December 31, 2003

Jobless Claims Plunge

The Bush Boom rolls on, with a sharp plunge in new applications for unemployment compensation hitting their lowest level in nearly three years last week. Reuters says the data is "boosting hopes that employment is finally beginning to show sustained growth."

The level of new claims was the lowest since President Bush's inauguration on Jan. 20, 2001. First-time jobless claims were much lower than Wall Street economists' forecast for 355,000 claims. The department originally reported new claims for the week ended Dec. 20 at 353,000.

"At 339,000 new claims, you're well within the range that you'd expecting a growing economy, even in a briskly growing economy," said Patrick Fearon, an economist for A.G. Edwards and Sons. "Seasonality around the holidays can have an impact, but when claims are down that low and when you had a pretty good downtrend I think you can be pretty confident that at the very least the labor market is strengthening," Fearon said.

A Victory for Tennessee Taxpayers

For several years, Tennesseans who use the Internet have paid what, it turns out, was a tax being collected illegally by the state of Tennessee. The good news: They're due a refund. The Knoxville News Sentinel has the details...

Internet service in Tennessee is one step closer to being sales-tax-free. The state Supreme Court last week declined to review an appeals court ruling that said it's OK for Prodigy not to collect sales tax on the Internet service it provides.

Now the state Department of Revenue is evaluating whether to pursue four other cases against Internet service providers or to drop its efforts to collect sales tax on what it has - until now - considered a "telecommunications" service. Telecommunications services, which include phone and cable television connections, are subject to sales tax under state law.

The cases involve AOL, CompuServe, Earthlink and AT&T and are being litigated in Davidson County Chancery Court. If the state decides to drop the cases and reverse its position on taxing Internet access, the Department of Revenue would send notices to Internet service providers across the state, informing them sales tax collection will no longer be required on Internet access services.

If the state reverses its position - which it would seem to have to do given it has lost the court case - the ISPs could file for the return of back taxes, but would have to then refund the money to the consumers who paid it. Although the state has collected the illegal tax since 1996, state law provides a three-year statute of limitations on tax refunds, which means the ISPs - and consumers - are due a refund only for the last three years.

December 30, 2003

Strong Economy Seen in 2004

The latest economic forecast is good news for President Bush, bad news for the Democrats who hoped the economy would remain sluggish in order to make it easier to oust Bush from the White House. I blame the Bush tax cuts.

The US economy is poised for its best performance in five years. Economists describe an economy that will be "solid," "sustainable," and "entering the new year with a wonderful head of steam."

If the optimistic forecasts are accurate, it will mean more Americans find jobs in 2004 - something that has been more difficult this year. A stronger economy could also help lower the federal budget deficit, as government coffers grow from stronger tax collections and fewer unemployment payments. Altogether, it could help President Bush in his reelection bid.

December 29, 2003

Mission Statement

HobbsOnline strives to provide reasoned, analytical, in-context coverage of today's world, with a special focus on business & the economy, Tennessee budget & tax politics, religion & culture, the development of blog-based journalism, and the War on Terror.

Rise of the Megachurch

The Christian Science Monitor has just published a story about the rise of the American megachurch.

In an era when small and medium-sized churches of almost every faith are losing members, megachurches continue to grow - last year by 4 percent. Their success is due in part to the ushering in of a new business-savvy approach to religion. But more important, experts say, these churches are thriving because of what's being ushered out. Gone are traditional religious dogma, rituals, and symbols, replaced by uplifting songs and sermons. Congregants are taught that - through God - they are victors, not victims. The messages are encouraging and easy to swallow, and no one is called a sinner. It's "Jesus meets the power of positive thinking."

"There's none of that old-time religion; none of that hell-and-damnation, fire-and-brimstone preaching," says Alan Wolfe, director of the Boisi Center for Religion and American Public Life at Boston College. "The message tends to be more upbeat, one of empowerment. And it seems to be working. These churches are packed."

