Sunday, December 31, 2017

When Is Government Big Enough?

Ask your local statist. Unless his answer is "never", he is not being honest. Statism is the public policy practice of an ideology with many names: socialism, social democracy, liberalism, progressivism... All those labels have one common denominator, namely the unrelenting pursuit of economic redistribution. 

Also known as "egalitarianism".

Saturday, December 30, 2017

Paid Leave: Egalitarianism on the Right

My latest essay on Larson's Political Economy criticizes the rising support for egalitarianism and the welfare state among America's conservative elite:

Friday, December 29, 2017

People Still Move Away from Higher Taxes

The latest migration data, putting Wyoming dead last with the largest net loss of population, is yet another wake-up call for all the tax hikers around our state. They have not even had their Taxmageddon package enacted, and we are still hemorrhaging workers and taxpayers. 

Thursday, December 28, 2017

Wednesday, December 27, 2017

School Recalibration Report: A First Glance

On December 15, the consulting firm Augenblick, Palaich and Associates delivered a draft of their school-funding recalibration report. It is a 500-plus page document, which no doubt has required quite a bit of work on behalf of the consultants.

Monday, December 25, 2017

The Elephant in the Air over Wyoming

Welcome back! To jumpstart our journey into the legislative session, here is a video on Governor Mead's signature project, ENDOW. ENJOY!

Monday, December 18, 2017

New Normal in County Business Data

Last week I reported on a slight improvement in the job market in Wyoming, but I also pointed out that it was combined with a negative trend in wages. Today, we are going to take a look at more county-level data and what it means for the near-term future of our state's economy.

To begin with, during the economic decline our state has seen a notable decline in private-sector business establishments.

Sunday, December 17, 2017

Infringements on Property Rights

My latest essay on Larson's Political Economy takes a look at the Teavana and Colorado baker cases, and what they mean for the concept of property rights:

Friday, December 15, 2017

Poverty in Wyoming on the Rise

I never thought the day would come when New York has a fiscally more intelligent governor than Wyoming. Yet here we are. While Governor Mead is pushing as hard as he can for his "economic development" ENDOW program, Governor Cuomo of New York is exhibiting some fiscally conservative character traits. Explains the Times Union out of Albany, NY:

Thursday, December 14, 2017

WyoFlot Still Ready for Take Off

The upcoming legislative session is already packed with fiscally dangerous ideas, most of which is in the $475 million pile of tax hikes. On top of those hikes is the ENDOW report, which is now coming down to the wire.

Since Governor Mead seems to have decided to make ENDOW the crown jewel of his gubernatorial tenure, it is not very surprising that his crew, working on the report, is pushing hard to give Mead a product that can sail through the legislature. Unfortunately, they are still heavily invested in WyoFlot, one of the most irresponsible ideas for spending taxpayer money I have seen in a long time.

Wednesday, December 13, 2017

Tax Reform Won't Make Dent in Deficit

As I have explained before, the tax reform that Congressional Republicans are working on is designed to secure as much tax revenue as possible, while still cutting taxes. In my latest piece for the American Institute for Economic Research I explain that this reform will make no real difference to our government's deficit problem:

Tuesday, December 12, 2017

County Data: Jobs Better, Wages Weaker

New county-level jobs and earnings numbers are in. The results are encouraging and disappointing - but even more so: predictable. 

Let us start with the encouraging part. In my last county-level labor market analysis, I noted that in the first-quarter private sector jobs numbers, only four counties saw growth in private-sector employment. For the second quarter, six counties climb into the job-growth bracket compared to the same quarter last year:

Monday, December 11, 2017

A Coordinated Effort To Raise Taxes

Despite mounting resistance from taxpayers, our statist politicians continue to push for their tax hikes. The latest example is a devious proposition from Campbell County Commission chairman Rusty Bell - and he is kind enough to draw our attention to a coordinated effort between state and local lawmakers to raise more than just our state taxes. 

Before we get to it, a quick piece of information that provides a good background. We all know that government produces essential services that we need for a functioning, orderly society and a strong economy. Those services are: 

Sunday, December 10, 2017

WyoFlot Q and A

With reference to the ENDOW plan's idea for a de facto state-run airline, an anonymous reader commented:

Taxes, Income and Growth

My latest on Larson's Political Economy offers some comments on the macroeconomic prospects of Trump's tax reform:

Friday, December 8, 2017

A Plan to Save Wyoming

I have said it before, and I will say it again: this upcoming legislative session is a do-or-die moment for Wyoming. 

As 2018 approaches with frightening speed, let us take inventory and see where we are at today. Here is a quick rundown of our economic problems, our political hurdles and some of the solutions that can bring us back on track to prosperity and growth.

