[Congressional Record Volume 140, Number 73 (Monday, June 13, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
 FREE ENTERPRISE, PRIVATE OWNERSHIP OF PROPERTY AND INDIVIDUAL FREEDOM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Tennessee [Mr. Duncan] is recognized for 5 minutes.
  Mr. DUNCAN. Madam Speaker, the Friedman magazine is the monthly 
publication of the Foundation for Economic Education. I think it is one 
of the finest publications dealing with economic and political issues 
available on the current political scene today. Certainly, it is an 
organization and a magazine which promotes those things which made this 
country great: Free enterprise, the private ownership of property and 
individual freedom.
  After all, that is what most debates in this Congress boil down to, a 
debate between those who favor the people and more freedom for them and 
those who favor the Government.
  In the current issue of the Friedman magazine, Mr. Lawrence W. Reed, 
who is the president of the Mackinac Center for Public Policy, a free 
market research and educational organization headquartered in Midland, 
MI, has an outstanding article. I would like to read a portion of this 
article into the Record at this time.

       Politicians love to promise the future and ignore their own 
     handiwork of the past. They typically spend much more time 
     concocting new schemes for intervention than they spend 
     searching for old ones that deserve to be repealed.

  How true that is. I was a lawyer and a judge before I came to 
Congress. We have so many millions of laws and rules and regulations on 
the books in this country today that no computer can keep up with all 
of them, much less a human being. That is certainly one of the points 
made by Mr. Reed.
  He goes on to say several things that I think are worth repeating.

       What really deserves our attention are those specific 
     barriers to economic opportunity erected by government--
     regulations, taxes, licensure laws, unfunded mandates, 
     building and zoning codes, special privileges for organized 
     labor, subsidies to business, chronic budget deficits that 
     consume needed capital, a welfare system that puts a premium 
     on idleness and a penalty on work, and an education monopoly 
     that fails to teach children as it vacuums their 
     parents' wallets, to name a few.
       Each 1 percent increase in the Federal tax burden, report 
     economists William Dunkelburg and John Skorburg, results in 
     an 1.8 percent decline in national output and a 1.14 percent 
     decline in national employment--a loss of about 1.5 million 
     jobs.

  I would like to repeat that estimate by these economists: Each 1 
percent increase in the Federal tax burden results in a loss of about 
1.5 million jobs.

       A study from the National Center for Policy Analysis points 
     out that a 1 percent decrease in the tax rates on all savings 
     and investment income would generate enough new investment to 
     increase the Nation's output by $25 billion.

  So a 1-percent tax increase results in the loss of about 1\1/2\ 
million jobs.
  Madam Speaker, I yield to the gentleman from California [Mr. Hunter].
  Mr. HUNTER. Madam Speaker, I think the gentleman for yielding. He is 
one of the most astute Members of the House.
  I think that his point is a point that should not be lost on this 
Congress or any Congress, and that is that if the private sector keeps 
a few bucks in their pocket and does not have to give it to Uncle Sam 
in the case of increased taxes, they can use those dollars to buy 
machinery, hire more people. And those people that they hire will then 
be paying income to the Federal Government. They will be paying 
withholding taxes. It would make the entire economy expand by cutting 
taxes and letting free enterprise create a few jobs.
  I thank the gentleman for bringing this very important issue to us 
this afternoon.
  Mr. DUNCAN. I thank the gentleman from California. He makes an 
important point, because all money that we can leave in the private 
sector, most economists estimate will create about two-and-a-half times 
the number of jobs created by government.
  I remember a few months ago, when we had the so-called jobs bill that 
the President set forth, and by the administration's own estimates, it 
was going to create 219,000 jobs but 144,000 of those jobs were 
temporary summer jobs. And even those temporary summer jobs were going 
to cost $89,000 each.
  One of the things that disturbs me the most about the President's 
health plan, Time magazine, a few months ago, had an article that said, 
prognosis, lost jobs. And they said the administration itself has an 
internal working paper that estimates that if the President's health 
plan goes forward or some version thereof, that it could cost as many 
as a million jobs lost over the next 5 years.
  Some estimates, as you know, are even higher. But I do not think that 
we should be passing any law in this Congress that is going to destroy 
a million jobs over the next 5 years. I am sure that the gentleman 
shares that opinion.
  But this article that I have referred to today, it continues in vain. 
It makes some points that I think are worth making at this time.
  Mr. Reed says:

       That dozens of studies have shown that excessively 
     restrictive zoning laws, building codes and property taxes 
     constitute the greatest obstacles to affordable housing for 
     the poor. Minimum wage laws, by making it illegal to employ 
     people whose skills are worth less than Congress decrees, 
     keep hundreds of thousands from getting a start in the job 
     market. Endless regulations designed to curtail entry into 
     markets from trucking to taxis freeze out many a would-be 
     entrepreneur from creating new businesses.

  I think that is such an important point. Big government helps those 
with power and influence and wealth. But big government hurts the poor 
and working people of this country worst of all.
  Mr. Reed goes on:

       I'm not talking about basic laws which prevent or punish 
     harm to others. I'm talking about the primary social disease 
     of our age--government beyond its proper bounds, playing 
     Robin Hood, Santa Claus and Mother Hen all at the same time, 
     inflicting real damage to real people who have victimized no 
     one. Economists, at least, are increasingly taking a critical 
     eye to such policies.

  Madam Speaker, I include for the Record the article from which I have 
quoted.

