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tv   Cato Discussion on State Regulation  CSPAN  September 17, 2018 8:29am-9:31am EDT

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to be extremely vigilant about. i don't believe that is a single country of origin challenge. the nature of our networks have changed significantly. our networks are comprised not just of hardware and venture mature. there's a lot of software. we have to be careful about what elements are in a network that we have to protect against. and . and i was in the u.s. telecom members are doing everything in our power to lead the way in making sure that we can enjoy the cybersecurity that we deserve. >> host: jonathan spalter president ceo of u.s. telecom. ali breland covers tech for the hill. gentlemen, thank you. >> guest: thank you very much. >> thank you. >> c-span, where history unfolds daily. in 1979 c-span was coded as a
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public service by america's cable-television companies and today we continue to bring to unfiltered coverage of congress, the white house, the supreme court and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. >> now the cato institute host a discussion about the impact of state policies and regulations on economic freedom. this is one hour. [inaudible conversations] >> good afternoon, everyone.
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thank you for joining us on one of the last few days of the august recess. we appreciate you being here for this briefing that the cato institute is hosting. my name is matt weibel, director of government affairs at the cato institute and today will be talking about freedom in the 50 states. i'll be moderating today's briefing on the fifth edition of freedom in the 50 states, an index of personal and economic freedom, a publication that ranks states based on personal freedom, regulatory policy and fiscal policy. you can find the complete list of rankings and a ton of information on the website, freedom in the 50 states.org. joining us today on our panel are john samples, vice president of the cato institute and the two authors of freedom in the 50 states, bill ruger and jason sorens. we will have time for q&a at the end so please hold your
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questions. with that i'll turn over to john samples who's going to introduce our authors. [applause] >> thank you. so do the states matter? i think here in washington we are inclined to forget about them or think they don't matter all that much. after all, , the biggest issues are debated here, fought about to come to dig history increasingly takes place later in washington, not in the states. think about for a moment the average citizens or even most citizens, their concrete interaction with government are most often going to take place at the state and local level. you want to have your children's educated, most people are going to have consented to, schools, want to open a business? you'll find out about state and local regulations need to deal with. and finally of course if you want to drive a car yet to go to the peer of motor vehicles which probably has made more libertarians than the cato
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institute. but i think also the states are important in another way. we are accustomed to think about government being accountable through the voting booth. you go in november, you vote, those people that are elected are accountable to you, the voters. cato, a scholar who works threat george mason university has pointed out that there's also, you can talk about voting with your feet. in the american system with 50 states, if you don't like the kind of government you are getting, you don't like the policies that are being pursued for the waste being applied, you can go somewhere else. of course, however, it's very important people be able to compare and contrast. they have to have information. citizens have to have information if they're going to vote with their feet. that brings us to what i think is the real one of the many virtues of this study. freedom in the 50 states attempts in a systematic way to
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give citizens and policymakers the kind of information they need to have the best kind, at the state and local level. let's begin with a brief introduction of our two co-authors and then i will turn it over to them. our first speaker william ruger is a research fellow in foreign policy studies at the cato institute. he is also vice president for research and policy at the charles koch institute. jason sorens his lecture and the department of government and program director of political economy project at dartmouth college. gentlemen, we await your information. >> thank you, john. thank you to the cato institute for publishing this book. if you want to know who was number one, you might look at my tie color. that might give you some indication but i'll save that for now. so again welcome and thank you for coming to hear about our
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study of freedom in the 50 states. this is the fifth edition of this book. we've been doing this now for over think it think it and we d because although it back to 2000 so we are to nice look at a variety of different policies overtime. freedom and 50 states that the most comprehensive study and ranking of freedom across the 50 states. it doesn't just examine economic freedoms, fiscal and regulatory. it also looks at personal freedoms and that was one of the big innovations of the study right from the beginning it was the first study had ever looked at personal freedoms either at the national or international level that we know of. our study looks at three dig big categories. fiscal policy, regulatory policy and policies that relate to government paternalism will be called personal freedom. as i said this is the fifth edition. it's updated fully and it is expanded. what is the purpose here really?