Economic problems

Thursday, December 7, 2017

Statist Rhetoric and How to Respond

The fight against Taxmageddon is making progress. The Revenue Committee has now, twice, postponed votes on their tax monstrosity. Their latest approach is to piecemeal it through, hoping to fly under taxpayers' radar.

Assorted statists provide increasingly aggressive support for these tax hikes. They use all kinds of arguments about how government is not growing, government has been starved and cut to the bones, and so on. As we approach the 2018 session - one of the most important in our state's recent history - the debate over the size of government is only going to intensify.

Wednesday, December 6, 2017

Tax Reform Entrenches the Welfare State

In my latest article for the American Institute for Economic Research, I explain how the GOP tax reform is the first of its kind - and not in a way that will make conservatives happy:

Tuesday, December 5, 2017

Mary Throne Puts on her Spending Pants

While the governor, the Appropriations Committee and the tax hikers in the Revenue Committee are busy pulling more spending and truck loads of higher taxes through December and into the legislative session, gubernatorial hopeful Mary Throne has taken the opportunity to sharpen her candidate profile. 

This is no coincidence. Next year's election is going to be an election over taxes, spending and the very economic future of our state. Throne, savvy as she is, knows which way the wind is blowing and wants to establish herself on that arena.

Monday, December 4, 2017

Half A Billion Dollars in Higher Taxes


This is it. This is do or die for the Wyoming economy. As we speak, the Joint Revenue Committee is meeting here in Cheyenne, with tax increases on their agenda that, if they all go through, will raise our taxes by $477 million. 

This is only the beginning. As a member of the legislature explained in a comment on the open Facebook group Wyoming Prosperity, the number discussed among legislators is $700 million. (If you haven't joined Wyoming Prosperity yet, please do so. We are going to need this group now more than ever.)

Sunday, December 3, 2017

Who Needs Democrats in Wyoming...

...when we have Republicans who tax and spend like drunken liberals?

I hope you are sitting down for this. If you have an allergy to tax hikes, please stop reading right here, because what I am about to tell you is even worse than I predicted. I never thought they would go this far, so - yes - I was wrong.  But only on the magnitude of the tax madness we are dealing with.

We'll get to it in a moment. First, the bigger picture. In the Governor's mansion, Matthew Hansen Mead is trying to spend more our money as fast as he can.

GOP's Trojan Horse for the Welfare State

My latest for the American Institute for Economic Research:

Saturday, December 2, 2017

Ideological Introspection from Left to Right

Here is my latest essay on Larson's Political Economy:

Friday, December 1, 2017

The Governor's Budget: A First Glance

Yes, it is that time of the year again! Governor Mead has released his budget. 

We are going to get many opportunities to look at it, from all sorts of angles. For now, a first impression: Governor Mead is not living in the same state as we are. His attitudes toward the state budget, and toward the Wyoming economy, have nothing in common with the reality that families, small business owners and taxpayers experience around the state. 

Thursday, November 30, 2017

Education Funding and Teacher Salaries

The Education Recalibration Committee is meeting again. The Casper Star Tribune reports that one of the committee's consultants has presented his findings on the current model for school funding in our state:
A funding analysis of parts of Wyoming’s education system showed that the state spends similarly to its peers in those areas, consultants told lawmakers Wednesday. “It’s comparable to all the studies in general,” consultant Mark Fermanich told lawmakers on the Select Committee on School Finance Recalibration, which is conducting a broad examination of Wyoming’s education system. 

How broad?

Tuesday, November 28, 2017

The Government Pay-Value Disparity

Government employee compensation is a recurring issue in the public policy arena. Since my response yesterday to a reader question about the compensation of employees in government and the private sector, I have received another question about the broader relationship between government employee compensation and government productivity. Since the measurement of government productivity is technically complex - not complicated - and therefore time consuming, for the purposes of this blog I have to restrict myself to a more basic measurement: the relationship of value production to employee compensation. 

Before we get lost in the technical details, let me summarize the findings:

Monday, November 27, 2017

Government Workers Are Well Paid

A blog reader sent a link to an article over at Ballotpedia, discussing the ratio of state and local government earnings to earnings in the private sector. The article, published under Ballotpedia's Verbatim Fact Check banner, explains its purpose:

In a column in September about Connecticut’s budget woes, Matt Walter, executive director of the State Government Leadership Foundation, urged the governor to endorse changes to state-employee union benefits. According to Walter, "Connecticut is extremely generous with its employees, who earn 42 percent more on average than the average private-sector worker in the state — the highest disparity in the country." Is Walter correct? Do Connecticut state employees earn 42 percent more, on average, than private-sector workers in the state? Is that the highest disparity in the country?

Sunday, November 26, 2017

Say No to HR 4174, Part 1

Welcome back.

