Not another State of the Union column!
Well, you’re in luck. The annual January spectacle has become such a part of the nation’s media furniture that few people even ask what it’s really for. For a fare more useful exercise, I propose the president deliver a “Union of the States” address instead. Because that’s what we really are, though the distinction seems lost on many politicians.
Truth be told, there is no “union” without the states. But it’s more than that. Legally, we are U.S. citizens, but we tend to self-identify more with our own home state. State legislatures and governors have greater impact on our pocketbooks than Congress or the White House. And states, Justice Brandeis’s proverbial “laboratories of democracy,” are a strong bellwether for policy changes for the nation as a whole.
That’s why next January, President Obama should speak to Americans about what he has learned from the states rather than assume the federal government knows best. He’s not likely to do that, of course. But if he did, he would do well to seek out the work of John Hood, president of the John Locke Foundation.
Hood’s online database of empirical studies and journal publications demonstrates how limited government propels economic progress and greater wellbeing for all. Writing about it recently in the March issue of Reason magazine, he draws some important lessons.
Taxes matter, as the high negative association between economic growth and high taxes shows. Indiana has abolished its estate tax and New Mexico cut its corporate tax.
Spending matters. You can’t solve a problem by throwing money at it, as evidenced by the murky relationship between levels of education spending and economic growth.
Regulations matter. As Hood notes, researchers have found a positive economic effect for lighter regulation 67 percent of the time.
In short, economic freedom works.
For their part, governors and state legislators should wean themselves off dependency on the federal government. Research by the Tax Foundation illustrates this overreliance on Uncle Sam. At one end of the spectrum, Mississippi depends most heavily on federal assistance, with federal aid accounting for 49 percent of its total general revenue. At the other end, Alaska relies on federal aid for “only” 24 percent of its general revenue. Even pro-business Texas relies on the feds for 40 percent of its general revenue! You don’t have to be Ron Paul to think 50 percent is crazy. Even 25 percent is still too much.
It is this state of affairs that lets President Obama propose, as he did in his 65-minute speech last week, to:
- Promote a partnership between federal and states “on issues from homelessness to marriage equality;”
- Encourage the governors to raise minimum wage, implying that “America” will support them if they do; and
- Use the federal government to help states build natural gas-fueled factories, set new carbon emission standards, create pre-K programs, and “reform our” schools;
“Our” schools? Considering public education is one of the few domains with any remaining state and local control, that kind of talk should be alarming, especially considering President Obama’s continuing use of executive power to implement his agenda—and preference for dubbing his political appointees “czars.” He appears to have forgotten the states are the building blocks of the Republic he seeks to lead.
That is why preserving and nurturing those laboratories of democracy is so important. They can produce quite telling results. Mobility is a powerful feedback mechanism, as people and businesses flee states with increasing regulatory and economic burdens. The IRS estimates that more than $2 trillion of wealth has moved across state lines in the past 15 years. Unfortunately, ignoring the U.S. government is much harder, to say the least.
While the president readies his inaugural Union of States address, the opposition party could prepare something more useful, as well. In 2015, let’s have a gaggle of governors deliver it. It would remind folks that in terms of economic liberalization, many of the States outpace the Feds. That’s a Republic at work. And that is well worth keeping.
