John Locke Foundation
As Election Day approaches, you will continue to hear a great deal about hot-button issues that candidates believe may either swing your vote or motivate you to cast it. But few will be as consequential as an issue you probably won’t hear about in 2018 but will matter a lot in 2019: upgrading the grid that delivers electricity to your home.
Duke Energy, the Charlotte-based utility that either generates power for or delivers it to most of North Carolina, proposed a $13 billion plan last year to transform the grid. Of that amount, $4.9 billion will be used to bury existing power lines, $3.5 billion will go to hardening distribution equipment, $2.2 billion will modernize the power lines themselves, and $1.2 billion will modernize the system’s capacity to react quickly to outages and inefficiencies.
The remaining $1.2 will improve Duke Energy’s data analytics, communications, and metering technologies, including the installation of “smart meters” to provide Duke and its customers with real-time information about power usage.
With so many North Carolinians having lost their electricity during Florence and Michael, in some cases for many days, you would think that the idea of burying lines, hardening substations, and increasing the resiliency of the power grid would be popular ideas. And you would be right — in theory.
But in practice, all goods are “good” at some price and not-so-good at some (higher) price. “I know Duke takes it on the chin when a storm comes through,” Preston Howard, president of the North Carolina Manufacturers Association, recently told the Charlotte Business Journal. “But customers have already paid for that infrastructure one time, and now Duke wants them to pay for it again.”
In other words, while burying power lines may be a wise and standard practice for new residential, industrial, and commercial development, spending billions of dollars to bury lines serving existing customers is not necessarily cost-effective. Nor is it necessarily cost-ineffective.
It is partly a math problem: you have to compare the cost of burying the lines against the probability of outages over the ensuing decades and the costs that those outages impose. But it is also a legal problem: whose responsibility is it to pay for burying the lines? Both Duke Energy shareholders and customers would presumably receive whatever net benefits there would be in the long run. What is the likely relative proportions of the benefit? Are those the proper proportions of legal responsibility for the cost?
The line-burial component of the $13 billion plan is probably its most controversial. But a broad coalition of skeptics, extending from business groups to environmental activists, has other concerns, as well. The North Carolina Utilities Commission has already ruled that it lacks the authority to approve the series of rate hikes that Duke Energy requested to finance the modernization of the grid — rate hikes that over the course of the next decade would have raised the average electric bill for residential customers by 25 percent, or roughly $26 a month per household.
That wasn’t an explicit rejection of the plan, mind you. It was a recognition that the General Assembly will have to be involved if North Carolina’s power grid is going to get such a sweeping upgrade.
I think state lawmakers will, indeed, take some action on this issue during the 2019 session. I suspect the original plan will be scaled down significantly. At the same time, however, it will be hard to argue against the concept of making the system more efficient, more resilient (against both storms and intentional attack by foreign adversaries or terrorists), and more accommodating to consumers with differing preferences with regard to both production and usage.
The distribution of electricity, at least, is not a competitive market. Private, municipal, and cooperative utilities enjoy exclusive franchises in their respective territories. At present, there is no alternative to a regulatory system that requires government to make complex decisions with the best information available.
North Carolinians have billions of dollars at stake in the outcome.
During the “dog days” of summer, in what was likely an opening salvo of the 2020 presidential campaign, Sen. Elizabeth Warren of Massachusetts introduced a proposal to alter American capitalism radically. If enacted, large firms would have to incorporate at the federal level and live by a charter that forces them to consider the interests of all stakeholders equally, not regard those of shareholders paramount. Workers must take 40 percent of the seats on the company’s board. The support of 75 percent of both shareholders and board members would be necessary for the corporation to engage in politics.
This is a big deal — not least because many believe Warren has a good chance of being the Democrats’ next presidential nominee. As you can imagine, I have strong views on the plan. Here’s one about the senator’s understanding of the economy: It is already the case that shareholders get paid only after governments, vendors, employees, and creditors have taken their cut. And one on her plan to hinder corporate political activity and level the playing field: Even with the recent Janus decision that prohibited public-sector unions from taking dues out of the paychecks of workers who were not members, labor’s leadership is today as free to distribute money from their organizations’ political coffers as are corporate boards and managers.
But I really want to talk about the broader significance of Warren’s Accountable Capitalism Act. By offering this proposal, the senator joins a number of politicians of the current era, including President Trump, eager to display a lack of understanding of the modern world and confidence in the American way. These leaders’ solutions to their perceived problems rest on a fantastical desire to turn back the clock — both Trump and Warren seem to pine for the rapid growth, greater economic equality, somewhat paradoxical social inequality, and American hegemony of the immediate postwar period.
They want to go back to a time when the world bent readily to American will. American liberal value — free markets, free minds, free movement, and free worship — provided inspiration, a path forward for many countries as they recovered from the devastation of World War II or shrugged off the bonds of colonialism. Others bowed to American economic and military might — strength augmented by international institutions like NATO, the IMF, and World Bank.
Neither Trump nor Warren have a time machine, of course. We cannot go back. And that’s the problem. The crop of leading politicians today, especially on the left but notably Trump as well, are offering solutions that try to obstruct the movement of political, economic, and social tectonic plates. No amount of American power, model behavior, or ingenuity can change their course these days.
These leaders misread our circumstances. The advantages in human capital we have enjoyed for around a century are no longer so great. The world has caught up, in its educational systems, its technical training, and increasingly its technological knowhow. Globalization and the internet revolution have ensured this. The key is to change America at the margins to ride these forces. American economic, political, and social institutions maintain our edge. They permit robust economic growth, attract talented and productive people, and provide crucial freedoms. Trump and the Warren crowd want to revive the 1950s and 1960s, when our foreign-born population was small, trade much less, unions strong, families always nuclear, and workers without college degrees highly paid. No amount of government policy can do that.
Their efforts also betray a lack of confidence. Trump speaks a good game, but he becomes more energized when talking about the past than the future. Leftists argue the “arc” of history is in their favor — they want to be called “progressives” after all — but they largely offer up industrial-era economic policies, repackaged with a heavy coating of identity politics.
