Civitas Review

Sowell: The Biggest Lie in Politics


Thomas Sowell writes about what he labels "the biggest lie in politics," that is, the constant accusation of "trickle-down economics" by leftists to smear opponents' economic policies.

Statists will mischaracterize their opponents' views as being, in the words of new New York mayor Bill de Blasio: "that the way to move forward is to give more to the most fortunate, and that somehow the benefits will work their way down to everyone else." They will then attack this position that they completely conjured up in their own imagination as if they were having an actual debate.

While there have been all too many lies told in politics, most have some little tiny fraction of truth in them, to make them seem plausible. But the "trickle-down" lie is 100 percent lie.

It should win the contest both because of its purity — no contaminating speck of truth — and because of how many people have repeated it over the years, without any evidence being asked for or given.

Years ago, this column challenged anybody to quote any economist outside of an insane asylum who had ever advocated this "trickle-down" theory. Some readers said that somebody said that somebody else had advocated a "trickle-down" policy. But they could never name that somebody else and quote them.

Such "debate" tactics are all too frequent coming from the "progressives." Construct imaginary straw men to slay; then smear and name call these imaginary villains, then claim intellectual superiority. All this obfuscation by the left underscores the great lengths to which they will go in order to avoid the true nature of their political ideology, because they know any true, honest exchange in the marketplace of ideas will not end well for their collectivist and authoritarian vision for society.

SEANC Hires Investigator to Examine State Treasurer Cowell for "Conflicts of Interest"


Due to growing concern over State Treasurer Janet Cowell's decision to shift a larger share of the state employee's pension fund into "alternative" investments that carry higher consultancy fees, the State Employee's Association of NC (SEANC) has hired an investigator to look into potential conflicts of interest.  As reported in the N&O:

The State Employees Association of North Carolina announced Monday it hired a forensic investigator to look at the state pension investments for “conflicts of interest related to TSERS investments and potential violations of the federal securities laws.”

SEANC will pay Edward “Ted” Siedle, a Florida-based consultant who is known for investigating pension investments, $65,000 for the report.

I will humbly offer SEANC and Mr. Siedle this friendly reminder of research I produced in late 2012 spotlighting a serious potential conflict of interest by Cowell. A sample:
Records from the National Institute on Money in State Politics show that Cowell’s 2012 campaign has received more money from out of state sources than from North Carolina backers, and in 2008 she received $225,000 in New York-based contributions alone. Why so much financial support from far-away places?

As you may already know, the pension fund is aggressively pursuing lead plaintiff status in one of many class action lawsuits against Facebook and its IPO underwriters. Which leads us to the issue of the pension fund’s choices to represent the fund in this lawsuit – a position if attained would be quite lucrative. Bernstein Litowitz Berger & Grossmann (Bernstein) is a New York based law firm specializing in securities class action suits. Labaton Sucharow (Laboton) is also based in New York and has the same specialization.

Something else they have in common: Both are donors to Janet Cowell.

Berger, Tillis Issue Statement Holding Hagan Responsible for Ending Long-Term Unemployment Benefits


Senate President Pro Tem Phil Berger and House Speaker Thom Tillis this afternoon released a joint statement discussing Sen. Kay Hagan's role in the dropping of long-term unemployment benefits in NC. Here are some highlights from the  release:

Raleigh, N.C. – Senate Leader Phil Berger (R-Rockingham) and House Speaker Thom Tillis (R-Mecklenburg) issued the following joint statement Monday in response to Sen. Kay Hagan’s attempt to shirk responsibility for her failure to grandfather North Carolina’s unemployment insurance reforms during the 2012 federal fiscal cliff negotiations.

“It’s about time Kay Hagan finally admitted she could have helped North Carolina’s long-term unemployed, but the fact is she’s a year late and $600 million worth of benefits short. If she truly cared about these North Carolinians, she would have done what the General Assembly called on her to do more than a year ago. But she dropped the ball and is now desperately trying to spin her way out of the damage she created.”


Federal fiscal cliff negotiations threw a wrench into the plan by failing to grandfather our unemployment insurance reforms (set to begin July 1, 2013) into an extension of federal emergency unemployment benefits. A condition of the fiscal cliff deal was that North Carolina maintain its current benefit levels in order to accept a one year extension of federal benefits.

General Assembly leaders called on Sen. Hagan (whose party in the U.S. Senate led fiscal cliff negotiations) and the rest of the N.C. Congressional delegation to grandfather in the unemployment insurance reforms into the final fiscal cliff package, so North Carolinians could be eligible for extended benefits. Because of their failure to act, an extension of federally funded payments for those unemployed longer than 26 weeks did not happen.

Four other states (Pennsylvania, Arkansas, Indiana, Rhode Island) had changes to their UI programs grandfathered in to a previous round of federal unemployment benefit extension negotiations in February 2012. North Carolina was the only state with a UI reform bill ready to go when federal fiscal cliff negotiations were taking place in December 2012, so we were the only state with the potential to be grandfathered.

Some Things Never Change…


"Marxism criticizes the achievements of all those who think otherwise by representing them as venal servants of the bourgeoisie. Marx and Engels never tried to refute their opponents with argument. They insulted, ridiculed, derided, slandered, and traduced, them, and in the use of these methods their followers are no less expert. Their polemic is directed never against the argument of the opponent, but always against his person."

– Ludwig von Mises, Socialism, pg. 19, first edition published in 1922

If I Wanted to Keep Poor People Poor


Advocates for free markets often get smeared with comments like "you just want to keep poor people poor and see the rich get richer!" Such accusations are utter nonsense, of course.

But a firm grasp of economics and how individuals respond to incentives, however, can tell us what policies a person who is interested in condemning poor people to a life of poverty would support. That's what I address in this article, which was originally published in the Charlotte Observer yesterday.  Here's a sample:

If I wanted to keep poor people poor, there are several government policies I would favor.

For starters, I would advocate for a robust and ever-expanding welfare state. Programs like Medicaid, food stamps, unemployment insurance, etc.? Perfect poverty traps.

I would recognize that a perfect recipe for keeping poor people poor is to create incentives that push them into decisions that prevent them from climbing out of poverty.

Case in point: This year the Fiscal Research Division of the General Assembly analyzed the decisions confronting individuals and families enrolled in various government welfare programs. A single mother with two children ages 1 and 4 earning $15,000 a year through work would be eligible for government benefits (such as Medicaid, housing vouchers and subsidized day care) equivalent to roughly an additional $35,000.

Such a scenario puts this woman in a bind. If she finds a better job paying more, she risks losing substantial amounts of benefits. She would make her family worse off even though her paycheck would be bigger. Just to come out even, once taxes are factored in, she would need to find work paying about $55,000 a year. Not many low-skilled workers can make such a leap.

This scenario is commonly referred to as the welfare cliff. Fear of falling off that cliff is perfectly rational, but it also serves as a highly effective tool to trap people in a life of poverty.