In 1970, there were 10 megachurches nationwide (defined as non-Catholic churches with at least 2,000 weekly attendants). Today there are 740, according to Church Growth Today, a Bolivar, Mo., organization. They appeal to people of all ethnicities: Lakewood attracts virtually equal numbers of blacks, whites, and Hispanics. The idea is to be inclusive and inoffensive. There's no talk of controversial subjects, such as abortion or homosexuality. Organs have been replaced by electric guitars, hymns with rock-and-roll tunes. Nowhere is there a cross or a candle, and the language is contemporary, with not a "thee" or a "thou" to be heard.

"They have removed every obstacle that keeps people from coming into the Christian church," says Eddie Gibbs, a professor at the Fuller Theological Seminary. "Plus, they give people a feeling of anonymity. And that's particularly important to those who have been hurt or burnt out in smaller churches."

Forbes had better coverage of megachurches back in October. I blogged it here.

Blog and Public Relations Consulting

Need a blog? Want to understand what blogging is and how a blog can help your business organization or political campaign? You've clicked to the right place - I offer blog consulting based on a unique mix of journalistic, online, blogging and public relations experience you won't find with anyone else, and can help you design your blog-based communication strategy, build your blog, and even operate it.

I also can provide more traditional public relations services such as writing and distributing press releases, writing website and printed brochure marketing content, and ghost-writing op-eds.

Contact me via email at bill-at-billhobbs.com for more information.

Comments Policy

Simple rules, really.

Stay on-topic.

No foul language.

No personal attacks.

I reserve the right to delete comments I find inappropriate, but offer no guarantee that commenters won't post something defamatory, libelous or rude. If you find such a comment, contact me and I'll remove it. Don't bother suing me over it - I don't have any money.

December 27, 2003

Was Bush "AWOL"?

As the presidential campaign season heats up, you are sure to hear some Democrats charge that President Bush was, long ago, "AWOL" from his Texas Air National Guard duties - and imply also that he joined the guard to avoid Vietnam. Their allegations simply do not hold water.

Last May I wrote several posts about the "Bush was AWOL" charge. Here are the links. Arm yourself with knowledge. You won't convince the hate-Bush crowd, but there are those in the middle who might not know what to believe. Assuring them of the truth may help assure they vote for George W. Bush in November. And just what are the facts?

Bush voluntarily joined a military unit part of which was at that very moment involved in combat in Vietnam. He learned to fly fighter jets. He served honorably and was well-regarded by his fellow pilots. He put in more than his required time of service. And he was honorably discharged.

Those are the facts.

The hate-Bush crowd likes to point to some missing paperwork and an aging colonel's inability to remember one man out of thousands, and claim it proves Bush served dishonorably and was "absent without leave." But paperwork snafus are as common in the military as guns. And the absense of evidence is NOT evidence of absense. The "Bush was AWOL" claim is so thin that the New York Times, hardly a bastion of Bush support, debunked and dismissed it.

You can find the links to all of my blog posts on the "Bush AWOL" lie, here. The earliest, posted May 7, is at the bottom. Scroll up for the most recent posts (including this one).

UPDATE: This post was inspired by this debate at the History Channel's website, in which the Bush-haters are losing in part because their side claims Bush was not honorably discharged, and then post links to documents that say Bush was, in fact, "honorably discharged."

December 20, 2003

Strategerical Successfullness!

There is now no denying that President Bush's foreign policy is working. Libya is giving up its WMD programs.

"Not surprisingly, the White House described the surprise announcement as a victory for Mr. Bush in facing down rogue states developing such weapons," says the New York Times.

Indeed it is.

UPDATE: THe Coalition of Bah Humbug says Libya giving up its WMD programs is not a big deal.

UPDATE: From the New York Times: "British officials said that Sir Nigel Sheinwald, Mr. Blair's national security adviser, and Condoleezza Rice, Mr. Bush's national security adviser, were involved in intense negotiations with Libyan officials in the days leading up to Libya's declaration. " Go Condi!!!

December 18, 2003

Iraq/Al Qaeda Link Update

Newsweek is reporting that the memo alleged as proof that lead 9/11 hijacker Mohammed Atta was in Iraq the summer before the September 11 attack is a "probably a fabrication."