We start off with a Congressional bill that could have major implications for the current and, especially, future independence of Wyoming as a state. The bill in question, HR 4174, could make it much more difficult for us to carry out necessary reforms to Medicaid, K-12 education and other federally sponsored programs. 

The proof is in the pudding. Superficially, HR 4174 looks like a bureaucratic bill that has few if any policy implications. However, a closer look reveals that HR 4174 is much more than that. It actually lays the cornerstones for the statistical infrastructure that the federal government would need if it wanted to create big, new entitlement programs. 

Put bluntly:

Thursday, November 23, 2017

Republicans Need to Talk Ideology Again

My latest blog article for the American Institute for Economic Research discusses the role of ideology - or lack thereof - in current Republican politics, especially their botched Obamacare repeal:

Tuesday, November 21, 2017

Wyoming GDP Growth: A Closer Look

Every time the Bureau of Economic Analysis releases a new set of GDP data, it is almost a taste of Christmas for us national accounts nerds. Today, the BEA published second-quarter GDP data for the several states.

And an interesting set of data it is. We need to take a look at it, because what is superficially some really good news will be used by some legislators - and, I fear, Governor Mead - to motivate both more government spending and higher taxes.

Sunday, November 19, 2017

Life Is Not a Budget Item

Thanks in good part to Senator Bouchard, we have been informed about the proceedings of the Labor and Health Committee meeting this week. One of the bills discussed in by committee has to do with organ donations (allegedly 18LSO-0302). What we know so far is that this bill would change the presumption of consent: unless you opt out, you would be an organ donor.

With the reservation that I have not seen the actual bill - it is not available on the committee website - it is worth taking a closer look at what motivates the very idea that we should all be presumed organ donors.

On the face of it, this sounds like a good idea. After all, who needs his body after death? 

Friday, November 17, 2017

County by County Jobs Update, Part 3

Here is the third, and final, installment of the survey of jobs and earnings by county. We have already seen that private-sector employment is down in almost every county; reluctantly, our state and local governments have slowly begun adjusting their workforces downward. That process, though, is neither fast nor big: the Government Employment Ratio (GER) has gone up and remains high across the state. In six counties, the GER is higher than 400; in three of those it exceeds 500!

Simply put: there are counties in Wyoming that depend more heavily on state-and-local government jobs than some European welfare states.* 

Thursday, November 16, 2017

Another Leftist Ad-Hominem Rant

For the most part, the political discourse here in Wyoming is civilized and respectful. The only consistent exception from that is when the far left gets involved. Every time they speak up, it seems as though they have to throw foul language and ad-hominem attacks at people they don't like. Perhaps the most pathetic example of this version of verbal mudslinging is found on a website called Blabber Wyoming

On November 15 this outfit did another personal hit job on a Republican they don't like. Their target this time is Wyoming Republican Party Secretary Charles Curley, and the reason is his testimony against higher taxes at the November meeting with the Revenue Committee. 

County by County Jobs Update, Part 2

On Tuesday, I reported the latest county-by-county jobs numbers from the Bureau of Labor Statistics. I noted that there has finally been a change for the better in the balance between private and government jobs: the state, our counties, cities, towns and school districts have begun adjusting their workforce - slowly, though - to the serious decline in private-sector employment. 

Wednesday, November 15, 2017

The Republican Path to Single-Payer

My latest piece for the American Institute for Economic Research:

With their apparent political agony before the universal-coverage principle, Republicans in Congress have opened the door for America’s egalitarians to further expand government’s role in medical care, and our lives in general.  

Tuesday, November 14, 2017

County by County Jobs Update, Part 1

Yes! Time for another update on employment and earnings by county! Today, let us take a look at employment. 

As explained in the September TRENDS report from the Department of Workforce Services, some parts of the state have - not surprisingly - taken a bigger beating than others.

Monday, November 13, 2017

Millionaire Tax Coming to Wyoming

 A state lawmaker from Jackson is working on a bill that would allow voters in Teton County to decide whether to tax the sales of million-dollar homes. Rep. Andy Schwartz said it would allow county commissioners to ask voters to approve the tax on homes that sell for $1 million or more. It would range from 1 percent to 2 percent based on the price. The bill would only apply to counties where annual property sales exceed $600 million. Teton County is the only one that meets that threshold although Schwartz, a Democrat, is open to lowering the figure if other counties want the taxing option. Wyoming Realtors president and Jackson real estate agent Devon Viehman says such a tax would make all housing less affordable.

Friday, November 10, 2017

Refuting the "Rural State" Argument

How many times have you heard that Wyoming needs a big government because we are a rural state? I have heard it so many times that I decided to do a little number crunching to see whether or not there is any truth to this statement. 

The answer is: no. Wyoming is still an outlier, perhaps even more so in this context than usually.