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john highlighted that a little bit. we want to measure and compare the states they somehow the public policies affect individual freedom. we want to know how the government impinges on peoples economic freedom, on their businesses through regulation, for example, and interpersonal stairs, the quote-unquote bedroom issues. now of course it's not just academic exercise their that oo look at freedom because freedom is valuable for its own sake. but we also do want to look at how freedom ethics of the things that we care about. so, for example, economic health, economic prosperity. how freedom might impact our wallets. wills want to look at how it might impact movement across the united states in terms of migration patterns. we can do this with our study, and one of the things we think is really valuable about the study is we provided this massive data set now i goes on the way back to 2000. think about about all those years multiplied by 230
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variables times 50 states. one of the things we've seen is scholars and policy analyst have used that didn't stop all kind of things we can anticipate. in other words, kind of creating a spontaneous order around data, kind of data informed social science analysis. we think that's a value to this. we hope other people would use that data and try to explore these issues. now, of the folks who might want to use this would be legislated and their staff. they can see other states are doing relative to other states, and sometimes it takes that compared analysis to say you know what, maybe we should be an easy about what's happening in our states and change. why are we using occupational licenses for funeral home attendance when all these other states are not? or, if people say we can't do it this way when it comes to zoe, you can still get all these other states that are doing it. i think it's a valuable for those folks and just to see if
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they care about freedom, how are we doing. citizens can use this to make decisions about when you might want to retire or where they might want to move their business or move themselves. jason has talked about and some of the interviews he's been doing this week about how he moved from new york to new hampshire in part because of some of the regulations on education that new york had that new hampshire didn't. reporters can use this computer in reporters are, thank you, you can use this to see of those get to look at a national contact io see some areas that are right for more investigation. what is our state doing this? right? wise our state like new york, why are they revoking drivers licenses for nondriving drug offenses? how does that actually affect people are trying to get back on the ladder of economic success if he can't drive remco particularly if you're not in everywhere there's a lot of public transportation or uber options. there's different ways you can use this and so hopefully even though i joked about who was not
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one, hopefully this isn't was just merely about the sizzle or the rankings but about that substance, about this date, if you would. one the great things about states is that the american federal system is still alive. it's been hampered over the last 80 years but it still alive and that allows state governments to talk to deal with a lot of different issues across the board. i say federalism is still alive and states are still important because we've seen that. a lot of the action that's been happening over the last several years, particularly back windows more come with all three branches were not in the hands of the same i guess the judiciary is in the hands of a partisan brain but we know we are talking but in terms of the fact there is more unified government in terms of party, when we had more divided government that was a need as much action happening here. it was happening out in the states. think about criminal justice and
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police uniform. you might really important initiatives when it came to dealing with prisons, , linking together with civil asset forfeiture. states like nebraska, new hampshire, new mexico were really leading in terms of pushing civil asset forfeiture reform. fiscal policy reform, the lord has done a good job over the last 15-20. >> a lot of action there. while the federal government seems to not care very much about spending increases relative to the, to both the economy and to just absolutely. states have really paid attention to that. think about marijuana policies. colorado, washington, alaska, others have been at the forefront of this. education policies, nevada, arizona, florida. regulatory reform, indiana, wisconsin, michigan. these are states that did right to work. so state governments are quite active and sometimes we miss that. it's also the case state governments are competing for citizens and businesses and so there will have to pay attention
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to this because people and businesses do vote with their feet so have to attract those people. and also as justice brandeis talked about, states are those laboratories for democracy where experimentation can happen. okay, so how do we define freedom? we have a very typical american conception of this. we believe that freedom is a moral concept and we say that freedom is the ability to order your life, liberty and property as you see fit consistent with the equal rights of others. it's a very traditional american way of understanding it. it's not radical. our index includes freedom or freedom includes freedom from unjust private and public interference. we are measuring the public sight of that. it's not the purpose of this to look at how effective our police departments and securing your property rights to keeping seeds out of your house. when looking at how does
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government impinge on these various -- thieves. even though we realize you're not in the state of freedom, if your personal and private property rights are being violated by private citizens. we also exclude abortion and the desperate and that's important. it's not because we have strong views on that but because the original quote-unquote freedom arguments that can be made on different sides of the issue. take abortion, whether the government should secure the right to abortion or secure the right to life of unborn persons or people depends on your view of again when life begins. that's a scientific, theological religious, et , et cetera, spr t we're trying to do. we do provide alternative indices at the end of the book and you can look at that at the website www."freedom in the 50 states".org we provide all the data we provide the alternatives
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indices so if you have a strong pro-choice view or strong pro-life you are somewhere in between, you can actually look at what we would look like if you include abortion. but for the top line ranking we don't include that with the death penalty. >> i will just briefly give you an aside on freedom of marelli, particularly if you're conservative person who has strong ethical feelings about how people would use the liberty, that we have a log of equal freedom. your ability to dispose of your life, liberty and property as you see fit consistent with legal rights of others is the law of equal freedom. but we are not taking a stance on how people use that freedom. if you think people who are using drugs or acting immorally in a way that's not consistent with their flourishing, or if you think that there really ought to be kind of certain
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views about different kind of culture war issues, there's nothing wrong with people holding those strong views. the question is do we actually utilize the power of government to enforce those views? so in this piece we are not taking a normative position on those issues, but what we are saying is that the state shouldn't intrude. we do a have strong views. so, for example, we might think very strongly about the fact that heroin use is not consistent with someone's flourishing, generally speaking, i think that's a pretty easy one. we are happy to say that. we are not moral relativists get that being said, we take a strong position that the state shouldn't be regulating, say bakery hours even if you think that an employer shouldn't have their workers worked six hours a week. we think that should be up to freedom of contract. we've actually written on this