Note the word "probably." Also note that if the document is a fake, it proves only that the document is a fake. It does not prove or disprove the larger question of whether Saddam's regime had ties to al Qaeda. Anti-war lefties dancing and celebrating and firing their rhetorical AK-47s in the air in celebration of this Newsweek story would be wise to remember this:

One of the more interesting pieces of postwar evidence was uncovered in Baghdad by reporters for the Toronto Star and London's Sunday Telegraph. The February 19, 1998, memo from Iraqi intelligence, in which bin Laden's name was covered over with Liquid Paper, reported planned meetings with an al Qaeda representative visiting Baghdad. Days later al Qaeda issued a fatwa alleging U.S. crimes against Iraq. At about the same time, a U.S. government source tells Stephen Hayes of the Weekly Standard, Iraq paid bin Laden deputy Ayman Zawahiri $300,000.

The anti-war lefties also should re-read this post from mid-November, which linked to and excerpted from stories in the New York Times and the Weekly Standard about a Senate Intelligence Committee memo outlining the long list of clues strongly suggesting ties between Saddam and al Qaeda generally - and possibly even between Saddam and the September 11 attack specifically.

December 17, 2003

History Lesson

Lee Harris explains the roots of the Iraq war...

This is something that most liberal critics of the second Iraq war would like for us to forget - that this war is part of a historical process that began with Saddam Hussein's invasion of Kuwait, and cannot be understood apart from it. Before they can condemn the second Iraq war as an act of aggression, they had best go back and reflect on the origins of the first Iraq war. The first Iraq war began because one man, Saddam Hussein, wished to acquire the oil fields of his neighbor, and he used the army that he had built up with his country's own oil revenue in order to do this. Had he been permitted to succeed in this venture, it is certain that he would have used this new source of revenue in order to build up an even larger army that he could have then used to gobble up all the other militarily weak but oil rich Arab states in his vicinity, including Saudi Arabia, until the day arrived when he controlled all the oil fields of the middle East, at which time he could have commanded a virtually unlimited source of revenue that he could have directed to whatever aggressive purposes he thought best - a rather large amount of power to put into the hands of "a vile monster."

… Now let us suppose that, back in 1991, the American President and the American public had said, "Saddam has done nothing to us. He has only invaded a far away insignificant little country -- what difference can this possibly make to our own well being?" What would have happened then? Is it remotely conceivable that the rest of the world would have lifted a finger to stop Saddam Hussein, if the United States had been itself unwilling to shoulder the bulk of the burden of defeating him?

… Which leads us to something else we forget, namely, that unless America had acted then, no one would ever have known what a paper tiger Saddam Hussein's army really was, and today, rather than being a powerless old man held captive by the United States, Saddam Hussein would have been sitting on top of the world, his vast armies undefeated and his oil revenues sufficient to buy an arsenal of WMD's.

And, yes, all of this could have easily happened without Saddam Hussein having ever done a single thing to hurt a single American.

December 16, 2003

Whither the WMD?

John Hawkins reveals the truth about the weapons of mass destruction.

Worst case scenario, it's like we stopped a serial killer before he could kill again as opposed to actually catching him with a body in the basement.

December 15, 2003

Congratulations, Safaa

I have at various times in the past two years showed you this photo, by Tennessean staff photographer P. Casey Daley, showing little Safaa Albadran, 4, outside the Nashville Convention Center under a banner held by her father Karim, an Iraqi immigrant who opposes Saddam Hussein’s government, left, proclaiming Saddam: Out - Democracy In.

The photo was taken more than a year ago, when President Bush was in town for a political fundraiser. Also outside the convention center that day: About 300 anti-war protestors, many in need of shower, deodorant and haircut, holding signs calling Bush a terrorist because he favored the removal from power of a mass murderer who would have ordered Safaa and her father killed and buried in a mass grave if they'd held that sign up outside the Baghdad Convention Center.

I would dearly love to know what Safaa's father is thinking today, to feel the joy he must feel now that Saddam indeed is out, and Democracy indeed is on its way in. And I would love to know if Safaa understands that the flag she clutched that day is the flag under which her home country was liberated, so that no more little girls like her will be executed and buried in mass graves because their mommy or daddy criticized the tyrant.

