(David Mansdoerfer) – Today we will be talking with Nevada Policy Research Institutes (NPRI) Deputy Policy Director Geoffrey Lawrence.
(DM) – NPRI recently appointed Andy Matthews as the new president. Do you see any major changes in how you guys operate now that he is in charge?
(GL) – Oh, yes. Sharon Rossie was a tremendous leader who really brought NPRI to the forefront of the policy debate in Nevada. Under her five-year tenure, NPRI grew from a staff of 3 to the current staff of 12. Over that same time, NPRI’s number of appearances in print, radio and television media grew from about 40 per year to over 1,000 today and NPRI has become a well-known and respected/feared presence in the halls of the legislature.
And I think that Andy is committed to continuing all of the things that Sharon did so well, but at the same time, he brings a new and energetic perspective to the job and I am very excited about his vision. I know Andy plans to aggressively expand NPRI’s reach across the state, making sure that the information we’re publishing is reaching not only citizens in the Las Vegas and Reno areas, but in the state’s rural as well. He envisions NPRI becoming a truly statewide operation. I also know that Andy is placing a heavy emphasis on fundraising so that NPRI can bring on more great analysts and reporters to expand the breadth of the Institute’s policy analysis and investigative reporting operations. So, all in all, I’d say that Nevadans can expect us to continue to do a lot of the things that we’ve done so effectively in recent years, but with some new and innovative ideas added to the mix.
(DM) – What is your take on the Nevada economy? What can be done to spur job creation?
(GL) – Huh…I should warn you that posing an open-ended question to me will generate a lengthy response.
Nevada certainly has its problems, with the nation’s highest unemployment and foreclosure rates. We’re also seeing increased competition in the gaming industry as governments across the world have begun to liberalize their gaming laws.
A related obstacle facing the Silver State is that, despite a relatively unskilled labor force, Nevadans have always enjoyed above average incomes. Other states’ traditional prohibition of gaming rendered Nevada’s gaming industry highly lucrative – ultimately leading to high wages for relatively unskilled workers. Now that the state’s monopoly of tolerance for gaming has begun to erode, it will be difficult for our unskilled workers to maintain the same standard of living. Many will be unwilling to work for a lower income, especially when so many public subsidies for unemployment are available – a factor which contributes to the current unemployment rate.
That said, there are multiple potential avenues for growth, but many of them will require a drastic shift in the direction of public policy. First, we should not overlook the fact that Nevadans are innovative and still live in a relatively free society. Famed economist Joseph Schumpeter always talked about “creative destruction” – the notion that, like a phoenix rising out of the ashes, successful entrepreneurs profit from the reduced rents and wages that accompany a recession and build the leading enterprises of tomorrow. Given Schumpeter’s framework, it becomes clear that the only real obstacle to growth is when public policy erects barriers to the entrepreneur. Unfortunately, we’ve seen this recently at both the federal and state levels – from Obamacare mandates to talk of increasing capital gains taxes to a doubling of the state’s payroll tax and business license fees.
Second, Nevada needs to move away from corporatist boondoggles and toward competitive entrepreneurship. The so-called “green jobs” myth is just that – a myth. What few jobs have been created in renewable energy have come through massive subsidies and legal mandates that require individuals to purchase renewable energy whether they want to or not. As I pointed out in a recent commentary at npri.org, some “green jobs” have cost the public as much as $23 million each. It’s possible that renewable energy will become competitive in the long run, but this will only happen in the long run. Mandates and subsidies that attempt to force this issue before the technology is mature enough to compete on the market only destroy wealth.
Third, Nevada needs to push hard to privatize federal lands. Eighty-six percent of the state’s land remains under the control of federal authorities today despite assurances at the time of statehood that these lands would be auctioned off to repay Civil War bonds. It’s high time for federal policymakers to live up to that promise. Silver State government could realize both immediate and ongoing financial gains through the sale or transfer of federal land by collecting a portion of the sales proceeds and collecting future property taxes as well as the federal share of mining taxes. This would allow for a lowering of currently assessed tax rates.
Fourth – and this is only my personal viewpoint, I think serious consideration should be given to establishing a nuclear reprocessing center in Nevada. If policymakers were really serious about bringing high-tech, high-paying jobs to Nevada, this would be the first topic of conversation. The capital investment alone would be larger than anything Nevada has known and it’s virtually certain that an entire nexus of advanced technologies would form a locus around the world’s largest nuclear reprocessing center. It seems shortsighted that we’ve given preference to the older and far more dangerous method of storing nuclear waste on-sight at the power plants in lieu of reprocessing the spent fuel rods as is done in other advanced nations.
Finally – and again, this is just my personal opinion, I believe state lawmakers should give serious consideration to extending the legal advantages that Nevada previously enjoyed in gaming by ending prohibition for other industries that are currently forced onto black markets. Decriminalization of marijuana, for instance, would not only provide an immediate boon the legal economy – it would also eradicate the violence associated with the illicit drug trade, lessen taxpayers’ burden of enforcement and provide a potential public revenue source. The experience of decriminalization in Portugal has refuted any argument that prohibition laws are the only thing standing between a witless public and rampant drug abuse. Drug use there has actually declined in the years since decriminalization.