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if you're interested at reason.org, sorry, reason.com, the case for virtue libertarianism that you might find of interest. moving back to the data, we measure freedom annually from 2000-2016, the year in 2016, the beginning fy '17 is when our data closes. we looked at over 230 variables so we are not not cherry picking just a few things that matter to us or might matter to the cato institute where trying to look at the full range of policies at the state level and this is everything from state and local tax burden to government consumption the debt, occupational licensing the right to work laws, from drug and alcohol policy to even raw milk sales. it's all covered. naturally, tax burden accounts for more than one milk sales. we are not measuring these equally and i get to the end of second but basically fiscal regular and personal freedoms
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count for about one-third of the value of the index. how do we wait for these? excess objective. we didn't did wake up one mornd say, let's go through and rank or weight all these policies that the effect over 300 million people. we're is going to decide for ourselves. that would be a recipe for disaster probably because some of the things jason and i probably don't care about like i'm not a gambler, jason is not a gambler. these things actually do matter to a lot of people, that freedom to do so. that came through when we started looking at what is the cost to those whose freedoms are actually imposed upon by government regulation? we used research that's been done by economist, political economist and scientists and other scholars to look and find out what is that cost to those people? if you want more on the specifics of how we do that, again look at the pdf that is available online or get a copy of the book.
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it's an objective weighting system. you still might disagree with the objective weighting system and again we think it's the best way otherwise we wouldn't have put in the book affected you might disagree on that or you might think in every will include right to work is not one that should be in there. one other great things the cato institute website is that we have a personalized your rankings button where you can go in and say, i care a lot about raw milk sales. each of the 50% of the index because i cannot flourish as a human without the ability to drink straight from the tap, if you will. so that's one of the things that we put in there and he think that's a really exciting thing, especially because libertarians and classical liberals and conservatives often times ten to be excited about peoples ability to choose so he can choose your rankings. one of the things about our weighting, we look at the quote-unquote victim cost of regulation but it's also true that we think are some things
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that are so fundamental to write that they been encoded in the constitution, for example, think about freedom of speech or the second amendment rights or they have been recognized by the court and the united states as being fundamental those things get additional weight because of the fact they are seen as so fundamental. things like eminent domain reform connects up with constitutional guarantees. you think about things like regulatory takings were physician-assisted suicide. those are things the courts of talk about as being fundamental. so quickly i want to go to the weights before turning it over to jason but if you look here you can see these are some of the weights for the fiscal policy categories. state taxation is a big part of that like it even goes down to things like government debt. next come if you look at regulatory policy, land use is a big deal particularly because this will affect peoples ability to choose housing as they might see fit.
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it also has health insurance, labor market regulations and so forth. in terms of personal weights, incarceration and arrests, and this is this is a crime adjusted so we're not saying that your absolute level of people in prison is a bad thing. it depends on the crime rate. some people deserve to be in prison, in jail, but we look at the crime adjusted, incarceration and arrest rates goes that available to sleep with a problem with excessive sentencing or over criminal station, particularly when it comes to victimless crimes or consensual crimes. you can see it's a whole roster things, marriage freedom, gun rights, some of these things would appeal to people and bluer states, some would appeal to read. it's not a conservative index if you look at fact with marijuana freedom and so forth. that's when you are on personal freedom. in trends of what's changed over
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the last few years since the fourth edition -- in terms -- we had that and updated or we used to collect data every two years and now we collect annual data and we filled in that date and the pastor let me tell you that made for a great christmas break for both of us. we also have improved the weights looking at that newbies because we want to be alive to social science that help us discover the cost of these policies. we've also added some new and improved variables so that we include the financial assets of government and this is a way to offset government debt because it states have cash on hand, that should offset that. think about land-use regulations, collateral consequences of arrest and incarceration. these are things like drivers license revocation, things like the cost of prison phone calls. we also include gambling wins. in other words, the revenue that the state is getting from that. we also include indices at which policies have been federalized and which ones have not because
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there are something set out of the hands of state governments, if you think about gun control or healthcare. these are areas in which federal court decisions and federal legislative efforts have reduced federalism. sometimes are good, sometimes for bad depending on your view. we also have an index of cronyism to kind of understand that particular problem with our body politic. in terms of the rankings, drumroll, please come in terms of fiscal policy you can see florida does really well. it's our number one state on fiscal policy followed by new hampshire, tennessee, pennsylvania, north dakota. in new york, state that paul krugman in a tweet today said that we were saying was a heretical hellhole, is number 50 -- tyrannical. thank you, paul. always good press to her from a nobel laureate. in regular policy chances that the number one state followed by nebraska, idaho, iowa and
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indiana and yet again new york performs really stellar there. and now when you look at economic freedom, which is both fiscal and regulatory policy, you can seek in that lord is performing best across-the-board although in regulatory policy lord is actually as good as it is on fiscal policy or on personal freedom for that matter but it's the anywhere can probably improve the most relative to other states. he see that new york performs quite badly here. then in terms of personal freedoms, things change. new york is not number 50, not that tyrannical hellhole. it's only number 40. but you see here a separate cast of characters, maine, nevada, new mexico, colorado and again new hampshire. and, unfortunately, i lived in texas for a long time. i was a professor at texas state university, go bobcats. the fact is that texas doesn't perform very well on personal freedom and we can go into the more in the q&a if that's of
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interest to you. so now the overall rankings, and here we have for vermont at nur 46, new jersey 47, california, hawaii and, bam, new york they are worse by far so we'll see some of that data. it's not, they are not even close. as far as the best states can lord is number one on the by new hampshire, colorado and nevada. those are the top five and florida is a new number one here based, compared to the last published version of this, and so that's exciting to see something interesting and different there. it wasn't something i expected or be expected when we ran the data, but the proof of the pudding is in eating and you look at the date and that's what popped up. i'm going to turn over to jason to talk about some of the implications of these freedom rankings and freedom scores. thank you. >> thanks, will.