Congratulations Safaa and Karim.

Preventing War

Polls show the American people increasingly support the war in Iraq, much to the chagrin of your average Democrat running for president who isn't named Joe Lieberman.

I support it too...

I support Bush's call and actions to spread democracy to the Middle East. A freer, more democratic Middle East will be more prosperous and produce fewer terrorists, and fewer Americans will die in Islamist terror attacks. Fewer Muslims will die, too, because if Islamist terrorists ever did use a WMD - a suitcase nuke, a bio weapon, a chemical weapon, a dirty bomb - to kill hundreds of thousands of Americans, the only possible response from the U.S. would be the vaporizing of the main capitals of the enemy. Baghdad. Tehran. Damascus. Maybe even Riyadh.

We will have no choice - if the enemy starts to slaughter us with WMDs, we will have to use even greater force - and that means nuking whole cities, killing millions in an eye-blink. The alternative would be to sit, do nothing, and be slaughtered.

I'd rather us go in now, kill a few thousand terrorists and Iraqi Baathist dead-enders, lose only a few hundred Americans (as tragic as that is for them and their loved ones) and prevent a far more horrific future by planting democracy and creating a new ally in the middle of the Middle East - and setting off a wave of change in the Middle East that will turn the Islamic world from its current, suicidal, direction.

I supported the conventional-arms invasion of Iraq now so we won't have to defeat Iraq later by killing tens of millions of people with horrific weaponry.

Because of what we did to Saddam now, in the future - say, 25 years from now - no one will ever ask a question like this:

If you could go back in time, knowing Saddam was going to give those Russian suitcase nukes to al Qaeda, who used them to vaporize Israel (6 million dead) and take out New York, Washington, Los Angeles and Chicago (100 million dead,) would you have supported stopping him before it got that far?

This year, with this murderous dictator, we did.

December 11, 2003

A Rebellion Against Low Taxes?

South Knox Bubba is pointing to this commentary in the Knoxville News Sentinel story about a "rebellion" against low taxes in Crossville, Tennessee. It's a heartwarming story about how some folks, who wished the county commission had approved a proposed property tax increase for schools, are sending money to the county school system anyway. Heartwarming. But utterly stupid to call it a "rebellion" against low taxes.

"I started thinking about that vote, and the Lord wouldn't let me quit thinking about it. I figured out what the extra tax would mean to me. It turned out to be only $13.30." Johnson scribbled a check and sent it to the Crossville Chronicle, along with a challenge for other taxpayers to do likewise. ... At last count, the "rebellion" has raised a little more than $5,100.

The newspaper stories I've read imply that these people are paying a "tax" by sending their checks to the school board. The KNS story SKB links to even says it:

The people are paying a new tax even after it was defeated.

Taxation is forced conscription of your money by government. These people in Crossville are making voluntary charitable donations. It is absurd to say they are "paying a new tax even after it was defeated" because, well, follow the logic here if you can: There IS no "new tax" because the proposed tax increase was "defeated."

Hence, the notion that this is some sort of "rebellion" against low taxes is just fantasy spin by a writer who probably voted FOR the proposed tax and thinks it ought to have passed.

I actually like what these people are doing - donating money. I've long believed that if you lower taxes, but continue to highlight community needs, people will increase their charitable donations. In fact, the 1980s saw a huge increase in charitable giving thanks in part to the Reagan tax cuts that freed up more people to donate more money.

What's happening in Crossville also is a good example of why Tennessee needs something akin to Colorado's Taxpayers Bill of Rights.

In Colorado, if state or local government wants to raise taxes, it has to get the people's permission in a referendum, which forces the legislative body to make its case to the people about why the increase is needed, what it will be used for, etc. Referendums are also required before government spends surplus revenue. In one town, after voters said "no" to a proposal to spend surplus revenue on expanding the town's park system (and some other things), some folks donated their rebated tax money to the park system. It's democracy - the people vote, and then the people are free to donate, or not donate, as they see fit.

December 10, 2003

WMD Update

A Badgdad dentist who blogs under the initials A.Y.S. comments on these photos of the unearthing of an Iraqi MiG fighter jet found buried in the Iraqi desert, and some great comments...

