a a second set of solar panels atop this building they own in Reidsville, N.C. The first co-owned by Chip Hagan, and Chip solar company that set of solar panels also was funded by federal dollars. (CJ photo by Don Carrington) is an officer at Plastic Revolutions. claimed to have per- ter she took office in 2009. Gore and USDA would consider awarding the The solar installation project formed work on the Hagan live in Greensboro. President grant, but they were missing from the was one phase of a series of energy project. Obama nominated Gore, and the Sen- file the USDA provided to CJ. upgrades at the JDC building for Carolina Journal ate confirmed him. The missing documents — which which JDC received $250,644 in fed- requested access to According to the application, also could include invoices, purchase Randall Gore eral stimulus funding. The grant, the USDA file. The signed by JDC’S co-owner and Kay orders, and work records — might ex- awarded in 2011, was managed by head of North Carolina’s USDA Rural Hagan’s husband, Charles “Chip” plain the involvement of businesses the State Energy Office, which now is Development office, Randall Gore, is Hagan, among the missing documents owned by Chip Hagan, the Hagans’ part of the N.C. Department of Envi- the custodian of the information in the should be a “Copy of all estimates to son Tilden, son-in-law William Stew- ronment and Natural Resources. solar grant file. He was recommended calculate total project cost or Turn-Key art, and possibly other family mem- for the position (which is a political Quote.” Those documents had to be in- appointment) by Hagan not long af- cluded with the application before the Continued as “Hagan-Nominated,” Page 14 Continued as “Stimulus,” Page 14 Hagan Contractor Applications Raise Questions

PAID tion for an unlimited license, a second RALEIGH, NC U.S. POSTAGE person attested to Tilden’s experience: PERMIT NO. 1766 NONPROFIT ORG. Senator’s husband William Stewart, Tilden’s brother-in- law. claims son worked The executive director of the state board that issues electrical contracting 76 hours per week licenses told CJ the board is obliged to By Don Carrington investigate credible information chal- Executive Editor lenging any license application, though RALEIGH he would not comment specifically on .S. Sen. Kay Hagan’s hus- the Hagan applications. band Charles “Chip” Hagan, a Carolina Journal calculated the Possessing an unlimited license Greensboro attorney, certified hours by comparing claims the Hagans affords Tilden the ability to manage toU the North Carolina licensing board made on applications Tilden Hagan projects of a greater scope and mone- for electrical contractors that their son filed for North Carolina contracting tary value than he could perform with Tilden Hagan worked 3,500 hours in- licenses in the “limited” and “unlim- a limited license. The experience re- stalling electrical wiring and equip- ited” categories. On both applications, quirements for an unlimited license are ment over a period of 324 days in 2012 only one person attested to Tilden’s ex- greater, but the licensing board allows — requiring Tilden to work consecu- perience as an electrical installer: Chip The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 tive 76-hour weeks over that period. Hagan, Tilden’s father. On the applica- Continued as “Hagan Electrical,” Page 15 PAGE 2 NOVEMBER 2014 | CAROLINA JOURNAL North Carolina C a r o l i n a Wos Optimistic About Medicaid Expansion in N.C.

By Dan Way funding bargain, the state would simply pull out. Journal Associate Editor RALEIGH ‘Hotel California’ clause Rick Henderson tate Secretary of Health and Human Services Aldona But national health policy experts say there is a “Hotel Managing Editor Wos has been crisscrossing the state with an optimistic California” clause in the law covering Medicaid expansion. message that she is preparing to recommend that Gov. The Supreme Court ruled that states cannot be forced to add Don Carrington SPat McCrory expand Medicaid under Obamacare. to their Medicaid rolls, but language in the act forbids them Executive Editor But at a mid-October meeting of the Joint Legisla- from withdrawing from the program once they choose to tive Oversight Committee, two key sign on. Mitch Kokai, Michael Lowrey lawmakers who monitor Wos’ agency “I’m not sure under the Umstead Barry Smith, Dan Way made clear their reservations about Act that we have the legal standing to Associate Editors expanding the government health take it away” once a Medicaid program insurance program for the poor and or service has been provided to a par- disabled. Given Medicaid’s checkered ticular population, Hise said. “You’d Chad Adams, Kristy Bailey history, and lingering problems resolv- get sued, and it would end up being all David N. Bass, Lloyd Billingsley ing years of mismanagement and bud- Kristen Blair, Roy Cordato state dollars if you discontinued it.” get overruns, they said the belief that Becki Gray, Sam A. Hieb “It’s hard to unring the bell, Lindalyn Kakadelis, Troy Kickler Medicaid is ready to accept more par- and that would basically be what you George Leef, Elizabeth Lincicome ticipants is a Pollyannaish view. would be doing,” Burr said. “Taking Karen McMahan, Donna Martinez Wos has told several media out- an entitlement away after you’ve given Karen Palasek, Marc Rotterman lets that the foundation is in place for it is a near impossible thing to do.” Jesse Saffron, Michael Sanera a more efficient and more effective Wos did not broach the subject of George Stephens, Terry Stoops Medicaid system, and that she will ask expanding Medicaid at the meeting. Andy Taylor, Michael Walden McCrory to expand Medicaid in the But on the agenda were updates and Karen Welsh, Hal Young John Calvin Young near term. McCrory has said through a concerns about how much progress Contributors spokesman that he is confident in Wos, has been made fixing the agency. and she will advise him when the time is right to expand. Joseph Chesser, Catherine Koniecsny But if that happens, the governor will have to convince Spending higher than previous year Austin Pruitt, Matt Shaeffer skeptical legislators. Rudy Dimmling, acting director of finance in the Divi- Interns “I will say that the original rejection of the Medicaid sion of Medical Assistance, under which Medicaid operates, expansion by the General Assembly required that any plan Published by said spending in the first two months of fiscal year 2015 al- The John Locke Foundation for expansion had to come through the General Assembly, ready was $325 million higher than the comparable months 200 W. Morgan St., # 200 and not through an executive decision, and I don’t feel that in 2014. Raleigh, N.C. 27601 we’re in any position right now to consider expansion un- That sparked the following exchange with Hise: (919) 828-3876 • Fax: 821-5117 der the Affordable Care Act,” said state Sen. Ralph Hise, R- HISE: “Right now we spent total dollars $325 million www.JohnLocke.org Mitchell. more than we did in the first two months of last year. That “We’ve had a lot of trouble in the last year enrolling would be about $107 million in state dollars. The entire an- nual increase we anticipated was about $143 million in the Jon Ham the 120,000 additional applications that have come in,” said Vice President & Publisher Hise, who is co-chairman of the Senate Appropriations budget for the entire year in overspending. Committee on Health and Human Services, and co-chair- “If you forecast those numbers out annually, we’re sit- John Hood man of the Joint Legislative Oversight Committee on Health ting over a $680 million state shortfall that’s coming out if Chairman & President and Human Services. this trend continues, and isn’t attributable to other factors.” DIMMLING: “You can’t extrapolate it that way. … We Herb Berkowitz, Charlie Carter Trouble enrolling are tracking very, very closely. We are confident that our Jim Fulghum, Chuck Fuller end-of-year results will be within budget, so it’s important Bill Graham, Assad Meymandi “You start trying to think what would happen to our Baker A. Mitchell Jr., Carl Mumpower to see how this works out seasonally. … I understand your state and our system if 600,000 additional individuals were concern.” David Stover, J.M Bryan Taylor approved for Medicaid in one year. We have no ability to Andy Wells HISE: “Having done this for three years, in October Board of Directors handle any of that type of enrollment growth to even con- we’re always in great shape. We hear we’re running a $40 sider it on a practical level even if it weren’t a huge cost to million surplus, we’re running an $80 million surplus. By Carolina Journal is a monthly journal the state,” Hise said. December that tends to evaporate. By January and February of news, analysis, and com- “I don’t think anyone on the budget side’s prepared it turns into a deficit, and then the big numbers come. And mentary on state and local to bring in the additional cost that expansion would do,” that has been the historical trends we’ve had for three or government and public policy he said. four years.” issues in North Carolina. ©2014 by The John “I think Sen. Hise summed it up. We haven’t had any State Rep. Marilyn Avila, R-Wake, and Sen. Tommy Locke Foundation Inc. All discussions with them up to this point about any type of Tucker, R-Union, also pushed Dimmling on the higher opinions expressed in bylined articles are those expansion,” said state Rep. Justin Burr, R-Stanly. He co- spending right out of the fiscal year gate. of the authors and do not necessarily reflect chairs the Joint Legislative Oversight Committee on Health the views of the editors of CJ or the staff and and Human Services with Hise, and is vice chairman of the ‘Should we trust you?’ board of the John Locke Foundation. Material House Health and Human Services Committee. published herein may be reprinted as long as “Should we trust you with these [numbers]?” Tuck- appropriate credit is given. Submissions and “There’s still quite a number of members concerned er asked. He said state Rep. Nelson Dollar, R-Wake, “was letters are welcome and should be directed about moving in that direction as our folks are cleaning up staunch in the budget negotiations” that the financial situ- to the editor. the existing program, and continuing to try to make sure ation would improve in Medicaid. As a result, House and CJ readers wanting more information we’ve got real [budget] numbers,” Burr said. Gaining a Senate budget negotiators compromised by putting just between monthly issues can call 919-828- comfort level with the budget numbers and moving for- $180 million in contingency reserves. 3876 and ask for Carolina Journal Weekly ward with more accurate budget forecasting is “where our While expressing confidence in the agency’s fore- Report, delivered each weekend by e-mail, or visit CarolinaJournal.com for news, links, focus is right now,” Burr said. casts, Dimmling added a caveat. “There are certain outli- and exclusive content updated each weekday. According to an editorial in The Charlotte Observer, Wos ers that you can’t predict,” such as what might happen Those interested in education, higher educa- praised other states that have expanded Medicaid, and told during flu season, or with the healthcare.gov enrollment tion, or local government should also ask to its editorial board members there is a “clever” solution to for Obamacare, Dimmling said. But based on trends now receive weekly e-letters covering these issues. fears the guarantee of federal funding for expansion are being monitored, “We are confident that we will come likely to be broken. If the feds fail to hold up their end of the in within budget.” CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 3 North Carolina Analysts: Moves to Force Donor Disclosure Would Chill Free Speech

By Dan Way sionate about the importance of free “If [censors] are able to take away profit corporations could be sucked Associate Editor speech. On his research scale, any is- our megaphone, if they are able to take into those attempts. DENVER, Colo. sue that scores in the mid-50s or higher away donor privacy, if they are able There are bills that attempt to hey are 45 of the most conse- is considered important to the public. then to silence our dissent and our reclassify the nature of 501(c)4 and quential words in America’s Free speech scored 73. promotion of liberty, the very essence 501(c)6 corporations as a form of politi- founding documents, but the That said, “Only one in four of liberty will be at risk,” Tillman said. cal action committee, forcing them to FirstT Amendment to the U.S. Constitu- Americans Often register as a political organization and tion is coming under repeated attack feel that the goal release their donor lists. from liberal advocacy groups, regula- it’s under is to force And still other bills would require tory agencies, and elected officials on threat” and conserva- disclosure of the “original donor” of both sides of the political aisle, accord- needs pro- tive advo- advertising. Because donor contribu- ing to an array of policy experts. tective push- cacy and tions are comingled in a large pool of John Tillman, CEO of the Illi- back, Allsop n o n p ro f i t funds, in many cases it would be im- nois Policy Institute, said the left is said. More- o rg a n i z a - possible to determine which donation using intimidation and harassment over, only tions to dis- paid for an individual advertisement, such as the IRS scandal to “fundamen- one in three close their so organizations would have to iden- tally change” American democracy, Americans private do- tify every donor, Nese said. freedoms of speech and association, follow the nor lists so Michael Quinn Sullivan, presi- and the right to dissent, by intimidat- policy de- that those dent of Empower Texans, a conserva- ing those who donate to conservative bate about i n d i v i d u - tive fiscal watchdog organization, said think tanks, right-of-center causes, and free-speech als can be his group learned firsthand about a Republican politicians. issues, ac- targeted for vindictive government. Tillman was among several pan- cording to public ridi- “The real threat is not coming elists at the State Policy Network’s his research. What news they hear cule or government investigation, the from Washington, D.C. The real threat 22nd annual meeting who warned mostly involves stories about events panelists agreed. to your organization is not [former rev- about the escalating movement to such as protests at abortion clinics. Liberal organizations have out- enue commissioner] Lois Lerner and erode protections guaranteed by the flanked conservative groups with so- the IRS” or other federal regulators, First Amendment. Donations as speech phisticated social media campaigns “but the real threat is the little agencies and bloggers who ignite campaigns to and commissions that exist in your ‘Nothing short of authoritarian’ Public support of speech in the form of monetary donations to or- regulate speech as issues arise. They states,” Sullivan said. “This almost sounds like hyper- ganizations and politicians is much are aided in their efforts by liberal Lawmakers “get a little frustrat- bole, and maybe a black helicopter or weaker, Allsop said. He added there mainstream media, said Rod Lowman. ed, and they start siccing those little two, but it is nothing short of what au- is a “very strong disposition” for a He is president and CEO of the Low- obscure agencies on you, as happened thoritarian regimes do,” Tillman said. change in laws that would “require man Group, a strategic marketing and to my organization,” Sullivan said. “They begin to try to control the me- public disclosure of donations, and to management research firm that has re- “Those are the agencies that are com- dia, and they begin to try to control the place limits on the amount of money searched the trend. ing after you.” The free-speech assault is taking levers of dissent.” that can be donated.” Given that trend, Legislative scorecards Americans are not well-informed he said, “This is not something that I place despite a 1958 Supreme Court on this subject, and liberals are “relent- would like to see put up to the people” ruling in Alabama v. NAACP in which His organization created a legis- lessly indoctrinating the public that for a vote. state officials attempted to force the lative scorecard to rate the spending free speech is OK [within] limits, and He notes that two of three Ameri- NAACP to disclose its list of members. records of Texas lawmakers. The score- … Washington shall decide what those cans “wrongly believe that you can The Supreme Court ruled that card revealed that some self-styled limits will be,” Tillman said. make an anonymous donation to a po- contributors “are constitutionally conservative lawmakers were not pru- Research conducted by Dee All- litical candidate,” and that mispercep- protected from disclosure,” Lowman dent fiscal stewards. sop, CEO of Heart+Mind Strategies, tion shapes opinion about all anony- said. The key passage in the decision “They have come after us in a found that most Americans are pas- mous giving. was “immunity from state scrutiny of variety of ways. They’ve been after us membership lists is constitutionally with lawsuits. They’ve been after us protected to ensure the ability to asso- with agency rules” that are little more ciate freely with others.” than laws written by regulators, Sulli- Regulations will ‘chill’ speech van said. Keep Up With Texas is the “reddest of the red Speech regulators “want names states, yet our state Senate passed leg- of individual donors, which will chill islation in our past session that would State Government free speech to the point if donors don’t require all nonprofit groups to disclose stop donating, they’ll be harassed into the names of their donors” based on not donating,” said Matthew Nese, the mere suspicion they might be con- Be sure to visit CarolinaJournal. head of legislative and policy outreach ducting political activity, Sullivan said. at the Center for Competitive Politics. A coalition of Democrats and com often for the latest on what’s go- It is instructive that anonymous Republicans approved the measure donors accounted for only 4.3 percent and sent it to Gov. Rick Perry. Perry ing on in state government. CJ writ- of spending in the 2012 election cycle, vetoed it, “saying that it infringed on Nese said. As of Sept. 18, the percent- the freedom of association” and would ers are posting several news stories age for the 2014 cycle had fallen to 3.9 have “a chilling effect on the freedom percent, “but yet [anonymous dona- of speech.” daily. And for real-time coverage of tions are] talked about as a scourge on Texas Speaker of the House democracy.” Joe Straus recently said legislation is breaking events, be sure to follow us Those seeking to limit free speech needed to “define who is a legitimate offer varying types of legislation in journalist, that it is the responsibility of on Twitter (addresses below). the states, he said. Some bills would state government to make sure that ac- require 501(c)4 advocacy groups and ceptable people are speaking on public CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal 501(c)6 trade associations to disclose policy issues,” Sullivan said. JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC the identities of donors in ways never “This is a big issue that’s going done before, and some 501(c)3 non- to get bigger,” Lowman said. CJ PAGE 4 NOVEMBER 2014 | CAROLINA JOURNAL North Carolina State Briefs Bankruptcy Hasn’t Put HOT Lane Off Track JLF: Economic news good By Barry Smith Toll rates would vary based on the The latest federal employ- Associate Editor time of day and day of the week — higher ment report delivers excellent RALEIGH during peak traffic hours, and lower when news for North Carolina. That’s fficials from both state government there is less traffic. The flexible tolls would the assessment from the John and companies that have aligned be designed to keep traffic flowing freely Locke Foundation’s chairman, to work on a planned High Occu- in the HOT lanes. Officials have yet to de- who notes that state employers Opancy and Toll lane project on Interstate termine the toll rates. added 14,000 new jobs in Septem- 77 near Charlotte say a recent bankruptcy DOT has no plan to use tolling ber. That means a net employment filing by the lead company in the project booths. Instead, drivers in the HOT lanes gain of 108,500 over the past year. should not affect its ability to obtain financ- who are expected to pay tolls could obtain “That’s a year-over-year ing for the HOT lanes in North Carolina. transponders, mounted on vehicle wind- growth rate of 2.7 percent, far “We’re moving forward,” said Jen shields, that identify a car’s usage of the higher than the national average Thompson, a spokeswoman for the N.C. HOT lanes and charge the user electroni- of 1.9 percent, the Southeast aver- Department of Transportation, regarding cally. Transponders are in use on many toll age of 1.9 percent, and the growth the HOT lanes on a 26-mile stretch of I-77 roads in the United States, including the rates of all our neighboring states,” from Charlotte to Lake Norman. Triangle Expressway in the Research Tri- said JLF Chairman John Hood. Cintra, which is based in Spain, and angle, and developers of smart-phone ap- North Carolina’s official un- Australian-based Macquarie Group Ltd. plications are working on apps that would employment rate for September recently entered a bankruptcy filing relat- allow users to deploy their phones as tran- was 6.7 percent, according to the ing to the work on the Indiana Toll Road. sponders. U.S. Bureau of Labor Statistics. The bankruptcy process is intended to People using the HOT lanes without The national unemployment rate help the companies reorganize their $6 bil- a transponder would receive notice of tolls for September 2014 is 5.9 percent. lion debt for the Indiana project. they owe. Cameras would photograph Hood’s analysis is based on Earlier this year, Cintra was award- the license plates of vehicles without tran- the U.S. Bureau of Labor Statistics’ ed the contract for a public-private part- sponders, and the owners of those vehicles establishment survey of employ- nership agreement on the I-77 project. would be billed. ers. He notes that other September NCDOT continues to expect a “financial The remaining general-purpose data reported from a household close,” which would mean that Cintra had lanes on I-77 will remain open, toll-free, to survey don’t paint as good a pic- locked up all of its financing, by the end of motorists. ture. the year. The price tag of the I-77 project is While the unemployment “Each of Cintra’s projects is wholly $655 million. North Carolina taxpayers rate dipped to 6.7 percent, both independent, with an isolated, nonre- will chip in $88 million of that bill. DOT the employment and labor force course financial structure that ensures that officials say that Cintra plans to put in $230 counts also dipped. From Septem- the performance of one project never im- million of its own money to finance the re- ber 2013 to September 2014, the pacts the operations of another concession maining portion. in which Cintra invests,” said Jean Leier, Plans call for construction on the household survey shows a drop a spokeswoman for I-77 Mobility Partners, project to start in the spring or summer of of 49,000 in unemployment and an which serves as a consortium for compa- 2015, with construction essentially com- employment gain of 18,000. “That nies designing, building, operating, and pleted by 2018. trend is wildly out of sync with maintaining the express lanes project. The I-77 project is not without con- the more-reliable jobs count from “The debt restructuring taking place troversy. A group called Widen I-77 has the establishment survey, which in Indiana has no bearing on any of the other 26 highway formed to oppose the HOT lane project, arguing instead that shows an employment gain nearly projects in which Cintra is invested worldwide, including a general-purpose lane should be added in each direction. 10 times as big over the past year the I-77 Express Lanes project here in North Carolina,” Leier The project became an issue in the recent U.S. Senate and has a much larger sample said. campaign. Both Democratic and Tea Party-related groups size in North Carolina and other Bob Poole, director of transportation studies at the have chided state House Speaker Thom Tillis, the Repub- states,” Hood said. Reason Foundation, noted that Cintra is a global company lican U.S. Senate nominee, for supporting the project. CJ “Since the enactment of the with a number of toll road projects new Republican-led legislature’s in operation and under construction first budget, tax, and regulatory around the world. policies in mid-2011, North Caro- “I see no significant impact on lina has added some 252,700 net their ability to do the I-77 project,” new jobs,” Hood said. “That em- Poole said. ployment gain from June 2011 Poole noted that databases show to September 2014 amounts to a Cintra and its parent company, Ferro- growth rate of 6.5 percent. Again, vial, with $73.5 billion in projects un- this is higher than the national (5.8 der active management worldwide. percent) and regional (4.8 percent) The proposed HOT project on averages.” I-77 would run from the Brookshire Other economic measures Freeway interchange in Charlotte (Exit confirm the trend, Hood said. 11) to the N.C. 150 interchange (Exit 36) “From 2011 to 2013, North Caroli- in Iredell County. na’s gross domestic product grew It would take existing High Oc- by an annual rate of 2.4 percent cupancy Vehicle lanes in each direction in inflation-adjusted terms, high- and combine them with a newly con- er than the national (2.2 percent) structed lane each way. The two new and regional (1.8 percent) aver- lanes in each direction would be con- ages,” he said. “During the same verted to HOT lanes. period, per-capita incomes rose Buses, motorcycles, and cars with 2.9 percent in North Carolina, 2.8 at least three occupants could travel percent in the nation as a whole, toll-free in the HOT lanes. Cars with and 2.3 percent in the Southeast one or two occupants could travel in as a whole.” CJ the HOT lanes if the motorists pay a toll. NOVEMBER 2014 | CAROLINA JOURNAL PAGE 5 North Carolina Audit: Rural Center Still Holding On To Federal Pass-Through Funds By Dan Way The Commerce Department con- Associate Editor tracted with the Rural Center to ad- RALEIGH minister three initiatives: he North Carolina Rural Eco- • Capital Access Program: nomic Development Center re- $8,261,319 turned more than $100 million • Loan Participation Program: inT state-appropriated grant funds to $27,800,000 the state as ordered, but it did not re- • Funds for Funds Program: linquish $22.3 million in federal pass- $10,000,000 through funds that statutorily belong The audit concluded that $22.3 to the state, the State Auditor’s Office million of that total remained in the concluded. possession of the Rural Center. That The audit, released Oct. 13, fur- money and any interest earned on the ther determined that it was impossible funds must be used specifically for the to verify interest earnings on some state’s Small Business Credit Initiative funds because they were comingled programs. in a revenue pool with money that did If the Commerce Department not bear interest, and records were not cancels its contract with the Rural Cen- kept well enough to distinguish how ter to administer those programs, the much came from paid interest and how state has three options for handling the much was from other revenue sources. leftover money, according to the audit. The N.C. Rural Economic Development Center, located at 4021 Carya Drive in Raleigh, It could create and administer the Second audit did not relinquish $22.3 million in funds, says a state audit.(CJ file photo) SBCI programs in-house within a state This is the second audit request- the state to recover because they were Assembly eliminated the Rural Cen- agency, or contract with another entity ed by lawmakers of the beleaguered in a private bank. The agency failed to ter from the 2013-14 budget. A divi- to administer the SBCI program. Both Rural Center. It was spurred by the monitor grants to ensure they met ob- sion was created in the Department of those options would require ap- first audit, released in July 2013. ligations, had lax reporting standards, of Commerce to promote and oversee proval from the U.S. Treasury Depart- In the first audit, State Auditor and provided excessive compensation rural economic development, and in ment. As an alternative, the state could Beth Wood told the Joint Legislative to its president, Billy Ray Hall, accord- October 2013 the Rural Center and return any remaining funds still held Program Evaluation Oversight Com- ing to that audit. Commerce Department signed a con- by the Rural Center to the Treasury mittee that the Rural Center held in- Hall resigned after that earlier tract outlining the return of money to Department. terest funds that would be difficult for audit was released, and the General the state. “We’re not sure how that will play out, obviously. The legislature Any funds remain? asked us to go in and look at this. It is Stay in the know with the JLF blogs The Program Evaluation Over- up to them now to decide what they would like to do with the informa- Visit our family of weblogs for immediate analysis and commentary on issues great and small sight Committee then asked the audi- tor’s office to determine, among other tion,” said Bill Holmes, a spokesman things, if any funds remained at the for Wood. Rural Center, to verify the Rural Cen- In another issue, “auditors were ter’s contention it still maintained $11.6 not able to verify that the Rural Cen- million in interest earnings, and to de- ter held approximately $11.6 million in interest earn- The Locker Room is the blog on the main JLF Web site. All JLF employees and many friends of the termine whether foundation post on this site every day: http://www.johnlocke.org/lockerroom/ the Rural Center ings as of October ever performed 31, 2013, because a full compliance Audit couldn’t the Rural Center audit of state grant determine interest comingled interest funds. earnings with non- “The Rural earnings because interest earnings Center never had a such as admin- compliance audit some funds istrative receipts on state-appropri- and donations,” The Meck Deck is the JLF’s blog in Charlotte. Jeff Taylor blogs on this site and has made it a must-read were comingled the audit stated. for anyone interested in issues in the Queen City: http://charlotte.johnlocke.org/blog/ ated grant funds,” according to the State statutes current audit. outline guidelines While local governments are re- that governments quired by law to perform audits on must follow on how interest earned on state grant funds “to determine an or- state appropriations should be treated, ganization’s compliance with specific but such rules did not exist prior to state program and grant requirements July 1 this year for nonprofit entities Piedmont Publius is the JLF’s blog in the Triad. Greensboro blogger and writer Sam A. Hieb mans the [on a] program-by-program level,” no receiving state appropriations. controls to keeps citizens updated on issues in the Triad: http://triad.johnlocke.org/blog/ such requirement exists for nonprofit The Rural Center kept detailed entities that receive state grants, the records on the Clean Waters Partners audit stated. program to enable verification of $11.3 According to the audit, the U.S. million in interest earned and $2.7 mil- Treasury Department allocated $46.6 lion of interest spent. million to the state Commerce Depart- “But due to a lack of detailed ac- ment as part of the Small Business counting records for interest earned Credit Initiative program created by on non-CWP funds, auditors could The Wild West is the JLF’s blog in Western North Carolina. Asheville’s Leslee Kulba blogs in this site, designed to keep track of issues in the mountains of N.C.: http://western.johnlocke.org/blog/ the Small Business Jobs Act of 2010. not verify that the Rural Center spent The intent of the act was to provide $7 million or had a balance of $3 mil- “critical resources to help small busi- lion remaining from interest earned nesses” create jobs and stimulate eco- on non-CWP funds as of October The John Locke Foundation, 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 nomic recovery. 31, 2013,” the audit stated. CJ PAGE 6 NOVEMBER 2014 | CAROLINA JOURNAL North Carolina Supreme Court Ruling Keeps New N.C. Election Law in Effect