Thursday, November 9, 2017

Some Victories - And Moving Forward

Dear Friends and Adversaries (yes, I know you read this blog...),

It has been a good couple of days so far this week. The Joint Revenue Committee, under the stewardship of Representative Madden, is on the defensive. They did not dare confront us voters and taxpayers in their meeting this week. Instead, they postponed as much as they could of their agenda to their meeting December 4-5, also here in Cheyenne. 

Wednesday, November 8, 2017

Your Civic Duty: Drink and Smoke

Yesterday the Revenue Committee cowardly defaulted on its promise to actually consider, debate and vote on a stack of bills to raise taxes. Too many of you let them know what you think, so instead of getting the message and refusing to raise taxes, they simply postponed their contribution to Taxmageddon. 

Not all of our legislators express such shame over their desire to grab more of our money. Some of them are open and honest about it, and for that they deserve recognition. An honest statist is more respectable than a dishonest conservative. 

Tuesday, November 7, 2017

Investment Income Is No Tax Substitute

Friends - good news! At its meeting here in Cheyenne today, the Joint Revenue Committee postponed its hearing of testimonies - and, most important of all, its votes - on a series of tax-hike bills. They are scared to touch these bills; they are feeling the groundswell; your voices matter!

That does not mean they have given up. They are going to try again at their next meeting, in the first week of December. They are betting you will have forgotten about it by then.

But you won't.

Monday, November 6, 2017

That "Funding Gap" Chart Again

Today, the Revenue Committee gets together here in Cheyenne to decide what tax hikes they are going to send to the legislature for its 2018 session. Predictably, as part of their arguments, the tax hikers once again rely on the so called "funding gap" chart from the Economic Analysis Division. This chart is supposed to show that we taxpayers only pay for a few percent of what we get from government.

Sunday, November 5, 2017

When Liberals Got Together - All Five

The left has a habit of accosting meetings held by conservatives, where they often behave disruptively and aggressively. Conservatives always allow them to come, and show them both courtesy and respect. So, I decided to see what would happen if I attended one of their meetings. 

Today, TaxWyoming - a coalition of leftist factions such as BetterWyoming, FurtherWyoming and such - held a meeting between 4PM and 5PM down at a bar here in Cheyenne. I went there at 4PM, sat down and looked through one of their "brochures". I did not talk to anyone, just sat there and waited to see if they were actually going to have a meeting. 

Friday, November 3, 2017

Wyoming Can Benefit from GOP Tax Plan

Yesterday, the Republican leadership in the House of Representatives finally presented their tax plan. Or reform, if you want to be generous.

This is not a great reform. Or plan. By a stretch, it is a good plan. The most accurate conclusion is that it is "alright". Halfway between a cheeseburger and broccoli.

Don't get me wrong - there are a couple of really good features in this tax plan. The cut in the corporate income tax stands out as the single best idea of them all, especially since it is combined with a full expensing of business investments. This is going to have substantial effects in capital-intensive industries, and it is definitely going to make us stronger in the next recession.

Wednesday, November 1, 2017

Your Property Tax Will Go Up

Here you go, folks:
AN ACT relating to ad valorem tax; increasing the property tax assessment rates for property used for industrial purposes and for all other property as specified; providing for the creation of and distribution of funds to the property tax refund program account; providing sunset dates; specifying applicability; and providing for an effective date.
This one is not yet listed under the Revenue Committee as a bill draft, but it is written to be sponsored by the committee. Currently known as 18LSO-0144 Working Draft, this bill wants to:

Tuesday, October 31, 2017

The Road to Egalitarian Serfdom

Update: As it happens, my good friend Dan Mitchell today published a piece on his blog that is highly relevant for this article. See inserted link below.
I appreciate all the inquiries about subjects for this blog that I get from all you readers out there! I do my very best to keep up with them and work them into my own schedule of topics to write about. Please keep your suggestions coming.

Today's article addresses one of those reader suggestions. Some leftist activist has put together a video about "trickle down tax cuts" that apparently has gotten a lot of attention in Wyoming news media. The video, which you can see here, is almost humorous in its unashamed bias and lack of substance, but we obviously cannot respond to it at that level. Unfortunately, bad information is sometimes elevated to a point where it is taken seriously. 

The overall message in this video is two-fold:

Sunday, October 29, 2017

The Spendoholics Strike Back

Never bark at the Big Dog. The Big Dog is always right.

How many times have I warned that the tax-and-spend welfare statists are not going to give up? How many times have I said that stopping tax hikes, and reckless spending ideas like WyoFlot, is merely the end of the beginning?

Beware. Be vigilant. The big spenders are back.