Now, I think it is very easy to hide the (WMD's) in a desert! ...Am I right.. watch at the area that might be used to bury a town!! So, how can they find the WMD's in few months?? I think it will last for years to search every yard in Iraq!! It is difficult..isn't it?

December 8, 2003

Not Planning for Failure

I'm launching a new web project... From now on, I will refer to George W. Bush as a great President at least once a day on my blog. Why, you ask? Well, someone came up with the idea to link George W. Bush's official White House bio with the words "miserable failure" in popular search engines, which is silly because we all know who the real miserable failure of a president was. So, I'm fighting back - and you can, too. If you have a blog or web site, help raise the link between George W. Bush and the phrase 'great President' by copying this link and placing somewhere on your site or blog. Because George W. Bush is a great President and we need to re-elect this great President in November 2004 so America can continue to be lead by a great President during the crucial years ahead in the War on Terror, during which time we can not afford to be led by another miserable failure - we must have a great President.

Sunday Sermon

On the end of uncertainty:

I was stunned by two things: First, that it was a verse no one had ever told me about before - and I thought I already knew everything in the Bible. Second, that there was actually a Bible verse that declared you can know the outcome ahead of time. You see, up to that point, I was pretty sure one could never know for certain. I had been impressed with all of the prayers that went this way: "And Lord, if in the end we have been found faithful, please give us a home with thee in heaven." You weren't supposed to be able to know - I thought that the only way to be sure of one's salvation was by making sure you were a really religious person. Never miss church; learn those memory verses; don't mess up with your life.

You just believe.

My purpose in writing is simply this: that you who believe in God's Son will know beyond the shadow of a doubt that you have eternal life, the reality and not the illusion. I John 5:13

Prepared text here. Audio here.

UPDATE: Michael Williams is also writing about religion today, and posing the two most important questions every human ought to consider.

Beggar Blogger

Andrew Sullivan says if you don't give him $20, he'll stop blogging.

If you visit here regularly, we ask for $20 donation for the next twelve months; if you come every day or more than once a day, please consider giving more. Without it, the blog won't survive.

Here at HobbsOnline I figure if I do a good job, folks will donate via the Amazon tip jar or PayPal in recognition for the good work I have already done. I'd just feel sleazy threatening to shut down my blog if you didn't give money - and then take a month off after you did.

December 5, 2003

The War On Terror is a Battle in a Much Longer War

So says writer Clark S. Judge, in an essay outlining the "100 Years War" that America has been fighting since the early 20th Century.

From the fall of the Berlin Wall until the September 11 attacks, Americans believed they were living in a largely post-conflict world - the "end of history" as Francis Fukuyama titled his famous 1992 book. Humanity was embracing an enduring state of liberal democratic happiness, a world entirely broken from the bloody past. Since the September 11 attacks, a shadow of doom has run across this new-age portrait, but the belief that we are in an entirely new age remains.

Yet, viewed with a little more attention to history and less to the euphoria and hysteria of the moment, this "new world" appears hardly new at all. Instead the major conflicts of the twentieth and early twenty-first centuries appear to be chapters of a single story, of a single epochal struggle: a new hundred years' war that is almost finished and will shape human institutions for centuries to come.

... Again and again in an unbroken line stretching from Wilson’s 14 Points to Roosevelt and Churchill’s Atlantic Charter to George W. Bush’s recently issued National Security Strategy, the United States has proclaimed as its goals free peoples, free nations, free expression, free commerce, enduring peace among less fearsomely armed nations, and human dignity.

December 4, 2003

Pushback

I was thinking a little more about this post yesterday - about an essay on Jeff Jarvis' blog about how technology such as webcams and weblogs are rendering the media's current methods obsolete - as I helped a professor at the university where I work set up his own weblog.

I work in the university PR office writing press releases and encouraging the media to write about various events here, and to include university faculty as "experts" quoted in news stories. I also have begun helping faculty members set up weblogs, and maintain a blog about blogging. The first, Dr. Jeff Cornwall's The Entrepreneurial Mind, is beginning to get noticed in the economics-and-business niche of the blogosphere - and has already been noticed by the local business press, which reported its launch and, in the case of one local business publication, republished one of Dr. Cornwall's posts as an op-ed.