By Barry Smith and common-sense bill will apply to on same-day registration, as well as the jority are Judge James Wynn, who hails Associate Editor the upcoming election,” McCrory said counting of ballots that were cast out from North Carolina, and Judge Henry RALEIGH in a statement. “We respect the legal of precinct, for years. As the appeals Floyd from South Carolina. Judge Di- orth Carolina’s 2014 general process and thank the Supreme Court court correctly concluded, eliminating ana Gribbon Motz of Maryland dis- election took place under the justices for protecting the integrity of these measures will cause irreparable sented. election laws enacted last year our elections.” harm of denying citizens their right Wynn and Floyd were appoint- Nby the General Assembly as the result The two top Republican legisla- to vote in the November election — a ed to the appeals court by President of an Oct. 8 ruling from the U.S. Su- tive leaders, House Speaker Thom Til- right that, once lost, can never be re- Obama. Motz was appointed by Presi- preme Court. lis and Senate President Pro Tem Phil covered.” dent Clinton. A majority of the justices agreed Berger, issued a joint statement also Barber said his organization Wynn, writing for the majority, said the court should consider the “to- to halt an Oct. 1 order from the 4th U.S. lauding the decision. would continue to work to make sure tality of the circumstances” in review- Circuit of Appeals that would have “Today, in bipartisan fashion, every vote is counted “despite the bar- ing the law. blocked two aspects of the North Caro- our nation’s riers posed “The election laws in North lina law from taking effect in the 2014 highest court by the Su- Carolina prior to House Bill 589’s en- election cycle: a ban on voter registra- a f f i r m e d p r e m e actment encouraged participation by tion during the early voting period, North Caro- Court’s rul- qualified voters,” Wynn wrote. “But and a provision invalidating ballots lina’s elec- ing.” the challenged House Bill 589 provi- cast by voters in a precinct where they tion reform T h e sions stripped them away. The public do not live. The stay ended voter reg- law by al- ACLU also interest thus weights heavily in the istration for the 2014 election on Oct. lowing it to criticized the plaintiffs’ favor.” 17, and registered voters who voted on move for- decision. House Bill 589 is the law passed Nov. 4 were required to cast their bal- ward for “Thou- in 2013 by the General Assembly. lots in their home precincts. next month’s sands of In her dissent, Motz noted the Other provisions of the law were elections,” North Caro- brief time between the majority’s or- not affected by the appeals court rul- Tillis and linians will der and this year’s election. She said ing, including the requirement that in Berger said. be left out that though she shares the majority’s 2016 voters present a state-approved “The court’s of the up- concerns about the new law, those con- identity card. However, the law did re- ruling re- coming elec- cerns do not establish that the plaintiffs quire elections officials to remind vot- stores the tion,” said have shown a clear likelihood of suc- ers of the upcoming requirement when clarity and certainty to the election Dale Ho, director of the organization’s cess on the merits, a requirement for they went to the polls during early vot- process that has been in place since Voting Rights Project, in a statement. getting an emergency stay — or halt — ing and in November. the May primary and was disrupted “More than 20,000 North Carolina vot- to the law being enforced. The appeals court’s 2-1 decision The 2013 law has been challenged at the 11th hour. These common-sense ers used same-day registration in the sent the State Board of Elections scur- by a number of parties, including the reforms will help support voter integ- last midterm election. While this or- rying to find ways to implement the der is not a final ruling on the merits, N.C. State Conference of the NAACP rity in North Carolina while protecting ruling as defendants in the election and the ACLU of North Carolina. Both every citizen’s constitutional right to it does allow a law that undermines law lawsuit appealed the order to the the plantiffs and the state have agreed vote.” voter participation to be in effect as Supreme Court. on an expedited review process, with a The Rev. William Barber, presi- this case makes its way through the The Supreme Court decision is a trial on the merits of the law scheduled dent of the state NAACP, decried the courts.” ruling on preliminary motions and not for next year. high court’s stay. The three-judge panel of the 4th a decision on the merits of the lawsuit Republican Gov. Pat McCrory, “We are disappointed with the Circuit ruled 2-1 to overturn a ruling itself. It is unclear if more than five who signed the bill into law last year, Supreme Court’s ruling today,” Barber in which federal District Court Judge justices supported the unsigned or- praised the high court’s ruling. said in a statement. “Tens of thousands Thomas Schroeder declined to block der, but it had two dissenters, associ- “I am pleased that the U.S. Su- of North Carolina voters, especially implementation of the new law. The ate justices Ruth Bader Ginsburg and preme Court has ensured this popular African-American voters, have relied two judges in the Appeals Court ma- Sonia Sotomayor. CJ

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Finished reading all the great articles in this month’s Carolina Jour- nal? Don’t just throw it in the recycling bin, pass it along to a friend or neighbor, and ask them to do the same. Thanks. http://carolinajournal.com NOVEMBER 2014 | CAROLINA JOURNAL PAGE 7 North Carolina NCGA Will Consider Regulating Ride-Sharing Uber and Lyft

By Barry Smith uses totaling $3 million in the Raleigh Associate Editor area, has suggested that ride-sharing RALEIGH services be required to display a “For s early as mid-November, a Hire” license plate on cars that pick up state legislative oversight com- passengers. Those plates vary in cost, mittee may look into whether based on body style and the county stateA regulations need to be updated as where they are registered. The lowest passengers increasingly arrange rides cost is $78. using a smart-phone application rather Bennett notes that Uber’s driv- than a phone call to a taxi service. Uber ers are independent contractors rather and Lyft are two companies that are than employees and that the cars they meshing technology and transporta- use to transport passengers are person- tion to offer ride-sharing services. al vehicles. “Some [drivers] are work- Their presence in a number of ing two hours a week in between trips North Carolina cities — Uber, for ex- to the grocery store,” Bennett said. ample, operates in Charlotte, Raleigh, “Some are working full time.” Chapel Hill, Durham, Winston-Salem, He said every driver who “part- Greensboro, Wilmington, and Fayette- ners” with Uber undergoes rigorous ville — has prompted a response from background checks. “Those back- municipal regulators along with taxi ground checks are local, multistate, as companies that compete for the same well as federal.” He said the checks go riders. back seven years. Charlotte shelved efforts to regu- Cars must be mid- to full-size, late ride-sharing services after learn- have four doors, and be a 2005 or later ing of the General Assembly’s plans to model. All drivers are required to carry consider statewide rules. personal liability insurance. In addi- “I think they’re looking for some tion, Uber offers a $1.5 million- com kind of guidance,” said Sen. Bob mercial liability policy, which covers Rucho, R-Mecklenburg, co-chairman driving partners while they’re logged of the legislative Revenue Laws Study into the Uber app on their way to pick Committee. The committee’s next up fares and while they are transport- scheduled meeting is Nov. 18. ing passengers, Bennett said. “There should be some consisten- Uber also has contingency cov- cy with the rules if it’s dealing with the erage for drivers who are logged in safety of the public,” Rucho said. That awaiting passengers they have not could mean bringing ride-sharing and picked up, Bennett said. tech-based businesses in under current Passengers can sign up for Uber rules, or it could mean getting rid of by downloading the app, filling out a some of the taxi regulations, he said. onto modern technology is like fit- tunities for entrepreneurs and drivers, profile, and leaving a credit card num- Taylor Bennett, a spokesman for ting a square peg into a round hole,” and new options for passengers. ber. When a passenger has requested Uber, said the company doesn’t op- Bennett said. He said the legislature is Patrick Ballantine, a former state a ride, and a driver has agreed to pro- pose regulation but thinks some of the right to explore rules for ride-sharing senator who was the GOP nominee for vide it, the passenger is given infor- longstanding regulations governing technology rather than merely forcing governor in 2004, is a registered lobby- mation about the driver and the car, taxis should not apply to ride-sharing old regulations onto the new service. ist for Taxi Taxi, a taxicab firm operat- including the name of the driver and a businesses. Bennett said Uber’s entry into ing in Raleigh. He said the company is photograph. “Forcing decades-old ordinances new markets provides business oppor- not pushing for unreasonable regula- “It’s all GPS-tracked,” Bennett tions on Uber and Lyft. He said safety said. Passengers can follow the car on is a legitimate concern of the state. a map until it reaches the pickup point. “These people aren’t delivering The payment is made electronically pizzas, they’re delivering grandma,” and is recorded only after the ride is Ballantine said. “It does seem incon- completed. No cash changes hands, gruous to have hundreds of pages of and Bennett said no tipping is allowed. regulations on taxis and zero on dig- Bennett said drivers operate as ital-dispatch companies that provide independent, small business own- the same service.” ers. Uber receives 20 percent of every Ballantine, who said Taxi Taxi fare, and drivers get the remaining recently purchased 100 Toyota Pri- 80 percent. CJ PAGE 8 NOVEMBER 2014 | CAROLINA JOURNAL Education

COMMENTARY N.C. School Voucher Case The K-12 Roots Of the UNC Scandal In Hands of Supreme Court By Barry Smith the state were preparing to open for enneth Wainstein’s report, ful, and often-accepted behaviors Associate Editor the 2014-15 academic year, Hobgood “Investigation of Irregular aided by complicit parents, negli- RALEIGH ruled that the Opportunity Scholar- Classes in the Department gent teachers, peer pressure, and he N.C. Supreme Court will de- ship Program violated the N.C. Con- Kof African and Afro-American easy access to online resources. cide the constitutionality of the stitution. He issued an order barring Studies at the University of North One problem, which often be- state’s fledgling Opportunity the distribution of any of the money Carolina at Chapel Hill,” detailed gins in middle school, is that strug- TScholarship Program, bypassing the for the vouchers. a long history of academic fraud gling students receive inordinate Court of Appeals. Hobgood said providing taxpay- at North Carolina’s flagship public assistance from a parent, tutor, or The Supreme Court on Oct. 10 er money for the scholarships without university. teacher. By the time these students issued an order stating it would take curriculum standards or teacher cer- More than 3,100 students, reach college, they are required the case on its own initiative. Briefs tification requirements “does not ac- nearly half of them student- to complete research and writing already submitted to the Court of Ap- complish a public purpose.” He added athletes, received (often favor- projects on their own, a skill we peals will be accepted by the Supreme that the program ran afoul of the state’s able) grades in Afro-American should expect any college-bound Court, along with any briefs yet to be landmark Leandro decision, which re- Studies courses that required no student to possess. filed. quires the state to provide every child attendance, no meaningful faculty Yet, one Chapel Hill tutor The court’s with the oppor- participation, and no recounted that a number consistent standards for of students she encoun- action pleased tunity to have student work. Although tered simply “could not people on both a “sound, basic many nonathletes en- write a paper on their sides of the issue. education.” rolled in these courses, own.” Another tutor “I think it’s Even so, they were designed to agreed, saying “players in everybody’s about 1,900 boost the grade point were so woefully under- interest to get would-be re- averages of student- prepared that they could it resolved as cipients of the athletes, preserving their not draft a paper with- quickly as pos- vouchers en- NCAA eligibility. out assistance.” In some sible,” said Dick rolled in private Understandably, cases, tutors or academic Komer, a senior schools anyway, much of the reaction to TERRY counselors simply wrote attorney for the with some par- the report has focused STOOPS or edited significant por- Institute for Jus- ents saying they on ways that faculty and tions of student-athletes’ tice, a public-interest law firm repre- had faith that the money eventually staff enabled students essays. Of course, these senting parents of children in the edu- would be released to help them pay for to circumvent the university’s students were more than happy to cation voucher program. their children’s education. The Court academic requirements. Accord- allow them to do so. “The decision by the N.C. Su- of Appeals did that last month, allow- ing to Wainstein, faculty and staff In addition, it appeared to preme Court to take this appeal di- ing the money already set aside by the conspired to do this because they be an accepted practice for UNC- rectly and bypass the Court of Appeals state to be spent. “felt sympathy for underprepared Chapel Hill students and student- reflects the importance of the constitu- Komer noted that it’s not un- students who struggled with the athletes to submit essays that, tional issues involved,” said Bob Orr, precedented for a state Supreme Court demanding Chapel Hill curricu- according to the Wainstein report, a former N.C. Supreme Court justice to accept a case without first going lum.” But we should be equally “were largely ‘cut and paste’ jobs who is representing the N.C. School through an appeals court. A decade- outraged that high schools granted that simply copied text from pub- diplomas to students who ap- licly available sources.” Unfor- Boards Association, which opposes the and-a-half ago, Arizona’s top court peared to be functionally illiterate. tunately, middle and high school vouchers, in the lawsuit. “It allows for took up that state’s voucher program Calling them “underprepared” is students knowingly submit essays an expedited final decision on the con- without it even going to a trial court, an understatement. Calling them full of passages that plagiarize stitutionality of the voucher program he said. high school graduates is a travesty. various online sources. It is a per- and serves the public’s interest in do- “Everything about this case First, it is necessary to ac- vasive problem. A 2013 Pew survey ing so.” has been a bit unusual,” Komer said. knowledge that none of the 3,100 of 2,500 middle and high school The N.C. Association of Educa- “State supreme courts generally exist students has been identified. As teachers found 68 percent agreeing tors filed a separate lawsuit challeng- to be the final word on these cases.” such, it is impossible to identify the that “digital tools make students ing opportunity scholarships. When Orr was on the N.C. Su- high schools that awarded diplo- more likely to take shortcuts and In 2013, the General Assembly preme Court in the early 2000s, the Su- mas to them. According to the uni- not put effort into their writing.” passed and Gov. Pat McCrory signed preme Court took up GOP challenges versity’s institutional research of- The fact that students arrived into law a bill creating the Opportunity to the legislative redistricting maps fice, nearly 70 percent of incoming at Chapel Hill with few writing or Scholarship Program, which provides passed in 2001 without that case going UNC-Chapel Hill undergraduates research skills does not excuse the up to $4,200 for children who come to the Court of Appeals. graduated from a North Carolina systematic fraud perpetrated by from lower-income families to use for “We look forward to presenting public school. Another 14 percent university faculty and staff. But it tuition at a private school. our arguments to the court in support graduated from a public school in does call into question the value At an initial hearing in February of the trial court’s ruling that the leg- another state. In other words, this of a high school diploma. A high before Superior Court Robert Hob- islation and appropriation of the pub- is likely a public and private school school diploma should signify stu- good, the plaintiffs contended that the lic’s tax dollars through the voucher problem in North Carolina and dents’ attainment of the skills and scholarships violate a provision of the law violates the N.C. Constitution,” beyond. knowledge that undergird the roles state constitution saying the state’s Orr said. Regardless of the type or and responsibilities of adulthood. school fund “shall be faithfully appro- Rep. Paul “Skip” Stam, R-Wake, location of schools, the Wainstein Perhaps the problem is that many report summarizes research and consider college to be a respite priated and used exclusively for estab- who sponsored the voucher legisla- writing deficiencies that are com- from adulthood, rather than its lishing and maintaining a uniform sys- tion, said he was pleased with the most mon in middle and high school initiation. CJ tem of free public schools.” Plaintiffs recent development. classrooms — excessive outside attorney Burton Craige emphasized “We remain confident the Op- assistance, adoption of informal Terry Stoops is director of the word “exclusively” when he asked portunity Scholarship Program will be writing styles, and cut-and-paste research and education studies at the Hobgood to allow the case to go for- permitted to expand, allowing more essays. These are learned, harm- John Locke Foundation. ward. parents to send their children to the In August, when most schools in school of their choice,” Stam said. CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 9 Education Common Core Commission Reviewing Curriculum Standards