All it took for the spendoholics to cork up another bottle of taxpayers' money is the latest CREG assessment of state government revenue. Reports WMOT Roots Radio:

Friday, October 27, 2017

Another Piece on Tax Foundation Rankings

Behold my latest article for the American Institute for Economic Research:

Economic Growth Defies Tax Foundation Ranking

Tax Hikes or Spending Cuts: The Big Picture

There are many reasons why we need to stop habitually cry for higher taxes as soon as a budget deficit opens up. For one, a few hundred million dollars of higher taxes would throw us straight into a new depression - the serious downturn we have just been through would be mild compared to what $400 million in higher taxes would do to us.

Thursday, October 26, 2017

Wyoming Jobs: Big Government, New Normal

As a follow-up on yesterday's article, here is a review of the latest employment numbers from the Bureau of Labor Statistics (BLS). The overall picture is not very surprising: we are in a weak state of stability that can go either way, depending on what the legislature does in the upcoming session. 

Aside the points I made yesterday about the economic forecast for our state, there is one important piece of information in the latest BLS numbers that I would like to draw attention to. It is not something sensationally new, but rather the reinforcement of a trend that has been going on for a bit too long in our state.

Wednesday, October 25, 2017

CREG Confirms New Economic Stability

Friend: "Do you watch 'The Walking Dead'?"
Me: "No, but I want term limits for them."

I don't know how we got on the topic of horror shows on TV, but we started out discussing the Wyoming economy. Yesterday the Wyoming Tribune Eagle spent half its A2 page on that particular topic. The article was surprisingly sober, almost somber, in its realism and messaging.

Tuesday, October 24, 2017

Another Useless Tax Index Ranking

The Tax Foundation has released its latest issue of the State Business Tax Climate Index. This is the annual product that Governor Mead loves to quote, because it raises Wyoming to the skies as the best of all 50 states for businesses. 

Over the years I have repeatedly criticized this index, pointing in particular to the fact that there is no correlation whatsoever between a state scoring high on this index, and that state's economic performance.

Monday, October 23, 2017

WyoFlot Is Grounded

Today, I drove up to Casper to testify before the Minerals and Economic Development Committee. Five hours on the road, round trip, for a quick public comment on the WyoFlot bill that was supposed to go to the legislature as a committee bill.

It was worth it. After supportive testimonies from Mr. Swelbar, the consultant, and the Aeronautics Division of the Wyoming Department of Transportation, a couple of more supportive voices were heard in the public comments section. I was the only critic.

Friday, October 20, 2017

Laramie County GOP Says No New Taxes

The only way we are going to win the fight for our state's economic future is by means of grassroots activism. There is a lot of it going on around the state, and it is having an effect. We need more of it, though; most welfare statists who say they don't want to raise taxes are just waiting for the grassroots to get tired and go do something else. 

That is the last thing we can do right now.

Thursday, October 19, 2017

Paid Leave: Trump's Gift to the Left

Never bark at the Big Dog. The Big Dog is always right.

It is not just at the state level we are fighting to turn the tide on big government. Even with Donald Trump in the White House - and overall I think he is a good president - there is a significant risk that the egalitarian welfare state continues to grow. One example of this is the paid family leave program that President Trump included in his budget for fiscal year 2018. Contrary to what seems to be the prevailing opinion, this idea has neither died nor shrunk in fiscal size. My previous warnings about this budget boondoggle stand firm. 

Wednesday, October 18, 2017

WyoFlot: Pervasive Lack of Logic

There is an old saying that you can't turn goat's pee into gasoline. Some people try, though, and one of the bravest examples I have seen recently is the report that the Minerals and Economic Development Committee ordered in support of its WyoFlot plans.

Tuesday, October 17, 2017

WyoFlot: Coming to an Airport Near You


AN ACT relating to aeronautics; establishing the Wyoming 2 commercial air service improvement act; providing 3 legislative findings; creating the Wyoming commercial air 4 service improvement council; prescribing duties; 5 authorizing contracting; creating an account; providing an 6 appropriation; and providing for an effective date.
As we have been anticipating... the Minerals and Economic Development Committee has released a draft version of a bill to create a state government airline in Wyoming. 

Monday, October 16, 2017

Instead of Tax Hikes: Parents in Charge

I have more to say about taxes and personal income, but the second part will have to wait a couple of days. Based on an inquiry from a blog reader, I would like to take the opportunity to expand on one of the ideas for spending reform that I put together in A New Chapter for Wyoming.

First of all, let us establish the conditions that spending reforms must meet. They all have to:

Friday, October 13, 2017

Taxes vs. Personal Income

There is some interesting data on its way out in the next couple of weeks, both from the Census Bureau and the Bureau of Economic analysis. With those numbers in hand, we will be able to make more predictions about where the Wyoming economy is heading.

Until then, let us continue the exploration of the relationship between personal income and taxes in Wyoming. We will do this in two steps: today's article looks at how much taxes we really pay in our state, compared to personal income; a second installment will compare our tax burden to other states. 