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i'd like to next take a look at how some of the top and bottom states have evolved over time. you can see that new hampshire used to be in a class sort of on its own in the early 2000s. freedom declined significantly up until the 2010 election seemed to be kind of a turning point there. a lot of states, 2009 was a turning point. what we found in a lot of states is that they responded to the great recession by cutting spending, and they have kept fiscal restraints since. as a result we've seen a big increase in average fiscal from overtime and receive it and some of his top states as well. you see that lord in particular has rebounded quite -- florida -- rebounded from the late 2006 fiscal crunch. the states near the bottom to be drifting downward. vermont of all the state in the union is the most worse and
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state since 2000 it is lost the most freedoms since 2000 according to our data set. if you look at how state average overall freedom has changed over time, it kind of mirrors some of those figures we saw for specific states were average freedom is declining to the 2000s. in particular the first half of the 2000 and the scallops in italy since 2010. it's important to note that these figures were showing on state average scores overtime exclude federalized policies to keep you include federalized policies, policies that called for the supreme court has essentially taken over and nationalized, you will see a less rosy picture, particularly because of the so-called obamacare adopted kind of the most restricted health insurance regulation regime that was etched into many of the state of the fact it was passed, and as
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result that looked like, if you include that that looks like a big decline in regulatory freedom, economic freedom and overall freedom for all the states, other than massachusetts would already have it, particularly for the states that are more free market health insurance states to begin with. we do it index of cronyism. we introduce this in the fourth edition. we update that in this edition and this looks specifically at barriers to entry computer industry or an occupation as well as restrictions on prices. so state regulates prices, wisconsin is one of the few states that has a minimum markup law for all retail sales that you have to, they force you to charge more than otherwise might. in terms of freedom from cronyism having the fuse of the source of policies we have call about at the top and then california is our most cronyism state. we notice that cronyism has a
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couple of interesting variables. one of them we're not displaying is corruption. so state corruption rates,, especially estimated by statehouse reporters, is strongly negatively related to freedom from cronyism. we also fear that more crony states have hire lobbyists to legislator ratios that we don't know where the causation goes, could be more lobbyists could lead to more crony policies are positive around, you get more lobbyists lobbyist because of trying to get exemptions for these. we find a strong relationship between public ideology and partisanship on the one hand, and freedom on the other, particularly economic freedom. this text is a little bit small for some of you perhaps to read, but we have at the top of this is the relationship between democratic and green cochair.