By Barry Smith “We wanted everybody to begin tion, which is an education partnership don’t just do a rehash of Common Core Associate Editor the process on an equal playing field,” group featuring representatives from standards and call them North Caroli- RALEIGH said Jeannie Metcalf, who co-chairs the government, businesses, and schools. na standards.” he 11-member Academic Stan- commission. Metcalf has been on the Peek hails from Wake County. Tillman noted that the legislation dards Review Commission has Forsyth County The next approved by the General Assembly begun the task of sifting through Board of Educa- step is to bring and signed into law by Gov. Pat Mc- theT state’s public school requirements tion for 20 years in the DPI staff Crory would allow the commission to to see which ones need to be modified and chairs that this month to re- adopt some Common Core standards and which ones don’t. school system’s view the current if they felt those standards were appro- The commission was mandated curriculum com- Common Core priate and sufficiently rigorous. by the 2014 General Assembly, which mittee. standards for The Common Core math stan- charged its members to examine the “We want to math. That meet- dards had been the most controversial, Common Core State Standards Initia- spend a period of ing will be held Tillman said. tive, adopted by the state in 2010. time on gathering Nov. 17. “They’re just not appropriate So far, no decisions have been facts and discov- After that, for young children,” Tillman said. made regarding what academic stan- ery,” said Andre the commis- “There’s a lot of work that needs to be dards will be used in the state’s public Peek, the com- sion is likely to done to make them age- and grade- schools. The first meeting was organi- mission’s other review other appropriate.” zational. During the second meeting, co-chair. Peek, potential stan- Meanwhile, math standards at held in October, staff members from who recently re- dards. the high school level also need work, the Department of Public Instruction tired as a business “ T h e r e ’ s Tillman said. “What I have heard from gave the commission an overview of executive at IBM, been talk about math experts and teachers is that they the current Common Core standards is chairman of the looking at what are not rigorous enough in the upper for English and language arts. N.C. Business Committee for Educa- other states have done when they grades,” Tillman said. made changes,” Metcalf said, referring Tillman said he hasn’t heard to those states that have decided to many complaints about the English repeal Common Core standards. Met- and language arts standards. calf said looking at the old standards, Both co-chairs say they’re pas- which North Carolina used before sionate about their work on the com- Visit our Triad regional page adopting the Common Core standards, mission and believe a lot of North Car- is another option. olinians are passionate about the issue, http://triad.johnlocke.org “We’ll probably have a couple too. of other standards,” Peek said. “Then “I’m a grandmother of nine who The John Locke Foundation we’ll begin to construct a set of trial is very concerned about my grandchil- has five regional Web sites span- recommendations.” After the com- dren having the best education we can ning the state from the mountains mission gets feedback from those sug- provide in North Carolina,” Metcalf to the sea. gestions, it is likely to “go through said. another phase of modifications and “This is a subject people care The Triad regional page includes refinements,” Peek said. about,” Peek said. “It’s encouraging to Peek said he can see the com- know that we have engaged in a work news, policy reports and re- mission sponsoring public meetings effort that people care about.” search of interest to people in around the state to give more people a Both Metcalf and Peek note that the Greensboro, Winston-Slem, chance to participate. the legislation sets December 2015 as High Point area. State Sen. Jerry Tillman, R-Ran- the deadline for the commission to dolph, who helped author the educa- complete its work. It also features the blog Pied- tion standards bill last summer, said Metcalf said she wasn’t sure if mont Publius, featuring com- that the commission will be given that would give the State Board of mentary on issues confronting enough time to do the job properly. Education time to implement changes “I know it’s not something that by the 2016-17 school year. If standards Triad residents. they can snap their fingers and do change drastically, time will be needed overnight,” Tillman said. “What I want to train educators how to teach under The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 to be absolutely sure of is that they the new standards, she said. CJ FIRST IN FREEDOM Transforming Ideas into Consequences for North Carolina In First in Freedom the John Locke Foundation’s president and research staff apply the timeless ideas of 20th-century con- servative thinkers to such 21st-century challenges as economic stagnation, tax and regulatory burdens, and educational medi- ocrity. To get your copy, go to JohnLockeStore.com. Cost: $10.

The John Locke Foundation, 200 W. Morgan St. Suite 200, Raleigh, NC, 27601 919-828-3876 • JohnLocke.org • CarolinaJournal.com • [email protected] PAGE 10 NOVEMBER 2014 | CAROLINA JOURNAL Local Government Town and County Durham County Shreds Gun Registry Records Charlotte airport control By Dan Way clear violation of state law — there is no reasonable course A Superior Court judge has Associate Editor of action but to destroy these registrations.” ruled that the city of Charlotte can RALEIGH Valone’s organization had offered to pay a commercial continue to run Charlotte Douglas urham County officials in early October destroyed vendor to shred the documents and recycle the waste paper. International Airport for now. Both gun registration documents stemming from a Jim “We were there to assist and observe the clerk,” Dur- city officials and a legislator who Crow-era statute, ending months of legal uncertain- ham County Sheriff’s Office spokesman Brian Jones said of wanted to have a regional author- Dty over ownership of the materials and threats of legal ac- the records shredding. ity run the facility claim the deci- tion had the records been preserved. The Sheriff’s Office had been receiving complaints and sion was a victory for their sides, “I am pleased that we have closed that chapter of Dur- inquiries from Durham residents, mostly those whose gun reports The Charlotte Observer. ham’s history,” said state Sen. Mike Woodard, D-Durham, registrations were kept on file, to determine what would be Last year, the General As- who successfully sponsored repeal legislation in this year’s done with the records, Jones said. sembly passed legislation shifting short legislative session ending the practice of forcing gun Reaction on the Sheriff’s Office Facebook page sup- control but not ownership of the owners to register their firearms. Durham had the only gun ported the registry destruction, garnering nearly 80 “likes” airport from the city to a newly registry in North Caro- within a few hours. established regional commission. lina. “This is a good thing Charlotte immediately went to “The gun registry for all N.C. residents. My court to challenge the new law. records were destroyed two are in there some- Judge Robert Ervin ruled this morning,” Woodard where. The others, I never that the General Assembly had the said Oct. 6. “The clerk [of registered anyway,” Rich- courts] and the Sheriff’s ard Dean wrote on the authority to create a regional air- Office got together this Facebook post. port commission but that the city morning, and took them “A registry does should continue to operate it until out, and shredded them.” nothing to prevent peo- the Federal Aviation Administra- Woodard main- ple from acquiring black- tion certifies the commission to run tained all along that his market firearms. Also, not the airport. repeal bill was intended having a registry makes it “We have consistently stated to result in destruction of ever-so-slightly more dif- from the beginning of this conflict the gun registry, and said ficult for government to that the attempted transfer was he would introduce a bill confiscate firearms from both unnecessary and poorly de- in the upcoming long law-abiding citizens,” signed,” said Charlotte city attor- session specifically man- wrote Jameson Lopp. ney Bob Hagemann. dating disposal of the re- “The death of an- Sen. Bob Rucho, R-Mecklen- cords if the issue was not other Jim Crow law is burg, who supports the regional resolved. always a good thing,” commission, praised the ruling as “We met two weeks wrote Sean Sorrentino. it reduces the number of obstacles ago to administratively Durham County to the board running the airport. make it happen,” Wood- Clerk of Courts Archie ard said. Smith, a licensed attorney “I convened a meet- since 1976 who described Cheaper gas ing with the clerk, the lawsuits as his “bread Drivers in the Triad and the sheriff, the county man- and butter,” said the Triangle saved $18 million this ager, and their respective Grass Roots North Caro- summer thanks to the adoption counsel, and at that meet- lina threat of litigation of new gasoline standards for the ing we came up with the “had nothing to do” with two regions. Travelers can expect path that we needed to Shredding records from Durham County’s gun registry took several the decision to shred the to save even more money in 2015, go to clear up ownership, hours and filled the garbage bags shown above. (Photo courtesy records. “It was simply a and there’s the possibility that and who’s going to take Durham County Sheriffs Office Facebook page) matter of they had passed Charlotte-area drivers might enjoy action,” he said. their time.” lower prices as well, reports the Ra- Destruction of the gun registry, first implemented Reaching that determination was straightforward, leigh News & Observer. in 1935, is “absolutely” a victory for gun owners’ Second Smith said. For many years, the U.S. En- Amendment and privacy rights, said Paul Valone, president “The Administrative Office of the Courts had noin- vironmental Protection Agency has of the nonprofit gun rights organization Grass Roots North terest in them because they weren’t state files. They were required the gasoline sold in Char- Carolina. “It is, I’m quite certain, a direct response to the strictly something for Durham County. The State Depart- lotte, the Triad, and the Triangle to certified letter we sent them” about the state’s pre-emption ment of History and Archives said they had no interest in have a special formula reducing law. keeping them and preserving them. The county attorney for the level of volatile organic com- Valone was unaware of the county’s action to shred Durham disclaimed any interest on behalf of the county in pounds, which contribute to smog. records until notified by Carolina Journal. them,” Smith said. N.C. Department of Environ- Once the gun registration statute was repealed, it be- “So as the clerk of court, if none of the legal entities for ment and Natural Resources scien- came “very clear that a unit of local government may not whom I’m charged with maintaining and keeping records tists, using data from recent years, regulate or register firearms in any manner, and that’s pre- have any interest in these records, and there is no owner of demonstrated to the EPA earlier cisely what they’re doing” by maintaining the registry, Va- them, no one wanted them … retention of them was point- this year that this special summer lone said. “So essentially what we said was either they de- less,” he said. blend of gasoline had insignificant stroy the records, or we destroy the records, or else we will Hand-feeding the documents into the shredder took impacts on air quality in the Triad sue you.” about three hours. The confetti-like remnants filled several and Triangle. As a result, the EPA The demand letter, sent Sept. 23, stated: large plastic bags. eliminated the mandate for its use. “Given that state experts have already determined “The sheriff and I fed the first few through, and then Smog readings are somewhat that the handgun registrations have no historic or archival some folks up here in the clerks’ office fed them through,” higher in Charlotte than in the Tri- value; given that no agent of Durham County or the City of Smith said. angle or Triad. But DENR officials Durham can legally utilize the registrations for any reason; Smith acknowledged the hullabaloo created by the sit- are optimistic that the EPA may end given that, absent a statute authorizing their retention, the uation was unusual for his office, which only occasionally the use of special summer fuels in registrations are a violation of the privacy of Durham Coun- deals with interesting or newsworthy events. the Queen City in 2015 as well. CJ ty residents; and given the liability to Durham County of “Our work is critical, but plain vanilla,” he said. “A hor- the Clerk’s Office continuing to regulate the registrations in rorific day up here is when somebody gets a paper cut.” CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 11 Local Government Revelations Rekindle Long-Running Concerns in Indian Trail

By Dan Way gal activity” to approve development “I can’t answer that,” Moore said interest in going back and creating [in- Associate Editor plans, said attorney Steve Smith, who when asked about the nondisclosure audible]. John’s passed away, and San- RALEIGH deposed Bailey in September. agreement. “I think that’s probably dy’s no longer mayor, so what would it former Indian Trail town plan- Smith represents the Bonterra Vil- part of personnel records that are part accomplish?” ner testified under oath in Sep- lage subdivision homeowners associa- of North Carolina law.” Jonathon Baer has been attempt- tember that in the early 2000s, tion against the developers, R.D. Har- Smith asked Town Council on ing for years without success to get townA leaders ordered him to commit rell Company, in a $1.5 million lawsuit Sept. 23 for the partial waiver. Some information about Munn’s salary over- illegal acts in approving developers’ alleging shoddy construction of roads council members unsuccessfully at- payments and public documents of plans. The revelation has rekindled and stormwater systems, substandard tempted to rescind the entire speech other town business. long-running concerns about govern- repairs, and noncompliance with plan- ban “because they didn’t see the utility Baer believes there is a “culture ment corruption in the Union County ning guidelines. in continuing to of corruption” that leads to “the atti- municipality. A settlement keep these secrets tude that the only way to get informa- For years, town watchdogs and was reached in from the public,” tion or the only way to have any kind former elected officials have contended October. Smith said. of transparency is for the citizens to that former town manager John Munn, “ A b s o - During the sue the government, and that is pre- now deceased, improperly received lutely not, that’s deposition, town posterous.” $400,000 in pay beyond his part-time, r i d i c u l o u s , ” attorney Keith He said Bailey received compen- $45,000 annual salary, and that ex- Moore, the for- Merritt said he sation with the confidentiality agree- mayor Sandy Moore also received ex- mer mayor, said represented both ment. tra compensation to which she was not of Bailey’s alle- Bailey and the “When you put two and two entitled. gations. “I have town. together, it looks like hush money,” Town Council has routinely de- no idea” why he “I think Baer said. Quinn called it a suspicious nied public records requests related to would say that. that’s extremely, “golden parachute” laced with several those issues. “I cer- extremely un- months’ pay. Critics now say former town tainly hope” all usual” for a town- planner Lee Bailey’s sworn testimony d e v e l o p m e n t paid attorney to Former councilwoman Mercedes corroborates what they have claimed projects during her tenure were done be at a deposition in a case in which the Cass said Munn was fired because all along — developers pull the strings according to code and legal standards, town is not a party, Smith said. “there were a lot of crooked things go- of town government, and town of- Moore said. “The town was there to protect its ing on.” He threatened to sue council ficials skirt the law to accommodate Smith said Bailey, who was dis- own interests. They were not there to members individually if they withheld them. missed in 2005 by Munn, “was clear in protect Lee Bailey’s interests, I guaran- payments he said he earned. “The town’s agenda is a partner- his deposition that none of those [un- tee you that,” Smith said. No formal contract could be ship with these developers. It has been lawful] activities were related to Bon- When he tried to ask Bailey ques- found to show Munn’s salary was only for years,” said former mayor John terra.” He was unable to press Bailey tions beyond the scope of the confiden- $45,000 for 25 hours of work per week. Quinn, who defeated Moore in 2007 about the alleged illegal acts during tiality waiver, Merritt “objected on the Council members ultimately declared and served until 2011. the deposition, he said, because the basis of privilege, and directed the wit- Munn was owed the hundreds of thou- “This obsession of urbanizing plans for Bonterra were approved in ness not to respond,” Smith said. sands of dollars, citing accounting er- Indian Trail was just curious to me. 2001 before Bailey started working for Smith said Bailey testified that rors as the reason the payments didn’t Somebody had to be benefiting from it the town. when he was town planner “he was appear earlier. because the residents weren’t happy” Moreover, Bailey signed a non- uncomfortable because certain devel- Cass said Moore received over- with the rapid growth, rising crime, disclosure agreement with the town. opers had unusual access to the mayor payments as mayor of $200 monthly, and lax enforcement of building and Indian Trail gave him a partial waiver and to John Munn.” approved by Munn but not authorized planning codes under Munn’s 10-year of that agreement to discuss Bonterra Smith said developers got plan by the council. tenure that ended with his firing in De- matters only. approvals for areas that “would not Former state representative and cember 2005, Quinn said. “I think it’s highly unusual for a make monetary sense [unless] they senator Fern Shubert briefly succeeded Bailey “claims that he was di- planning director to have a confidenti- had control over the local politicians Munn as town manager. rected by the mayor to engage in ille- ality agreement,” Smith said. who could direct sewer and water to “There was a whole bunch wrong those areas.” with that picture” involving Munn’s As mayor, Quinn had testy rela- pay, she said. tions with the council as he investigat- When his attorney threatened Help us keep our presses rolling ed Munn’s salary and other town poli- council members, “I begged them not tics. He has tried unsuccessfully to get to pay him that money” because there a local or state law enforcement agency Publishing a newspaper is an ex- was no record of it ever being autho- to investigate Indian Trail. pensive proposition. Just ask the many rized, Shubert said. “Why doesn’t anybody care?” he daily newspapers that are having trouble She signed an agreement with the asked after Bailey testified about the making ends meet these days. council to be paid the same amount town’s alleged illegal activities. “He It takes a large team of editors, re- Munn received, she said. The council porters, photographers and copy editors said it under oath.” Quinn provided Carolina Journal did not pay her the higher amount to bring you the aggressive investigative when it was discovered how much reporting you have become accustomed with an audio recording made several years ago in which Bailey made state- Munn had paid himself. to seeing in Carolina Journal each Both Shubert and Cass said month. ments similar to those in the deposi- tion. Munn’s pay was the source of heated Putting their work on newsprint and discussions in closed meetings, records then delivering it to more than 100,000 “I wasn’t rubber-stamping all the plans and letting things ride,” Bai- of which remain sealed despite state readers each month puts a sizeable dent laws requiring them to be made public. in the John Locke Foundation’s budget. ley said on the recording. While there were threats and attempts by Munn Smith said when he first started That’s why we’re asking you to help talking to Indian Trail residents, he had defray those costs with a donation. Just and Moore to bully him, “There’s no smoking gun” in which he was threat- an initial impression they were “con- send a check to: Carolina Journal Fund, spiracy theorists.” John Locke Foundation, 200 W. Morgan ened with “any bad acts.” Quinn asked if the actions Bailey “At first blush it sounds kind of St., Suite 200, Raleigh, NC 27601. was asked to perform were criminal in fantastic and incredible, but the more We thank you for your support. nature. you get into it, the more you see what “Probably,” Bailey responded. these people are telling you is true, and John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 “But you know, at this point I have no it’s very suspicious,” he said. CJ PAGE 12 NOVEMBER 2014 | CAROLINA JOURNAL Local Government COMMENTARY G’boro to Let Citizens In On Uber, Lyft Seek Fare Deal Some Budgeting Decisions By Michael Lowrey years moved more aggressively to shift egulation stifles innovation, that aren’t have a huge disadvan- Associate Editor costs to PWC while subjecting the wa- resulting in poor-quality tage compared with the favored RALEIGH ter and sewer authority to budget and products at higher prices companies. Not surprising, the win- reensboro City Council has hiring constraints that apply to other Rfor consumers. And removing ning cab companies are generous voted to allow citizens to de- city departments. PWC commissioners long-established regulations takes political donors. Patrick Cannon, cide how a portion of the city’s believed that the city was exceeding its a massive effort, usually driven who in 2013 was elected mayor of Gbudget is spent. The city would be the authority when it decided to phase out by obvious massive benefits that Charlotte, received 10 percent of his first in the South payments to ex- an emerging new industry offers. total campaign contributions from to approve so- tend sewer lines That’s the difficult situation riding- the taxicab companies selected to called “partici- to newly an- sharing services Uber and Lyft are operate from the airport. patory budget- Cherokee nexed areas and facing today as they attempt to There been allegations that ing,” reports the transferred mon- ey and person- provide an alternative to existing now-former mayor and convicted Greensboro News nel from PWC to taxicabs. felon Cannon, who soon will begin & Record. to Under the other city depart- While the concept of private serving a 44-month sentence on plan, Greensboro ments. individuals using their own cars public corruption charges, may would spend Currituck “We are to transport passengers have tried to shake down $200,000 for a certainly sorry for money may seem cab companies wanting consultant to to have gotten like a new concept, it’s to get in on the airport develop guidelines for the program. to this point, but we feel like we have not. It first happened a action. Even if the charges Proponents hope private foundations an obligation to the ratepayers and to century ago, as the mass aren’t true, the current will cover half the expense. Then in the the citizens of this community to do production of the auto- arrangement simply en- 2016-17 fiscal year, Greensboro would our job as commissioners,” said PWC mobile suddenly saw an courages corruption. Still, set aside $500,000 for five special proj- board chairman Mike Lallier. estimated 62,000 “jit- plenty of politicos and ects — one $100,000 project in each of Voorhees, for his part, contends neys” — slang of the time bureaucrats have no prob- the city’s five voting districts — to be that the city has done nothing wrong. for a nickel, the typical lem with the status quo, as selected by voters from a number of “It is regrettable that the com- mission views its role as superseding streetcar fare — operate MICHAEL it gives them power over options. in 175 cities across the marketplace transactions. “The people of Greensboro are ea- that of the duly elected City Council,” wrote Voorhees in an email to council country. Jitneys didn’t LOWREY And forcing locals to ger to get involved,” Spoma Jovanovic, members. “This suggests to me that last long, though, as they rely on cabs that visitors an assistant professor of communica- the council is on the right path in re- effectively were regulated might find too decrepit tions at UNC-Greensboro and propo- nent of the plan, said to city council. quiring greater transparency and ac- out of existence across the country doesn’t send an encouraging signal countability from the PWC.” by 1918, in large part to protect the about the general quality of taxi “This is probably the best mechanism better politically connected streetcar service in city. I’ve seen in a long time that can make Homesharing site a concern that happen.” industry. Not surprising, Uber and Lyft A number of city council mem- Doug Erickson recently decided Since then, taxicab companies have done very well since com- ber were critical of the proposal, which to list his C.W. Worth House Bed and have faced regulations, usually ing to Charlotte. These services passed by a slender 5-4 margin. Breakfast on the Airbnb.com website. from local governments, with the let passengers book rides using a “There are some of us who think Erickson described the move to the usual result protecting existing smart-phone app. The drivers are that it is fairly bizarre that we should Wilmington Star-News as a way for his cab companies from competi- independent contractors using their give a firm in New York $200,000 to tell business to compete. The move marks tion. Where the absurdity of such own vehicles. Drivers share their us how to spend $500,000,” said coun- something of a change of direction for regulation reaches its zenith is at fares with the service. cil member Zack Matheny. Erickson, notes the newspaper, as he’s many cities’ airports. The situation “What they’ve done in the “I think a vote for [participatory spent the past two years asking local at Charlotte Douglas International past five to six months is scary,” budgeting] is actually a vote against officials to monitor more closely the Airport is typical. said Obaid Khan, co-owner of democracy,” Matheny said. “It’s taking properties listed on Airbnb and other In 2011, the Charlotte City Charlotte-based Diamond Cab, to away part of my job that I was elected home-sharing websites. Council approved a special set of The Charlotte Observer. “They’ve set to do.” Erickson’s specific concern is that regulations on cabs operating at the their rates so low small companies homeowners may be renting out prop- airport. The justification was that like us can’t compete with them.” Fayetteville PWC sues city erties without following the same reg- the cabs running in the Queen City Khan wants to see Uber and ulations he’s subject to, such as obtain- The Fayetteville Public Works ing a business license, being subject to weren’t nice enough and would Lyft regulated more strictly or have Commission has sued the city of Fay- county health department inspections, give visitors a poor perception of regulations loosened on cab compa- etteville, contending that the city is at- and collecting and remitting room oc- the city. nies. tempting to exert too much influence cupancy tax. The solution: Upgrade a lim- The General Assembly is over its operations and finances, re- Airbnb’s website states that it ited number of cabs to a nicer stan- working on new regulations for ports the Fayetteville Observer. “assumes no responsibility for a host’s dard, with special markings show- ride-sharing companies. The best Most North Carolina municipal compliance with any agreements with ing they are allowed to pick up outcome would be a framework public water and sewer systems op- or duties to third parties, applicable fares at the airport. Only a limited allowing ride-sharing companies erate under the direct control of their laws, rules, and regulations.” number of companies — three to be to serve the customers who value municipal government boards. The Roger Kelley, tax administrator exact — were permitted to operate that alternative while liberating taxi Fayetteville Public Works Commis- for New Hanover County, agrees that cabs that could pick up passengers companies from excessive, costly sion is one of two water and sewer home-sharing websites are a potential at the airport. regulations through which the gov- systems in North Carolina — the other concern but difficult for his depart- This is madness. ernment often picks winners and is in Greenville — granted autonomy ment to monitor adequately. by state law. In Fayetteville’s case, city These limits let the city pick losers. CJ “Naturally we want every dol- council appoints PWC commissioners winners and losers — the com- lar we can get,” Kelley said. “And it’s and sets their salaries and must ap- not fair to everybody that’s paying it, panies allowed to operate at the Michael Lowrey is an associate prove PWC’s budget. so yeah, I’d like to see that better en- airport make a lot of money, those editor of Carolina Journal. Under City Manager Ted Voor- forced. But again, what’s the answer? hees, Fayetteville has in the past two Manpower.” CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 13 Local Government Court Fails to Draw Line Over Blood Draws in DWI Cases

