George Nemeth: Hi. This is George Nemeth of Brewed Fresh Daily, and I’m here with Jill Miller Zimon, Gloria Ferris, Tim Russo, and we’ve got another Blogger in the room, and let’s see if we can get him on the mic.
Tim Russo: Subject some peer pressure onto him.
Jeff Verespej: Jeff Verespej.
Tim Russo: What’s the name of your blog?
George Nemeth: The Haps, DarthVadarMeditations at BlogSpot.com, but we’re here with Gubernatorial Candidate, Bill Peirce. Thank you for joining us today.
Bill Peirce: Well it’s my pleasure.
George Nemeth: Did anybody have a first question, or should I?
Tim Russo: George.
George Nemeth: I actually wanted to do one from the… What we do is we post that we’re going to be doing the interview, and then people leave comments. We ask them to submit questions by the blog, and somebody called Bushel Bob actually wants to know what political experience do you bring to the Gubernatorial race in Ohio?
Bill Peirce: Political experience, very little. This is my first attempt at an elected office. I’ve been an observer of the political process for a long time. I wrote the book on Bureaucratic Failure, and of course my experience that qualifies me is that I’ve been a careful student of this whole area for my whole professional career. My main field over the years has been public access, public expenditures, what goes wrong between the….
George Nemeth: Could you name the books that you authored and co-authored? I noticed there were four or five of them.
Bill Peirce: There were three entire books that I’ve done. I’ve done a lot of chapters and articles, but the three books that I did were the Bureaucratic Failure and Public Expenditure, which is the most closely related, but also the Economics of the Energy Industries deals a lot with coal mining and other public utilities, other problems; and then the other one is on the Technological Progress and Industrial Leadership, which deals specifically with the coal mining or steel industries. It has a lot of general material about technological progress.
George Nemeth: Now before we go on, why don’t you give a little bit of bio about yourself?
Bill Peirce: Well I grew up in Lexington, Massachusetts, got my Bachelor’s Degree at Harvard in 1960, PhD from Princeton in 1966, and started teaching at Case Tech in January ’66 and never left. Thought I’d be in Ohio for about 5 years and then head back to New England, but…
George Nemeth: That never happened.
Bill Peirce: That never happened.
George Nemeth: Why is that? Did you meet somebody?
Bill Peirce: Well when I came out here, the girl that I was interested in at Princeton had moved to Kent State to study. That may have been something to do with the decision. We’re still married now 39 years later.
George Nemeth: That’s great.
Bill Peirce: So I found Cleveland a very, very comfortable place to live, and I like my colleagues at Case, later Case Western, and really I found it a great place to be.
George Nemeth: Anyone got a question now, or do I need…?
Gloria Ferris: Yes, I do.
George Nemeth: Grab the mic.
Gloria Ferris: I heard you say that you had written books about the energy industry.
Bill Peirce: Correct.
Gloria Ferris: And on that, I wish Bill Callahan was here to ask this question, but there is a huge difference in electrical prices that we pay for our utilities in Ohio, and here in Northeast Ohio we pay a lot more than Southern Ohio. How would you try to make that more equitable?
Bill Peirce: Well try a new Public Utilities Commission. If you look down that bill that you get from First Energy, it’s itemized and you see all the other charges are fairly ordinary. They have to pay for fuel and generating and so on, but then there’s that big thing, the transition charge, that’s just about as big as the generating cost, and that’s the sop to the utilities who made the errors in managing the nuclear power plant construction. I mean it’s not that nuclear power was a mistake, but they managed the construction process very poorly, and built in huge cost overruns, and we’re still paying for that. The Public Utilities Commission said they didn’t want the utilities to go bankrupt, but at some stage, a company that makes bad mistakes should go bankrupt.
George Nemeth: Sure. You want to follow up? Go ahead.
Gloria Ferris: I do want to follow up, because those utility companies are still paying huge dividends to their shareholders. Correct?
Bill Peirce: Well they’re paying dividends, sure.
Gloria Ferris: Ok, but a company who is in that kind of trouble usually doesn’t pay the dividend or cuts it down. Isn’t that correct?
Bill Peirce: Well, you know, it becomes a political decision. The Public Utilities Commission decided to keep those companies afloat and comfortable. I mean you can make that argument. The companies did. They say if they’re financially strong, then they will be able to provide better service and keep investing in new facilities and so on. But you can make the other argument, too, that the ratepayers shouldn’t be the ones bearing the burden. The companies, the utilities have been forced to cut the rates for the big industrial users, because they have the option of generating their own electricity, which we don’t at any reasonable price. Until natural gas prices went up, even fairly small consumers of electricity could generate their own. A big shopping center could have a natural gas appellate unit that provided the electricity, heat, the air conditioning, hot water, the whole works, a co-generating plant, but you and I can’t do that at home without running into enormous cost. It’s a hobby, rather than an economic decision.