(DM) – Will the Occupy Wall Street movement be effective?
(GL) – I don’t understand the theme of this movement and neither, I think, do its supporters. “Occupy Wall Street” is billed by some as a protest against free enterprise and by others as a protest against cronyism and government bailouts – the exact opposite of free enterprise! It looks to be just a group of disaffected individuals unsure about where to aim their frustration.
I don’t immediately see much significance to this movement. However, one warning lurking in the back of my mind is that it was a series of similar protests by young, disaffected, left-leaning individuals that eventually culminated in the rise of the National Socialist Workers Party in 1930s Germany. I’m not saying that Hitler-esque totalitarianism is imminent within the United States, but Friedrich Hayek would definitely be warning about the “Road to Serfdom.”
(DM) – Are the rich not paying their fair share in taxes?
(GL) – This is a trick question. On one hand, I can say that the top one percent of taxpayers paid 38 percent of federal taxes in 2008 while the bottom 50 percent of taxpayers paid only 3 percent of federal taxes that year. Indeed, individual taxes are extremely progressive in the United States. At the same time, the United States suffers the highest corporate income taxes in the developed world.
That said, the rich don’t get rich by being stupid. They often find ways of avoiding taxes – whether it be shipping corporate profits offshore or holding equities in foreign assets as opposed to American assets so as to avoid capital gains taxes. This is where the so-called “Laffer Curve” applies – if American corporate income tax rates, for instance, were reduced, it’s likely that revenues would increase because fewer profits would be shipped offshore.
I certainly don’t think there’s a case for making the federal tax system even more progressive. It should be noted that progressive tax systems impede capital formation which, in turn, limits wage growth up and down the income scale. If anything, federal tax rates should be lowered – even if this might result in the wealthy paying more taxes due to the Laffer effect.
(DM) – If you could eliminate one regulation – what would it be?
(GL) – Nevada’s renewable portfolio standard. The higher electricity rates that result from this regulation make Nevada a less attractive destination for investment. We’ve already got the highest electricity rates in the region – why would we intentionally make them higher?
(DM) – What issues will you be focusing on in the next couple of months?
(GL) – I’m currently working on a legislative issues guide, which we’ve dubbed “Agenda 2013.” I’m very excited about this publication. It will examine the top 50, or so, policy issues confronting the state legislature and devote two pages to each one.
Agenda 2013 will provide a ready-made platform for fiscally conservative candidates, complete with hundreds of proposed solutions that will serve as ready-made bill draft requests.
(DM) – NPRI has long been an advocate of school choice. How is the fight for school choice going in Nevada?
(GL) – Some huge steps forward were taken in 2011 within the education reform movement. Nationwide, eight new school choice programs were created and 11 existing programs were expanded. However, the most exciting reforms skipped over Nevada.
Here, school choice proposals barely got a hearing in the legislature. Nevada lawmakers did, however, reform the way teacher tenure is granted and required student achievement to be included in teacher evaluations. There was also legislation that expanded the empowerment school program, created a state charter school authority and that created a program of alternative teacher certification. These changes all have to be viewed as successes for those who care about the next generation of Nevadans.
(DM) – If you could sit down with any economist, dead or alive, who would it be?
(GL) – There are so many good ones to choose from. I always say Murray Rothbard is my favorite, but if I could sit down with just one person it would definitely be Ludwig von Mises. Not only did Mises contribute volumes to the methodology and understanding of economic phenomenon, but perhaps no other academic has shown as much courage under fire to defend the pursuit of truth as did Mises.
First, the Nazis forced him out of his native Austria in the middle of the night because his free-market ideas were viewed as a direct threat to the Reich. He took refuge in Switzerland and had to start over after leaving all of his research behind in Vienna – only to again be forced out a few years later. Even after coming to the United States and accepting a position at New York University, he was constantly ostracized within the academic community because he was the first to systematically point out that economic calculation is impossible in a socialist commonwealth. To this day, his masterpiece, Human Action, is probably the greatest economics text ever written.
(DM) – Other than your recreational readings into the “dismal science,” how do you spend your free time?
The truth is that I love my job and I’m fortunate enough to be paid for doing it. Even when I’m not physically at work, I’m usually either thinking about an issue I’m working on or reading a policy paper or economic theory.
However, I do enjoy many hobbies that most people would consider a little more “normal.” I’m an avid baseball fan and will never shy away from a good baseball discussion – especially if it involves the Dodgers. I’m also into mixed martial arts and I train at Tapout Las Vegas several times a week, in addition to lifting weights and running. I’ve only been doing that for a few months. However, I did wrestle throughout high school and through four years of undergrad where I was a Division II All-American…okay, Academic All-American. Finally, I’m getting married next month to a beautiful young lady and we spend every moment we can together.
(Mr. Mansdoerfer is the Director of Legislative Affairs for Citizen Outreach. He holds a Master’s degree in public policy with an emphasis in international relations and state & local policy from the Pepperdine School of Public Policy. You can follow him on Twitter at @DPMANSDOERFER)