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we have economic freedom in 2000 and you see a noisy but negative relationship especially once you get past the midpoint. the most democratic states significantly less free on average than moderate states. then we see this relationship seems to strengthen somewhat, fewer outliers when you look in 2016. when we look at personal freedom, however, we don't see that relationship and that might be as you expect. red states are from our perspective good on some personal freedoms and that of others, and vice versa for blue states. in the early 2000s there was a positive relationship between democratic partisanship and personal freedom. that has gone away now in part because of things like the obergefell decision that increased personal freedom and a lot of red states. do americans and value freedom? we were not sure what we would find when we first investigated
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this. in the first addition we looked at migration in the early 2000s. what we saw was that for your states did seem to attract people. we saw this across all three dimensions, the people are moving from states that are lower on fiscal regulatory and personal freedom the state that are higher on those three dimensions. what we are not able to do because we have this longtime theories is split the sample and see if we were to protect from the first edition that in future though states that have freedom are going to have more freedom will have more migration in the future, doesn't hold true out of sample? it does actually. when we look post great recession we find the same relationship that americans are moving from less free states to for your states, and with a cadet at a right-of-way strip we compare states to the neighbors in this neighborhood only straightens -- strengthens. we do see a little bit of evidence that people are post
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great recession are moving, are more strongly motivated by economic freedom and personal freedom when they move. so personal freedom with stronger pre-great recession which might make sense, people are less likely to seek out personal freedom when their economic position is uncertain, they might be more motivated by jobs and things like that which depend on the investment of entrepreneurs. .. >> pre-great recession, things were freer in 2000 and got more migration over the next few years. there are some out liers, arizona and nevada had huge
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migration figures, people were moving there for other reasons than freedom. and louisiana has more outward migration because of hurricane katrina, but this relationship seems just as strong between freedom and migration when we look at post-great recession and then again, we see that new york, for instance, our worst state on freedom is the worst state in the last 15 years, net migration. 14% of new york's population in 2000 has subsequently moved out of state to another state on net since then. and we look at economic growth. we want to look at growth and personal income. we wanted to look, especially growth and personal income other than say employment growth because there might be this objection. and they might be creating lots of jobs and good jobs. income growth is a way of looking at that. not just job growth, but how good are the jobs.
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when you look at economic growth in the states, there are a couple of pitfalls and lower quality studies and memes that people share. per capita income is a very bad measure of economic health in a state. why? because people can move across states. so, if a state has high per capita income, that means that it's a state that's attractive to rich people. that doesn't necessarily mean it's a state attractive to everybody or a state that's more productive. in fact, there are a lot of things with high per capita income that people are flowing out because they can't afford to live there. massachusetts is an example. so, we can't look at per capita income to look at states. we can use that look at countries for productivity. when a state improves its economic policies, the reward is not a big increase in per capita income, maybe a very small increase, but mostly what you get is new residents, new
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workers, new jobs in the state. so we have to -- we have to use the total-- first of all, not per capita and then we have to adjust for cost of living. if you don't do that, you're not getting a full picture because cost of living varies dramatically across a state, particularly california has high cost of living. housing is extremely expensive there, i don't think that's news to anybody. once you adjust for that, c california looks like one of the worst economic in the countries not one of the better ones. and pits -- it's carrying to easy taxes administration of justice the rest brought about by the natural course of things as we write about this do we need easy taxes for justice and growth and it seems that those things are helpful.
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economic freedom, not personal freedom, which is what we expect is associated with economic growth. once we have-- once we look at state cost of living adjusted personal income growth and then we control for the region of the countries and initial capital per worker and split the sample by pre-and post great recession and then we see some evidence that regulatory policy was more significant for growth pre recession and fiscal more post-recession and the bottom line is that economic freedom is equally important, actually, both pre and post great recession for economic growth. so, freedom does seem to have instrumental value in addition to its inherent interest and for that we'd like to open up for more questions. >> thanks, jason. and thanks, will. i will start out with a couple of questions. the first one open-ended. what is it that's so great about florida and what is it that's so bad about new york?
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>> well, they're obviously both great places, but their policies are very different and a state like florida has really avoided the kind of stifling tax burdens that other states have put on their peoples. particularly, you know, after the great recession. but again, florida over the likes of the last 15 to 20 years has really been quite remarkable in keeping the clamps down. and it's done some things positive not just noted doing bad things, but done some positive things in terms of corporate taxes and another area where it's done quite well, especially compared to say, california or new york, is to make sure that land use restrictions haven't been so onerous as to harm housing, which is a major, you know, aspect of a flourishing life is being able to afford reasonable accommodation. and florida has some restrictions on the ability of
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localities to regulate land use in a way that is harmful to its citizens and that's been something important. it's also had educational reforms that have been valuable and i think they're number three in terms of educational freedom due to some of the programs that were started, i think, under jeb bush. and so that's been valuable for florida. i'm going to turn it over to jason to talk about new york, which is obviously not berma or madagascar in terms of its freedom, but in the american perspective is clearly number 50, as you saw. >> yeah, so new york is interesting. it has by far the highest state and local tax burden in the country and when we investigate this, we find that the state government tax burden is one of the highest, but not completely out of whack with some of the high tax states. the local tax burden is extremely high, it's far higher than even the second highest state. it's 8.5% of income compared to