America has never been a revolutionary country. Our “Revolution” was an assertion of independence and the ideas of John Locke that were at the heart of British political culture. The Civil War was an internal squabble over an American anomaly, slavery. The Progressive Era and New Deal did not lead to the kind of pervasive welfare state and broad nationalization of business that emerged in Western Europe following World War II.
The last time we lacked this confidence was in the 1970s. Ronald Reagan provided the remedy. He did not have all the answers. But it’s interesting that much of the successful world followed his lead by emphasizing the core ideas of political and economic freedom. Since then, presidential and congressional majorities of both parties have largely embraced this reinvigorated American model, making adjustments at the margins to accommodate developments.
Desperate times often call for big changes. But regardless of whether these times are bad, our experience tells us not to abandon the values that made America great.
Andy Taylor is a professor of political science at the School of International and Public Affairs at the N.C. State University. He does not speak for the university.
Politicians and newsmakers have lately developed a penchant for the words “libel,” “slander,” and “defamation.” Oftentimes these words, salient and distinct, are used carelessly and ignorantly.
Writers and irresponsible journalists have in fact lurched off course — accidentally or deliberately — and sometimes — after costly and lengthy legal proceedings — the aggrieved party is justified in court.
But that’s much more the exception than the rule, and it’s all the more reason to refrain from using the aforementioned words in jest, or in anger.
For reckless use of these words digs at the ground from which this country was born. At the roots of the First Amendment, of free speech and a free press. Of rights not casual but critical to our culture, our republic, and our individual liberties.
The current libel laws are clear and strong, refined and established by our courts, maybe most notably in New York Times Co. v. Sullivan in 1964, when the U.S. Supreme Court established a standard for actual malice, requiring that public officials or public figures prove a statement is false or used recklessly and without investigating its veracity.
Calling a story “false” or “fake” or “made up” because it’s perceived by a group or individual as negative or incomplete is irresponsible and sets a dangerous precedent.
Terminology may vary among states, but to prove libel, says The Associated Press Stylebook, a plaintiff must prove a defamatory statement was made; that the defamatory statement is a matter of fact, not opinion; that the defamatory statement is false; that the defamatory statement is about (“of and concerning”) the plaintiff; and that the defamatory statement was published with the requisite degree of “fault.”
The bar, as stated, is considerably higher for public officials.
Nadine Strossen is a professor of Constitutional Law at New York Law School and the first woman national president of the American Civil Liberties Union.
She’s the author of the recently published “Hate: Why we Should Resist it with Free Speech, Not Censorship.” Strossen spoke at Campbell Law School on Monday, Oct. 15.
She warned about efforts to restructure libel laws toward making it easier for public officials to sue and tougher for journalists to do their jobs.
“It would be very harmful,” she told Carolina Journal. “Because, you look at anything that has a pragmatic impact on suppressing speech, which the Supreme Court recognized most famously in the New York Times v. Sullivan. … Even having to defend against libel lawsuits, let alone paying damages can have even more of a chilling effect than being criminally prosecuted.”
Smaller news organizations don’t have the resources to defend against such charges, regardless of how frivolous they may be. I would like to think public officials would stop being so cavalier in using words such as libel and slander until they understand their meaning and the laws encapsulating them.
That’s not happening, so it’s incumbent on all of us to delve deeper. Journalists and published writers are held to a legal standard, one that’s strictly reinforced in newsrooms across the country. Sadly, too many people today reside in one polar region or another, far removed from logic and reason. Sadly, too many listen only to things they want to hear, coming only from the people they want saying them. Hyperbole and empty words prevail. Truth becomes a casualty.
North Carolinians are more upbeat about their state than they are about the nation as a whole, according to election-season polls by Meredith College, Survey USA (for Spectrum News), and Harper Polling (for the Civitas Institute). To my mind, that shows good judgment on the part of the state’s voters.
By most measures, North Carolina has been doing better than the national average lately. Our economy is adding jobs at a rapid rate. So far this decade, North Carolina’s rates of unemployment and underemployment have dropped faster than those of almost every other state in the country. Our median household income reached $52,752 in 2017, up more than 8 percent from 2010, after inflation. That’s the second-fasted growth rate in the Southeast.
In public policy, too, there are unmistakable signs of progress. Take transportation, for example. A decade ago, North Carolina ranked an unimpressive 31st in the cost-effectiveness of its highway system, according to annual reports published by the Reason Foundation that examined pavement conditions, congestion, deadly accidents, and other variables.
But as of 2015, the most recent year for which all the data are available, North Carolina’s highway system ranks 14th in the nation. We rank 14th in rural interstate condition and 7th in urban interstate condition. As recently as 2009, those rankings were 36th and 22nd, respectively. The fatality rate on North Carolina’s highways has improved markedly, as well.
By no means should we be satisfied. Too many of our bridges are structurally unsound and need repair or replacement. We still have too many bumpy, jammed-up roads. Still, there is no question that North Carolina as a whole is a better place to commute or travel than it was just a few years ago.
That is no accident. It reflects hard work and tough choices by policymakers of both parties. The progress actually began during the second term of former Gov. Mike Easley and extended through the administrations of Bev Perdue and Pat McCrory. Years earlier, state legislators had decided to transfer hundreds of millions of dollars a year in gas and car taxes — money collected from motorists in rough proportion to their usage of the state road system — to non-highway uses within the state budget.
While lawmakers had believed they were doing the right thing at the time (the origins of the various transfers from the Highway Fund and Highway Trust Fund are complicated), the practical effect was to constrain the ability of the North Carolina Department of Transportation, its contractors, and local governments to keep up with the transportation needs of a fast-growing state.
Those transfers are no more. The General Assembly has ended them. North Carolina is now spending hundreds of millions of dollars more a year building, expanding, resurfacing, and maintaining our highways. The results are evident not just in official government statistics but in the personal experience of nearly everyone who drives significant distances in our state.
To say there are signs of progress — in our economy, our road network, and other areas — is not to deny the unease with which many North Carolinians approach the current midterm elections. People are angry. They are shouting at each other. Activists are chasing cars, confronting politicians, banging on the doors of the U.S. Supreme Court. To most of us, Washington looks like either a circus or a cesspool, depending on what day we’re watching the news.
North Carolina has its own controversies, its own shouting matches, its own instances of furious activists taking the law into its own hands. But North Carolinians are more upbeat. It may be because so many were living somewhere else not too long ago. They have a direct basis for comparison.