Thursday, October 12, 2017

An Update on the 2018 Governor's Race

We are just over a year away from one of the most critical elections in our state's recent history. Next year in November we will determine which way the legislature will go: left toward more spending and higher taxes or right toward less government, parent choice in education, health care freedom and private-sector driven prosperity. 

Next year's election is also critical because it will decide who is going to be our next governor.

Wednesday, October 11, 2017

Wage Report Raises Questions

They say there are lies, damned lies and statistics. I don't subscribe to that, but with 12 years as a political economist in public policy, and a total of 17 years as a Ph.D. economist, I also know that people in influential positions often try to twist statistical facts into verifying their particular position. 

Tuesday, October 10, 2017

Fewer States Let Income Be Tax Free

My latest piece for the American Institute for Economic Research:
What do Alaska, Connecticut, and Wyoming have in common? They have all tried to get by without an income tax. Soon, Alaska and Wyoming may do what Connecticut did in 1991: start taxing income.

Government Pay: We Stand Out Again

One of the arguments we often hear for why it is good to raise taxes in Wyoming, is that our state has a relatively low cost of living anyway. After all, compare to California and New York and Wyoming is downright a bargain. 

There is just one problem with this argument: Wyomingites in general do not make that much money. In the private sector, with the exception of the approximately ten percent who work in minerals, an average employee pulls in some $37,000 per year. If that were the average personal income in our state as a whole, we would be one of the three worst-off states in the country.

In fact, even if we adjust for cost of living, that average non-minerals private-sector income would put us among the poorest states in the nation. 

Statistically, though, we do not rank among the poorest. On the contrary, as my good friend and fellow economist Byron Schlomach explains in a new research report, Wyoming actually ranks right at the top in personal income. 

Schlomach reports that when personal income per capita (not per employee, which I use) is adjusted for cost of living, Wyomingites have $58,359 in pre-tax income at their disposal. This is the highest number in the country; Connecticut is second ($55,574) and North Dakota third ($55,524).

How is this possible? How can Wyoming, a state where most private-sector employees average three grand a month before taxes, suddenly rank as the most affordable place to live and earn a paycheck?

The reason is not sloppy work on Schlomach's behalf. He is a solid economist who, in his report, takes careful measures to qualify his findings and caution against runaway conclusions. That said, like any other economist he is stuck in a methodology that someone once summarized with the words: you get the answers you ask for. In using traditional economics methods, Schlomach has to narrow down his focus and leave out some real-world factors that - if brought into the picture - would dramatically alter his conclusions. 

The good thing with Schlomach's study, aside the fact that it is a solid piece of research worth reading, is that he makes a meaningful contribution by defining cost of living in a realistic fashion. In doing so, he establishes that Wyoming's overall cost of living is somewhere in the lower third of all states, in a strictly relative comparison. Using a realistic definition of cost of living, he makes a good case for Wyoming as a relatively affordable state. 

There are, however, two points where his study somewhat skews the picture of cost of living here in Wyoming. First, there is the problem with the sharp division between minerals and non-minerals jobs. Even though our state is suffering from the decline in the coal industry, the difference in earnings between minerals and non-minerals jobs has remained. This, in turn, is due to the overall weakness of non-minerals industries; when minerals production and employment decline, there is no secondary industry there to step in. Incomes outside minerals remain depressed. 

The second point has to do with government - and I have to criticize Schlomach for overlooking this factor in his study. Not only does government artificially drive up compensation of its employees, but the government employment ratio varies substantially between states: in Wyoming, we have some 300 state and local government employees per 1,000 private employees, while in other states the ratio is less than half of ours. 

A high government employment ratio, combined with a big difference in earnings between government and the private sector, can together make a statistically identifiable difference.* The comparatively high per-capita personal income number for Wyoming is partly the result of a very large, well paid government workforce. 

Government employees make more than private employees in every state, thereby pulling up average income. However, the disparity varies quite a bit. Figure 1 shows compensation of employees, per state government employee, per dollar earned by a private employee. In other words, for every $1.00 of compensation of one private employee, a state government employee earns $1.90 in compensation:

Source: Bureau of Economic Analysis

Wyoming ranks fifth-highest in the country, more than 20 percent above the U.S. average, and 52 percent above Indiana, ranked 50th, where the state employee makes $1.25 in compensation per $1.00 of a private employee.

On the local-government side, things do not look much better for Wyoming:

With a compensation disparity of $1.77, we are now 19 percent above the U.S. average, and 51 percent above Kansas, which is dead last at a $1.17 compensation disparity. 

Already here, we have a reason to believe that government is skewing the personal-income numbers in Schlomach's report. But the most compelling numbers on artificial inflation of government employee compensation are reported in the so called government compensation ratio in Figure 3 below. Here, we compare total employee compensation in state and local governments to total employee compensation in the private sector. The percentage we get is, so to speak, a hypothetical tax rate that private-sector employees would have to pay, if state and local government workers got paid directly out of private-sector compensation. 