George Nemeth: I want to jump in, because there are two themes that I want to pick up real quick, and one is kind of… Maybe there are like two branches of it. One is kind of sustainable energy, and one would be the future of utilities like that. But then the other kind of threat that I want to pursue is your free market philosophy, because that’s mentioned on your website, and really how that affects government, because I think traditional approach, either the Democrats or the Republicans are going to approach the market differently than a Libertarian would or an Independent would.
Bill Peirce: Well let me deal with the markets question first. I’m certainly in favor of free markets, but they don’t work unless you have competition, and the problem in the Public Utilities case is that you have a monopoly mostly for technical reasons for the consumers. There’s only one set of electric wires coming to your house, and that’s why the attempts of deregulation have not worked very well yet. We’re moving in that direction. You can get deregulation at the wholesale level and for the big businesses. They can generate their own, if they’re pressed. But for the foreseeable future, we probably need something like a Public Utilities Commission dealing with electricity.
We used to need it for the telephone system too, but with the Morton Communications Methods, you’re getting lots of alternatives now, and so that can be freed up and we can go to a market solution for any of these other things. But electricity is a tough one.
George Nemeth: I want to comment on that real quick, though, because I think that communication is improving, but in Northeast Ohio you still have the 800-pound gorilla. Right? You’ve got SBC, and although everybody talks about competition… Gloria is shaking her head. Gloria has been through a situation as a consumer. Would you like to elaborate on that? No?
Bill Peirce: We’re moving quickly, though. I mean you can get your telephone over your Internet connection.
George Nemeth: Which is what Gloria and Tim are doing right now.
Bill Peirce: And you don’t have to buy a cell phone.
George Nemeth: Except it’s still… I mean the line to your house is serviced by SBC, you know, so data and things can be delivered over that copper cable, but unless you go to like cable television, fiber optics at home, you’re still tied to SBC. I think they still have a way to get in there.
Bill Peirce: Well I mean it’s improving there, and indeed there are experiments now with sending data over the electric wires, which would give the electric utility even more of a control.
George Nemeth: Sure. Do we want that?
Bill Peirce: It’s nice to have it as an option, playing one half against the other, but those are real exceptions, where there’s one wire or one pipe coming to your house, and you don’t have that much choice. But in almost every other area of our lives, we do have choices, and that’s where the markets can work very well. So, yes, I believe in markets, and I want them to work, and we shouldn’t focus too much on the ones where it’s a real problem.
George Nemeth: Ok. Let’s go back to the future and sustainable energy and green energy and stuff like that, some of your thoughts on those.
Bill Peirce: Well mostly those things have not been worthwhile yet. I mean the thing that does pay off is to insulate your house, then you don’t need to buy much fuel, but if you want to put solar collectors on your roof, well that’s a nice hobby, and it’s interesting to do, but don’t expect to save money in this area. I’m glad that people are looking around at various things like this, and someday some combination of clever engineering, newer materials, combined with the rising cost of traditional sources will push us over the hill, and these sources will be useful, but don’t expect it right away.
I mean there are some interesting things going on. Clean coal, for example, which sounds like an oxymoron, but if you can take coal as a raw material and process it through essentially a chemical plant and come out with fuels. It may be possible to do it cleaning at a reason price. There are some indications that can happen now. But here I’d really like to see the markets work. If you talk about something like ethanol that’s very heavily subsidized, it’s not clear that it’s doing anything for the environment. It’s certainly not doing anything for the economy.
George Nemeth: Jill, you have a question?
Jill Miller Zimon: Ah, yes. This morning on WKSU, there was a maybe 5 or 10-minute report where they were covering Betty Montgomery, Jim Petro and Ted Strickland’s opinions about what the priorities would be for the next Governor, and the conclusion that they all came to was education and economic development. But how they would resolve the issues facing the State of Ohio, as far as education and economic development, were quite different. One of the things that struck me about what all of them said was their focus on higher education, and no focus, no mention at all, probably for the obvious reasons that it’s a lot more complex in a lot of ways and certainly doesn’t make as good a sound byte, is elementary and secondary education.
On your website, you dedicate quite a bit of space to education. I believe there is parents and students, and then there’s teachers also. And, unfortunately, when I went to the parent’s section, it sounded a lot like the teachers’ section, so as a parent, I was a little disappointed. I had hoped it would be a little bit more specific. I would like to have you talk about your ideas for education in Ohio, as far as it being a priority. I’m going to take that for granted. I think education and economic development. I don’t think that’s something we could really argue with as far as being a priority. But how, which is the question that they did not address, how would you approach the priority of education?