By Michael Lowrey care and no other officer was available Associate Editor to stay with him while the officer left to RALEIGH obtain a warrant. runks don’t always make the The appeals court held that the most cooperative suspects. But trial judge should have made specific it’s not clear how aggressively findings of fact about whether a mag- Dpolice can pursue evidence, such as istrate had been available and how blood samples, when they apprehend much time it would have required to a suspect who’s suspected of driving obtain a warrant. while intoxicated. And a recent ruling Judge Ann Marie Calabria dis- by the state Court of Appeals hasn’t sented from the majority holding, find- settled the matter. ing that Fyle overstepped his authority On Dec. 28, 2010, Chatham and it was not necessary to ask a trial County Sheriff’s Deputy Justin Fyle re- court to look for more facts. sponded to a call reporting suspicious “In the instant case, the trial activity. Fyle found Ronald McCrary court’s unchallenged findings demon- apparently sleeping in a red Isuzu strate that Deputy Fyle’s actions fall Trooper parked poorly in a driveway squarely within the ambit of the exam- of another person’s home. When Fyle ple articulated by McNeely.” opened the car’s door, he noticed a The key to Calabria was that Fyle nearly empty bottle of vodka. McCrary had decided to obtain a blood sample smelled of alcohol, had red and glassy well before any exigent circumstances eyes, and couldn’t stand up to perform municating threats. He was sentenced the bloodstream does not constitute an may have developed at the hospital. field sobriety tests. Fyle arrested Mc- to consecutive 120-day prison terms on exigency in every case sufficient to jus- “Deputy Fyle simply ignored our Crary for driving while impaired. the charges. tify conducting a blood test without a Supreme Court’s long-established di- Soon afterward, McCrary began warrant.” In McNeely, an officer drove rective that ‘a search warrant must be complaining of chest pains and de- Drawing blood is a search a suspect to a hospital to obtain a blood issued before a blood sample can be manded to be taken to the hospital. sample without first obtaining a war- obtained,’” she wrote. At trial and again before the N.C. Emergency medical services personnel rant after McNeely said he would re- “He then sought to impermis- Court of Appeals, McCrary argued were called. At that point, Fyle stated fuse a breath test. sibly benefit from his failure to seek a that the results of the blood sample his plan was either to bring McCrary The question before the appeals warrant by asserting that an exigency into the sheriff’s office for processing should be suppressed. court was whether the circumstances existed at the moment the blood draw if he were cleared by EMS personnel Federal and state courts have rec- in McCrary’s case rose to the level of was to occur. At this point, it was far or to obtain a blood sample without a ognized that taking blood from some- an exigency. Two of the three judges on too late for Deputy Fyle to consider, for warrant if McCrary were transported one amounts to a search under both the the Court of Appeals’ panel held that it the first time, whether a warrant could to the hospital. U.S. and North Carolina constitutions. might, although a trial court needed to reasonably be obtained. ” Fyle’s sergeant ordered McCrary Searches conducted without a prop- make that determination. N.C. Court of Appeals rulings to be taken to the hospital, where his erly issued warrant are unreasonable “We find this case to be more are binding interpretations of state law “belligerent conduct accelerated.” Mc- unless conducted with probable cause similar to State v. Granger than to Mc- unless overruled by a higher court. Be- Crary also refused to provide a blood and under exigent circumstances. And Neely,” wrote Judge Donna Stroud for cause of Calabria’s dissent, the state sample; one was taken without his last year, the U.S. Supreme Court in a the court. Supreme Court is required to hear the consent. case called Missouri v. McNeely held In Granger, the Court of Appeals case should McCrary appeal. McCrary eventually was convict- that “in drunk-driving investigations, held that exigent circumstances existed The case is State v McCrary, (13- ed of driving while impaired and com- the natural dissipation of alcohol in when a DWI suspect required hospital 1059). CJ Visit our Western regional page Visit our Triangle regional page http://western.johnlocke.org http://triangle.johnlocke.org The John Locke Foundation has five regional Web sites span- The John Locke Foundation ning the state from the mountains has five regional Web sites span- to the sea. ning the state from the mountains to the sea. The Western regional page in- cludes news, policy reports and The Triangle regional page in- research of interest to people in cludes news, policy reports and the N.C. mountains. research of interest to people in the Research Triangle area. It also features the blog The Wild West, featuring com- It also features the blog Right mentary on issues confronting Angles, featuring commentary Western N.C. residents. on issues confronting Triangle residents.

The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 PAGE 14 NOVEMBER 2014 | CAROLINA JOURNAL From Page 1 Hagan-Nominated USDA Official Scrubs Solar Grant Documents

Continued from Page 1 website were exaggerated or mislead- ing. Even so, William Stewart per- bers in the installation of solar panels formed some work on the project, and at the JDC building in Reidsville. Tilden Hagan had a significant role in When asked about the omitted the project. (See related story, page 1.) documents, Gore said in an email, The file on a separate $250,644 “Please note that the information you stimulus grant to the Hagan family have requested is part of the propri- was made available to reporters and etary information that has been re- contained detailed information on dacted.” When CJ followed up, asking costs and actual expenses incurred by if the redactions were made by JDC JDC Manufacturing. Manufacturing or the USDA, Gore did not respond. Grant boosts net worth Policy: Notify grant recipient Unlike the energy upgrades fi- nanced in part by the stimulus grant, Earlier, Gore had told CJ that which were intended to cut energy it was his office’s policy to notify the The solar panels paid for with two federal grants were installed atop a Hagan-owned costs by $100,000 a year for Plastic grant recipient that an inquiry had building in Reidsville, N.C., which houses Plastic Revolutions, a Hagan-owned com- Revolutions and reduce carbon emis- been made and give the recipient an pany. (CJ photo by Don Carrington) sions produced at the building, the opportunity to object to a review of all provide them to CJ. cation for the grant, documents spell- USDA file shows the $50,000 federal or portions of the grant records. The redacted contents of the ing out the evaluation process used by grant for the second solar panel proj- From the initial reporting in late USDA file may include invoices and the agency to approve the grant, and ect was intended to subsidize a project September by the Politico.com news other documents that could determine a request for funding for JDC. But — that would boost JDC’s net worth. service on a stimulus grant, Hagan and whether the additional invoices JDC unlike the file of documents provided “This is a partnership involved in various family representatives have provided to the other media outlets to CJ and other media outlets for JDC’s investment activities. JDC Manufactur- insisted that the family businesses referred to spending that took place stimulus grant, it does not include in- ing is investing in and installing a Solar did not profit from an earlier $250,644 as part of the second, USDA-funded voices, timesheets, or work orders for PV System to produce green power to stimulus grant JDC received. More- phase of the project, rather than the the project. sell to the local utility company,” the over, Hagan representatives have said first, stimulus-funded phase of the application says. a separate company founded by Chip project. State Energy Office The $50,000 grant came through and Tilden — Solardyne/Green State JDC is a Reidsville-based real es- The stimulus grant was managed the USDA’s Rural Energy for America Power — received “no funding, public tate business co-owned by Chip Hagan by the State Energy Office, which re- Program administered by the Rural or private,” spokeswoman Caitlin Leg- and his brothers John and David. JDC ceived funding from the U.S. Depart- acki said to WRAL-TV. was awarded the USDA grant a few Development office in Raleigh. It was ment of Energy. At the time the grant used to pay for additional solar pan- months after JDC gained approval for was awarded, the State Energy Office Costs, documents in question a $250,644 federal stimulus grant to in- els on the JDC building in Reidsville. was part of the N.C. Department of Chip Hagan completed the grant re- CJ reported that the company in- stall new light fixtures, new furnaces, Commerce. It now is part of the De- quest and submitted it to North Caro- formed state officials that the budget and solar panels at JDC’s building. partment of Environment and Natural lina USDA officials on June 13, 2011. for the stimulus-funded project had Resources. Second phase USDA area specialist Lynn Straughan been revised downward by more than The Hagan family’s solar com- approved the grant the same day. Gore $114,000 and that the savings would be The USDA helped pay for what pany was originally formed in August applied to the company’s share of the appears to be the second phase of the 2010 as Solardyne, and Chip changed signed off on the project July 11, 2011. project. After CJ’s reports, company solar project. Green State Power’s web- the name to Green State Power in May According to the grant applica- representatives contacted WRAL and site claims the company was involved 2012. tion, the total cost of the solar system The News & Observer with documents in the installation of a 53 kW solar pan- CJ initially reported that Solar- would be $200,000, and JDC Manufac- allegedly showing that the project in el array and an additional 58 kW solar dyne performed both phases of the turing would provide $150,000 of the fact cost much more than the final bud- panel array on the building for Plastic solar installation primarily based on project’s costs. get filed with the state claimed. The Revolutions, a recycling business also claims made on the company’s web- The grant application did not documents presented to other media owned by the Hagans that leases space site. After reviewing the project file at mention the previous stimulus grant outlets are not part of the file at the in the JDC facility. the State Energy Office, it appears that and the solar panels that had been in- State Energy Office, and JDC will not The USDA file includes the appli- the claims made on the company’s stalled on the building. CJ Stimulus Grant File Shows Substantial Hagan Family Involvement

Continued from Page 1 to Tilden and Stewart of $12,785. They (the location of the JDC building). former in South Carolina for $7,695 for may have additional compensation • On Dec. 1, 2010, Tilden Hagan, equipment. Attorneys for the Hagan cam- that was not reflected in the public re- on behalf of JDC Manufacturing issued • For the week ending Dec. 11, paign committee say JDC Manufactur- cords. Moreover, Stewart now is listed a purchase order to Solar Electric Dis- 2010, contractor Circuitmakers Inc. ing never paid Solardyne/Green State as a manager of Green State Power. tributor of Denver, Colo., for numer- paid Tilden Hagan $420 for his services Power, citing a story published Oct.17 Some examples of their activities ous items totaling $12,502.64. He listed as an electrician. and updated Oct. 18 in The News & Ob- follow: his contact information as Tilden@So- • On Dec. 14, 2010, groSolar in- server, saying records provided by the • On Nov. 18, 2010, groSolar, a lardynenc.com. voiced Tilden Hagan of Solardyne in company don’t show any payments to Vermont-based solar equipment sup- • On Dec. 7, 2010, groSolar in- Chapel Hill for another order totaling Solardyne/Green State Power. plier, invoiced Tilden Hagan of Solar- voiced Tilden Hagan of Solardyne in $100.54. Items were to be shipped to However, a Carolina Journal ex- dyne at 408 Coolidge St., Chapel Hill, Chapel Hill for another order totaling Solardyne at the JDC building in Re- amination of the JDC Manufacturing N.C., for 216 solar panels and other $22,927. Items were to be shipped to idsville. grant file at DENR revealed that Til- equipment totaling $137,916. The ad- Solardyne at the JDC building in Re- • On Dec. 17, 2010, Tilden Hagan den Hagan and William Stewart, Sen. dress is Tilden Hagan’s home. The in- idsville. from [email protected] con- Hagan’s son-in-law, had significant in- voice stated the products were to be • On Dec. 8, 2010, Tilden Hagan tacted John Hagan: “I’m bringing with volvement in the project. Records from shipped to John Hagan at Solardyne on behalf of JDC Manufacturing issued the stimulus file show direct payments located at 1704 Barnes St. in Reidsville a purchase order to Sunbelt Trans- Continued as “Stimulus,” Page 15 NOVEMBER 2014 | CAROLINA JOURNAL PAGE 15 From Page 1 Hagan Electrical Contractor License Applications Raise Questions

