Tag: governor

Fiscal Report Card on the Governors

We released Cato’s report card on the fiscal policies of the governors today. We calculated data on the taxing and spending habits of 45 of the nation’s 50 governors, between 2008 to August 2010.

The governors are scored from 0 to 100 on seven separate taxing and spending variables. The scores are aggregated and converted to letter grades, A to F.

Four governors earned an “A” this year: Tim Pawlenty of Minnesota, Bobby Jindal of Louisiana, Mark Sanford of South Carolina, and Joe Manchin of West Virginia. You can read the report to find out what these governors did right from our limited-government point of view.

As it turns out, the residents of these four states seem to like the fiscal stance of their winning governors, who favor tax cuts and spending restraint.

Pawlenty has a 52 percent approval rating in quite a liberal state.

Jindal has a 74 percent approval rating.

Manchin has a 69 percent approval rating.

Sanford has a 55 percent approval rating, despite the troubles in his personal life.

Governors shouldn’t just focus on being popular in a superficial sense. These polls tell us that governors who focus on cutting taxes and spending in an honest and intelligent way will be supported by the people.

Crist Fiscally Responsible? Not So Fast

He did it again: Florida governor and senatorial candidate Charlie Crist cited Cato’s 2008 Governors’ Report Card as evidence of his fiscal conservative credentials, this time in a Fox News Sunday debate with his primary opponent Marco Rubio.

Trouble is, the report card’s author, Chris Edwards, has gone on the record again and again explaining how Crist has fallen hard off the fiscal responsibility wagon since the report was released two years ago.

The Florida media has publicized Edwards’ correction of the record numerous times since Crist began citing the Cato rating in his political ads. It is difficult to believe that Crist can be unaware of that.

Here’s Edwards in October 2009:

Since I wrote the report in mid-2008, the governor seems to have fallen off the fiscal responsibility horse.

In particular, Crist approved a huge $2.2 billion tax increase for the fiscal 2010 budget, even though he had promised that $12 billion in federal “stimulus” money showered on Florida over three years would obviate the need for tax increases.

About $1 billion of the tax increases are on cigarette consumers, which will particularly harm moderate-income families. The rest of the increases are in the form of higher costs for often mandatory services, such as automobile registration, which is really just a sneaky form of tax increases.

Watch the exchange below. Crist cites Cato at 8:43:

Transcript here.

Fed Governor Starting to Make Sense

Despite still defending the Fed’s bailouts, Fed Governor Kevin Warsh gave a speech this morning offering a few insights about reforming our financial system that seem to be lost on both Obama and Bernanke.

A few highlights:

The mortgage finance system is owed far stricter scrutiny to gather a fuller appreciation of the causes of the crisis. The government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, for example, were given license and direction to take excessive risks.

One has to hope that both Bernanke and Obama are listening.  The silence of the Obama administration on fixing Fannie and Freddie is nothing short of shocking and irresponsible.  Any commitment to real reform has to include the GSEs.

Granting new powers to resolve failing firms in the discretionary hands of regulators is unlikely, in the near-term, to drive the market discipline required to avoid the recurrence of financial crises.

…Some newly-empowered and untested regulatory structure is not likely – in and of itself – to be sufficient to tackle institutions that are too-big-to-fail, particularly as memories of the crisis fade. Regulation is too important to be left to regulators alone.

I believe these two points cannot be stated more strongly:  what we need is more market discipline, rather than less.  Putting the entire weight of our financial system on the backs of our financial regulators is a crisis just waiting to happen.  Sadly the direction of both President Obama and Congress seems to be in undermining market monitoring of firms and relying solely on regulators to “get it right” – the very same regulators who were asleep at the wheel prior to the last crisis.

Who Wants to Make Sarah Palin the Leader of the Republican Party?

Could it be the Washington Post? Bannered across the top of the Post’s op-ed page today is a piece titled “Copenhagen’s political science,” titularly authored by Sarah Palin. I’m delighted to see the Post publishing an op-ed critical of the questionable science behind the Copenhagen conference and the demands for massive regulations to deal with “climate change.”

But Sarah Palin? Of all the experts and political leaders a great newspaper might call on for a critical look at the science behind global warming, Sarah Palin?