              Economic Opportunity Needs a Moral Dimension

                         (By Lawrence W. Reed)

       In this Congressional election year, expect to be barraged 
     with rhetoric about ``getting America moving again,'' 
     ``creating jobs, jobs, jobs,'' and ``stimulating the economy.
       Politicians love to promise the future and ignore their own 
     handiwork of the past. They typically spend much more time 
     concocting new schemes for intervention than they spend 
     searching for old ones that deserve to be repealed.
       What really deserves our attention are those specific 
     barriers to economic opportunity erected by government--
     regulations, taxes, licensure laws, unfunded mandates, 
     building and zoning codes, special privileges for organized 
     labor, subsidies to business, chronic budget deficits that 
     consume needed capital, a welfare system and puts a premium 
     on idleness and a penalty on work, and an education monopoly 
     that fails to teach children as it vacuums their parents' 
     wallets, to name a few.
       Each 1 percent increase in the federal tax burden, report 
     economists William Dunkelburg and John Skorburg for the Cato 
     Institute, results in a 1.8 percent decline in national 
     output and a 1.14 percent decline in national employment--a 
     loss of about 1.5 million jobs. A study from the National 
     Center for Policy Analysis points out that a 1 percent 
     decrease in the tax rates on all saving and investment income 
     would generate enough new investment to increase the nation's 
     output by $25 billion.
       Dozens of studies have shown that excessively restrictive 
     zoning laws, building codes, and property taxes constitute 
     the greatest obstacles to affordable housing for the poor. 
     Minimum wage laws, by making it illegal to employ people 
     whose skills are worth less than Congress decrees, keep 
     hundreds of thousands from getting a start in the job market. 
     Endless regulations designed to curtail entry into markets 
     from trucking to taxis freeze out many a would-be 
     entrepreneur from creating new businesses
       I'm not talking about basic laws which prevent or punish 
     harm to others. I'm talking about the primary social disease 
     of our age--government beyond its proper bounds, playing 
     Robin Hood, Santa Claus, and Mother Hen all at the same time, 
     inflicting real damage to real people who have victimized no 
     one. Economists, at least, are increasingly taking a critical 
     eye to such policies.
       It must be understood, however, that economic analysis will 
     not by itself make the case for ridding ourselves of these 
     man-made obstructions. It is powerful, but still not enough, 
     to simply tote up the numbers and show how many jobs are 
     erased by particular actions of government. It is not enough 
     to produce graphs and models that plot the fluctuations in 
     Gross National Product.
       What is sorely needed in the discussion is a recognition of 
     the moral backwardness that so many of these barriers to 
     economic opportunity represent. Dismantling the barricade 
     requires that we who advocate freedom of enterprise seize the 
     high ground. We must appeal to what most people instinctively 
     know is right, not just what makes the cash register sing. We 
     must learn to speak of the deleterious actions of government 
     in terms of trampled rights, broken dreams, and ruined lives.
       For instance, when the city of Detroit in my state 
     imposes--as it does--a tax burden that is seven times the 
     average burden in Michigan municipalities, that is not simply 
     bad economics. It is an affront to every citizen of that city 
     who wants the best for his family, who wants simply a chance 
     to be productive. Those high taxes should evoke visions of 
     hungry children, of a boarded-up business that was once 
     someone's dream, of homes torn apart because of the 
     breadwinner's inability to pay the bills of irresponsible 
     politicians.
       In case a reader might think I'm dealing in generalities, 
     let me provide a very specific example--also from my state of 
     Michigan. As is the policy in 41 other states which regulate 
     the business of trucking, the ``authority'' to haul goods 
     within the state is granted by state government. The Michigan 
     Public Service Commission is empowered to determine who can 
     be in the trucking business, what goods they can and can't 
     transport, where they can haul them, and what rates they can 
     charge their customers. Doing business as a Michigan trucker 
     means playing an elaborate and costly game of ``Mother, May 
     I?'' with state bureaucrats--filing forms and begging 
     permission every step of the way.
       The regulatory apparatus is not designed to protect the 
     public from any harm. Rather, it is a means by which some of 
     the regulated firms discourage newcomers and keep rates 
     artifically high. One company, known as Federal Armored, 
     Inc., ran afoul of these rules recently. A Public Service 
     Commission ruling stripped the company of its right to do 
     intrastate business in Michigan, resulting in its severance 
     of more than 160 employees.
       There were no public health or safety questions involved, 
     no alleged fraud, and no complaints against Federal Armored 
     by any of its customers or employees. The company's 
     ``crimes'' boiled down to nothing more than charging 
     customers less than the fixed rate and failing to file 
     worthless paperwork with state regulators. The PSC itself 
     brazenly asserted, ``the absence of shipper objection . . . 
     is irrelevant to Federal Armored's fitness'' to do business 
     in Michigan!
       Why is it that people who go to work for government as 
     officeholders or bureaucrats are known as ``public 
     servants''--even when highly paid? Why isn't ``public 
     servant'' a term reserved for those entrepreneurial heroes in 
     the private sector who create jobs, invent machines, cure 
     illnesses, building businesses, serve customers, and pay the 
     bills of government through their taxes? When the barriers 
     erected by ``public servants'' crush the self-reliance of 
     citizens like those at Federal Armored, where is the outcry 
     of righteous indignation from the public or the press?
       What regulators did to Federal Armored--and what countless 
     other acts of government may inflict upon people every day--
     is morally repugnant. Such deeds are throwbacks to less 
     enlightened times when the common thief and the uncommon 
     prince were indistinguishable but for their robes.
       The campaign to restore our liberties and enhance our 
     economic opportunities must incorporate a personal, moral 
     dimension at its core. A law which suffocates the aspirations 
     of enterprising men and women is more than bad economics. In 
     a free society, it ought to be a moral outrage.

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