Continued from Page 1 applicants to use personal recommen- dations from people claiming to be su- pervisors without requiring any docu- mentation to back up those claims. Both Chip and Tilden Hagan claimed the work took place at Solar- dyne, the solar energy company that was recognized formally in August 2010 by the state’s Corporations Di- vision in the office of the secretary of state. Initially, Chip and Tilden listed themselves as managers. Chip changed the name of the company to Green State Power in 2012, later adding son- in-law Stewart as a third manager. As part of Tilden’s application for a limited license, on Jan. 25, 2012, In Tilden Hagan’s application for his electrical contractor’s license, his father, Charles “Chip” Hagan, Sen. Kay Hagan’s husband, Chip Hagan certified to the board attests to his son’s work experience at the family solar company. that he was his son’s manager at So- ence; and that in my opinion he/she credit is allowed for other activities. prepared a “Clarification of Experi- lardyne, and that Tilden had worked does have the ability to satisfactorily A limited license requires a minimum ence” statement certifying that Tilden 5,000 hours. Less than 11 months later, supervise and direct all electrical wir- of four years experience including two had then accumulated 5,000 hours Dec. 13, 2012, as Tilden applied for an ing or electrical installation work done years of primary experience in electri- of primary work experience. “As the unlimited license, Chip Hagan stated, by an electrical contracting business in cal installation. One year is equivalent manager of the company I am able to “As the manager of the company I am the UNLIMITED classification.” to 2,000 hours. Those with a limited attest that he has done so for two and able to attest that he has performed The North Carolina State Board license were restricted to contracts of a half years and performed 5,000 hours 8,500 hours of work to date.” of Examiners of Electrical Contractors less than $40,000. That threshold was of work to date,” he wrote. Working an additional 3,500 is the licensing and regulatory agency recently changed to $50,000. After Tilden Hagan passed his hours 46 weeks would have required for N.C electricians. Applicants seek- On Sept. 17, 2011, one year af- exam in May 2012, the board granted Tilden to work consecutive 76-hour ing a limited, intermediate, unlim- ter the Hagan family launched their him a limited category electrical con- weeks in electrical installation. ited, or special license must complete solar energy company, Tilden Hagen tractor license. He applied to take the Neither Chip nor Tilden Hagan an application and take an exam. The signed his initial application for the exam for an unlimited contractor li- has responded to emails or phone application relies heavily on primary limited classification electrical contrac- cense Nov. 27. On Dec. 13, Chip stat- messages from CJ seeking information work experience, and that experience tor license. He stated that he had been ed that Tilden had accumulated 8,500 about the experience they claimed on needs to be certified by the applicant’s employed at Solardyne since February hours of experience. Tilden was issued the two license applications. employers. The applications are public 2009, a period of two years and eight his unlimited contractor license June 5, While Tilden’s father claimed information. months, and listed his current position 2013. to be his supervisor on one form, CJ reviewed Tilden Hagan’s ap- as president. Chip Hagan completed But there are other issues raised his brother-in-law William Stewart plications with the board’s executive the “Employer Statement Form” claim- by the information contained in Tilden claimed to be Tilden’s supervisor on director, Tim Norman. Norman said ing Tilden Hagan had worked 4,000 Hagan’s first application. another. Stewart is married to Tilden he has an obligation to investigate all hours as an electrician. Chip Hagan Tilden Hagan’s work experience Hagan’s sister. complaints as well as credible informa- signed the form as the manager of So- at Solardyne coincides with his stated On a form titled, “Supervise and tion that may involve a license applica- lardyne. time as a medical school student. His Direct Statement,” listing himself as tion. He said he could not comment on Tilden Hagan’s work experience LinkedIn page states he was enrolled president of Green State Power, Stew- Tilden Hagan’s applications. caught the attention of a reviewer at in the UNC School of Medicine in art stated, “This is to certify that I have An unlimited license requires a the licensing board. A handwritten Chapel Hill from January 2009 to Au- known Charles Tilden Hagan IV for ap- minimum of seven years experience, note on the application reads, “Need gust 2011 — essentially the same time proximately 20 years; that I am knowl- including five years of primary expe- clarification on experience.” period he claimed to have worked edgeable of his/her electrical experi- rience in electrical installation. Some On Jan. 25, 2012, Chip Hagan 4,000 hours at Solardyne. CJ Stimulus Grant File Shows Substantial Hagan Family Involvement Continued from Page 14 voiced Tilden Hagan of Solardyne in $1447.50 for 96.5 hours at $15 an hour as an electrician. Chapel Hill for another order totaling for the general labor of unspecified • On Feb. 3, 2011, William me tomorrow the Power Purchase $449.39. Items were to be shipped to workers he apparently supervised. Stewart invoiced Plastic Revolutions Agreement (PPA) from Duke which Solardyne at the JDC building in Re- • On Jan. 31, 2011, Plastic Revo- $1,867.99 for labor and materials on the I’ve signed but when I return it to idsville. lutions billed JDC Manufacturing JDC project. Duke I need to include the check for • For the week ending Dec. 24, $12,677.90 for the solar project. Includ- • On May 2, 2011, the N.C. De- $28,901.59 from JDC Manufacturing. 2010, contractor Circuitmakers Inc. ed in that total was $2,772.50 to William partment of Commerce sent a site visit Let me know if it would be best for me to leave it somewhere at the plant or if paid William Stewart $400 for his ser- Stewart for contracting services. Plastic report to JDC Manufacturing grantee my Dad can write a check from JDC. vices as a general laborer. Revolutions and JDC are owned by the representatives John Hagan and Tilden It needs to go out on Monday so we • For the week ending Dec. 31, Hagan family. Hagan. The report stated that the proj- can be sure they’ll start their side of the 2010, subcontractor William Stewart • On Jan 11, 2011, Circuitmakers ect ws closed. construction as soon as possible to be paid himself $525 and a laborer under Inc. invoiced Plastic Revolutions for • On July 19, 2011, N.C. Depart- done before year end.” his supervision $435 for services as $3,405 for the labor of Tilden Hagan ment of Commerce official Starlett • For the week ending Dec. 18, general laborers on the JDC project. and $1,620 for the labor of William Hodge emailed program manager 2010, contractor Circuitmakers Inc. • On Dec. 31, 2010, William Stew- Stewart. Nichele Parker following up with Til- paid Tilden Hagan $360 for his services art invoiced Plastic Revolutions a to- • For the week ending Jan. 15, den Hagan at [email protected] as an electrician. tal of $2,772.50, itemized as $1,325 for 2011, contractor Circuitmakers Inc. and others that a JDC site visit was • On Dec. 21, 2010, groSolar in- 53 hours at $25 an hour for him, and paid Tilden Hagan $90 for his services planned for July 27. CJ PAGE 16 NOVEMBER 2014 | CAROLINA JOURNAL Interview Shibley: Disturbing That Censorship Calls Coming from Students

By CJ Staff RALEIGH “[An] ongoing problem is the sad fact troll through a college campus, and you expect to hear debate that campuses do tend to discrimi- about a range of good, bad, and evenS crazy ideas. Too many colleges nate, for the most part, against con- place limits on debate or restrict the free exchange of ideas to small, out- servative and Christian students and of-the-way sections of campus. Robert libertarian students to a lesser ex- Shibley, senior vice president of the Foundation for Individual Rights in tent, but still significant on campus, Education, recently discussed higher education free-speech restrictions with simply because of political differ- Mitch Kokai for Carolina Journal Ra- dio. (Head to http://www.carolina- ences.” journal.com/cjradio/ to find a station near you or to learn about the weekly Robert Shibley CJ Radio podcast.) Senior Vice President Foundation for Individual Rights in Education Kokai: You recently wrote a col- umn for The Washington Post. People in North Carolina may have seen it in other publications here, and you start- ed off saying that the last Sept. 17 was a pretty bad day for the Constitution on our campuses. How so? ties across America. ing inculcated on campus, not just Also, North Carolina’s univer- Kokai: Now, you mentioned through, you know, what professors sities, thankfully, their speech codes Shibley: Well, not just one, but these two cases and three other suits, might be teaching, but really just are generally less severe than those two different students were told that so this is not just happening in Cali- through the idea that you’re living in in many other states. I think Illinois is they were not allowed to exercise their fornia, not just isolated instances, but this authoritarian sort of Orwellian one of the worst. North Carolina is do- constitutional rights, there on Con- happening in a lot of different places. universe — you get used to these kinds ing pretty well. Virginia is among the stitution Day, one at Modesto Junior What is that sort of general trend that of restrictions on speech. You start to best when it comes to respecting free College in California, where a student you’re seeing? think they’re normal. You start to think speech on campus. And North Carolina also has — and Army veteran named Robert Van they’re good, and you’re being told not a free-speech issue, but they have Tuinen wanted to pass out copies of Shibley: … The main trend that they’re good in many cases and that you can rely on is this campus au- good people would want to silence the right to counsel on college cam- the Constitution on campus and was puses. And so, … administrators know told by the campus security that he thoritarianism, and even a kind of to- offensive opinions. And those people talitarianism, … that every single thing are leaving campus, and they’re taking now that if you are dragged in front of couldn’t. Then he had a run-in that’s a campus tribunal for something like almost impossible to believe — thank- you do on campus has to be regulated that attitude off campus with them, in some way. So when we’re talking and it’s starting to crimp the idea of this, you’re going to have an attorney fully, it’s on video — with the adminis- with you, or you may have an attor- trator, who told him that he wouldn’t about students who are passing out, free speech in this country. you know, small pamphlets, being You know, America is unique in ney with you who can make the argu- be able to do it today, and he had to told that they can’t do that, they’re not our respect for free speech. But, un- ment, saying, “Hey, you know what? sign up ahead of time, and maybe in blocking anybody’s traffic, nobody’s fortunately, it’s becoming less so with The First Amendment prohibits what a few days or maybe next month he complaining about them — or getting each passing year. We saw the “disin- you’re trying to do here.” So it’s an im- could come back and pass out Con- petition signatures. vitation season” phenomenon this year portant safeguard, too. stitutions on his campus. And that he In a couple of the other cases, with Condoleezza Rice, with Ayaan So we’re lucky to live in North had to stay inside a tiny free-speech they were wearing T-shirts that an- Hirsi Ali, with [International Monetary Carolina for that reason. There’s a lot zone that is less than 1 percent of the noyed administrators. You know, it Fund] head Christine Lagarde — all of of improvement that can take place campus — a little concrete stage in the doesn’t matter — it seems like no ac- whom either backed out or [were] un- and that should take place, and that’s middle of the quad that he wasn’t sup- tivity, no matter how small, is too small invited from giving speeches, simply something I want to work on as a North Carolinian here. posed to leave. to escape the notice of campus admin- because the universities didn’t want istrators. And that’s a part of the func- the controversy or disagreed with Kokai: Our time is running short, Kokai: That was just one exam- tion of administrative bloat. them, or they wanted to give in to peo- but when you look over the recent his- ple, and there was another? The other ongoing problem is ple who were demanding that they be tory of these types of cases, are things the sad fact that campuses do tend to silenced. Shibley: That was one example. about the same as they had been in re- discriminate, for the most part, against cent years, or are they getting worse or The other was a student at Citrus Col- Kokai: conservative and Christian students It’s very much a concern. maybe even getting a little better? lege in California, so these are both and libertarian students to a lesser ex- All of the examples we’ve been talking California cases. Vincenzo Sinapi-Rid- tent, but still significant on campus, about so far have been in other states. Shibley: dle, he goes by Vinnie, wanted to … The disturbing thing simply because of political differences. Some people might hear this and say, that we’re seeing is an increasing collect petition signatures protesting And while it’s certainly not confined to “Too bad for them, but things are fine amount of the demands for censor- NSA domestic surveillance, and was people who you might perceive as be- here in North Carolina.” Are things ship are coming from students, rather told that he could not do that outside ing on the right, they certainly do bear fine in North Carolina? than faculty or administrators. And it’s their tiny, free-speech zone at Citrus, the brunt of it, particularly with pro- sad to see students have been misedu- which is, to give them credit, slightly life speech or other kinds of controver- Shibley: I think when it comes cated in the K-12 system, and they’re more than 1 percent of the college cam- sial issues. to the free speech, they are a little bit taking that with them to the college pus. And so, Robert Van Tuinen al- better than average. I think part of that system, which is also not educating ready has brought the suit and settled Kokai: Most of us who are listen- is because of the historical significance them properly, to teach them the value it with the help of FIRE, and now Vin- ing today don’t spend much time on of the UNC-Chapel Hill speaker ban, of free speech. That said, you know, nie has brought suit against his college, college campuses these days, but why from decades ago, as sort of … North six years ago, 79 percent of public col- again with the help of FIRE, and on the should this concern everyone? Carolina got an early lesson on: How leges had laughably unconstitutional same day as we launched three other do we want to regulate who’s able to speech codes. Now it’s down to 58 cases in our effort, the Stand Up For Shibley: Unfortunately, what speak on campus? So North Carolina percent, so that’s a big improvement, Speech [Litigation Project], that we are we’re seeing is that this attitude, this had an early lesson that was thankfully but it should be zero. The law requires trying to finally bring an end to speech jaundiced attitude, this crimped at- decided in favor of free speech there. that it be zero, so that’s why we’ve codes at public colleges and universi- titude toward free speech that is be- And so I think there’s a legacy of that. launched our lawsuit effort. CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 17 Higher Education UNC’s ‘Low Productivity’ COMMENTARY Loan Repayments Programs Hard to End And Bad Incentives By Jesse Saffron university. Contributor This summer, the Pope Center ederal student aid programs a law degree, then gets a job as a RALEIGH conducted its own analysis to find de- demonstrate a point econo- lawyer (for any unit of government he 1971 law reorganizing the grees within the UNC system that are mists often make: Govern- or nonprofit entity) and earns the University of North Carolina “low productive.” We used the stan- Fment policies almost always have median wage for lawyers his age. declared that the UNC system dards for productivity established by undesirable consequences that After borrowing about $54,000, Tshould “encourage an economical use the University of Georgia, which are weren’t anticipated. all further debt will be covered of the state’s resources” to further the somewhat more stringent than UNC’s. At the time they were begun, by taxpayers, so there is no rea- state’s constitutional mission of pro- The University of Georgia, under during President Johnson’s “Great son to economize, use one’s own viding public higher education. Chancellor Hank Huckaby, has made a Society” years and shortly there- resources, or work to offset some of In that spirit, the system’s Board concerted effort to reduce unnecessary after, hardly anyone forecast that the cost. of Governors assigned mission state- programs. In 2010 and 2011, the Uni- they would result in huge increases While some people argue for ments to system universities setting versity System of Georgia approved 71 in the cost of going to college. De- “reforming” these loan repayment boundaries on the types of academic programs and discontinued only 12. programs that can be implemented on But after Huckaby, former director of cades later, it’s evident they have. programs and minimizing the bad individual campuses. the state’s budget office, became chan- Now that college is far more incentives, it would be better to Today, the 16 universities in the cellor, 576 programs across the system expensive and many eliminate them entirely. UNC system offer roughly 1,000 bache- were terminated, and only 99 have students are borrowing IBR should be elimi- lor’s, 700 master’s, been added. (Many huge sums to afford their nated because it encour- and 200 doctoral of the 576 pro- degrees, politicians are ages Americans to ignore degree programs. grams were inac- tinkering with the system the poor cost-benefit North Caro- tive, so there were to solve the “student debt ratio for many college lina law states that no faculty layoffs crisis.” programs. Lending large the board “shall or cost savings.) Two programs amounts of money to review the produc- In our study, meant to ease the burden students with the under- tivity of academic we focused on un- on students are Income- standing, “If you have degree programs dergraduate pro- every two years” grams in 2012-13. Based Repayment and GEORGE trouble paying it back, and “withdraw We found that if Public Service Loan For- LEEF don’t worry because we approval” of any Georgia’s stan- giveness. These programs will adjust to your ability program appear- dards had been ap- are expanding rapidly, to pay,” encourages bad ing “unproduc- plied to the UNC adding to the ever-accu- decisionmaking. tive, excessively system, 210 pro- mulating federal debt. That’s what IBR does for the costly, or unnecessarily duplicative.” grams would be flagged, compared to The idea behind IBR is that decision young Americans make The latest systemwide study, the 129 undergraduate programs dis- since some students have a finan- about college. They’re encouraged conducted by the system’s General covered by UNC in its latest review. cial struggle with their payments to adopt a breezy “Hey, why not Administration, appeared in 2013. A But does closing down degree because of their low earnings after give it a shot?” attitude instead of key measurement is “productivity,” programs save money? That is far from college, their repayment schedule thinking responsibly about the bal- which means that a program is “pro- certain at this point. should vary with their income. IBR ance of costs and benefits. ducing” an adequate (and presumably For example, at a Board of Gov- caps repayments at 10 percent of PSLF should be eliminated cost-effective) number of graduates ernors meeting earlier this year, Ap- discretionary income, and after 20 because the government should each year. palachian State University requested A bachelor’s program is consid- approval to eliminate eight programs years of payments any remaining not favor people who take jobs ered to be “low productive” if 1) it due to low enrollment. When asked if balance is forgiven. (That is to say, in “public service” (which cov- has awarded fewer than 20 degrees in that would save money, Suzanne Orte- taxpayers cover the loss.) ers 25 percent of all employment) the previous two years; 2) upper divi- ga, at the time the senior vice president But IBR is just a minnow rather than jobs in the for-profit sion (juniors and seniors) enrollment for academic affairs at the UNC’s Gen- compared with the barracuda of sector. Nonprofit work is neither is less than 26 students; and 3) fewer eral Administration, said the faculty PSLF, which lets students who go underpaid nor more virtuous than than 11 degrees have been conferred and resources would be “redeployed.” to work in “public service” jobs for-profit employment. in the most recent year. For master’s I asked Appalachian State of- repay their loans for only 10 years If banks had to lend money and doctoral programs, those numbers ficials the same question. Susan Mc- before the balance is wiped out. Be- to new businesses under similar change, but the focus is still on degrees Cracken, the school’s director of ex- cause many of the jobs that qualify terms — “Don’t worry about prof- awarded and enrollment. ternal affairs, replied, “resources that for PSLF require postgraduate edu- itability, because we’ll lower your Once a program is rated as “low were previously allocated to elimi- cation, the debts that the taxpayers payments if you aren’t doing well” productive,” it is not automatically re- nated or merged programs will be re- must eat are far higher. — you can see what would hap- moved. Several factors are weighed to viewed and prioritized for the most ef- People who learn how to pen. We would have lots of ill-con- determine whether to keep the degree ficient and practical use as determined or not. They include whether a pro- by the chancellor and provost.” game this system can get much of ceived new companies wastefully gram is “central to the [university’s] So, while the Board of Gover- their education, especially gradu- absorbing capital and resources. institutional mission,” fills a “high so- nors has the authority to terminate ate degrees, at little or no cost to Until we get government out cietal need,” or provides “access and low-producing programs, the de facto themselves. Furthermore, the gov- of the student loan business en- opportunity for underrepresented decision making comes from General ernment jobs that qualify them for tirely, the best policy would be for groups.” Administration and the universities. Uncle Sam’s generosity pay quite all students to be treated the same: In the latest review, 247 UNC They can use a variety of justifications well. The net effect is to transfer required to pay back the full cost of system programs (undergraduate for continuing a struggling degree pro- money from taxpayers to well-off their borrowing. CJ and graduate) were flagged as low- gram, and the evidence suggests that individuals and the institutions producing, but 200 of those were re- they may be doing just that. CJ where they received their creden- George Leef is director of re- tained because the universities either tials. search at the John W. Pope Center for had “plans to increase enrollment” or Jesse Saffron is a writer and editor Consider someone who earns Higher Education Policy. because the programs were related to for the John W. Pope Center for Higher the “core mission” of their respective Education Policy. PAGE 18 NOVEMBER 2014 | CAROLINA JOURNAL Higher Education Campus Briefs UNC Board Members Vent on Oversight Concerns t UNC-Chapel Hill’s First Amendment Day celebra- By Dan Way we should think twice before we interfere with their opera- Associate Editor tion in late September, tions,” Long said. keynoteA speaker Greg Lukianoff, RALEIGH “But the Board of Governors is primarily responsible president of the Foundation for eform-minded members of the UNC Board of Gov- for setting their budget, and I do not believe we have suf- ernors say they are taking necessary steps to control ficient information to do that” because the information is Individual Rights in Education, spending at the UNC System’s 16 campuses, and are not broken down into categories by individual campuses, presented some alarming findings: Rmore active in policy decisions, reversing past boards’ rub- Long said. The demographic group most ber-stamp votes. UNC-Greensboro is an exception. It posts its budget hostile to free speech is not baby But some of the 32 members say UNC General Ad- information on its website, he said. boomers or other generations, but ministration and college chancellors are reluctant to provide Rippy would like to see every campus budget online. millennials, those 18 to 30 years board members information. New internal policies frustrate The large universities are most averse to providing budget old. requests for information and block discussion of important details, and UNC General Administration is more resistant One of the panels that day, topics at meetings, they say. than campuses, he said. “Speech that Hurts and the First “I doubt that,” Board of Governors Chairman John A new board policy Fennebresque implemented re- Amendment,” suggested Luki- Fennebresque said when told that some board members ex- quires either his authorization or approval from committee anoff’s right. At least for some col- pressed unease, calling the issues “old news.” chairmen to seek additional information not in the board’s lege students, freedom of speech “I’m in pretty constant touch with all of them,” he meeting packets. Fennebresque said he has denied only one takes a backseat to sensitivity. said. “They do quite frequently tell me ‘You’re doing this request. That panel featured three stu- wrong, let’s do it this way.’ I generally listen to them.” But Long said the policy has created concern among dents and longtime First Amend- He said there always will be issues when 32 people some board members. ment attorney Hugh Stevens. It deal with a $9.3 billion enterprise. “It was an outgrowth of a desire to be sensitive to the drew a crowd of about 70 students “We know there are things we demands placed on staff by the board, but it may be that the and professors. need to do better. We know there are board needs a staff person [dedicated] Much of the panelists’ discus- things that need to be fixed. But at the to handle all these research requests” as a better alternative, Long said. sion related to “trigger warnings.” end of the day, we have a very good Some feel “I think it is a little frustrating for Those are warnings that precede a system,” Fennebresque said. “I feel like John Fennebresque is administrative us to have to go that way,” Rippy said reading assignment, class discus- of the new policy. sion, or campus event. They are taking a strong lead as our new chair- man. I’m pleased with the direction staff blocks “I have not yet found it to be an designed to protect students from he’s taking us,” said board member Bob impediment to getting information. experiencing traumatic reactions discussion of Rippy of Wilmington. I know that other people have … and to the content. But board member Marty Kotis of have not gotten that information, and All three student panelists important topics Summerville, appointed in 2013, is less have not been happy about that,” said said that such warnings, which supportive. W.G. Champion “Champ” Mitchell of gained publicity at California uni- Fennebresque appointed new New Bern, appointed in 2013. versities earlier this year and have committee chairmen. Kotis says they back the university’s Some board members contend most of the time in spread to other schools, are neces- administration more than they do the interests of taxpay- board meetings is spent hearing presentations, chairmen, sary on college campuses. ers and student advocates. Fennebresque switched Kotis and committee reports, and there is insufficient time to dis- As the discussion progressed, from the Budget and Finance Committee to the Personnel cuss agenda items. “There’s a lot less inclination to just go it became apparent that the stu- and Tenure Committee, and Kotis says that may have hap- along than there once was,” and that creates the need for more open discussion on new items not on the agenda, or to dents were more passionate about pened because Kotis was asking tough questions about the discuss matters that are bothering members, Mitchell said. “social justice” and supporting system’s budget. Kotis opposes the inability to bring up new business at an offended campus constituency “One of the things that we’re not doing is we’re not meetings because it can thwart timely handling of emerging than championing free speech. providing oversight on the full $9.3 billion budget,” concen- issues. “I am a fan of the First trating instead only on the $2.6 billion in state allocations, It has not been uncommon for board members to re- Amendment, but I do step in when Kotis said. ceive 500 to 900 pages of materials less than a week before the speech is hurtful,” said Destiny “We do look at the overall revenue picture,” Fenne- meetings, Kotis said. Though he crunches time to read it all, Planter, vice president of UNC’s bresque countered. he said not all board members can, and he’s raised that con- Black Student Movement. “There’s some very heated discussions going on in cern at eight board meetings. A few students in the audi- public and in private” among board members involving “I would be surprised if many people think that now. I ence, as well as student panelist governance and educational philosophy, and along political think the General Administration understands that we need Wilson Hood, wanted to know if fault lines, said Rippy. He was among 16 board members, information quickly. They get us information quickly,” Fen- anything could be done to pro- 14 of them Republicans, appointed in 2013 by the General nebresque said. When asked, he said he was not certain how tect “people on campus who are Assembly. many days before a meeting board members receive their sensitive to violent pictures and Rippy said he wants to scrutinize a wide array of major packets. words,” or if there are legal rem- issues, and he believes Fennebresque shares his concerns. If a board member wants additional information after edies for offended parties. “I think the board’s really starting to take some leader- reviewing the contents of a meeting packet, the necessity of Hugh Stevens, the attorney, ship role on some of this instead of depending on General getting approval from committee chairmen, combined with did offer a remedy — more exercise Administration for all the answers,” Rippy said. “A year slow responses from university and General Administra- of the First Amendment, not less. ago I didn’t feel so good.” tion staffs, can dash the attempt, Kotis said. He told the students to respond Steve Long of Raleigh, appointed in 2013, believes “A lot of times they’re giving you the answer during to “offensive” or “disagreeable” Fennebresque is “doing a great job. He’s got a very collegial the meeting, so it just doesn’t lend itself to a whole lot of ideas with, for example, peace- board. We all get along with each other. There’s a lot of good oversight,” Kotis said. ful counterprotests and boycotts: humor and willingness to work together, and with the staff, At one meeting involving budget and finance issues, “[Use your] First Amendment and with President [Tom] Ross.” board members received their packet at 7 p.m. the previous rights to challenge the legitimacy But like several board members who spoke with Caro- day. The Budget and Finance Committee chairman rejected lina Journal, Long is concerned about the board’s inability to of what was said or done.” CJ Kotis’ request for additional spreadsheet information avail- provide full financial oversight of the UNC System. able to staff supplementing the chart members were pro- “The main frustration I have is in the lack of transpar- Compiled by Jesse Saffron, a vided, he said. ency in budgeting,” Long said. writer and editor for the John W. Pope “So now I’m stuck with having to do a Free- “Chancellors should be given a significant amount of dom of Information Act request” to get public in- Center for Higher Education Policy. authority because they are the CEOs of their campuses, and formation from his own board, Kotis said. CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 19 Higher Education Opinion Avoid Fearmongering, Politicization on Campus Sexual Assault he national hysteria over sexual Chapel Hill’s investigators don’t sentative of college campuses col- assault on college campuses policy imposes an have to share lectively, and that its use as a basis is approaching a frightening extremely vague Issues evidence with the for policies affecting one of the most crescendo.T Cheered on by feminist and unrealistic accused before a intimate of human activities is dubi- groups, left-leaning political activists, standard that is in hearing, meaning ous at best. and rape victim advocates, politicians out of step with the Higher Education that the presenta- Criminology professor James and campus officials are rushing to way our culture tion of “exculpa- Alan Fox and sociology professor “do something” about this “crisis,” views and engages tory material” is Richard Moran explained in a USA even if that means ignoring data that in sexual activity. thwarted. And the Today op-ed that the assault rate par- undermine their Under the new accused’s lawyer roted by pundits and politicos comes claims and tram- rules, for example, can’t cross-examine from a 2007 survey of just two four- pling students’ hugging could be construed as “sex- the accuser at hearings; he or she can year universities, and it “might not due process rights. ual contact.” Without first receiving a only “submit questions to the hear- accurately reflect our nation’s colleges UNC-Chapel definitive “yes, you can hug me” from ing chair, which can ask the question, overall.” Hill has joined his or her partner, an individual could modify it, or refuse to ask it.” Fox and Moran also pointed the crusade. The be charged with sexual assault. Many of the aforementioned pol- out that the survey had a substantial university recently Furthermore, the standard states icy changes are the result of escalating “nonresponse rate,” meaning that adopted policies that consent “is not to be inferred pressure from the federal government, victims were more likely to respond closely mirror- from an existing or previous dating or which has seen a surge in complaints to the questionnaire. “Moreover,” they ing California’s JESSE sexual relationship.” If a couple gets relating to universities’ botched sexual wrote, “the definition of sexual assault controversial “Yes in a verbal fight and emotions flare, assault investigations. used in this and other studies was too Means Yes” law, SAFFRON one ill-considered call to the campus In August of this year, the U.S. broad. … By lumping uninvited ad- signed in late police could set in motion the destruc- Department of Education released the vances and alcohol/drug-influenced September by tion of the educational and career names of 76 universities that allegedly encounters together with forcible rape, Gov. Jerry Brown. That law requires prospects of the accused. had “mishandled” sexual assault cases the problem can appear more severe students at state-funded universities Students attending universi- and shirked federal laws. Obviously, than it really is.” to obtain “affirmative, conscious, and ties with the new standard may have no university wants to be on that list My criticism of “affirmative voluntary agreement” — a clause of- much more than vague policy lan- or under the federal microscope. If consent” is not meant to downplay the ten shortened to “affirmative consent” guage to worry about. That’s because an institution can take pre-emptive darkness and tragedy of sexual assault — before and during a sexual activity. their due process rights are under measures to avoid public disgrace and and rape. Nor am I denying that there At UNC-Chapel Hill, the new attack. elude the government’s tangled web have been instances of underreporting standard states that consent “requires At UNC-Chapel Hill, as Brook- of rigmarole, that’s what it will do. and rape cover-ups on campus. But an outward demonstration, through lyn College professor K.C. Johnson A major reason for the sexual the accused as well as accusers would understandable words or actions, that noted in an article for Minding the assault mania is the dissemination be better off with policies and proce- conveys a clear willingness to engage Campus, the administration can of a doubtful statistic, trotted out dures based on sound data and the in sexual contact.” The policy stresses “brand a student a rapist even if both repeatedly by the Obama administra- “innocent until proven guilty” stan- that consent is “not to be inferred [an investigator] and [a] three-person tion, federal bureaucrats, and reform dard rather than fearmongering and from silence, passivity, or a lack of panel independently determine that advocates. It’s that one in five women hyperpoliticization. CJ resistance, and relying on nonverbal the accused student is not in any way is sexually assaulted while enrolled in communication alone may result in a culpable,” an absurdity that Johnson college. Jesse Saffron is a writer and editor violation of this policy.” calls “triple jeopardy.” It turns out, however, that the for the John W. Pope Center for Higher Like the California law, UNC- Equally troublesome is that “one in five” ratio may not be repre- Education Policy. PAGE 20 NOVEMBER 2014 | CAROLINA JOURNAL Books & the Arts