Bill Peirce: Well education and economic development definitely are the priorities, and as far as education goes, I want to go toward total parental choice system, so that the State money simply follows the student. The parents can choose any school, public or private. Schools also would be able to set their own admission standards. If there are troublemakers, then the State eventually has to end up providing some sort of schooling for them, but they don’t have to disrupt the ordinary schools. So the schools have their choice also.
So the basic idea is to rely on parents to choose the appropriate school. In the nice suburbs where people have already, families have already moved for the sake of the schools, the Shaker Heights, Beachwood and so on, then most kids are going to stay in the local public school. But in Cleveland and East Cleveland, I would guess that a lot of parents would like to send their kids somewhere else. Cleveland, of course, has a voucher plan now. The big cities do, but it’s fairly complex and a lot of kids don’t opt into it, parents don’t opt into it because of the complications and difficulties, and there are limited numbers that are permitted, but I would simply make it general.
Jill Miller Zimon: Are you suggesting that the same amount of money that’s already going into the State coffers for the education budget would be redistributed in a way directly to the parents, as opposed to a district?
Bill Peirce: Well the cash wouldn’t actually be in the hands of the parents, but they would in fact, as they enroll their kids in the school, the cash would follow from the State.
Jill Miller Zimon: Do you have the specific step-by-step idea of how this would function?
Bill Peirce: Well you mean the actual policing to make sure the schools are treating…?
Jill Miller Zimon: Well are you saying that parents, there would be some process by which parents would designate to the State where they want to send their school, and then the State would send the money to the school?
Bill Peirce: Right. Right. I mean that’s the idea that I have in mind. I haven’t actually specified the paperwork.
Jill Miller Zimon: Are you aware that the Ohio Constitution would prohibit that?
Bill Peirce: Well it may be necessary to change the Ohio Constitution.
Jill Miller Zimon: And this is what I’m asking. In the plan to go to 100% parental choice, that would be a very significant change, if and when in Ohio it broadly operates.
Bill Peirce: But I think the significant change is necessary. The attempts at reform that have been carried out so far have been talked down, and education is very difficult to monitor. There are a lot of different characteristics that parents are interested in, and so what you get is the schools, school districts reporting to the State that they complied with various regulations, and you see the results. In Cleveland, even faking the attendance numbers. This is crazy, but it gets worse now with the No Child Left Behind Act, which means that the federal government is also imposing these kinds of rules. That’s been dubbed “The No Bureaucrat Left Behind Act.�
We have experience from what happened with vocational education, beginning in 1917. But you get this complex of federal, state and local bureaucracies that are really controlling things, and it’s not done in the interest of the students in the end. I think a lot of teachers are interested in students, but the bureaucracy has its own mechanisms, its own rewards, and the students are lost sight of eventually.
So I think we have to scrap all that and start over and say, “Look. What we’re interested in is education.� The people who have the most serious interest in education, the students and their parents, and they should have the decision making power.
George Nemeth: I want to ask a question, because I was looking through the website, and there is this $3,000 figure. I’m wondering where that came from. Is that like an annual thing, or is that…? Could you speak to that for a little bit?
Bill Peirce: Yes, that was… What I’ve been saying more recently, and I probably should revise that number, is that the State money will follow, and that’s a different amount in different communities. The State funding is $5,500 per student, minus what the formula says the district ought to be able to generate. So if the district has no assessed value per student, zero, then it would be $5,500. If you’re in Beachwood with something over $250,000 of assessed value per student, then you get zero. That’s a scale.
And I think the best we can do right now is to say the State money follows, which means that if you’re in Cleveland or East Cleveland, the school gets a large amount if you enrolled. If you’re in Cleveland Heights, it’s a middling amount. If it’s in Beachwood, it’s essentially zero.
George Nemeth: Ok. Jill, you have a follow up?
Jill Miller Zimon: Yes, I do, and I want to be as respectful as possible in asking you this, but on your website, I believe there is some language that tries to persuade individuals that the Libertarian option is an option, and they should not think that it is not an option, because you’ll never win, it’ll be a vote that doesn’t really count in the end. However, as a parent with children in the public schools, who follows education fairly closely, the absence of specifics and the way that you phrase your answer and desires for education to me indicate the weakness in not having political experience, because I have a difficult time being able to believe that while I might agree with 100% parental choice that this could ever become an actual way for education kids in Ohio in my lifetime, certainly not in my children’s public school education lifetime. How do you respond to that to someone who likes your ideas, but feels there’s a lack of thorough planning out? Can someone do a better job of that?