In other words, in Wyoming in 2016 all private workers made a total of $11.8 billion, and state and local government employees earned almost $4.4 billion in total compensation. This comes out to a ratio of 36.8 percent: if we privately employed paid for our state and local government employees directly out of our paychecks, we would lose almost 37 cents out of every dollar we made:

Figure 3

U.S. average is 17.7 percent. Once again, Indiana comes in dead last at 13.9 percent. This discrepancy makes me wonder what eminent, brilliant services we get from our government employees that Indiana residents have to give up. And no, it is not a matter of us being a rural state: in North Dakota, this government-to-private compensation ratio is 18.5 percent, or almost exactly half of ours. In South Dakota it is 19.4 percent. In Idaho, 20.4.

If we had the same compensation ratio as North Dakota, Wyoming taxpayers would get to keep more than $2.1 billion per year. Inject that back into the private sector, folks, and you would see substantial economic growth and persistently rising prosperity. 

The numbers reported in this article clearly demonstrate that Wyoming looks artificially prosperous, especially when adjusted for cost of living, and that over-inflated compensation of government employees is a major contributor to this artificial image. 

These numbers also demonstrate, beyond a shred of a doubt, that we have built a government sector in our state that is indefensibly expensive. Let us keep that in mind as we continue our arguments with those who want to raise our taxes by up to half a billion dollars. 
*) I purposely do not use the term "statistically significant". I do not want to make this a peeing contest between different regression models. For the purposes of public policy, a modest diet of statistical methodology is highly preferable. I will be happy to elaborate in case anyone is interested.

Principles of Liberty Classes

Here is an important announcement. I am not affiliated with Principles of Liberty, but I do support their cause. I recommend you participate if you have the day off!


Sunday, October 8, 2017

When Egalitarianism Strikes

Sometimes, it is important to take a step back from the issues pertaining to our daily work to save Wyoming from its tax-and-spend activists. Our focus must always be on the threat of higher taxes, and the detriments of frivolous government spending, but there is also a broader discussion we must sometimes delve into. This is a discussion of ideas and political and economic theory, the ideas that ultimately help us set course for the horizon, to aim for the kind of country and society we really want.

One of the essential questions at that level is about the proper role of government.

Friday, October 6, 2017

More Taxes Coming Your Way

Last week I reviewed the tax increases we can expect from the state legislature and the governor's ENDOW program, as well as some of the demands from the Wyoming Association of Municipalities. I concluded that in total, we are looking at about $500 million in higher taxes on families and businesses here in Wyoming.

Sadly, that is not all.

Thursday, October 5, 2017

Poverty Trend in Weak Household Spending

In their much-anticipated data on personal consumption, the Bureau of Economic Analysis has some sinister new numbers to report. 

Not for the country as a whole - generally, the U.S. economy is still moving along at a decent pace. If Congress could get Trump's tax reform done, we might be able to extend, even accelerate our current growth.

Again, that refers to our country as a whole. As far as Wyoming goes, the latest private-consumption numbers, from 2016, are not exactly good news.

Tuesday, October 3, 2017

A Lesson on the Income Tax

Nobody wants an income tax in Wyoming. Right? 

If you ask our legislators directly, almost all of them will state clearly that they will never vote for an income tax. Some of them are honest to the core in their answer; others will play on the semantics of the question: so long as you ask about an income tax proper, they think they can be honest with you and still get away with voting for an income tax.

Monday, October 2, 2017

Sober Analysis from State Economist

This blog's readership continues to grow! August was a record month, and September reader volumes inched even a little bit higher. Thank you, Wyoming!

There is a lot to get to this week. We now have a good idea of just how big, broad and serious the threat is to our state's economic future. Those who claim they are working the hardest to save us - our Governor and the legislative leadership - are in reality the ones whose policies are the greatest threat to the future of this great state.

Saturday, September 30, 2017

The Price for GOP Tax Reform Failure

In my latest piece for the American Institute for Economic Research, I highlight the consequences of a Republican failure to pass tax reform through Congress:

When Representative Cheney was on KGAB here in Cheyenne on Friday morning, she expressed confidence that Trump's tax reform plans will have a bigger chance to pass Congress than the repeal-and-replace Obamacare efforts. I like our Representative; Ms. Cheney is an intelligent politician with integrity, a worthy successor to Cynthia Lummis. However, as far as tax reform goes, I have my doubts. I will believe it when I see it.

Friday, September 29, 2017

The Freezing Point of the Human Intellect

This article is about something I usually do not delve into, but I cannot let this one fly. I have seen Catherine Rampell's "opinion columns" in the Casper Star Tribune for a while, and they are always of such poor quality that it has not seemed worth the while to discuss them. But after having considered a subscription to the paper, I decided to take a closer look at Rampell's rants.