From the Liberty Library Book review

Dead Men Risen, winner of the prestigious Orwell Prize for Folsoms Recount Government Business Disasters Books, is the epic story of a belea- guered British battle group fight- • Burton Folsom and Anita Folsom, Uncle Sam Can’t Count: to get a bill passed that ended the subsidies and closed the ing desperately A History of Failed Government Investments, from Beaver Pelts government posts, after 27 years of waste. to prevent the to Green Energy, Broadside Books, 2014, 239 pages, $26.99. Another fascinating story the authors tell is that of our Taliban from early steamship industry. Here, the central character is an- seizing Af- By George Leef other famous business magnate, Cornelius Vanderbilt. g h a n i s t a n ’ s Contributor In his youth, Vanderbilt worked for Thomas Gibbons, H e l m a n d RALEIGH who broke the Hudson River steamboat monopoly given to province just he day after the 2010 midterm elections, the federal Robert Fulton by New York. Soon Vanderbilt was in busi- as the U.S. Ma- government quietly announced the bankruptcy of ness on his own, rapidly improving the steamboat, lowering rines arrive Solyndra, a “green energy” company that had been fares, and improving customer service. to take over. toutedT by President Obama as a leader in the kind of inno- Vanderbilt was so successful that the cartel he com- Toby Harnden vation that would help the planet to “heal.” peted against, the Hudson Steamboat Association, offered weaves the ex- Solyndra was founded by a big supporter of the presi- to buy him out for $100,000, provided that he would not periences of the dent, and early in 2009 the company had received a $535 run boats for 10 years. He took the deal, but it did the cartel soldiers, their historical forebears, million loan from the government. In less than two years, little good. It raised prices after Vanderbilt left, but other and the flawed NATO strategy the taxpayers were stuck with the loss. entrepreneurs quickly entered the market and undercut its into a masterly narrative. No other Solyndra is a recent instance of the almost invariably prices. book about modern conflict suc- foolish combination of government and business, but few With the capital from the River Association, Vander- ceeds on so many levels. Dead Men Americans have any idea about our long history of such bilt went into the business of trans-Atlantic shipping. The Risen is essential for anyone who “partnerships.” As authors Burton and Anita Folsom show wants to understand the reality of British were already there, Parliament having given Samuel the Afghan war for the U.S and its in this wonderful book, we have been making that mistake Cunard a large subsidy for pas- allies. Visit www.regnery.com. since our earliest days as a na- senger and mail service. Shortly tion. thereafter, the U.S. government • While America’s influence Throughout the book, the followed suit, subsidizing Ed- around the world recedes — in its stories the Folsoms tell are fas- ward Collins to compete with military and diplomatic power, in cinating but at the same time Cunard. its political leverage, in its econom- maddening, since they leave you How could Vanderbilt sur- ic might, and perhaps most danger- thinking, “How could the politi- vive against such subsidized and ously, in the power and appeal of cians have been so stupid?” earlier-established rivals? By in- its ideas — Russia and China have Let’s start with the beaver novation and superior efficiency, seen their influence increase. Mos- pelts. George Washington had that’s how. cow and Beijing are playing the led the war for independence When Vanderbilt’s lower game for keeps — while America, from Britain, but he nevertheless fares put Collins into financial pledged to “leading from behind,” adhered to British mercantilistic trouble, naturally he looked to no longer does much leading at concepts, under which the gov- politics for salvation. He plead- all. In their book A New Cold War, ernment established and sup- ed for bigger subsidies and got Douglas Schoen and Melik Kaylan ported business enterprises for them. But while Vanderbilt kept systematically chronicle the grow- the supposed national good. working to lower his costs, Col- ing threat from the Russian-Chi- In 1795, with his backing, nese Axis, and they argue that only Congress passed an appropria- lins squandered money building a rebirth of American leadership in tion of $50,000 to create a number huge, luxurious ships that lost the world can counter the corrosive of trading posts in the Northwest money in competition. impact of this anti-democratic alli- Territories. The purpose was to Economic sense finally pre- ance, which soon may threaten the vailed when President Franklin peace and security of the world. counter British influence among the Indians by purchasing furs Pierce vetoed the Collins subsidy More at www.encounterbooks. in 1855. Vanderbilt continued to com. from them and selling goods to them. improve steamship travel and, • By the publisher of the pres- There were private traders amazingly, created the first ca- tigious Grant’s Interest Rate Observ- doing exactly that, but Washing- nal across Central America so er, The Forgotten Depression — 1921: ton and the Federalists who con- that ships wouldn’t have to sail The Crash That Cured Itself is an ac- trolled Congress thought them around the tip of South America count of the deep economic slump inadequate for the national pur- to reach California. That canal of 1920–21 that proposes, with re- pose. They were certain that the went across Nicaragua in 1854. spect to federal intervention, “less government must get involved. Why we had to wait until 1914 for the completion of is more.” This is a free-market re- Although these posts were expected at least to break the Panama Canal rather than benefiting from Vanderbilt’s joinder to the Keynesian stimulus even, they lost money, and the subsidies had to be increased canal completed 60 years earlier is a fascinating story, but applied by Presidents Bush and steadily. you’ll have to read the book to find out about it. Obama to the 2007–09 recession, In 1808, John Jacob Astor, a German immigrant, went Among the other illuminating stories about our failed in whose aftereffects, James Grant into the trading business. With his own money at stake and governmental forays into business the book covers are the asserts, the nation still toils. Grant possessing a much sharper mind for business than the gov- canals and railroads built in Michigan by its “boy governor” tells the story of America’s last gov- ernment functionaries running the competing posts, Astor Stevens Mason, the subsidized waste and corruption of the ernmentally untreated depression; earned good profits. transcontinental railroads built after the Civil War (with relatively brief and self-correcting, The man in charge of the government’s operations, it gave way to the Roaring ‘20s. the notable exception of J.J. Hill’s sound and unsubsidized Thomas McKenney, turned to politics instead of figuring In 1920–21, Woodrow Wilson and Great Northern), and the government’s support for Samuel Warren Harding met a deep eco- out how to compete against Astor. He wheedled more mon- Langley, who flopped in competition with the Wright broth- nomic slump by seeming to ignore ey from Congress and also sought high licensing fees for ers to build the first airplane. it, implementing policies that most all his competitors. He even tried to get Congress to ban Government should stick to its few proper tasks, 21st-century economists would call his free-market rivals. McKenney was the prototype of what which don’t include business operations. If you doubt that, backward. See more at www.simo- the Folsoms call a “political entrepreneur” — eager to “win” you really must read this book. CJ nandschuster.com. CJ through political influence rather than by doing a better job of satisfying consumers. George Leef is director of research at the John W. Pope Cen- Finally, in 1822, Sen. Thomas Hart Benton managed ter for Higher Education Policy. NOVEMBER 2014 | CAROLINA JOURNAL PAGE 21 Books & the Arts Ebola Outbreak Recalls Memories of Flu Pandemic of 1918 he recent outbreak of the Ebola mately 600,000 died. servers, notably doctors, did not write deliberate, heavy breathing, to gasp- virus in West Africa and the few However, few history text- memoirs of the experience. Second, ing, and then essentially to drowning recent infections in the United books — I checked those on my office the horrid pandemic occurred while in his or her own fluids. StatesT have alarmed many Americans. bookshelves — include even a men- Western Civilization almost commit- The first known case in America Considering how modern transporta- tion of the devastating 1918 pandemic, ted cultural suicide in World War I. happened in Fort Riley, Kan., and a tion and technology have made the a virus that killed more people than In other words, it was one of many in couple of months later, reports re- wide world into those who died during World War I, a series of unfortunate events. Third, vealed that the influenza was infecting a smaller place, one of the most de- some scholars have Europe. As the U.S. armed forces were Americans should structive conflicts in speculated that the deployed to Europe and as European be concerned. modern warfare. Some Spanish Influenza of forces traveled to and fro across the The Ebola crisis, textbooks entirely 1918 is not discussed continent, the virus spread rapidly. although different, overlooked the flu in depth because no (Some commanders, such as General reminded me of pandemic. A few others great leader died from Erich von Lundendorff, contended the Flu Pandemic had only a couple of contracting the flu. (The that the pandemic weakened the final that spread across sentences describing first two are more plau- German offensive in 1918.) the globe in 1918. the pandemic, com- sible reasons.) Meanwhile, in the United States, There have bining it and thereby Another reason is hopeful preventive measures were been flu epidem- TROY equating the decimat- that the flu pandemic implemented — soldiers gargled with ics throughout KICKLER ing virus with events of 1918 still baffles alcohol, hospital staff hung sheets be- history, but the such as the 1919 Black scientists. Unlike other tween beds, and some municipalities one in 1918 was different. Although Sox scandal to prove flu viruses that preyed passed ordinances requiring residents many Americans died from the 1890 that Americans lived through trou- on those younger than 5, the elderly, to wear gauze masks when in public flu virus, many survivors lived long bling and controversial times in 1918 and the ill, the 1918 flu attacked 20- to places or using public transportation. enough to endure the 1918 pandemic. and 1919. One textbook did have a 40-year-olds. The outbreak occurred The flu virus disappeared almost as The latter was decimating. Some lengthy section — approximately one first in military camps, and many sol- quickly as it arrived, and the disap- researchers estimate that the airborne page along with an informative graph diers, in their physical prime, died in pearance also baffles researchers. virus killed between 20 million and on a subsequent page relaying the the United States while preparing to Let’s hope another “forgotten 40 million people across the globe in horrific effects of the pandemic. fight the Central Powers in Europe. pandemic,” of any sort, does not at- an age of modern transportation. (The Why the reticence regarding The victims died approximately tack the United States or anywhere exact number of worldwide deaths is what one historian has called Amer- five days after contracting the aggres- else on the planet. CJ difficult to know.) In the United States ica’s “forgotten pandemic”? For one, sive flu virus. Descriptions of the vic- approximately 24 million caught the many who lived through the night- tims’ final days reveal a horrific end as Dr. Troy Kickler is director of the Spanish Influenza, as it was called, mare wanted to forget the tragedy. the poor soul, with a gradually venous North Carolina History Project (northcar- and in roughly six months approxi- Many knowledgeable first hand ob- and discolored face, regressed from olinahistory.org). BOOKS BY JOHN LOCKE FOUNDATION AUTHORS