Despite the many problems that remain unsolved or even overlooked in our state, North Carolina is headed in the right direction. We are growing. We are innovating. We are making significant progress. Many newly arrived residents know this to be true. That’s why they are here and not there — wherever that “there” may be.
Voters tend to credit the governor for a state’s strong economy and fiscal health. Governors tend to take the blame when the news isn’t so good.
This focus on the state’s most high-profile government official shouldn’t surprise anyone. But two national reports issued this month should lead us to question popular assumptions about the governor’s leading role. The reports’ contrasting assessments of North Carolina deserve closer scrutiny.
First, the good news. The free-market Mercatus Center at George Mason University now ranks the Tar Heel State No. 9 in the country for its fiscal health. As Lindsay Marchello reported in Carolina Journal, that overall top-10 ranking includes ranks of No. 2 for budget solvency and No. 8 for long-term solvency. North Carolina fares slightly worse for trust-fund (No. 14), service-level (No. 16), and cash (No. 23) solvency.
The overall ranking attracted attention from Senate leader Phil Berger, R-Rockingham, a chief architect of state government’s fiscal policy since 2011. “Under Republican leadership in the legislature, North Carolina has climbed in the Mercatus rankings from 27th to the top 10,” Berger’s office highlighted in a news release.
“The Republican-led General Assembly has balanced the budget, rebuilt the rainy-day fund, invested record-breaking amounts in public education, and produced a pro-business environment that has created hundreds of thousands of jobs — all while cutting taxes,” Berger’s news release continued. “Growth in North Carolina’s [gross domestic product], employment, and population all outpace the national and regional averages.”
For the last two years, that General Assembly has worked with Democrat Roy Cooper in the executive mansion. One might expect that Cooper could take some credit for Mercatus’ recent kudos.
Not so fast. A report card issued on the same day as the Mercatus Center ranking offers a much different assessment of Cooper’s performance as fiscal steward.
The libertarian Cato Institute assigns Cooper an F for his fiscal policies. Yep. The governor of the state with the ninth-best fiscal status earns a failing grade for his fiscal policies.
Lest you think the Cato crowd consists of particularly harsh graders, consider the following: Only one other Southern governor, John Bel Edwards of Louisiana, earns an F. Just eight governors nationwide earn that dubious distinction.
Among our neighbors, Georgia’s Nathan Deal gets a B and Tennessee’s Bill Haslam a D. Those who especially relish competition with the “other” Carolina might cringe when they see an A grade for Henry McMaster of South Carolina. McMaster is one of just five governors nationwide to secure the top letter grade.
How does a governor in a state with so much recent economic success flunk Cato’s test?
“Cooper scored poorly on both spending and taxes,” according to Cato’s report. It notes the governor’s 6.5 percent proposed state government spending increase for 2019. The report also explains that the state enacted budgets with smaller spending increases only after lawmakers voted to override Cooper’s vetoes.
“On taxes, Cooper has tried to block efforts by the legislature to make pro-growth reforms,” Cato researchers add. They cite his opposition to legislated changes that “will cut taxes by more than $900 million annually.” The Cato report assigns Cooper a simple motive. “He wanted higher revenues to fund a spending increase.”
“He’s only been in office just a bit less than two years, but, so far, he’s going in the wrong direction, it seems to me,” report author Chris Edwards told Carolina Journal Radio. “He’s pushed for substantial increases in the state budget, and he’s blocked tax reductions.”
Contrast Cooper with his South Carolina counterpart. “McMaster is off to a fiscally conservative start as governor by offering a restrained budget this year, supporting pension reforms, vetoing tax increases, and proposing income tax reforms,” according to the Cato report.
While Cooper has stamped his veto on GOP budget bills that spent money more frugally than he wished, “McMaster vetoed a transportation bill that raised gas taxes by 12 cents per gallon and jacked up vehicle fees.” The S.C. legislature overrode McMaster’s veto, but the Cato report credits him nonetheless for his efforts.
Cooper and McMaster. Two governors with different fiscal priorities. Two governors with polar opposite grades on Cato’s report card.
One of them leads the state with the third-best fiscal health ranking in the Southeast and the ninth-best ranking among the nation’s 50 states. The fact that Roy Cooper, not Henry McMaster, enjoys that honor should remind us that there’s much more to a state’s fiscal health than the man or woman who sits behind the governor’s desk.
Mitch Kokai is senior political analyst for the John Locke Foundation.
North Carolina’s elementary and secondary schools are among the best in the country at delivering academic value for the tax dollars spent on them. If you haven’t heard that before, it’s not your fault. You have been repeatedly misinformed.
Before I defend my claim, let me clarify it. I’m not saying our students are getting everything they need to thrive and prosper. I’m not saying there aren’t significant performance gaps. I’m not saying the task of education reform is complete. We’ve barely started it. The strength of our economy, the health of our families and communities, and the fate of our republic depend on seeing it through.
But to chart an accurate course, we must know our current position. We have to take the right measurements. And ranking North Carolina’s schools low based on politically motivated criteria will not get us there.
For years, critics have argued that the state’s current letter-grade system, which relies mostly on raw test scores, yields both false negatives and false positives. Because there is a strong relationship between student performance and family background, they observe, high-poverty schools get low grades even though their students might actually be making impressive gains. Just as problematic, schools with few disadvantaged students get high grades even when those schools aren’t really delivering the educational value they ought to.
This criticism is deserved. North Carolina absolutely should change its letter-grading system to emphasize the value added by schools. But the argument proves more than its adherents may realize or admit.
Here’s another widely understood truth: organizations that judge themselves by resources or effort expended rather than by results are fooling both themselves and those who invest in them. In my role as the president of a grantmaking foundation, I recognize and apply this truth every day. I don’t assume that giving money to a nonprofit with a noble mission will necessarily result in social progress. My team and I know it’s our job to try to pick the grantees with the greatest potential to do good with our dollars.
Some models work better than others. Some teams of nonprofit staff and volunteers are better led than others. Some previously successful ideas become outdated. Some money spent in good faith gets wasted.
In the business sector, assuming that how much you spend and how many people you hire are equivalent to how much value you create is a one-way ticket to bankruptcy. It’s about the rate of return — not budgets, promises, or good intentions.