The media world is being transformed by blogs and other technology that is increasingly pushing the power of the "press" into the hands of individuals. A few years ago, the big Internet content buzzword was "push," as Big Media and the tech industry focused on ways to "push" content over the web to Internet surfers. It was a top-down, force-feed, audience-as-passive-consumers broadcast model. "Push" bombed.

Meanwhile, Blogger and others launched the weblogs niche, the price of digital cameras fell to affordable levels, digital video cameras dropped below $1,000, webcams became cheap and cell phones became cameras, empowring the audience in ways unprecedented in the history of media. "Push" as envisioned by Big Media may have bombed, but there is a "push" happening in the news business.

The audience is pushing the content - by linking to and highlighting obscure news articles, digging up facts and data that run counter to the major media spin, "fisking" news stories for bias and error, and publishing its own coverage of news events by blogging first-person accounts increasingly accompanied by digital photos, audio and video.

The media has been pushing its audience around for years. Now, the audience is pushing back.

December 2, 2003

Is Latent Entrepreneurialism a Threat to Economy?

Bill Wellborn considers the results of a survey released by FedEx showing that two out of three workers in America would rather own their own business ... and sees the seeds of economic calamity...

The survey said 67 percent - that's two out of every three people for those of you challenged by percentages - dream about owning their own business. And 55 percent - that's every other person you have ever known - would leave their job tomorrow to start a business if a little thing like money were not an issue. I was flabbergasted. I was floored. I was fairly shocked at this revelation.

I wondered what would happen if two out of every three people employed in America suddenly quit their jobs and started their own businesses. The companies they left behind would probably fail because they wouldn't be able to find employees to fill the 67 percent that left. And the start-up businesses would eventually join the 96 percent of new businesses that the Department of Commerce predicts will fail within 10 years. Our economy would collapse, leaving the final opening Wal-Mart will need to take over the free world.

Huh. I wonder what Jeff Cornwall thinks about this.

UPDATE: Well, now I know what Cornwall thinks about the FedEx survey. He also has a link to the FedEx PowerPoint presentation of the survey results, here.

UPDATE: It is interesting to me that, in the FedEx survey, "Become Wealthy" was not the top reason respondents said they had started a business or wanted to start a business. In fact, fewer than one in 10 gave that is their primary reason for starting a business or wanting to start a business - far more said they wanted to "Do Something You Love," "Be Own Boss," and "Have Work/Family Flexibility."

Licensing Illegals is a Risky Road

Licensing Illegals is a Risky Road
Here's an editorial criticizing the giving of driver's licenses to illegal aliens.

Taking the "practical" route of giving licenses to illegal immigrants who now drive without them will only further encourage more Mexicans and others to illegally cross the border, endangering their lives. Why lure more migrants to take such risks? ... Granting the licenses now would put expediency over legality, and put more migrants and the nation at risk.

Caution: Children Playing

"After a 90-minute policy discussion with Madonna...," it has been reported, Madonna was impressed with candidate Wesley Clark. Yeah. This is gonna help Clark big time in flyover country.

December 1, 2003

Self-Employment Boosting Economic Recovery

The Wall Street Journal has a story today with data showing how the growth in self-employment is boosting the U.S. economy.

Are start-up companies helping to drive the economic recovery? For months, economists who pore over the Department of Labor's employment surveys have suspected as much. That is because for the past 18 months, more and more Americans have been going off to work on their own. Self-employment has increased by 400,000 in the past year alone, according to a monthly survey of American households conducted by the Labor Department. But it has been hard to tell whether these new self-employed workers were really profiting from their ventures, or whether they were just biding their time during a period of painful unemployment.

Now, investment strategist Kenneth Safian says he has found evidence that small enterprises really are playing an important role in the recovery. The evidence is buried in the government's monthly personal-income report, which was released last week. Proprietors' income, which is the income earned by individuals from running their own businesses and from partnerships, is surging. The Commerce Department reported Wednesday that proprietor's income, excluding the farm sector, was up 8.6% from a year earlier. By contrast, the wages and salaries of individuals on corporate payrolls were up just 2.3%.