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new jersey which is 5.5% is the next highest and we investigated why this was this time. and we found that actually, it's not necessarily local government's fault that the tax burden is so high in new york. it has to do with state mandates on local governments, including collective bargaining roles and local governments have almost zero control over employee benefits and very generous collective bargaining rules also make it difficult for them to control public employee wages, that's driven up the tax burden there. but it's not just tax burden. we see new york as the highest debt burden and it has-- it has rent controls, one of four states where there's rent controls and economists study the effects of rent control in new york city and found about a third of a billion dollars per year of simply destroyed by rent control. and that's a dead weight loss of rent control and that's huge. plus, a large redistribution of
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wealth away from tenants in uncontrolled properties to tenants in controlled properties, which also counts in our index as a loss for freedom. new york has restrictive labor laws that are sort of anti-employment and high minimum wages that hurt upstate employers, and potential employees, unskilled workers in the up-state because they can't afford to pay that kind of wage of an unskilled worker in upstate new york. they have mandatory insurance, mandatory paid family leave additional costs to employees and administrator burdens for employers. and new york on the personal freedom side is average in some areas, you know. it's sort of average on incarceration rates. we would expect that a deep blue state would be average on incarceration and criminal justice policies. that hurts new york. for guns rights no need to go
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to that, highly restricted in new york. new york, we'll mention that new york is one of only a handful of states that penalizes you for a drug offense, taking away your license. new york is bad for home schoolers which is probably the most restrictive state for home schooling. there are a variety of reasons why new york doesn't do well on personal freedoms and cigarettes taxes almost amounts to complete tobacco prohibition in new york city it's so high and you get black markets as a result of that. >> i want to add that this high school a big effect on where people are choosing to live. if you look at new york, for example, you'd think that new york would be a attractive place for people to love move . it's a big city attractive to people and should be attractive to people at home. new york has lost 14% of its
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2000 population since 2000. that's just remarkable, right? and that's on net. that's taking into account all the people coming from other states and the outflow is pretty massive. i guess you'd want to be in the rental truck business in new york, right? you compare that to a state like florida, our number one state, and florida is having people flood in. and it's not just retirees, older americans, it's also younger americans who are looking for opportunities, perhaps they're the low skilled worker in upstate new york who can't get a job because of the fact that the minimum wage is so high or because that tax burden is so scientificallying because housing costs are a problem. upstate, there's relatively affordable housing there because of the housing stocks they have. there aren't opportunities. even if you can get a house relatively cheaply it's by far harder to have jobs and having that economic dynamism that
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you've seen in florida. i think this is a real case where outcomes are impacted by freedom and, yeah, people move for lots of reasons, weather, family, lots of amenities. on margin freedom matters and you can see that in states like new york compared to florida. nevada compared to california. california has probably the best weather in the world, lots of cities, lots of things to do, mountains, beaches, hollywood and yet 6% of their population has flowed out during that time on net and nevada is growing. or you look at the difference between illinois and indiana. indiana has lost a little bit of population like a lot of the rust belt states, but compare that to illinois where they've lost 10% of their population on net. and illinois has a great city like chicago that's a magnet both in terms of economic dynamism and it's a great city, lots to do. and so if you compare indiana to illinois, you can see that there's a freedom advantage there. you see it between massachusetts and new
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hampshire, vermont and new hampshire. and it's really had an ared to-- hard to look at comparisons and say, yeah, we don't think that freedom matters. even if you didn't do analysis that we do. >> and people moving out of new york after new jersey, and then we look at the age demographics are people moving out by five-year chunks. and we found that the biggest age demographic moving from new york to florida is actually 20 to 24 years old. it's not retirees. >> since we're on capitol hill another question about federal policies that impact state and local policies. you have marijuana policies, for example. some states have ignored federal policy in cities as well with complete legalization or for medicinal uses. what other types of policies on the federal level can affect the states, where maybe the states say we just want to be in compliance with federal law?
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>> yeah, that's a good question. so, i i mean, in terms of of what happened in our index, we've seen that courts have struck down state sodomy laws, same-sex marriage bans and local gun bans, mcdonald v chicago the things that the federal courts have done and in congress, federalized health insurance. these are things that happened. if there's a lesson from that, it's that power is still centralizing over time in washington, but in general when courts do it, it's good for freedom, and when congress does it, it's bad for freedom, at least that's the lesson of the last 16 years. now, other areas where states can nevertheless-- the federal government cannot comandeer the states. the states can choose whether or not to have the laws. and the federal government doesn't have the resources to
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enforce laws in these places. we've seen that with sanctuary towns and cities and states. and this is black letter constitutional law that the federal government can't force them to do this. and in other areas, there are some states that tried to do this on firearms, on montana, passed a law saying that a montana manufactured gun does not have to follow the restrictions of the national firearms act. i believe that hasn't really been litigated yet in terms of whether that can get around the interstate commerce issue, but certainly montana as a state is not going to be enforcing federal law there, it looks like. >> yeah, and i think the marijuana policy issue is a great example of how states have the power to buck washington on certain issues and in some cases that that's a good thing for liberty. and i think that we sometimes
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forget -- it's interesting to know why we think this, right? if you look at the original constitutional design, states are really empowered in our system, but we often times think of the co-equal branches of government. you look at congress versus the presidency, but we often times forget that it's not necessarily a kind of pure hierarchy system in which washington gets to dictate everything down that it wants to, there are significant powers that the states have and the states can push back given their-- you know, so think in the case of a lot of the areas like kind of, you know, what used to be called kind of health, safety and morality issues, right? those are areas in which the states like with the marijuana policy can really try to push back and because of the fact that the federal government can't commandeer it, the states, then push back. some areas like civil rights
