Opinion: Daily Journal

Round and Round He Goes

RALEIGH – Time to clear out my notebook again.

During legislative sessions in particular, I accumulate a number of ideas that never quite make it into full-fledged columns. This time around, I ended up saving interesting readings or clippings on issues about which I had already written. So what I’ve decided to do for today is to offer them in bullet form, along with handy links for you to circle around and read my initial take on the subject.

Here we go:

Video gambling. By an overwhelming majority, the General Assembly has passed yet another prohibition bill against North Carolina’s video-gambling industry. You may remember that lawmakers “banned” video poker in 2006, only to witness the proliferation of new “internet sweepstakes” businesses that offered a similar opportunity to play. Now that the 2010 ban has been approved, should we expect the gambling industry to go poof on December 1?

Of course not. There are too many stores, employees, and customers at stake. Instead, expect a two-part strategy: redefine the business model yet again, and prepare to litigate the matter. Here’s a hint from a store manager in Wilmington:

“We actually have a back-up plan. “We’re not throwing in the towel. Our manager/owner evidently saw this possibility months ago, because he’s been working on a back-up plan. When December 1 rolls around, we’re not shutting our doors. We have something new lined up.”

As I wrote last month, it is not only paternalistic for the state to meddle in the private gambling choices of North Carolinians. It is also expensive and fruitless.

State ports & railroads. Supporters of a new international shipping terminal at Southport didn’t get the state funds they wanted for a feasibility study of the project. Instead, lawmakers got a broader idea inserted into the annual study bill: whether state government ought to merge the North Carolina Railroad, the ports at Wilmington and Morehead City, and the troubled Global TransPark project into a single freight-management authority or agency.

I’ve written on all these subjects separately: the value of freight rail and folly of passenger rail, the proper disposition of state ports, and recent developments at the TransPark. Should they all be merged together? Only a prelude to selling the transportation assets to private firms.

University Funding. Jay Schalin of the Pope Center for Higher Education Policy has just published a new paper “rethinking the impact on economic growth” of states pouring gobs of taxpayer dollars into higher education. He examines the economic models used to predict growth effects from university spending, as well as particular cases such as the high-tech corridors that developed in Boston, Silicon Valley, and the Research Triangle Park.

Schalin concludes his analysis of this complex subject by arguing that “the current general levels of public spending on higher education are very likely too much of a good thing, limiting economic growth rather than promoting it.” If you like to hear more – or argue back at Jay, he can certainly take it – you should attend a Pope Center event on July 20 in Raleigh where he and N.C. State economist Doug Pearce will discuss the issue further.

I last wrote on a related subject last month.

Financial Reform. Also in June, I wrote in the context of business subsidies and financial regulation that you should always “judge politicians by what they do, not what they say.” Now that the financial-reform package seems likely to get through Congress, it’s worth noting that liberal politicians have again blabbed about dastardly corporate insiders while giving them a pass and another crack at your tax money.

Why does the package fail to include the single-most important reform: abolishing the implicit taxpayer guarantee for Fannie Mae and Freddie Mac? Because, reports Bloomberg Businessweek, lobbyists for the nation’s biggest banks and mortgage lenders demanded that the bailout bait continue. Otherwise, they said, investors might not buy mortgage-backed securities. Uh, shouldn’t that tell the politicians something?

Yes, but they don’t hear so good. Or don’t care.

Hood is president of the John Locke Foundation.