Proprietor's income covers a broad swath of the economy - everything from larger law firms to one-person construction companies or tech consultants operating out of a home office. Mr. Safian, who is president of Safian Investment Research Inc., based in White Plains, N.Y., says the upshot of the latest trend is that more workers are striking out on their own and earning money doing it. The economy, he says, "is becoming more entrepreneurial."

If that is the case, it would say a lot about the dynamism of an economy that has been through series of shocks in the past three years. It might also help explain why official payroll employment levels have been so depressed in recent months. If more people are striking out on their own, then their job status in some cases wouldn't show up in the government's measure of employment levels at established businesses, which is down 2.4 million since the recession started in March 2001.

Are States' Economic Development Tax Incentives Unconstitutional?

Reader Ben Cunningham sent me a link to an interesting article on the web site of the respected Mackinac Center for Public Policy that explores where tax rebates and other incentives offered by various states to lure new businesses might violate the Commerce Clause of the U.S. Constitution.

But a far more important development is Cuno, et.al. v. Daimler Chrysler, in which the plaintiffs argue that such incentives violate the Commerce Clause of the U.S. Constitution. The case was filed by a number of parties, including two Michigan residents, and is aimed also at the state of Ohio and the city of Toledo.

The Cuno case is described as a "true test case" because it was brought largely to test the constitutionality of such programs. In March 2000, attorneys for the plaintiffs filed suit over a $300 million incentive package the state of Ohio offered to DaimlerChrysler in exchange for maintaining long-standing jeep production in Toledo, instead of opening a new plant in Michigan, just over the border.

The suit alleges that Ohio's granting of property tax abatements and/or tax credits to DaimlerChrysler represents a violation of Commerce Clause restraints.

...

According to plaintiff counsel Peter Enrich, the Commerce Clause was designed to prohibit state regulation and tax policy from interfering with economic activity between the states. For example, one state may not raise barriers to competition with another state in order to protect its own interests.

But what about the power of a state being used to advance its own interests at the expense of another state? Does this not also constitute undue interference, on the part of that state, with interstate commerce? Enrich argues that the United States Supreme Court has "consistently struck down on Commerce Clause grounds, state tax breaks or benefits that discriminate against out-of-state economic activities or interstate enterprises." In other words, when one state provides financial incentives to a business to build or expand a facility within its borders, and those incentives make the investment less costly than it would otherwise be if it were invested in another state, the incentive is unconstitutional.

On the other hand, in their brief before the court, defendant's attorneys argue that the Commerce Clause "does not require that all states maintain the same taxing system and rates." In other words, incentives are just part of the states' overall tax structures. Michigan may have a lower overall income tax burden, but the fact that a business locating in Michigan has lower taxes than one locating in Ohio doesn't constitute discrimination against Ohio. Defendants argue that the Commerce Clause only prohibits states from erecting barriers to commerce. For instance, Ohio may not impose tariffs on Michigan-manufactured Cadillacs to protect Ohio-made Hondas.

Back in the early 1990s, when I was a reporter for the Nashville Business Journal, I wrote a series of stories exploring how Kentucky's more aggressive use of tax incentives was helping that state land a lot of new manufacturing company projects for which Tennessee was also on the short list. (None of the stories are online - this was before Al Gore invented the Internet.)

One key Kentucky incentive, called KREDA, allows eligible businesses to receive a 100 percent credit against the Kentucky income tax liability on taxable income generated by the project. In plain English, what it meant is that a company building a new plant in an economic distressed county could keep all of the state income tax paid by its new employees and use it to finance the construction of the new plant.

Tennessee, which did not and still does not have a state income tax (other than a tax on certain investment income), found it very hard to compete. Ultimately, the stories written by myself and fellow NBJ reporter Bill Lewis (who later became NBJ's editor, and now is a business reporter at The Tennessean) led to then-Gov. Ned McWherter reforming the state's economic development incentives. Though Tennessee's offerings remained far less generous than Kentucky's, they seemed to tilt the playing field somewhat back in Tennessee's favor. Key Tennessee incentives include state funds to pay for infrastructure improvements (rail lines, roads, utilities and such) for new plants and for communities to prepare new sites for industry, and funds for worker training. Those, combined with the state's excellent central location, good work force, low taxes and such, helped make Tennessee one of the leading states for economic development in the 1990s, with momentum that continues still.