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when states have pushed back, that's been a bad thing for liberty, and we saw that with jim crowe in which states were violating individual's rights and that required a federal solution there. >> very quickly, i just want to mention that the federal government does have an adverse effect on state policy, i think in some other ways. we could talk about state asset forfeiture rules and state licensing, a lot has been driven by federal government. they require landscapers to have a federal license for state projects, licensing that profession. >> one other quick question, jason, mentioned cronyism which makes me think of corporate welfare. where does this fall where the states and local governments offer tax breaks, subsidies, loan guarantees to lure big
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corporations and we saw this with amazon's second headquarters where every city, you know, was trying to draw amazon in or you see a taxpayer-funded stadium or new arena with the promise of huge economic benefits later. where does that fall in the ranking of freedom? >> well, it doesn't directly. no one has good data on this. good jobs first is trying to get data on this. right now, it's just kind of a mass of data on projects that they've happened to get information on and we don't know that it's comprehensive, it's not organized by year. so it's just not suitable for our purposes, but the one thing i will say is that states that simply do not have a broad-based tax are unable to offer incentives on that tax, right? so if you don't have a state income tax or a state corporate income tax, you're not going to have lots of exemptions and loopholes to these taxes. so, in general, states with lower tax burdens as we
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measured are the ones that don't have the broad-based taxes and fewer exemptions. the fewer exemptions you have, the higher rates have to be. >> we have ten minutes left and we'll hope it up to the audience. please wait for a microphone to come near you, so the cameras can pick it up. >> the methodology, how do you weigh out or pars restrictions in one field that may add to freedoms in another. for example, a local tax to issues to expand transportation options thereby giving people the freedom to be able to live further away from their work places, cheaper housing, et cetera? >> our index is only an index of negative freedom so we don't include profit freedom like access to resources. we do take this into account though in how we weigh tax burden. we realizes that taxes do pay for some valuable things and so we look at how people value the
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services from taxes and we use that to basically shrink the waste of tax burden would be the intuitive way to think about the tax burden, it's worth a lot less than the index than otherwise. we're not pursuing that every dollar tax is a dim munition of freedom. and the life you choose to live at the cost of others, so if someone doesn't have the ability own a printing press, it's not government's responsibility to provide one so that you can have your first amendment rights. what it means is that government can't restrict your ability to run a newspaper or a website or a blog. >> on the left side. okay. against the wall. >> thank you. so when you think of taxes, you think one of the greatest states in the union, at least the top five, but your ratings
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for economic 10th, lawsuit 45th, regulatory 26th, health insurance 49th and guns 29th. even guns. i'm wondering why that is and why it's following most of those? >> okay, we should both jump in here. i used to live in texas for a long time and he was born in texas so we'll try to take this on. i love texas, texas forever, right? unfortunately, texas has not lived up to its own hype as far as freeing individuals from the kind of paternalism of the state. so it's number 50 on personal freedom and a big part of that is driven by the above the crime rate adjusted incarceration and arrests. it does poorly in its criminal justice areas. there's a key caveat, especially my friend at the texas policy foundation and right on crime would remind us, texas has been leading in reform efforts to try to get a handle on that problem because they've recognized that this is a real challenge. i mean, if you've had too many
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people in prison in texas, especially relative to the crime rate. and in fact, that's why you have things like right on crime. you want to be smart on this, not just tough. for a long time texas was just tough without thinking about being smart. and so that's why you've seen conservative leadership, actually there in the legislature with governor perry and others, to try to get a handle on that because they know they have a problem. do you want to add anything to that, jason? >> yeah, so, one example of texas being overbearing on criminal justice is on marijuana policies where one. few states where you can still get life in prison or a single marijuana offense not involving a minor, simply cultivating a large amount of marijuana could theoretically send you to prison for life. in gun rights, texas here has, you know, it's not as if it's bad, really, for gun rights, it's just that most states have
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been liberalizing gun laws over time and texas is not a constitutional carry state, it's a shall issue state, but the permits are kind of expensive and difficult to obtain. you know, in terms of there are some hoops to jump through and since the-- since our closing date on the index, texas legalized open carry so it will probably rise op gun policy the next edition, but as of our closing data, completely banned open carry. those are reasons why it wasn't so good on gun rights and even things like education, we're sort of curious to see that texas does not have school of choice programs, even though states like arizona and florida and indiana have gone very far in affording school of choice to parents. >> yeah, that last one is really important. if texas really wants to stay on the cutting edge and texans are very keen to be number one, right? the educational freedom, kind of giving families more
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choices, i think, would be a huge thing for texas, even more important than the rankings, this will just be good for children of texas and that's kind of part of the problem is that these policies aren't good for the kids of texas. . >> i was noticing that on every single one of the rankings that are on this paper, hawaii seems to be in the bottom five for every single one and i was wondering why that was. >> well, i think first, we're excited to have jen-- gen z at the event. it's great to have you here and thanks for coming. my kids are gen z and watching at home. >> and hawaii is a pretty regulated state all around. it has very high taxes and the taxes are also centralized and the states do get some benefits and most taxes at the state are at the local level and there are a lot of local government
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toss choose from, the idea that maybe what local governments are doing is basically just providing services that people want, much more so than when it's centralized at the state level and there's little choice within the state. hawaii is the state where the whole state is a school district. you don't like your school district? move to another state. [laughter] >> it's probably now that illinois enacted the firearm reform, the most restricted for guns, not surprising. it's restricted for labor laws and hawaii has as a result of the big out migration and hawaii lost 6% of its 2000 population on net to other states and you really have to mess up your policies badly if you're driving people away from a tropical paradise. [laughter] >> which is going on there.