After doing so, I decided against a subscription. Why? Glad you asked.

Wyoming The Tax Hike State, Part 2

Yesterday I gave an overview of what tax increases we can expect at the state level: tallying up the worst-case, but increasingly likely scenario, we are looking at half-a-billion dollars in higher taxes. This tax shock - which, I repeat, is no longer unrealistic but increasingly probable - would probably be introduced over two years and would come in the form of assorted "small increases" this year and an entirely new tax the year after. 

In other words, it would be foolish - to say the least - to dismiss this scenario as something not-gonna-happen absurd concoction of conspiracy theorists. This is Taxmageddon on the horizon.

Thursday, September 28, 2017

Wyoming The Tax Hike State, Part 1

Between the legislature, Governor Mead, the Wyoming Association of Municipalities and assorted local tax efforts, we as a state could easily be facing half a billion dollars in higher taxes.

Half a billion dollars. 

Tuesday, September 26, 2017

GOP: Do You Realize What You've Done?

Dear Republican Members of Congress,

I seriously doubt that any one of you really understands what you have just done:

Work-Based Income Keeps Falling

For natural reasons, people often compare Wyoming to Alaska. Our dependency on minerals is comparable, both in terms of the overall economy and government dependency on minerals-based tax revenue. There are, of course, geographic differences that make economic life easier in Wyoming, but from an overall fiscal policy viewpoint, Alaska is a good object of comparison for us here in the Cowboy State. 

Monday, September 25, 2017

Health Care Socialization: An Update

A while back I wrote an article about a troubling tendency in our state's health care industry. Of all hospital employees in our state, the share working for private employers is dwindling. While the total number of hospital employees has been rising, the number of them who are privately employed has hovered steadily around 3,000: 

Friday, September 22, 2017

Kansas Tax Cuts: The Real Story

The welfare statists here in Wyoming, in their fear of tax cuts, are beginning to once again toss out references to the "failure" of tax cuts in Kansas. Among them, Better Wyoming's July 10 article is one example; back in June, Wyoming Public Media also gloated over the Republican back-pedaling in Kansas. 

That was this summer. As the fight for Wyoming's future tightens, the so-called failure of the Kansas tax cuts will most certainly jump to the frontline of the debate again. Yesterday, CNBC reporter Kate Rogers made her contribution at the national level:

Thursday, September 21, 2017

Don't Rock the Economic Boat

Bad but nor surprising news: former U.S. Representative Cynthia Lummis
has ruled out running next year for governor of Wyoming. Lummis says that she had seriously thought to running [sic] for governor but ultimately decided that she wanted more personal time and freedom from politics. 
The political grapevine had it already in early August that she was "probably" not going to run. Too bad. She is an unrepentant fiscal conservative and has a lot of backbone. We need someone of her caliber to lead our state out of the fiscal and macroeconomic mess we are in today. 

Wednesday, September 20, 2017

Another Piece on Paid Family Leave

My overview of the paid-family leave idea for the American Institute for Economic Research:

For an in-depth analysis of this issue, see my first Paper on the Welfare State:

Tuesday, September 19, 2017

America's Last Wake-Up Call

Great news!

In two short weeks, my new book 

The Rise of Big Government
How Egalitarianism Conquered America

will be available online and in book stores. 

This book is America's last wake-up call. It exposes the true nature of the American welfare state like you have never seen it before. It traces the roots of egalitarianism straight back to their ugly origin. And it minces no words explaining what a price we are about to pay for letting egalitarianism conquer the Greatest Nation on Earth.

In the name of fighting "inequality", the United States of America is sliding straight down into the dungeon of industrial poverty and serfdom. We are transforming our country with...

  • Runaway debt - which is already imposing an enormous extra tax burden on our children, just so we can all live in an egalitarian dreamland;
  • Perennially slow growth - for the first time in our history, children will grow up to a life less prosperous than their parents have, all in the name of creating and maintaining an egalitarian society; and
  • The demotion of life - the United States is closer than most people realize to a single-payer health care system, and when that system is a fact, life itself will become a cost item in the government budget.

Like never before, this book exposes the ideological origin of the American welfare state. That ideology has roots as ugly and immoral as you could ever have guessed: it prescribes eugenics, talks about people as "the population stock", wants parents to be reduced to mere feeder units for their children... 

The roots of the American welfare state go even further, advocating forced sterilization and other measures to "enhance" the quality of the workforce. All so that government can maximize its tax revenue.

So far, we have not seen the truly dark side of the welfare state. But soon enough, we will.

This book is America's last wake-up call. It is the last cry to convince the greatest nation on Earth to turn back from the road to egalitarianism and serfdom.

Thank you.