So, if we know that what happens in schools is only partially responsible for how students perform, and that measuring inputs isn’t the same as measuring outcomes, then why in the world would we rank education systems without taking these fundamental realities into account?
Stan Liebowitz and Matthew Kelly, researchers at the University of Texas at Dallas, have just done rankings the right way, by using independent measures of student achievement from the National Assessment of Educational Progress and adjusting them for student background. North Carolina ranked 12th in school quality by this measure. Then Liebowitz and Kelly adjusted for educational expenditure. By that measure, North Carolina ranked 6th in the nation in cost-effectiveness.
To state these facts is not to settle any particular dispute about education policy. If you are a fiscal progressive, you can argue that if North Carolina raised taxes in order to vastly increase education spending, that would catapult us into the top 10. Fiscal conservatives can respond by pointing to Florida (3rd in performance and 1st in efficiency) and Texas (5th in performance and 2nd in efficiency) as examples of why higher taxes and vastly larger budgets are neither necessary for better schools nor advisable for our economy.
But to assert the counterfactual — that North Carolina ranks low in the effectiveness of its education system — is to misinform the public about the performance of the largest government enterprise in our state. Parents, educators, and taxpayers deserve better that what they’re getting. They deserve the truth.
In 2015, Greg Lukianoff, president of the Foundation for Individual Rights in Education, and Jonathan Haidt, professor of ethical leadership at New York University, wrote an article for The Atlantic entitled “The Coddling of the American Mind.” In that article, the authors argued that students increasingly react to words, books, images, and speakers with fear and anger because they’ve been taught to exaggerate danger, to let their emotions rule, and to engage in binary thinking.
It proved to be one of the most read and discussed articles ever published by the magazine.
Now Lukianoff and Haidt have expanded on that article with a book entitled “The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure.” Their book has a lot to say about the way our colleges and universities are making a bad situation — the bad mental habits noted above combined with the belief that kids must be kept absolutely safe — much worse.
The root of the problem, argue Lukianoff and Haidt, is that parents, teachers, professors, and college administrators have been leading young people to believe Three Great Untruths.
The first of those is the Untruth of Fragility. That is the idea that what doesn’t kill you makes you weaker, and therefore young people must be protected against everything from a stray peanut to hearing any “hateful” ideas.
The second great untruth is that you should trust and follow your emotions. Emotions frequently get in the way of sound reasoning, but young people are often told that because they feel that something is true, then it really is true.
And third is the Us Versus Them Untruth — the erroneous view that the world is divided into good people and evil people. Once that mentality soaks in, there’s no need for dialogue or debate since everything the other side might say will be lies and propaganda.
Lukianoff and Haidt point out that those untruths don’t originate on college campuses. They begin and are nurtured from early life on through high school. Unfortunately, when students get to college, which ought to be an environment where people face and deal with ideas that they find offensive, shocking, or even hostile, they instead find reinforcement for the Great Untruths.
Those bad mental habits are not just “setting up a generation for failure,” but are sowing the seeds of bitter social strife in the future. What should college leaders do to reverse course? Lukianoff and Haidt have a number of good suggestions.
First, they should endorse free speech on campus. I would suggest that instead of devoting orientation sessions to divisive talk about group oppression and privilege, colleges spend the time explaining why free speech is so important.
Second, they must never allow students to wield the “heckler’s veto.” In case the teaching about free speech doesn’t take hold, students need to understand that serious consequences will follow if they try to prevent people from speaking.
Third, schools should strive for more viewpoint diversity in their hiring. Scholars get sloppy if no one pushes back against their ideas, but that’s the case in many departments.
Fourth, schools should “educate for productive disagreement.” That is, they should make sure that students see demonstrations of rational disagreement between reasonable people. One way to do that is to set up campus debates.
“The Coddling of the American Mind” deserves a wide readership and vigorous discussion about how we are miseducating our youth. College leaders won’t like much of what it says because they have a lot to answer for.
George Leef is director of editorial content for the James G. Martin Center for Academic Renewal.
I’m a huge fan of free markets, limited government, and the promotion of individual liberty.
Except when one’s perceived individual liberty infringes on mine because he or she fails to follow rules set by a participant in the free market.
I refer to electric scooters, which have popped up around downtown Raleigh like pumpkin spice in the fall.
They’ve become ubiquitous, and the onslaught surprised city leaders, who are scrambling to control the proliferation. Durham is working on an ordinance before that city, too, is overrun by the silly things.
Before you discount this piece as humorless ramblings from a grumpy old man, I must say that I also was a grumpy young man. I’ve spent my life, as a colleague pointed out, training for my current state.
I do applaud the scooter entrepreneurs, who saw an opportunity and seized it. The things are popular, regardless of how ridiculous people look while riding them. Thing is, people aren’t following the rules, which, to be fair, are printed low on the steering arm and easy to miss. But the app, which is needed to rent the scooters, helps clear things up. The companies clearly explain safety measures, which, sadly, most all riders I’ve seen summarily ignore.
Allow me to enlighten you, dear riders.
Rules, under the headline “Ride Safely” printed on the scooters, are as follows:
I have seen hundreds of riders and nary a helmet.
No riding on sidewalks.
This is big. Raleigh has bike lanes, which is where these things belong. Yet riders show no shame as they scoot down the sidewalks in every direction. The companies even reinforce this rule on their websites. To no avail. The scooters are hard to see, so motorists must be extra vigilant of yet another hazard on the downtown streets. We paid — to our chagrin, for these bike lines — so use them.
No double riding.
OK, most people are following this one, as far as I can tell.
Riders must be 18.
Again, who knows? But I’m pretty sure minors are grabbing illegal rides.
Don’t get me wrong, because I do support these companies and their capitalistic spirit.
It’s wonderful that people now have alternate ways of getting around, but personal responsibility is key here. Just the other day I saw a pair of scooters run a red light at the busy intersection of Morgan and McDowell streets.
The city will make rules, but enforcing them is another story. It’s our hope, though, that government uses some common sense and refrains from outright bans, which will disrupt the market.
The burden here is on the riders. They’ll ultimately decide whether these things stay or go.
