Job-killing regulations

Want a great example of a job-killing regulation? Take a look at the new immigration law that Alabama Republicans enacted. Last week, the law's provision requiring police to detain undocumented foreigners netted an executive from Mercedes-Benz. CNN reports

Fierce critics of Alabama's controversial new immigration law -- and one of its staunchest supporters -- are pointing to the arrest of a German Mercedes-Benz executive last week to make their case.

Police in Tuscaloosa, Alabama, pulled the man over because of a problem with the tag on the rental car he was driving, and then detained him when he didn't have proper identification on hand, according to Alabama's homeland security director.

What could be more business friendly?

You better believe that foreign and multinational businesses are going to think twice before setting up shop in Alabama and other states with similar provisions.

North Carolina's job recession continues

Yet another month has passed, and we're left to ask "where are the jobs that Republicans promised with their tax-cutting austerity budget?"

This morning, the Department of Labor released its monthly report on state employment and unemployment. Compared to the rest of the country, North Carolina continues to under-perform.

The state's seasonally-adjusted unemployment rate edged down from 10.5 percent in September to 10.4 percent in October. In June, the month before the Republican budget went into effect, the unemployment rate was 9.9 percent. Also, a substantial part of October's decline was due to 3,500 North Carolinians leaving the labor market and thus no longer being counted as part of the unemployed.

On a seasonally-adjusted basis, the state added a measly 5,500 jobs in October. On net, private sector jobs were unchanged--the slight gain in jobs came from the partial recovery of state and local government jobs. The number of jobs continues to be substantially lower than this spring and to largely reflect net changes in public employment.

After overriding the Governor's veto of their budget in June, the Republicans bragged

In November 2010, the people of North Carolina used the ballot box to send a message to North Carolina lawmakers: State government must reduce costs and regulation on the people, so that they can create jobs and prosperity. Years of overspending by Democrats had given North Carolina the highest tax rates in the Southeast and a budget shortfall of at least $3 billion. High taxes were killing jobs.

...Our budget contains the largest tax rate cut in the history of North Carolina. It makes our state more competitive with our neighbors again. It puts almost $1.5 billion back in to the hands of hard working North Carolinians.

Funny thing about those job-killing high taxes, they were associated with thousands more jobs than the low-tax, competitive Nirvana that Republicans created.

Businesses and wealthy North Carolina households now enjoy lower taxes than they did last year, and they are using that bonanza to create...well, not much of anything at all.

$12.4 million grant sits unused while state Republicans dither

North Carolina recently received a $12.4 million federal grant to help set up its health insurance exchange, but the grant is going unused because Republicans refuse to meet to provide the go ahead.

Millions in federal money has gone unspent for weeks because legislators have put off talking to the state Department of Insurance about how a national health insurance grant will be used.

Lawmakers dropped discussion of the $12.4 million grant from the Oct. 27 agenda of a high-powered group called the Joint Legislative Committee on Governmental Operations. Agencies must consult with the committee, which House Speaker Thom Tillis and Senate leader Phil Berger run, before spending grant money in certain circumstances.

The money is for the state to do prep work for a health benefit exchange that the federal health insurance law would require of all states by 2014. With no grant money to support it, most of the work at the state Department of Insurance and the N.C. Institute of Medicine on the exchange has stopped.

Health insurance exchanges were a feature of both the Republican and Democratic proposals on health care reform and rightly so because the exchanges will increase the availability, transparency, and efficiency of health insurance. There is no good reason not to begin planning for how to set up the state's exchange.

The approach is also counter-productive to Republican goals because it increases the chances that North Carolina will have to operate under a possible federal exchange program rather than a North-Carolina-run and tailored program.

In addition, the delay hurts North Carolina economically. The $12.4 million would provide an economic boost to a state that sorely needs it. Over the last year, North Carolina has effectively had no job growth, and last month, the state had the dubious distinction of leading the nation in job losses. Given that sorry record, you would think that the Republicans would feel some urgency to get the money into the economy.

Instead, much like they did with the federal unemployment money, Republicans are engaged in a senseless, self-defeating, job-killing delay.

Insider trading by Congress?

An article earlier this year by a Georgia State University researcher and colleagues in the electronic journal, Business and Politics, uncovered evidence that suggests that Congressional representatives may have been financially benefiting from insider information.

We measure abnormal returns for more than 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Consistent with the study of Senatorial trading activity, we find stocks purchased by Representatives also earn significant positive abnormal returns (albeit considerably smaller returns). A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually).

As the blurb indicates, the study produced results that were consistent with an earlier analysis of Senators' stock returns, and some of you may recall an earlier insider financial transaction by a panicked Sen. Burr.

The evidence from the latest study is suggestive but far from convincing. First, the evidence is indirect; the authors don't examine insider trading directly but instead try to infer it from stock returns.

Second, the study includes evidence that counters the insider trading argument. For example, the authors found that stock returns were high for junior members of Congress but not for senior members. To the extent that insider knowledge and influence increase with seniority, we might expect the opposite relationship to hold.

Diminishes us all

The New York Times reports on the disreputable and fraudulent actions of a Dutch researcher.

A well-known psychologist in the Netherlands whose work has been published widely in professional journals falsified data and made up entire experiments, an investigating committee has found. Experts say the case exposes deep flaws in the way science is done in a field, psychology, that has only recently earned a fragile respectability.

The identified offenses may have occurred in another discipline and another country, but they damage the scientific enterprise everywhere.

In principle, all of the studies that scientists conduct and publish should be replicable. In practice though, replication rarely occurs, is often impossible, and seldom gets attention or credit if it is conducted. Because of this, the modest amounts of credibility and respect that scientific conclusions muster owe greatly to scientists' reputations for reporting research accurately. Put another way, much (possibly too much) of science relies on trust.

Sadly, researchers like this particular Dutch psychologist treat science as a confidence game. Equally sadly, the psychologist has a lot of company in the scientific community.