What’s even more interesting is that the Post also ran an op-ed by Palin in July. But during this entire year, the Post has not run any op-eds by such credible and accomplished Republicans as Gov. Mitch Daniels; former governors Mitt Romney or Gary Johnson; Sen. John Thune; or indeed former governor Mike Huckabee, who might be Palin’s chief rival for the social-conservative vote. You might almost think the Post wanted Palin to be seen as a leader of Republicans.

I should note that during the past year the Post has run one op-ed each from John McCain, Bobby Jindal, Newt Gingrich, and Tim Pawlenty. (And for people who don’t read well, I should note that when I call the people above “credible and accomplished,” that’s not an endorsement for any political office.) Still, it’s the rare political leader who gets two Post op-eds in six months, and rarer still the Post op-eds by ex-governors who can’t name a newspaper that they read.

Crist and Cato

Florida’s airwaves are alive with the sound of Governor Charlie Crist’s radio advertisement trumpeting his grade of “A” on Cato’s “Fiscal Policy Report Card on America’s Governors.”

I am pleased that Gov. Crist values Cato’s ratings because we work hard to make them accurate and nonpartisan. But the radio ad is making many fiscally conservative Floridians scratch their heads because of the governor’s recent policy actions.

The governor earned his Cato grade in last year’s report mainly because of his large property tax cuts and moderate spending approach. The grade was based purely on quantitative data on revenues, general fund spending, and tax rate changes.

However, since I wrote the report in mid-2008, the governor seems to have fallen off the fiscal responsibility horse.

In particular, Crist approved a huge $2.2 billion tax increase for the fiscal 2010 budget, even though he had promised that $12 billion in federal “stimulus” money showered on Florida over three years would obviate the need for tax increases.

About $1 billion of the tax increases are on cigarette consumers, which will particularly harm moderate-income families. The rest of the increases are in the form of higher costs for often mandatory services, such as automobile registration, which is really just a sneaky form of tax increases.

These tax increases will be particularly painful to Floridians in the short-term because of the recession. But Crist has also jeopardized the state’s long-term finances with his expanded subsidies for hurricane insurance. Hurricanes are a major challenge in Florida, but giving big subsidies to coastal property owners, driving private insurers out of the state, and guaranteeing a massive state bailout when the next hurricane hits strikes me as the height of fiscally irresponsibility.

More on the Crist campaign here.

Too Big to Fail Redux

Mervyn King Mervyn King, governor of the Bank of England, has shocked the staid world of British banking by raising the possibility of breaking up the UKs big banks. Mr. King is no socialist, but a worried banking regulator. He is worried about “the sheer creative imagination of of the financial sector to think up new ways of taking risk.”

Around the world, regulators and finance ministers are hoping that banks will grow their way out of their current mess. To do so, however, banks will in fact need to seek new ways of taking on risk. It is called going for broke: the upside goes to stockholders and managers, and the downside to taxpayers. Mr. King knows that it is a “delusion” that regulators can control bank risk-taking.

Whether one agrees with his solution, at least he recognizes the problem. Would that were true of Treasury and Fed officials in the United States.

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The Seat-Warming Senate

With Gov. Deval Patrick’s appointment of longtime Kennedy courtier Paul Kirk to Sen. Edward M. Kennedy’s seat in the U.S. Senate, there are now at least three close aides holding on to Senate seats while their states go through the formality of an election. The governor of Delaware appointed Joe Biden’s longtime friend and former chief of staff to fill the rest of his term in the Senate. Can you name him? It is generally thought that he is obligingly holding on to the seat until Biden’s son Beau gets back from National Guard service and is able to run to succeed his father. And in Florida, Gov. Charlie Crist named his former chief of staff to fill the seat of retiring Sen. Mel Martinez until the 2010 election in which Crist is running for the seat. There are more seat-fillers in the Senate than at the Oscars.

Of course, Kennedy himself took his seat when he attained the age of 30, after it was kept warm for him by family retainer Benjamin A. Smith III.

Meanwhile, as of 2005 there were 18 senators who gained office at least partly through their family ties – sons, daughters, wives, nephews of former senators, governors, presidents, and so on.

The Founders envisioned the Senate as an assembly of wise and accomplished men, chosen for their experience and judiciousness. Political campaigns that favor the handsome, the glib, the panderers, and the best fundraisers are bad enough. But a Senate full of legacies and seat-warmers is especially unfortunate.