From what I’ve seen so far, riders aren’t exactly making a case to keep them.
North Carolina’s 2018 election cycle may be considered a “blue moon” — but Democrats aren’t just standing around without a dream in their hearts. They dream of a sweeping victory this year, and are working hard to try to accomplish it.
Every 12 years, North Carolinians go to the polls in midterms with no statewide races on the ballot other than for the appellate courts. That’s what constitutes a blue-moon election. Lacking a presidential, gubernatorial, or U.S. Senate contest to galvanize public attention across the state, voter turnout tends to be low.
What will happen this year? At least until the tumult of the past two weeks, Democrats have looked confident. They’ve recruited solid candidates in key districts and raised significant funds for them. Most polls have favored them.
So does history. In most modern midterm elections, the party holding the White House have lost congressional and legislative seats. The opposition party’s core voters are usually more motivated to turn out, to vote against policies they dislike and to check the power of the president’s party.
Let’s consider the specific case of the North Carolina General Assembly. In the 12 midterm elections since 1970, the party not controlling the White House has gained an average of 11 seats in the state legislature — an average of eight seats in the N.C. House and three seats in the N.C. Senate.
If we zero in on blue-moon elections only, there have been four since 1970. The average legislative swing against the president’s party during blue-moon cycles has been an impressive 17 seats. This is one of those times, however, when the average can be misleading. In three of those cycles, the gains by the opposing party were moderate: +10 Democratic seats in 1970 (with Nixon in the White House), +10 Democratic seats in 1982 (Reagan), and +7 Democratic seats in 2006 (Bush).
The outlier was 1994, the Clinton era, when Republicans gained a whopping 39 seats, clinching the House with a 26-seat gain and nearly winning the Senate with 13. If we go with the median (10) rather than average gain for the out-of-power party, blue-moon elections don’t look much different from midterms as a whole.
Although the anti-White House dynamic will be working against them, Republicans have some advantages of their own. In recent years, at least, GOP-leaning voters — being older and less transient — have tended to vote more reliably during midterm cycles than Democratic-leaning voters have.
Also, congressional and legislative elections don’t happen statewide. They occur within districts. The current electoral maps favor Republican candidates. While Democrats are correct to cite favorable redistricting as an explanation, that’s not the only one. Democratic-leaning voters are disproportionately found in large cities. Even with neutrally drawn maps, running up big majorities in urban districts wouldn’t help them win suburban and rural districts.
Going into the 2018 cycle, Republicans have a 75-45 majority in the N.C. House and a 35-15 edge in the N.C. Senate. That’s more than the required three-fifths vote to override a veto. Democrats are hoping to strengthen Gov. Roy Cooper’s hand by breaking one or both GOP supermajorities.
That would take a four-seat gain in the House and a six-seat gain in the Senate. Based on historical trends, the former is more likely than the latter. As we have seen, a net gain of something like eight Democrats in the House and three in the Senate would be normal. If Republicans manage to keep their General Assembly losses to single digits, that would be comparatively impressive. And if Democratic gains surged into the 20s or higher, that would constitute a catastrophe for the GOP. Its legislative majorities, not just its supermajorities, would be in danger.
I recognize that elections are won race by race. I expect some surprises on Election Day. But with few exceptions, voters in midterms have tended to break against the party in the White House. And in North Carolina legislative races, a loss in the low teens is par for the course.
After a natural disaster, most people strive to restore their normal lives. But, in some cases, the return to normal might not be the best option.
A particular challenge for those leading the recovery after a disaster like Hurricane Florence is deciding when the pre-disaster status quo isn’t good enough.
It’s an issue that already has cropped up in North Carolina’s assessment of damage linked to Florence. The storm’s impact on state transportation networks offers one example.
Florence helped close parts of 2,500 roads across the state. The number peaked at 1,700 roads out of commission at one time. State Transportation Secretary Jim Trogdon compiled those numbers for an Oct. 3 presentation to the N.C. House Select Committee on Strategic Transportation Planning and Long-Term Funding Solutions.
By the time of the meeting, 19 days after Florence made landfall, 126 roads remained out of service. “All the way from Ocracoke Island, where we saw extensive damage, down to Wilmington, Brunswick County, all the way out to Charlotte in the west, all the way up to Ashe and Haywood and Watauga counties, we’ve seen damage in all of those locations,” Trogdon said.
More than 3,100 sites required some type of long-term road repair. Trogdon offered an initial total cost estimate of $266 million, with state taxpayers expected to pick up $66.8 million of the tab. He warned lawmakers that both numbers would grow.
“My guess is, at this point. we’ll have at least half of those done within the next 30 days,” Trogdon said of the long-term repairs. “Some of them will take a little longer.”
Most repairs will return roads to their pre-Florence condition. DOT is also looking to the future, Trogdon explained.
“Equally important, too, is how do we do things to mitigate future damage,” he said. “We are very concerned with flooding of the interstates and closing of the interstates in future storms.”
Florence closed portions of both Interstates 40 and 95 for more than a week. Officials were unable to reopen I-95, a primary north-south road for the entire East Coast, until Sept. 23. That was nine days after the storm’s landfall. I-40 reopened a day later.
“Certain things we can’t stop,” Trogdon told lawmakers. “Huge rainstorms are going to create flooding, and flooding is going to close roads. But we believe there are some things that we can do in the longer term to make sure that, in the future, I-95 and I-40 aren’t as susceptible as they are today.”
State officials are working on strategies with federal highway officials, Trogdon said. “Their reimbursement process, as you can imagine, they typically reimburse to put things back the way they were,” he explained. “We understand those rules. But we’re trying to find some creative ways of getting access to some other funds that will allow us to actually make I-95, in locations, and I-40, in locations, better than it was so in the future it will be less susceptible to this kind of closure.”
Few would challenge Trogdon’s goal of taking steps, within reason, to limit the likelihood of repeat flooding of N.C. interstates. Both 40 and 95 serve as essential elements of the state’s transportation system, especially during times of disaster.
That’s a simple case. But it won’t always be as easy to choose between the pre-Florence status quo and more expensive alternatives. Policymakers tasked with making those difficult choices must sift through competing proposals for upgrades.