The Mackinac Center for Public Policy article raises the possibility that the U.S. Supreme Court could strike down states' economic-development tax incentives and subsidies as a violation of the Commerce Clause. I hope not. Because if they do it is a short step from there to a future ruling declaring that all states must have identical tax codes, so that none would tax less and therefore be more attractive to businesses or individuals in other states.

After all, differing tax codes cause some people who live near a state border to leave their own state and shop in a neighboring state, don't they? Isn't that a case of a tax code influence interstate commerce?

The right view in my book is that the Commerce Clause was intended to prevent states from enacting punitive taxes and regulations on interstate commerce but was not intended to forbid states from deciding for themselves how to tax commerce within their own borders. And if such state tax codes are percieved by businesses and individuals in other states to be less onerous than the tax code in their own state, and they decide to relocate, or drive across the border to shop, the state with the more-onerous tax code has, after all, the constitutional right to lower taxes.

That view of the Commerce Clause protects an environment in which states compete to keep taxes low. Re-interpreting the Commerce Clause to outlaw economic development tax incentives removes the incentive for states to keep their taxes low. It also might create a perverse incentive for states to raise taxes. Why? Because other states would also have to do raise taxes in order to not run afoul of the Commerce Clause. State legislatures would see no downside to raising taxes, especially on business, since all other states would be forced to do likewise (and have no reason not to) and politicians from coast to coast would promise all sorts of new programs funded by the flood of new revenue, and tout those - instead of low taxes and generous tax incentives - as "economic development" lures. Another step on the road to cradle-to-grave socialism.

UPDATE: Michael Williams says "federalism is an application of competitive market principles to government," and calls for scaling back the Commerce Clause via repeal of the 17th Amendment, which replaced the selection of senators by state legislatures with the direct election of senators by the people of each state.

Sunday Sermon

Here's your Sunday sermon for the week. I'll post a link to the audio when it becomes available. I look forward to hearing it - the Hobbs family stayed home Sunday as the two little ones had colds, Mom too, and Dad felt like he might be coming down with a cold of his own. Here's an excerpt from the pre-prepared text. Warning: No Hellfire and Damnation ahead...

Christians nowadays are too often willing to allow ourselves the luxury of dividing our experience of Christ into mutually exclusive categories of faith and obedience, believing and doing, claiming Christ as Savior and following him as Lord. I am rather sure that writers such as Paul, James, or Peter – and certainly our friend John – would find such distinctions meaningless.

On the one hand, all these biblical writers certainly affirmed that nobody could be saved by doing enough. Nobody can match the perfect commands of God with perfect obedience. Not one of us is without sin under law. There is no "merit system" in the Christian religion by which we balance our failures with good deeds that make up for them or tip the balance our way on the weighing scale of divine justice. The biblical argument for our lostness goes this way: the wages of sin is death, all of us are guilty of sin, anyone who denies he sins is both a liar and indicts God as a liar, and so . . . well, you can draw the conclusion even if you’ve never had a course in logic.

There is one and only one path to life. It has been blazed and marked for us by Jesus Christ – God among us to make atonement for sin and to effect a perfect reconciliation between God and humankind. No, Jesus himself is the path to God. He is the Way, the Truth, and the Life; no one can have access to God except through him. So the essential proclamation of the Christian faith is not "Do this!" but "Believe this!" And what we are called to believe is the gospel – the good news that heaven has borne the burden of our redemption in Christ’s death, burial, and resurrection. We are neither asked nor expected to find our own way to God but to receive salvation as heaven's free gift through faith in Christ alone.

On the other hand, it has been the fatal error of many attempts at Christian theology to equate faith in Christ alone with faith that stands alone. In his effort to keep his followers from mistaking and misapplying his teachings, John Calvin used to say, "It is faith alone that justifies, but the faith that justifies is never alone."