Gloria Ferris: Or maybe the ideals are there, and we agree with some of the ideals, but how would we get there? I think it’s too large a leap for some people. The implementation seems to be sketchy.
Bill Peirce: Well, yes. You have to sketch out the vision first, before you sketch out the steps to get there, and it… Well, you know, we’ve taken some steps toward educational choice in Ohio already, but they’ve been limited, and if you wanted my timetable for what to do next, I would say make the voucher program in the cities that qualify now universal and easy to get into. I mean that could be done quite easily. We already have the programs in Cleveland. It runs into political opposition. Teachers Union, in particular, is afraid of it, although good teachers would always have good jobs.
But the problem with the incremental approach is that you get sidestepped into something like the Charter Schools, which are kind of halfway. I mean there’s some choice. Some of them are good; some of them are bad. It’s better than just the public schools, because a bad child at school does fail very quickly and disappears, whereas a bad public school can go on year after year after year. But it’s not clear. I mean it may be that the Charter School movement, since there are so many people who are politically influential lined up behind it now would block the total voucher program, which has some other advantages to the parents. And so I am wary of the incremental approach, even though it may seem more practical. I think we have to state the vision first.
Tim Russo: Can I ask you a little bit more about this Libertarian party that you seem to represent? Why are you running for Governor?
Bill Peirce: Well I think the major parties haven’t done a very good job, and I approached it first from the viewpoint of what’s happened to the economy of Ohio, where economic growth is very low, population growth is essentially negative. There’s a little bit of growth, but none out of migration. The median incomes are declining relative to national medians. Unemployment rate is higher than national average. And not surprisingly, taxes have gone from being among the lowest in the country 20 years ago to being among the highest in the country now. I think those are related. I think the taxes have been a great barricade to economic growth. It encourages people who start businesses to move out as soon as they start generating profits.
And so, yes, I mean my initial focus was on the economic issues, and I think, you know, if it had been… Traditionally we thought of Democrats as being the party that wanted to spend more on various social programs anyway, and the Republicans wanted tight budgets. This state has been dominated by Republicans for a long time, and I don’t see any sign of tight budgets.
Tim Russo: So you are running for Governor because?
Bill Peirce: The major parties have failed.
Tim Russo: Now on your website, you’ve got a link to the “World’s Smallest Political Quiz.�
Bill Pierce: Right.
Tim Russo: I just took it, and apparently I’m a liberal, which has not been a shock. And it may shock others, but can we walk though it with you just to see if it actually works?
Bill Peirce: Sure.
Tim Russo: All right. “Government should not censor speech, press, media or Internet. Agree, maybe, or disagree?�
Bill Peirce: Agree. No censorship.
Tim Russo: All right. “Military service should be voluntary. There should be no draft. Agree, maybe, disagree.�
Bill Peirce: Agree.
Tim Russo: Agree. “There should be no laws regarding sex for consenting adults.�
Bill Peirce: Agree.
Tim Russo: “Repeal laws prohibiting adult possession and use of drugs.�
Bill Peirce: Agree.
Tim Russo: “There should be no national ID card.�
Bill Peirce: Agree.
Tim Russo: “End of corporation welfare. No government handouts to business.�
Bill Peirce: Agree.
Tim Russo: “End government barriers to international free trade.�
Bill Peirce: Agree.
Tim Russo: “Let people control their own retirement; Privatize Social Security.�
Bill Peirce: Agree.
Tim Russo: “Replace government welfare with private charity.�
Bill Peirce: Agree, but we can’t get there right away.
Tim Russo: Is that a maybe, or is that an agree?
Bill Peirce: It’s an agree, but that’s kind of in the great future, when all the other Libertarian goals have been adopted.
Tim Russo: “Cut taxes and government spending by 50% or more.�
Bill Peirce: Ah well…
Tim Russo: We’re going to say maybe on that one?
Bill Peirce: Let’s say maybe, although some day we will do it.
Tim Russo: All right. We’re going to score you now and see how it works. It wants me to remember my old answers, perhaps, but tick, tock, tick, tock. And it says you are a Libertarian!
George Nemeth: What do you know!
Tim Russo: What do you know! You win, and you’re way over here on this little map. Your little red dot is way on the Libertarians. This would be great if it was television.
George Nemeth: It kind of breaks down on, you know, the sort of…
Jill Miller Zimon: Can I follow up on Tim’s pursuit?
Tim Russo: Sure, as long as I can come back and follow up too.
Jill Miller Zimon: Sure. If there were three things that you wanted to tell people who knew nothing about Libertarian…
George Nemeth: Yes, that’s a good question.