Some will fit squarely within the bounds of disaster recovery. Others will represent an attempt to use Florence as an excuse to enact a legislative wish list. (One thinks of the 2009 pronouncement from Rahm Emanuel, then chief of staff to president-elect Barack Obama. “You never want a serious crisis to go to waste,” Emanuel said on national television. “And what I mean by that — it’s an opportunity to do things that you think you could not do before.”)
Attempting to use Florence to advance its pre-existing goals, a left-of-center think tank floated several hurricane recovery ideas recently in the Raleigh News and Observer.
Proactive investment in hazard mitigation infrastructure? That seems like a worthwhile goal. Stepping up regulations of hog lagoons and coal ash ponds? Maybe.
Increasing taxpayer spending on public education and jobs training? Raising the government-mandated minimum wage? Good ideas or not, these proposals seem better-suited to everyday political debate. They can wait.
Policymakers would be wise to prioritize as they continue to assess the hurricane’s impact. It would be a shame to turn a crisis into an excuse for waste.
Mitch Kokai is senior political analyst for the John Locke Foundation.
Do political movements ever really accomplish anything? The English writer G.K. Chesterton had his doubts. “The whole modern world has divided itself into Conservatives and Progressives,” he wrote in 1924. “The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected.”
I have always appreciated Chesterton’s wit and insight. But he was unduly pessimistic, as North Carolina’s experience over the last eight years can attest.
To most conservatives, that experience feels like one of tremendous successes. Many public policies we advocated for decades — government reorganization, sound budgeting, tax relief, regulatory reform, choice and competition in education — are no longer just aspirations. They are either accomplished or underway.
According to the Tax Foundation, for example, North Carolina used to have one of the nation’s most anti-growth tax codes. Today, our tax system is 12th-best. The Frasier Institute has long rated states according to economic freedom, including both fiscal and regulatory variables. North Carolina ranks 18th in economic freedom, vs. 25th in 2010.
Another think tank that publishes freedom ratings, the Cato Institute, ranks North Carolina 6th in the country in educational freedom, reflecting our mix of policies that extend and protect parents’ ability to choose the best school for their children. Cato also rates North Carolina relatively highly on criminal justice (17th in the nation and 1st in the Southeast) and labor-market freedom (11th).
As a conservative, I see progress. Progressives, from their perspective, do not. At least we can agree there has been a lot of change under a Republican-controlled General Assembly.
So, what’s next? The think tank I co-founded and for which I still serve as board chairman, the John Locke Foundation, set our own goal some years ago. Ultimately, we want North Carolina to be “First in Freedom,” as some license plates now read. Not 17th or 12th or even 6th. We want to be the freest state in the union.
Getting there will require a lot more work. Despite recent progress, North Carolina continues to overtax, overregulate, overcentralize, and rely too heavily on outdated monopolies and cartels rather than competitive markets to deliver critical services to the public. In their new briefing book, North Carolina Policy Solutions 2018, my JLF colleagues have laid out an ambitious reform agenda for the coming years.
One common theme is removing barriers. North Carolina makes it too hard for innovators to start new businesses, for residents to begin new careers, for health providers and insurers to give patients more choices, for nurses to deliver high-quality care at reasonable prices, for educators to offer parents more options, and for brewers and distillers to sell their products to willing consumers.
Another common theme is protecting rights. Unlike many states, North Carolina has yet to amend its constitution to deter eminent-domain abuse — to keep governments from taking private property not for public use but instead to transfer to other private parties. We also need to do more to reform our systems of civil and criminal justice.
Still another theme is economy in government. We should extend North Carolina’s recent practice of keeping a lid on spending growth, building up budget reserves, and rooting out waste and special-interest subsidies. We should get the state out of enterprises it shouldn’t be in, such as selling alcohol and encouraging people to gamble, while improving the cost-effectiveness and quality of longtime state enterprises such as roads.
Modern conservatism — which is really a fusion of traditionalism and classical liberalism — isn’t about resisting reform. It champions reform. It assumes the future can be better than the present or the past, but only if, as G.K. Chesterton himself observed, we accept timeless truths about human nature. Progressive reformers, he wrote, “destroy conventions by appealing to fads.” Conservatives seek to reform by “appealing to facts that are older than conventions.”
One of those facts is that freedom is both a birthright and a practical solution. It works. North Carolina needs still more of it.
The U.S. Department of Education is poised to replace Obama-era regulations on for-profit colleges and universities with more broad-based transparency measures. On Aug. 10, Education Secretary Betsy DeVos revealed her plan to fully repeal the “gainful employment” regulations that required for-profit colleges to publish information on their graduates’ student debt levels and post-graduation earnings. Under the regulation, schools who failed to meet government standards for their average debt-to-earnings ratio lost federal funding.
In place of the gainful employment rule, DeVos proposed a new rule that would require all schools to publish data on student outcomes. The data — such as debt levels, expected earnings after graduation, completion rates, program costs, accreditation, and consistency with licensure requirements — would then be published on the College Scorecard website.
This level of transparency could help students make better decisions about their college education. But it’ not clear that students would change their behavior with the new information, as some state transparency efforts have shown.
Unlike the gainful employment rule it will replace, DeVos’ new regulations have no enforcement mechanism. Reported student outcomes will have no effect on federal funding of higher education unless Congress or the Department of Education add to the rule in the future. It’s unclear whether they will do so.
Some experts have suggested a new rule could use the same debt-to-earnings standards from the gainful employment regulation, but apply them across the board and at the program level instead of the institution level. Such a rule would lay responsibility for students’ post-graduation success at the feet of individual departments instead of institutions as a whole. If applied well, it would also better match education outcomes with the demand of the market by limiting student borrowing only to those who enroll in departments whose graduates have a track record of employment success.
The gainful employment rule, created originally to stamp out diploma mills and stifle competition from for-profits, was a strict one. Schools that failed to meet the thresholds for debt-to-earning (D/E) ratios became ineligible for Title IV program funds if they either failed the D/E rates measure for two out of three consecutive years or have a combination of D/E rates that are in the neither-passing-nor-failing zone or failing for four consecutive years.
If such a rule were applied, it could have far-reaching consequences for many programs in the social sciences and humanities.