If you don’t know about Edenton, North Carolina, your knowledge of U.S. history is incomplete and your knowledge of North Carolina insufficient. Organized women’s political activity in America was born in Eden- ton. The concept of judicial review—that courts can declare legislative acts unconstitutional—was champi- oned here. Ideas for a national navy and defense were implemented here. Many passages of the N.C. Con- stitution (1776) and the U.S. Constitution originated here. Leading proponents of the U.S. Constitution (a.k.a. Federalists) lived in this small place, and so did nationally known jurists and politicians. Dr. Troy Kickler, founding director of the North Carolina History Project, brings Edenton, its people, and its actions into proper and full focus in his book, The King’s Trouble Makers. Go to northcarolinahistory.org for more information. PAGE 22 NOVEMBER 2014 | CAROLINA JOURNAL Books & the Arts Book review Gilder Says Free-Market Theory Ignores Altruism of Entrepreneurs • George Gilder, Knowledge And Power: incalculable creativity of entrepre- that leads to economic growth. valid theory of capitalism.” The Information Theory of Capitalism and neurs, making purposeful gifts with- Take, for instance, items and ser- Later, while referencing environ- How It Is Revolutionizing Our World, out predetermined returns, launching vices government provides at no direct mentalists’ opposition to fossil fuels, Regnery, 2013, 350 pages, $27.95. enterprise into the always unknown cost. “Perhaps the most obvious rule of Gilder cites “the first critique of envi- future,” Gilder continues. “The market public policy is that people will abuse ronmentalism to demonstrate that the By Mitch Kokai is the conduit, not the content; the low- any free good,” Gilder writes. “Evok- ‘green’ movement is the world’s chief Associate Editor entropy carrier, not the high-entropy ing unbounded demand while choking threat to the environment because it RALEIGH message. Capitalism begins not with off supply, free goods and free services squanders precious land to obviate use eorge Gilder doesn’t quote the exchange but with giving, not with de- destroy information and lead to cor- of abundant subterranean resources Bard, but one could picture terminist rationality but rupt decision-making. extractable with little or no permanent him as Hamlet to his reader’s with creation and sur- “In the perverse damage to the environment.” GHoratio, pointing out: “There are more prisal.” feedback loops of free One of Gilder’s greatest contri- things in heaven and Earth … than are If the references to goods, free health care butions involves a rebuttal of popular dreamt of in your philosophy.” “entropy” and “surpri- comes to mean hypo- arguments suggesting that capitalism That famous line of Shakespeare’s sal” sound confusing, chondria and needless depends on greed and selfishness. came to mind on several occasions be prepared to spend illness caused by need- His final chapter asserts at the outset: during this reader’s journey through much of your read- less exams and treat- “Capitalism begins with giving.” How Gilder’s latest book. More than 30 ing time wrestling with ments, queues for an so? “It is not the exchange that elicits years after his classic Wealth And Pov- Gilder’s arguments. He ever-expanding politi- the goods and generates the increase erty helped provide the intellectual urges economic thinkers cal portfolio of mediocre in their value; it is the initial gift that firepower supporting the growth of to adopt the concepts of services, and — at the evokes the desire to reciprocate, and supply-side economics, Knowledge And information theory. And end of the line — eu- Power arrives to challenge fundamen- while Gilder devotes sig- thanasia under govern- which thus induces exchange.” tal concepts of economic thought. nificant space to that the- ment bureaucracy,” he “The circle of giving (the profits Gilder is no supporter of big, ory, including a glossary adds. “Free drugs lead of the economy) will grow as long as intrusive government or central plan- of key terms, this reader to widespread addiction the gifts are consistently valued more ning, and fans of free markets will find realized at the end of to existing medications by the receivers than by the givers,” plenty to cheer. But Gilder also takes the book that both the and an end to medical Gilder adds. “In deciding what new on well-established notions of eco- theory and its application to economic innovation. Free money, manifested in goods to assemble or create, therefore, nomic thought that guide many think- phenomena remain somewhat unclear. the zero-interest-rate policy of the Fed- the givers or investors must be willing ers on the political right. That’s not Gilder’s fault. This eral Reserve, diverts the wealth of sav- to focus on others’ needs more than A key observation to which Gild- reader needs to spend more time re- ers to favored governments and crony on their own. The difference between er returns repeatedly is the absence viewing key chapters and exploring capitalists while creating shortages for the value of an item to the giver and from traditional economic models of an other texts on information theory be- everyone else.” its value to the recipient is the profit. adequate measure of the entrepreneur. fore assessing with confidence the mer- Similarly shrewd pronounce- Profit is thus an index of the altruism “At the heart of capitalistic growth,” its and demerits of the author’s case. ments abound in Gilder’s work — of an investment.” he writes, “is not the mechanistic homo One consequence of Gilder’s even in his endnotes. Among notes The “genius” of capitalism re- economicus but conscious, willful, often presentation of information theory is linked to a chapter on “The Feckless- sults from the way in which it allows altruistic, inventive man. Although a clear: An overly active government ness of Efficiency,” Gilder reminds us those successful givers to continue marketplace may work mechanically, creates too much “noise,” defined in about the importance of “loss” in a sys- making decisions about when, where, an economy is in no sense a great ma- Gilder’s glossary as “Any influence of tem of profit and loss. “Vital to capital- and how to give — without govern- chine. the conduit on the content; an unde- ist profits are falsifiability; the possibil- ment dictates. CJ “The market provides only the sired disturbance in a communications ity of bankruptcy. The raptorial revels perfunctory denouement of a tem- channel.” In other words, too much of bankers with government moneys Mitch Kokai is an associate editor of pestuous drama, dominated by the government chokes off the knowledge and guarantees are indefensible by any Carolina Journal. Help us keep our presses rolling Publishing a newspaper is an ex- Share your CJ pensive proposition. Just ask the many daily newspapers that are having trouble making ends meet these days. It takes a large team of editors, re- Finished reading all porters, photographers and copy editors to bring you the aggressive investigative the great articles in this reporting you have become accustomed to seeing in Carolina Journal each month’s Carolina Jour- month. Putting their work on newsprint and nal? Don’t just throw it then delivering it to more than 100,000 readers each month puts a sizeable dent in the recycling bin, pass in the John Locke Foundation’s budget. That’s why we’re asking you to help it along to a friend or defray those costs with a donation. Just send a check to: Carolina Journal Fund, neighbor, and ask them John Locke Foundation, 200 W. Morgan St., Suite 200, Raleigh, NC 27601. to do the same. We thank you for your support. Thanks. John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 NOVEMBER 2014 | CAROLINA JOURNAL PAGE 23 Books & the Arts Book Review Obama Insider Envisions Community Organizing in Islamic World • Vali Nasr, The Dispensable Nation: the public because his “principal aim introduction of facts to the debate is tion, trade, and direct foreign invest- American Foreign Policy in Retreat, An- is not to make strategic decisions but unacceptable in scholarly circles. ment.” It has escaped the author’s chor Books, 2013, 300 pages, $19.00. satisfy public opinion.” Likewise, any Obama, meanwhile, wants to notice that the United States also has praise for his “successful handling of lead from behind, but Vali Nasr wants a bloated and corrupt public sector, as By Lloyd Billingsley foreign policy,” whatever that means, the United States to be, as Bill Clinton well as an overregulated economy in Contributor had less to do with accomplishments said, “the indispensable nation,” the need of privatization. What kind of ex- RALEIGH “than with how American actions in world leader by default, solving prob- ample is that? he Dispensable Nation failed to that region of the world were reshaped lems everywhere. Readers will not be In Saudi Arabia, “jacked-up en- make much of a media splash to accommodate partisan political convinced this is a great idea. titlement spending has poured oil on last year, a shame because the concerns in a way unimaginable a Nazr goes into detail on Ameri- the troubled waters,” but this can’t last. bookT packs material relevant for 2016 few decades ago.” Maybe ca’s “frenemies” with their No word whether the creation of new and beyond. The initial low profile was that is the transformation warring Sunni and Shiite entitlements like Obamacare, and jacked- partly by design. of America the president factions. When these fren- up spending on the others, will make “I didn’t want the book used as wanted all along. emies are disposed toward the United States a shining star for the a bludgeon,” explains Nasr, dean of Nasr also has some America, the reason is region. No matter, because “we still have the Paul H. Nitze School of Advanced fascinating observations usually money. all the ingredients for global leadership,” International Studies at Johns Hopkins about former Secretary In the decade after and Nasr is even talking about a Mar- University. That is, he didn’t want the of State Hillary Clinton, 9/11, the author notes, shall Plan for the Middle East. “We have “American Right” and Republicans to an “incredibly dedicat- Pakistan got $20.7 bil- done it in the past,” he says, “and we can use the book against his former boss, ed and talented” person lion in assistance from the do it again.” But Nasr gives readers rea- Barack Obama. who wants to be presi- United States. But Paki- son to be skeptical. When the Right was belittling dent. Hillary proved she stan’s finance minister, The Arab Spring “is not a rising Obama’s background as a community was a “team player,” but Hinna Rabbani Khar, tells liberal order but an ascendant Islamist organizer, Nasr explains, “I thought Obama’s inner circle “re- Richard Holbrooke most one,” and the Taliban “will win Af- to myself that the Middle East could mained concerned with of the money gets spent ghanistan again.” And what about the use a little community organizing.” her popularity and ap- in Washington, and that prospect of nuclear weapons in Iran? Why, the Ayatollah Khamenei has de- And that “is why I joined the admin- proval ratings, and feared of every dollar maybe 10 clared nuclear weapons a “great sin.” istration.” But as senior adviser to Am- that she could overshadow the presi- cents gets to Pakistan. So the aid ac- So no worries. bassador Richard Holbrooke, special dent.” Even so, “when things seemed complishes nothing. On the other hand, Nasr is more representative for Afghanistan and to be falling apart, the administration In similar style, an Arab foreign upbeat about the United States escap- Pakistan, Nasr was in for a surprise. finally turned to Hillary because they minister tells Holbrooke, “You can pay ing dependence on Middle East oil. He found “truly disturbing” the presi- knew she was the only person who to end this war. One billion dollars.” “The Right’s solution is to find more dent’s habit of “funneling major for- could save the situation, and she did And this was the discount price. oil at home,” he says, “and this might eign policy decisions through a small that time and again.” Many readers In Afghanistan, “yes, there was well work.” Readers and presiden- cabal of relatively inexperienced White will wonder what situations the author waste and graft and millions were em- tial candidates may well agree. Bet- House advisers whose turf was strictly has in mind. bezzled.” But of course, Nasr explains, ter to drill here, get our own house in politics.” Further, “the primary con- The Dispensable Nation contains it is “still a tribal society” where such order, and let the Middle East fund cern of these advisers was how any ac- nothing on the Sept. 11, 2012, terror- things were seen as a duty to the com- its own community organizing. CJ tion in Afghanistan or the Middle East ist attack in Benghazi, which Clinton munity. And after all, “that sort of cor- would play on the nightly news, or claimed was part of a protest over a ruption is not alien to politics.” Lloyd Billingsley is author of Holly- which talking point it would give the video. Interestingly enough, Nasr told Egypt, the author says, “would wood Party: Stalinist Adventures in the Republicans in the relentless war they The New York Times that he held off on have to open its economy, shrink its American Movie Industry, Exceptional were waging against the president.” releasing his book before the Novem- bloated and corrupt public sector, Depravity: Dan Who Likes Dark and The author says Obama gets ber 2012 elections, lest he “meddle” in reform its laws and financial regula- Double Murder in Davis, California, “high marks on foreign policy” from the political debate. Presumably the tions,” and also “promote privatiza- both now available for Kindle on Amazon.

Books authored By JLF staFFers Free Choice for Workers: Selling the Dream A History of the Right to Work Movement Why Advertising is Good Business

By John Hood President of the John Locke Foundation By George C. Leef ViceDirector President of Research for Research at the at John the W. JohnPope William Center Pope for HigherCenter for Education Higher “[Selling the Dream] provides a EducationPolicy Policy fascinating look into the world of advertising and beyond ... “He writes like a buccaneer... Highly recommended.” recording episodes of bravery, Choice treachery, commitment and April 2006 vacillation.” Robert Huberty www.praeger.com (Call Jameson Books, 1-800-426-1357, to order) Capital Research Center PAGE 24 NOVEMBER 2014 | CAROLINA JOURNAL Opinion

COMMENTARY Don’t Let Technicality Deny Eugenics Victims s the first checks compensat- by disqualification for “missing ing the survivors of North paperwork.” While there should be Carolina’s forced-steriliza- some benchmarks for establishing tionA program reach the victims, a proof of victimhood, it would seem key deadline may pass with very reasonable to expect that a person few of the others qualifying. That having the same name as a recorded isn’t good news. sterilization victim, having some From an Associated Press evidence to show himself as being report, it seems as if victims may that victim, and being in fact steril- be disqualified for compensation ized would be enough. owing to a legal technicality — that North Carolina’s forced- they were sterilized on orders by sterilization program spanned five county, not state, authorities. decades, from 1929 to 1977. It was “As of Sept. 30, the steeped in the eugenics N.C. Industrial Commis- fascination promoted EDITORIAL sion had approved 213 by “Progressives” who claims for compensa- sought to further human tion of the 731 claims evolution by prevent- The Wages reviewed, or about 30 ing “undesirables” from percent,” the AP reports. reproducing, leaving re- “Major reasons for denials production to “desirable” Of Government … include missing paper- members of society. work and a determination If that sounds like he question — “Who should set wages and benefits that do not satisfy someone wasn’t sterilized something out of Nazi the minimum wage?” — and the worker’s demands, there’s no JON Germany, it was. But on orders of the Eugenics SANDERS its constant companion — deal. No one is hired. The wage paid Board of North Carolina while the Nazis’ eu- “HowT high should it be?” — became is zero. but on orders issued at the genicism exposed its staples at political debates during Government can prevent these county level, said Graham Wilson, true nature and made it ultimately the recent election season, in part, voluntary transactions from taking spokesman for the state Commerce untenable, eugenicism was em- because Democratic pollsters have place. The market may set compensa- Department. That department braced throughout the United States found significant public support for a tion levels, but when governments oversees the industrial commission as well. North Carolina was joined measure pushed by President Obama force those levels higher than an ap- tasked with approving claims.” by 30 other states with eugenics to raise the federal minimum to $10.10 plicant or current jobholder justifies, That’s the way the statute was programs. an hour from the current $7.25 — and then the applicant will not be hired written. The budget bill of 2013, North Carolina’s forced- Democrats were desperate for an issue and the current worker will see his which included the compensation, sterilization program actually began to boost their candidates’ flagging hours cut or his job eliminated. before the Nazis’, and it lasted defines a “qualified recipient” as popularity. Set a minimum wage too high, longer — in fact, over three-fourths “an individual who was asexuali- And while it may be difficult to and workers with low skills and little of the approximately 7,600 victims zed involuntarily or sterilized invol- believe an ideological debate remains job experience may never get their were sterilized after 1945. As my untarily under the authority of the over the impact of mandating higher first job, and current employees with former John Locke Foundation wages on employers, the assumption modest talents may be laid off. Eugenics Board of North Carolina colleague Daren Bakst showed, that government must set the mini- Moreover, wages are hardly the in accordance with Chapter 224 of North Carolina’s eugenics program mum afflicts even some conservatives only form of compensation. Obam- the Public Laws of 1933 or Chapter represented a complete failure by and libertarians. We heard several acare promises to become a new tax 221 of the Public Laws of 1937.” all three branches of government to candidates from the right side of on hiring. Under the law’s employer But if ever there were an protect its citizens: the political spectrum suggest state mandate, companies will be forced instance of violating the spirit of a • Approved by the legislature government should set the minimum to provide a government-approved law by abiding by the strict letter of • Implemented by the execu- wage and others say that the wage package of health insurance to all the law, it is here. Counties get their tive branch floor should rise alongside inflation or workers who put in more than 30 authority from the state. A much • Deemed constitutional by other price indexes. hours weekly. The mandate will broader reading of the statute is the judiciary The fact is, wages and other reduce employment, as fewer people morally warranted. With its forced-sterilization forms of compensation are set by without jobs will get work and many Involuntary sterilization — the program, the state of North Caro- market forces. But government poli- (especially at the lower end of the AP noted that some victims were lina was obviously and morally in cies can disrupt those market signals, wage scale) who do have jobs will see “as young as 10 and chosen because the wrong. So it was right and prop- standing in between businesses will- their hours cut and take-home pay they were promiscuous or did not er for the General Assembly finally ing to hire and workers hoping to be reduced. get along with their schoolmates” to address that wrong by establish- hired. In February, the Congressional — was a serious harm inflicted by ing this compensation program. Employment is a voluntary ar- Budget Office projected that, by 2024, the state against its citizens. Provid- It would be a shame — not to rangement between an employer and the employer mandate will reduce the ing some remedy, however late, to mention shabby and inexplicably an employee, who agree to exchange number of hours worked annually by actual victims should not hinge on petty — to deny the clear intent of compensation (wages, benefits, educa- the equivalent of 2.5 million full-time whether the hideous government the program through an overly rigid tion, security/tenure) for “work” (la- employees. Those are real people who order originated from the state interpretation of the statute. CJ bor, skill, knowledge, expertise). The will lose take-home pay if they can get eugenics board directly or from exchange occurs when both parties jobs at all. county officials operating under Jon Sanders is director of regula- agree that the other side is offering a The bottom line: Markets set their wrongheaded example. tory studies for the John Locke Founda- bargain. If the worker demands higher wages and compensation levels, but compensation than the employer is government policies often determine Not that much is improved tion. willing to pay, or the employer offers who (if anyone) gets hired. CJ NOVEMBER 2014 | CAROLINA JOURNAL PAGE 25 Opinion