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>> like i said at the beginning of this, i'm from new york. and i'm wondering in terms of you were talking about over time how the states have been moving and if it's the case that states that are already in kind of a bad position are more likely to get worse. like, kind of what you were mentioning with illinois and the gun reforms in chicago, and people trying to make things better and actually taking away liberties and with new york and new york city and the mta might raise taxes to fix the mta, right. are those sort of things that happen a lot or not really the case like over the 50 states? >> i think one. problems, again not to beat up new york because we forget that hawaii, california, new jersey, vermont are also doing quite poorly, but not to beat up on new york or to beat up on new york, maybe i am, you know, there's just a different
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mindset about the relationship between the individual and the government there. at least within the governs clagoverns-- governing class. there's a notion in what they say and do, in that they say government needs to do a lot of stuff. a lot of times it's well-intentioned. you think about the 20-ounce soda ban or in california the straw issue that's popular now. you know, there's people being killed in yemen, but straws are the most important thing. but you know, this is the case in which there's just a kind of paternalistic mindset and having lived in a lot of different places, i've lived in utah, lived in texas, indiana, new hampshire, you know, massachusetts, you know. the fact is that you look at these places and you visit new york, just a real different approach, right? new hampshirites don't like to be told what to do, why they scored well across the board. states like florida, new hampshire, colorado are not states that are just doing well
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in economics and not so good on personal freedom or vice versa, they're doing pretty well across the board and i think that flows a lot pr political culture and there's a huge debate in political science, institution versus culture and obviously both have an impact, but i think political culture matters here. and that's the same-- that's one of the things that's so frustrating about texas, i think there is that kind of political culture of liberty, but at the same time, there are some other threads throughout texas' political culture that pushes in the other direction, particularly in the path. there's path dependence. texas is more individualistic political culture that talks about freedom will outweigh some of the other things and then maybe texas could realize its right and proper place in the top five. >> you know, i think that political culture matters a lot. i think there's no accidents that it's a bunch of midwestern states do well on regulatory policy, but i also have a pet
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theory about the change over time because i think some of the data supports it. so we do see growing divergence in freedom. the freest states have become freer, especially post 2008. the less free states have just sort of drifting less and less free, it seems like. and i think this has a lot to do with actually a change in g.o.p. attitudes toward public policy at the state level after the push years. during the bush years, a lot of red states lost freedom and then during the obama years, they seemed to rediscover it. and you know, read into that what you will, but you know, it's post 2010 that we've seen all of these reform initiatives in places like wisconsin and indiana and michigan and new hampshire, you know, it's red states are taking on operational licensing and particular need laws and doing right to work which is a republican priority, but not
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one they stressed until very recently. so, i think there has been a change and from our perspective, a good one, in republican governance at the sate level. then you've seen change in which states partisanship. so the last edition, the fourth prediction, and we wrote that west virginia would probably increase on freedom because they moved from a deep blue state deep red state and increased freedom in 2016 and a drama change as a result of the change in partisan environment and simply with the political of political geography in the u.s. majority of states are now lean red, right, pure count of the number of states, and so as a result of that, you see a lot of those states trying to
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increase, especially economic freedom. >> and i think that the political culture point fits with that in the case of vermont. you've seen more and more people moving from places like new york, connecticut and that's changed the political culture in vermont and i think that's why, well, i guess we'll see, but i think that might be why a republican governor could pass -- could sign gun control laws and not suffer as they might have, you know, 20, 30, 50 years ago in a place leak -- like vermont that when it came to guns it was much more like new hampshire, deep blue statesments i use today joke with people from texas that vermont had better gun laws than texas which was true and that always shook up the texans because they think of them as birkenstock

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