Deregulation Works

Deregulation works! That is not a headline you are likely to see in any major newspaper. Well, maybe the WSJ would be an exception. But it would be an apt headline for a story recounting the FCC's release of its 11th annual report on the state of competition in the wireless industry.

Since 1993, when Congress largely eliminated federal and state economic regulation of the wireless industry, the American consumer has been served very well by the competition that has been unleashed. The FCC's news release recites the mind-boggling statistics concerning subscriber growth, time spent talking on our cell phones and the number of text messages, and decline (yes, decline) in the per-minute price, and the like. At the end of 2005, there were 213 million subscribers, 50 or so million more than the number of landline subscribers. You can read the statistics in the news release. Or you can just walk outside of your home or office anywhere in America and see people using their mobile devices everywhere--even where you wish they weren't!

FCC Chairman Kevin Martin points out in his statement that 98% of the total U.S. population lives in counties with 3 or more mobile service operators. There is no doubt the competition is robust, and mobile services will increasingly compete with other broadband platforms in the video and Internet market segments.

The mobile services market is a good case study concerning how a technologically-dynamic marketplace can flourish when lawmakers and regulators allow competition to substitute for regulation. All the more reason why it is important not to allow states, as some have been wont to do, to establish a patchwork of different regulations that, in effect, chip away at the 1993 deregulation mandate. In this light, the provision of Senate Commerce Committee bill establishing a national framework that preempts state wireless regulation represents sound communications policy.

Maryland's Economic Freedom Ranking

Today the National Center for Policy Analysis and Canada's Fraser Institute, two well-respected non-partisan public policy research organizations, released their annual report that attempts to quantify each state's economic freedom and examines what this means for economic growth. As the news release accompanying the report aptly states: "States that have lower taxes, smaller government and flexible labor markets tend to have comparatively more economic growth." The full study may be found here.

The rankings are based on data only for the period from 2000-2003, so they should not necessarily be taken as an accurate reflection of the current reality. Nevertheless, the study provides useful information and benchmarks. Among the states, Maryland's economic freedom score ranks it in 36th place, an improvement from 39th in 2000. The study's summary for Maryland states:

[O]verall numbers both show modest improvement from three years ago, the all-government ranking moving from 39th in 2000 to 36th in 2003 and the subnational from 24th to 15th. The same three-year improvement holds for government size (42nd to 32nd all-government, 27th to 20th subnational). Changes in the other two major areas were less dramatic. All-government takings and taxation actually dropped two places to 39th while the state and local stayed at 23rd. Labor market freedom all-government also went down slightly from 31st to 33rd, while the subnational ranking, the state’s best-performing measurement over the last decade, went from 14th to 12th. Maryland once hovered around the national average for combined state and local tax burden but has now exceeded it at 10.2%, placing Maryland at 11th highest. The state is even higher—No. 4—on the overall tax list after the federal burden is folded in. Its various alcohol taxes are at or below average, especially beer at 9¢. [Page 57].

Despite Maryland's modest improvement, there is obviously a lot of room for further progress, especially regarding taxes, regulation, and labor flexibility. Legislative actions, for example, such as singling out Wal-Mart for the imposition of government-dictated levels of health care spending and local ordinances purporting to dictate a "living wage" are the antithesis of the freedom we should expect in a market-oriented economy. And these measures have the unfortunate effect, as shown in the NCPA-Fraser Institute report, of repressing economic growth.

New Hampshirites take special pride in their state's motto: "Live Free or Die." Marylanders should take special pride in their state's nickname: "The Free State." And they should do all they can to help Maryland live up to its name!

The Real Lesson From Maryland's Voting Problems

The Washington Post had an editorial yesterday skewering election officials in Montgomery and Prince George's counties and Baltimore for the serious voting problems experienced on primary day. Given the problems--from failure to deliver computer cards in many precincts to failure to have a system in place for election boards to communicate with the polling places--some real skewering is in order. As the Post points out, the responsibility for the problems looks to fall most heavily on the local election boards rather than state officials.

But here's perhaps the most important takeaway from the primary day voting difficulties: Even apart from the serious legal issues that led to the judicial rebuke of the legislature's measure allowing early voting outside of home precincts, it doesn't make sense to consider new measures like multiple-day "early" voting when the election boards haven't shown they can run "scheduled" elections in a smooth fashion. Can you imagine the potential chaos--and potential for fraud and chicanery--if the local election boards were required to run elections spanning five days with voters having "multiple choice" precincts?

In today's lingo: "Let's don't go there!" If we place a high premium on election integrity--and what's more important?--let's just ask our election officials to ensure a smooth and clean election on one long-designated day in precincts with known voters. Apparently that task will be challenging enough.

The Foolishness of Wal-Mart Bashing

If you want to understand why it is foolish for (mostly) Democrats to bash Wal-Mart, read George Will's column, "Democrats versus Wal-Mart," in today's Washington Post. It is filled with facts and figures concerning how much Wal-Mart's low prices save consumers and I won't repeat them. Here's just one: "Wal-Mart and its effects save shoppers more than $200 billion a year, dwarfing such government programs as food stamps ($28.6 billion) and the earned-income tax credit ($34.6 billion)." Oh well, here's one more: "A Mckinsey company study concluded that Wal-Mart accounted for 13percent of the nation's productivity gains in the second half of the 1990s...."

Will's column is mostly about the war being waged against Wal-Mart by the Democrats at the national level. But the Democrat-controlled Maryland General Assembly can lay claim to some of the earliest and most irrational Wal-Mart bashing, passing a bill, since held unlawful by a federal court, singling Wal-Mart out for a mandatory increase in health benefits.

Regardless of party, let's hope the politicians begin to understand that wages and benefit levels are better left to marketplace regulation than government dictates. And they should understand that the consumers they purport to represent benefit from--and value--Wal-Mart's low prices.