The graph below shows the D/E ratio for the ten most popular majors in the UNC system. The rate is calculated according to the gainful employment formula, using average earnings three and four years after graduation and assuming a 4.5 percent fixed interest rate on a 10-year Stafford Loan. (This was the rate for 2010-2011, the same cohort year used for income and borrowing data.) Only half of the programs would meet the D/E threshold necessary to “pass.”
Bachelor’s programs in registered nursing perform best. Business administration, speech communication and rhetoric, elementary education and teaching, and criminal justice/safety studies also make the cut.
But rates across the system don’t show the whole picture. Looking at programs at the school level reveals further divisions. Rates of borrowing, graduation, and income vary considerably by university. Fifteen schools in the UNC system offer psychology degrees. Of those, 10 self-report data on student debt.
Just two of the 10 programs “pass” the threshold. Elizabeth City State’s psychology program passed due to extremely low levels of reported student debt, just $3,846 per graduate in 2011 according to the Institution for College Access and Success. N.C. State’s program passed due to higher-than-average income among its psychology graduates, $33,346 four years after graduation according to NC Tower.
The information, made available at the national level, could help students to more carefully consider what disciplines to pursue, the schools where they pursue them, and how much debt it’s responsible to carry. For those reasons, the Department of Education’s new transparency measures are a welcome change. Easily accessible program-level data could help to stem problems related to student debt and underemployment.
But, it’s likely that many students will continue to have expectations and make decisions that don’t align with market reality. In many states, including North Carolina, excellent data on graduates’ salaries and employment rates are already available. Universities already disclose graduation and retention rates, default rates, and average debt levels annually to the Department of Education, which makes them available on various websites.
To be sure, amassing useful data in one place, on the College Scorecard website, is a step in the right direction. But for the most part, lack of transparency isn’t the problem. The challenge is to get the data into the hands of those who can use it — students and parents — and give them incentives to do so. Until that happens, universities and students will be reluctant to change.
Jenna A. Robinson is president of the James G. Martin Center for Academic Renewal.
Recovery from Hurricane Florence will be long and hard. But as the waters recede, the strength of North Carolinians shines.
We’ve been here before. From 1851 to 2018, North Carolina has been hit by 65 hurricanes. Hurricane Hazel in the 1950s set a benchmark, and Hurricanes Fran, Floyd, Irene, Irma, and Matthew have wrought damage and destruction. When Florence threatened, past lessons and leadership helped us prepare for the worst. Gov. Bev Purdue’s emergency communications plan before and after Irene set a new standard and became a case study for U.S. Homeland Security. Gov. Pat McCrory made sure emergency supplies were ready before Matthew hit, and it made a big difference in rescue and recovery, as did his coordination of federal, state, and local resources.
The General Assembly met two months after Matthew and allocated $200 million for short-term recovery. Although he received criticism for long-term recovery efforts after Matthew, Gov. Roy Cooper built on the lessons of his predecessors in preparations for Florence, providing strong support for those affected from private resources, and government aid from all reaches of the state and country. Leadership is built on many shoulders, and partisan politics have no place in a crisis.
Sometimes, out of crisis comes opportunity. Access to quality and affordable health care is a concern, particularly in rural areas hit hardest by the storm. If people want to work, we should let them. Bridge loans can help repair bridges and a lot more. Now’s the time to think about the next storm. Balance of government and private markets is delicate, but key to successful recovery.
The N.C. Department of Health and Human Services is calling for medical volunteers to assist in getting the right medical treatment to those affected by the storm. They’re encouraging nurses, physicians, and behavioral health specialists to apply to volunteer, even if they hold out-of-state licensing. Accepting reciprocity licenses for medical personal is a good idea, no matter the crisis; addressing shortages due to school safety concerns, rural area shortages, or hard-to-fill specialties.
UNC Healthcare waived a $50 fee for virtual urgent care service for the first weekend of the storm. Getting a sick child to the hospital or dealing with a minor injury could be handled via a telephone chat or video-conference, for example. Telemedicine is a less expensive, effective, and efficient way to deliver heath care. Let’s use it.
Many hospitals aren’t equipped for dialysis. Emergency rooms were jammed with patients who needed treatment during the storm. Post-storm needs for mental health and other health-related needs are expected to skyrocket, particularly in areas already short on access to care. Certificate of Need laws should be eliminated to increase access to critical care and allow medical providers to offer new technology, better facilities, and more treatment options.
North Carolina requires more licenses for more occupations than most states, but is a license always necessary? People got the job done during the storm. Shouldn’t we allow them to work afterward?
One of the strengths in hurricane recovery is the coordination and collaboration of levels of government. But some take longer than others. The N.C. Rural Center recently created Thread Capital, which offers short-term loans up to $50,000 to small businesses impacted by the storm to maintain or re-build while awaiting state and federal grants. Readers may recall the N.C. Connect bond included short-term grants for water and sewer projects. Extending revolving short-term loan programs to include school construction and other capital needs across the state is worth exploring. Reducing regulations that may discourage private investments is also worth a look.
Only 35 percent of at-risk properties here were covered by flood insurance, a program largely run by the federal government. The state’s Beach and FAIR plans may have trouble paying all the expected claims. Now’s the time to plan for the next storm and move toward an open, competitive market, with rates reflecting risk and allowing consumers choice and products to meet their needs.
Finally, a balance between private resources and government services is what works. North Carolina again is a model for the rest of the country. It’s why we like calling North Carolina home.
Becki Gray is John Locke Foundation senior vice president.
As the North Carolina General Assembly gathered for its Oct. 2 special session on Hurricane Florence relief, the state’s rainy-day fund stood at $2.01 billion. There was another $737 million in reserves earmarked for other purposes (including $104 million specifically for disaster relief) along with an unreserved credit balance in the General Fund of $1.2 billion.
That North Carolina had billions of dollars socked away to address emergencies such as Florence was no accident. Prudently and methodically, the General Assembly has spent years building up financial reserves. Foolishly and repeatedly, critics faulted lawmakers for saving these dollars rather than spending them.
There has been a partisan dimension, no question. After winning majorities in both legislative chambers in 2010, the Republicans made it a high priority to accumulate a substantial rainy-day reserve equal to at least 8 percent of annual state spending, and preferably upwards of 10 percent. Former Gov. Pat McCrory, who served from 2013 to 2016, was if anything even more hawkish about the rainy-day fund.