EDITORIALS COMMENTARY Borrow When It Saves Spending Has Withhold judgment until we see the details Diminishing Returns iscal conservatives tend to look But other states’ balance sheets askance at large issuances of have fared worse, and state Treasurer ne of my favorite modern beginning to become a popular con- public debt. In this sentiment, Janet Cowell has noted that North historians, the late Rufus sumer good, state and local govern- they are in good company. “I go on Carolina has the capacity to add $570 Fears at the University of ments used property and gas taxes F OOklahoma, was fond of saying that to build their first real networks of the principle that a public debt is a million in General Fund debt and $805 “ideas make history.” University graded, dedicated, and, later, paved public curse,” wrote James Madison, million in Highway Fund debt with- of Chicago professor and North roadways. The economic and social “and in a Republican government a out triggering scrutiny by bond-rating Carolina native Richard Weaver ex- benefits of this investment were greater curse than any other.” agencies. pressed a similar view in his famous massive. Next, during the 1950s, a To advise against a large ac- Everything else being equal, bor- 1948 book Ideas Have Consequences. new wave of federal, state, and local cumulation of public debt suggests rowing is costlier than paying as you Sounds obvious, I know, but spending gave us limited-access using debt only for large- go. And every dollar spent both men were challenging the highways (interstates) and a more scale projects with high on servicing an infrastruc- orthodoxy of scholars, usually but extensive set of paved secondary costs in the short run and ture debt is a dollar than not always Marxists, who roads. Again the benefits high returns in the long can’t be spent on some- believed that inexorable were substantial, albeit run. Which brings us to thing North Carolinians social forces determined not quite as massive. Gov. Pat McCrory’s recent might value more, such as the outcome of his- Today, the practi- recommendation that the teacher salaries, communi- tory. Ironically, Marxism cal value of adding more state issue $1 billion in ty-college training, or tax itself was one of the most lanes or highways to the bonds to finance a pack- relief. consequential ideas in existing road network is age of transportation McCrory has yet to human history, producing smaller. That’s not an ar- improvements across the James Madison formalize the list of proj- suffering and death on a gument against building state. ects he’d fund with a $1 massive scale. them. It is an argument North Carolina traditionally billion bond or explain how it would Another powerful for being choosy about has been a low-debt state. Over the be financed. Conservatives should idea, one with revelatory JOHN which ones to build, so decades, state and local policymakers withhold judgment until he does so. rather than destructive HOOD that the marginal benefits devoted substantial sums to capital For example, if he proposed to fund consequences, was that remain likely to exceed needs on a pay-as-you-go basis while light-rail schemes or low-traffic road of diminishing returns. the marginal costs. using bonded debt as a supplement. projects with gas-tax hikes, Carolina A related concept in economics, di- In education, there has also Around the turn of the 21st century, Journal would say no to the deal. minishing marginal utility, became been a clearly diminishing return that began to change. In 1998, the total If he proposed to fund high- influential at about the same time on tax dollars spent. During the cost of servicing the state’s debt was priority roads by ending the annual Marxism did, in the late 19th centu- early to mid-20th century, rising ry. It was independently described expenditures were associated with $166 million, or about $22 per resi- transfer of Highway Fund revenues to and developed by three different building schools where few existed, dent. By 2013, debt service had risen nonhighway functions, we might well economists in the 1870s: William offering high school to many for the to $843 million, or $91 per resident. say yes. Stanley Jevons in England, Carl first time, equalizing opportunities Counties and municipalities loaded The details matter. Let’s see Menger in Austria, and Leon Walras across class and race, and establish- up on more debt at the same time. them. CJ in Switzerland. Not coincidentally, ing minimum standards for person- they helped found three of the great nel and curriculum. Since the early modern traditions of economic 1970s, however, real, per-pupil thought: neoclassical economics, spending on public education has Austrian economics, and general- risen substantially while the aver- Good News on Taxes equilibrium theory, respectively. age performance of 17-year-olds on What’s the idea? That you national math and reading exams N.C. rates have become more competitive can’t predict the effect or value of has barely budged. something without first knowing The story line is a bit different xcept when complaining that But this happens around the world, how much of it is already present. in North Carolina, where additional North Carolina isn’t giving not just in the United States. In farming, for example, you get a programs and educational expen- enough targeted tax incentives Tax rates are far from the only lot of initial value out of fertilizing ditures during the 1970s and 1980s Eto Hollywood studios, solar-panel consideration in business decisions. your fields. As you keep adding may explain partially the significant manufacturers, and commercial real- Otherwise all corporations would more fertilizer, however, each new gains that North Carolina students estate developers, liberals contend relocate to Ireland (with a rate of 12.5 increment has less of a productive made on independent reading and that cutting taxes on business has no percent). Still, it is the height of folly effect than before. Eventually you math exams during the 1990s. But effect on business starts, corporate to assume that we can afford to ignore reach a point at which additional the next wave of state reforms and relocation, or job creation. the corporate tax burden when it is fertilizer is actually harmful. spending increases, during the They are mistaken. Fortunately lower in every other industrialized Marginal utility is a valuable 1990s and part of the 2000s, did for North Carolina’s economy, law- country, as well as in many American tool for explaining things that might not produce a commensurate rise makers are ignoring their mistaken states. otherwise seem puzzling. Why can in achievement among the affected the same good be worth $5 at one students. views. That’s why Gov. Pat McCrory time or place and only $1 at a differ- In neither transportation Until this year, our state’s corpo- and the legislature decided to act. ent time and place? Because value is nor education has North Carolina rate income tax rate was 6.9 percent. In the tax reform enacted last year, determined by circumstances. A lost reached the end of potential im- When added to the federal tax rate, North Carolina’s corporate tax rate fell traveler stumbling out of the desert provement, of course. The point is which works out to 32.8 percent when to 6 percent in 2014. If state revenue will put a higher value on a drink that additional progress will have adjusted for deductibility, that put targets are met, it will continue to fall of water than will an office worker to come largely from productivity North Carolina at a serious disadvan- by a point a year through 2017, when who sits near a water fountain. gains, not from simply spending tage compared to locations in Europe at 3 percent it will be half the national In public policy, the concept tomorrow’s money on yesterday’s (where combined corporate rates aver- average and significantly below that comes into play when discussing terms. CJ age 26 percent) and Asia (28 percent). of our neighbors. issues such as transportation and Admittedly, corporations typically North Carolina’s reforms repre- education. In the early 20th cen- John Hood is chairman of the don’t pay the published tax rate, due sent a welcome step in the right direc- tury, when the automobile was just John Locke Foundation. to various exclusions and exemptions. tion. CJ PAGE 26 NOVEMBER 2014 | CAROLINA JOURNAL Opinion MEDIA MANGLE Accountability Not a Gimmick ewspapers never have been hesitant to shame a public official into appropriate behavior. It’s a time-honored tradition. NHave you ever noticed things like “Sen. Blowhard did not return a phone call,” or “Rep. Self-Dealer did not answer an email” in news stories? Those are there not just to let the reader know that the politician could not be contacted. They are there to let the reader know that this person, elected by you, the voter, did not see fit to answer these important questions related to his or her job as a public servant. And there is no more important time for a politi- JON cian to be open and available HAM to the public (via the media) than during an election. There was a time when a politician hiding during the very time they were Stability and Control asking for votes would make the media’s anten- ost of us focus on decisions affecting our to worry. Investors sell rather than buy. Businesses nae go up like an infield fly. daily lives — earning an income, spending, delay expansion plans and cut payrolls. And — per- When I was managing editor of The Herald- investing, and looking ahead to our retire- haps worst of all — some households and business- Sun in Durham, we held candidate debates in our ment.M Businesses face similar choices about produc- es find they now can’t meet the payments on their building’s meeting room every election. If there tion, advertising, workers, and pricing. Even public debts. If lenders — like banks — aren’t paid and were eight people running for a particular office, institutions have to make a wide range of manage- depositors fear their money isn’t safe, a “run on the we made sure that there were eight microphones ment selections. banks” can set off widespread economic panic and a on the table, eight glasses of water, eight note- Economists call these types of choices micro- recession — or worse. pads, eight pens, and eight nameplates. economic decisions because they deal with indi- We saw this scenario unfold during the recent If one of these electoral hopefuls chose not vidual entities trying to make decisions to advance recession. Optimism about the economy and partic- to show up, the microphone, water, pen, note- their overall objective, like hap- ularly the housing market fueled record-high debts pad, and nameplate stayed there, even in their piness for a household or profits in the early 2000s. But pessimism took over toward absence. That was my call, my reasoning being for a business. the end of the decade, and the economy experienced that if only seven showed up, and there was not However, we don’t live in the housing crash, debt defaults, and the worst an empty seat showing, the public would not our own individual economic recession in 70 years. understand that there was a candidate in the race worlds. Our economic worlds We now have institutions and programs, like in addition to the ones who showed up. are interconnected. Individu- the Federal Reserve and federal deposit insurance, Likewise, if a candidate declined or refused als earn income by working to cushion the blows of recessions. There were no to answer our election-section questionnaire, for businesses. Businesses earn bank runs during the recent recession, although we made sure that the public knew that. We’d income by selling to individuals there were “runs” on nonbank lenders, and the Fed- run a space in the section with their photo and and to other businesses. Govern- eral Reserve had to scramble to contain them. a prominent note saying they did not choose to ments levy taxes on individu- MICHAEL Still, if we know that excessive economic opti- participate. This act alone is as valuable a bit of als and businesses and provide WALDEN mism eventually leads to unsustainable borrowing information for the voter as a completed ques- services. and a recessionary correction, can public policymak- tionnaire. Putting these individual economic players ers impose controls to bring more stability to the Newspapers, at least in the past, had no together forms the macroeconomy. Until a century economy? qualms about doing these things. Call it ridicule, ago, economists didn’t pay much attention to the This is a big, big question in economic policy shame, coercion, whatever. Our feeling was that macroeconomy. Then came the “Long Recession” of circles — one that has been debated for decades. these people wanting to run some level of gov- the 1870s, the “Great Depression” of the 1930s, and One option is for government to attempt to moder- ernment should be accountable to the voters, and several other less serious economic downturns. ate the growth of credit during “boom times.” The part of that accountability should be answering Since then, a great deal of economic brain- Federal Reserve has some tools to do this, including questions and attending debates with opponents. power has gone into analyzing the macroeconomy. the ability to limit the amount of bank deposits that Which is why I was so surprised at the One conclusion that some economists have reached can be loaned as well as the interest rate charged on last U.S. senatorial debate when the sponsoring is, perhaps, rather startling. It is that the macroecon- loans. Also, federal legislation passed in the after- newspapers, The News & Observer and The Char- omy is inherently unstable and recession-prone. The argument is actually simple. When the math of the recent recession has added some further lotte Observer, chose not to participate because economy is doing well and expanding, sales and restrictions on bank lending. of the “gimmick” that an empty chair would be profits increase, incomes grow, and optimism about Of course, such controls and limits have down- used to show that Sen. Kay Hagan chose not to the economy’s future becomes widespread. People sides, because they restrict the ability of borrowers show up to debate Thom Tillis. see nothing but blue skies ahead. Lenders feel the to obtain funds. As a result, the economy tends to It is never a gimmick to show voters that same way, so they lower lending standards to allow grow slower than it would have without the con- a candidate chose not to attend a debate. There households and businesses to take on more debt. trols. This is a common explanation of why business was a time when newspapers saw this kind of All is well as long as the economy grows and expansion and job growth are lagging in many parts thing as part of their responsibility under the nothing happens to disrupt the general optimism. of the economy. First Amendment. But times change, I guess. CJ Yet it could be something small, like an uptick in So if our economy is inherently unstable, the interest rates or lackluster corporate earnings — or question is how to deal with it. We’re still deciding. CJ Jon Ham is a vice president of the John Locke something big, such as a foreign war or internation- Foundation and publisher of Carolina Journal. al default, that ultimately upsets the good feelings. Michael Walden is a Reynolds Distinguished Pro- Once the optimism is shattered, people begin fessor at N.C. State University. NOVEMBER 2014 | CAROLINA JOURNAL PAGE 27 Opinion A Referendum on State Policy

he election of 2014 will have The U.S. Senate race between Hagan in both chambers. Analysis from both but also on the ideology of its mem- widespread impacts. It will and Tillis has become a referendum on sides of the aisle suggests Republicans bers. Depending on the election’s determine who will control Republican-led policies. How will the could lose some seats (although far outcome, the body could become Tthe legislative branch, directly affect results affect further reforms in North fewer than the 22-seat-loss average for more conservative, especially if the policy decisions (whether to repeal, Carolina? a first-term governor’s midterm elec- Republicans pick up new seats. It is replace, or renew earlier reforms), and Not only Tillis but also every tion). I believe if Republicans lose no less likely it will become more liberal. set the stage for the 2016 election and Republican legislative candidate has more than six seats in the House and If the Democratic caucus becomes beyond. I am talking, of course, about had to defend the policies. Republican four in the Senate, they will maintain more conservative, it increases the the election for the candidates have been attacked for their veto-proof majorities and can likelihood of bipartisanship and could North Carolina raising teacher consider it a green pull the body more to the middle. General Assembly. pay, reducing tax light from voters Just as this year’s election has So much rates across the to continue their become a referendum on recent Re- ink, bandwidth, board, explor- Elections will momentum. publican leadership, the 2016 election and money have ing new energy tell if public If Repub- will continue that theme. McCrory focused on North sources, and refus- licans lose their is likely to face Democratic Attorney Carolina’s U.S. ing to expand a wants to continue veto-proof major- General Roy Cooper. All legislative Senate race, but broken Medicaid ity in either body, and Council of State seats will be up the implications program. In spite freedom-oriented McCrory will for election. And the policies of Mc- of this election of signs of a recov- gain negotiating Crory and the 2015-16 General As- on state policies BECKI ering economy, state policies power with the sembly again will be the subject of the have been over- GRAY more people General Assembly. elections. looked. And that’s getting back to The governor has But of course, the big showdown a shame. work, and more opportunities for largely gotten much of what he wants, will be in 2020. The 2021 legislature While as the incumbent U.S. North Carolina students to excel, the but there have been some differences. will redraw all the congressional and senator, Democrat Kay Hagan has had attacks have been relentless and often Without a veto-proof majority, McCro- legislative districts, setting the stage to defend President Obama’s policies, misleading. ry will become an even bigger player (unless the process changes) for con- Thom Tillis as the speaker of the N.C. I believe the policies are good for when there’s an impasse. His policies, trol of state government in the follow- House has had to defend the policies the state and its people. We are start- priorities, and approach to reforms ing decade. What direction will North of the Republican-led General Assem- ing to see signs that they are working. will gain importance. Carolina take? bly and GOP Gov. Pat McCrory. But change is hard, and these changes This referendum on General Will it be toward limited govern- Since Republicans took control have been difficult to accomplish. Assembly policies also will have a ment, free markets, and personal re- of the legislative branch in 2011, they Policymakers have struggled to find huge influence on the selection of the sponsibility — or for big government, have implemented a very aggressive a balance between being aggressive next speaker of the House. Will the regulations, and more entitlements? reform agenda. They have reformed enough to make a difference and slow Republican caucus choose a leader to Will the failed policies of 140 years our tax system, rolled back regula- enough to enact deliberate change. continue an aggressive reform agenda, be resurrected, or will the aggressive tions, strengthened infrastructure, What will it take to keep the momen- one committed to maintaining the reforms of the 2010s prevail? The ref- raised teacher pay, expanded school tum going? momentum, or someone who wants to erendum starts Nov 4. CJ choice, and restored integrity to our Republicans currently hold 33 of let the dust settle a bit? elections. It has been transformational the 50 state Senate seats and 77 of the The direction of the General As- Becki Gray is vice president for out- and has taken strong, bold leadership. 120 House seats, a veto-proof majority sembly depends not only on numbers reach at the John Locke Foundation. After the Midterms, GOP Must Lead ven before the 1980 presidential outline a specific agenda to jump-start put, socialized government-run health phone. Congress must check Obama election, the Reagan campaign our anemic economy and ensure that care does not work. By a large major- and his administration when they at- was planning the first 100 days America is safe and secure. ity, the American people don’t like tempt to circumvent Congress and the Eof a Reagan administration. The plan Suggested priorities for the 2015 Obamacare. Millions of our citizens Constitution. was precise and goal-oriented — de- Congress: have seen their health insurance • Open the Keystone XL pipeline. signed to get America moving again. • Unleash the American econo- canceled and premiums skyrocket, The House and Senate should approve Jimmy Carter my. Clearly, this is the weakest recov- many have lost their doctors, and the Keystone pipeline quickly and send had made a mess ery since World War II. Our businesses businesses have been forced to change the measure to Obama’s desk for ap- of the economy and corporations are being penalized many of their workers to part-time proval. The benefits are many. In addi- and on the world and are having a hard time competing status to avoid Obamacare mandates. tion to making America less dependent stage. The United with other major industrial nations be- We should expand health savings on the Middle East for oil, it is estimated States had lost cause of our onerous 35 percent corpo- accounts and make health insurance that energy from the pipeline would cre- a great deal of rate tax rate. To jumpstart growth, to personal, portable, and affordable. ate some 42,000 jobs. respect. stimulate investment and job creation, And as we did with Bill Clinton In 2015, a proactive legisla- To be blunt, and to make America competitive and welfare reform, we should con- tive agenda — driven by House nothing seemed to internationally, we must reduce the tinue to put free-market health care Speaker John Boehner and newly work. Americans corporate tax rate to 25 percent. legislation on Obama’s desk until we felt less secure MARC • Secure the southern border. get this monstrosity off the backs of minted Republican Senate Majority economically and ROTTERMAN Fund and finish the border fence. Stop the American people. Leader Mitch McConnell — should be very unsure about the practice of catch and release by • Reform taxes. Completely viewed by our team as a fresh start for the country’s Immigration and Customs Enforce- overhaul our tax system. It’s too com- America and an opportunity to move role in the world. ment. Enforce the laws currently on plicated and too cumbersome, and the forward. America was ready for change. the books. We cannot ignore the grow- IRS is too intrusive. We need to end This will pay dividends for Today, in the fall of 2014 — by ing national security threats of ISIS the massive paperwork, simplify the Americans and set the tone for the almost every measure — a great many and Ebola. We should welcome those code, and make taxes flatter, simpler, 2016 presidential election. CJ Americans believe once again that the legal immigrants who play by the and fairer. United States is on the wrong track. rules and enter this country legally, • Check Obama’s imperial presi- Marc Rotterman is a senior fellow I suggest that the Republican and we should be stalwart in our ef- dency. President Obama has stated at the John Locke Foundation and a former Party should emulate Reagan, and im- forts to defeat any amnesty. frequently that if Congress won’t do member of the Reagan administration mediately after the midterm elections • Repeal Obamacare. Simply what he wants, he has a pen and a (1981-84). PAGE 28 NOVEMBER 2014 | CAROLINA JOURNAL Parting Shot UNC-CH Tightens Guidelines on No-Show Classes (a CJ parody) By Vernon Wormer demic difficulties as evidence can en- Higher Education Correspondent roll in the no-show classes for free and CHAPEL HILL get the credits they lack for graduation. esponding to a devastating re- “We also have safeguards in port on an 18-year academic place to make sure that no-show stu- scandal focusing on steering dents never set foot in a classroom,” scholarshipR athletes into no-show Folt added. Students who are seen classes, UNC-Chapel Hill Chancellor anywhere on the Chapel Hill campus, Carol Folt announced that the uni- or who check in on social media sites versity would tighten restrictions on such as Foursquare from locations in the “paper” curriculum and make the Chapel Hill, would lose their eligibil- courses available to the entire student ity. body. Jazminn Jordan, a barista in Port- Folt announced a new Division land, Ore., told Carolina Journal she was of No-Show Distance Learning that six credits short of a degree in chemical would provide course credit for any engineering when she dropped out of UNC student, ending the favoritism school. “I’m so jazzed that I can get my toward athletes that had tarnished the The new Division of No-Show Distance Learning at UNC-Chapel Hill has resulted in degree while I’m working the second university’s reputation and threatened the university scrambling to find space for the many needed no-show classrooms. shift here,” she said. its accreditation from the Southern bility into AFAM Studies. There, de- than 700 enrolled in them. She and Skye Simmons, a tourism rick- Association of Colleges and Schools’ partment secretary Deborah Crowder Nyang’oro maintained the no-show shaw operator in San Diego, Calif., also Commission on Colleges. and chairman Julius Nyang’oro cre- program, thinking they were help- was pleased to learn of the program. “After the [association] said it ated independent study courses that ing athletes who faced the pressure “I was struggling in a Critical Theory might review the university’s accredi- required no professor. of keeping up with the demands of course my senior year in political sci- tation status, I decided we had to dem- The courses had a single require- school and training for sports. ence and had to drop the course,” he onstrate that our no-show classes were ment for students: Submit a research Even though scholarship athletes said. “[Jurgen] Habermas was kick- just as rigorous as the rest of the cur- paper that automatically would re- comprise roughly 4 percent of the stu- ing my butt. [Now] I’ll enroll for that riculum,” Folt said. ceive a grade of A or B. dent body at UNC-Chapel Hill, they course online and then see what no- The new division will offer no- According to a 133-page investi- took 47 percent of the no-show cours- show courses Carolina’s offering in the show courses from any academic gative report from former U.S. Justice es. Folt says “the Division of No-Show master’s program.” department at the Chapel Hill cam- Department official Kenneth Wain- Distance Learning is meant to rectify Folt spoke of “great possibili- pus. Its curriculum is modeled after stein, more than 3,000 scholarship ath- that injustice.” Only nonathletes will ties” with the online program. “We can the program run from 1993-2011 by letes enrolled in the courses over the be accepted in the new program until boost our faculty’s teaching load geo- the Department of African and Afro- 18-year period. its partipication levels reflect those of metrically with these no-show cours- American Studies. Crowder, who retired from the the entire student body. es,” she said. “In fact, with all this extra In the program, academic advis- university in 2009, became angered In addition, she said, UNC stu- work they’ll take on, I may have to go ers would steer athletes who were in when fraternity and sorority students dents who did not complete degrees to the General Assembly and demand danger of losing their academic eligi- discovered the no-show courses; more and can cite poor grades or other aca- a raise for them.” CJ E.A. MORRIS FELLOWSHIP FOR EMERGING LEADERS The E.A. Morris Fellowship is seeking principled, energetic applicants for the 2015 Fellowship class. Applications available online or at the John Locke Foundation. Application deadline is December 8, 2014. Please visit the E.A. Morris Fellowship Web site (www.EAMorrisFellows.org) for more information, including eligibility, program overview and application materials. Eligibility • Must be between the ages of 25 and 40, must be a resident of North Carolina and a U.S. citizen • Must be willing to complete a special project requiring leadership and innovative thinking on a local level • Must be willing to attend all program events associated with the fel- lowship • Must not be the spouse of a current or past Fellow. Timeline Sept. 15, 2014: Application period opens March 20-22, 2015: Retreat 1 — Pinhurst, NC Dec. 8, 2014: Application period closes, applications due June 12-14, 2015: Retreat 2 — Blowing Rock, NC Jan. 5, 2015: Finalist notification & invitations to Selection Weekend Oct. 17-19, 2015: Retreat 3 — Coastal NC Jan. 31-Feb. 1, 2015: Hello/Goodbye Gala & Selections Weekend

www.EAMorrisFellows.org Contact Karen Palasek | [email protected] 200 W. Morgan St., Ste 200 Raleigh, NC 27601 | 919-828-3876 | 1-866-553-4636