Democrats favor keeping some money in reserve, of course, but have often argued that GOP policymakers were overdoing it. Larry Hall, then the Democratic leader in the North Carolina House, complained during the 2016 legislative session that the Republican majority was saving too much and spending too little. “We artificially starved ourselves,” he said just before that year’s budget bill passed the House. “We have funds available, and we’ve decided not to invest.”
And while campaigning against McCrory in 2016, Roy Cooper blasted the governor for “building up the rainy day fund in excess of what’s necessary for the state,” and for letting the money “just be sitting there” rather than spending it.
A few weeks later, Hurricane Matthew hit North Carolina. As you might expect, Cooper immediately stopped complaining about an overly large rainy-day fund.
At this point, maintaining significant fiscal reserves ought to be a goal shared by North Carolina politicos of all persuasions. It’s not as if they can’t imagine what it would be like to experience a massive storm with inadequate savings. Most can remember 1999, when Hurricane Floyd ravaged large swaths of the state.
Then-Gov. Jim Hunt and a Democratic-controlled legislature settled on a $840 million disaster-relief package. But there wasn’t enough dedicated savings to pay for it. They had to cobble together the funding from several sources, including reverted funds from the operating budget. As a result, the North Carolina had inadequate reserves in 2000-01 when a recession bit into state tax revenues, creating massive budget deficits.
Democratic policymakers responded to those deficits by raising taxes, primarily sales taxes. Their decision was economically counterproductive and politically damaging, contributing to legislative losses in 2002 that would have turned control of the North Carolina House over to the Republicans — except that then-House Speaker Jim Black bribed a Republican lawmaker to switch parties and then convinced a rump group of credulous Republicans to keep him in power. This skullduggery sowed the seeds of Black’s ultimate political downfall, felony conviction, and stay in federal prison. But it can also be thought of as a delayed consequence of unwise fiscal policy during the high-growth years of the 1990s.
I don’t expect the two sides to agree on the fundamental trade-off that lies beneath all state budgets. Republicans think that lowering taxes has broad economic benefits. Democrats think higher spending on state programs would be a better choice. This disagreement reflects contrasting philosophical premises and differing interpretations of the empirical evidence.
Nevertheless, both sides should want to keep a sizable savings reserve — and should be willing to prioritize replenishing it even if that means some other fiscal goal has to be deferred. Remember that natural disasters aren’t the only potential shocks to the system. If a recession comes, a healthy reserve will reduce the pressure on lawmakers either to raise taxes or enact precipitous budget cuts.
While no one can forecast precisely when disasters will strike, strike us they will. Thank goodness we were ready this time.
State lawmakers grouped six constitutional amendments on the November ballot in a way that limits efforts to distinguish each amendment from the others.
A recent complaint from former Republican Gov. Pat McCrory highlights one potential problem that results for amendment supporters.
Each amendment will appear on the ballot below the simple words “constitutional amendment.” No letter or number follows those words. That’s not an accident or oversight.
State law clearly forbids election officials from attaching a number, letter, or any other distinguishing identifier for the amendments. If voters, pundits, and partisans want to discuss particular amendments, they must refer to some shorthand description of each measure. They can’t just say “Vote for Amendment One! Vote against Amendment Two!”
This observer has no inside scoop on why legislators chose to eschew amendment numbers. One possible explanation is the political calculation that widespread support for some amendments might help push all six over the finishing line.
A ballot measure to reduce the cap on the state’s income tax rate consistently polls well. So does a proposal to require photo identification from voters. Measures to protect crime victims’ rights and the right to hunt and fish also have attracted broad-based support.
Four of the six amendments address those topics. The other two deal more with balance-of-power issues within state government. One would change the way the state fills judicial vacancies. The other would shift power from the governor to the General Assembly for appointments to the state board overseeing elections and ethics enforcement.
Prospects for the two power-shifting amendments do not appear as clear as support for voter ID and a lower income tax cap. Perhaps voters will lump the six amendments together and help secure approval of each one.
That’s one possible scenario.
Or voters could group the six amendments together and reject them. Opponents of one or more amendments have adopted a clear strategy of targeting all of them. They’ve staked out yard signs urging neighbors to “vote against” unspecified amendments. They’ve backed a social media strategy to #NixAllSix.
The lack of a distinguishing number or letter for individual amendments helps the measures’ opponents. If you can’t ask voters to oppose Amendments Two and Five, ask them to reject every one. It’s a simple message.
Opposing amendments en masse also relieves the critics from some political pressure. They don’t have to explain why they think it’s a bad idea to prevent the prospect of a future 90 percent income tax hike. They don’t have to justify North Carolina remaining among the minority of states with no voter identification requirement. They don’t have to say why they think crime victims should not secure a stronger role in the legal system.
Perhaps a good idea will get lost in the shuffle, some critics will say, but that’s a small price to pay to avoid a seriously awful proposal sneaking past voters.
While helping opponents, the absence of a distinguishing number for each constitutional amendment also creates problems for some supporters. This is true especially for those who fervently support some measures while actively opposing others.
Here’s where McCrory’s complaint enters the story.
He and all four other living former N.C. governors have joined forces to oppose the two power-structure amendments. After an opening State Capitol news conference, the five former governors from both major parties pledged to campaign against the two amendments.
But McCrory cried foul when a group called “Stop Deceptive Amendments” aired a television commercial referencing the former governors. In the ad, a narrator suggested that each governor called for a “no” vote on “the constitutional amendments Raleigh lawmakers put on the ballot this fall.”
McCrory argued that this language suggested he opposes all six amendments. He supports four of the six.
The “Stop Deceptive Amendments” group revised the ad, but only after its spokesman claimed in a news report that the original message was “accurate” and “clearly referencing” the amendments that united McCrory with his four fellow former chief executives.
Accurate? Perhaps. Clear? Certainly not.
But that’s thanks in no small part to the General Assembly’s decision not to distinguish amendments by separate numbers.
We’ll have to wait until November to learn whether voters decide to lump the amendments together — either to support or reject them. Only then can we judge the ultimate wisdom of the General Assembly’s decision to bind all six proposals so closely together.
Mitch Kokai is senior political analyst for the John Locke Foundation.