Jill Miller Zimon: …politics, what would you want them to know? What’s essential to understanding that perhaps is the biggest myth out there?
Bill Peirce: Well what I want people to know is Libertarianism means that you believe in individual responsibility, individual choice, and small government. It’s really going back to what the Founding Fathers had to say, that government should control only a very limited part of our lives. At the national level, you have to have some sort of national defense and foreign policy. You don’t have to have national offense, but you have to have national defense. The national government shouldn’t be making lots of social policy decisions. Those things should be left to the states. Bill of Rights is very important. The entire Bill of Rights, I believe in the whole thing, and states have some responsibility for, well, obviously maintaining law and order. Internal law and order is extremely important, kind of the anarchy. And education is important, and there are a few other things, but generally restrict the scope of government. It just doesn’t work very well, as we’ve seen, and you know, you kind of have to assume that your friends are going to be running government, because somebody else is going to win sometime, and they’re going to do things you don’t like. Well let’s limit the amount of damage they can do.
Tim Russo: Now I’ve been going around in the last couple of years talking to Republicans. They just won’t admit they are Republicans anymore. They tell me they are now Libertarians. “I’m more of a Libertarian.� Have you seen a spike in membership in the Libertarian party since, I don’t know, the last couple of years?
Bill Peirce: There’s been little growth in party membership. I think there’s been a lot more growth in sympathy. You know, I was told, when I started campaigning, that I was going to run into a lot of antipathy and active hatred, and instead I find lots of people saying, “You’re running? Great! You know, we need somebody. The Republicans aren’t doing anything for me now,� and I don’t know how much of that is going to translate into votes, but I do get a lot of enthusiastic reactions to the Libertarian label now.
Tim Russo: Do you have a primary, or you’re just going to sail through this primary?
Bill Peirce: The party has endorsed me already in a convention. The problem is the party does not have official party status under the very restrictive laws that Ohio has. Before the 2004 election, we submitted petitions with more than 60,000 signatures. Well 60,000 signatures. We needed something like 35,000 to get party status, and Blackwell rejected the whole packet, because he said petition forms were wrong. One of his predecessors had approved the form, but he had approved a different form and the law says the form…
Tim Russo: Was it not on heavy card stock? Is that the reason?
Bill Peirce: No. It had a sixth column. The standard forms have five columns, but this had a sixth column where you could print your name, because often the signatures are difficult to read. So Libertarian, that case was in court until recently. I think there may be a vestige of it still in Federal Court, but it doesn’t look very promising.
So we don’t have party status, so I will be listed on the ballot. If I get my 5,000 signatures that I need on the petition now (and I have my petitions here; I’ll ask you guys to sign)… But if I get my 5,000 ballot signatures, then I will be listed on the ballot as “Other.�
George Nemeth: “Other.� Not even Independent; just “Other.� They might as well call you an alien.
Bill Peirce: Well I think that’s our advertising campaign: Vote For Bill Peirce, the “Other� Candidate.
George Nemeth: I wanted to ask, because on your website, there’s the “Freedom to Prosper,� and there are three parts to that. We talked about improving education. Step two is protecting private property, and you mentioned imminent domain, but then “Bogus Blight,� as well, and I kind of like that term. I’d like you to speak about that, then we will get into the other step, which is “Lifting Roadblocks to Growth,� where you talk about addressing the commercial activities tax.
Bill Peirce: Ok, the “Bogus Blight� term, I think, is used by the Institute for Justice. I don’t have that one copyrighted, but what they’re talking about there… Well, let me give a clear example. When the flap came up about the Kelo case, the Supreme Court decided I think in June, May or June, the Ohio State legislature reacted. That made a lot of people very hot, that the government could come in and take your house away, give it to a developer. The Ohio legislature reacted by passing a moratorium until the end of 2006, but in that there was a (and a study commission during that time will decide what to do next), but in that there was an exemption for blighted property, and that gives away the whole show, because the whole justification in Lakewood was that these properties were blighted. We call that “Bogus Blight,� because one of the characteristics of blight in those Lakewood neighborhoods, it was…
Gloria Ferris: One-car garage.
Bill Peirce: One-car garage, detached one-car garage, or only one bathroom.
Jeff Verespej: No sidewalk area.
Bill Peirce: Yes, yes, and most of us live or have lived…
George Nemeth: Whatever the new condos would be, it’s the opposite of that.
Bill Peirce: Yes, and there will be a rally in Columbus on the 11th, next Wednesday, for the Baldwin case, which is going to be in the Ohio Supreme Court that day. And the house that poor Joy and Cal Gamble were displaced from there was a perfectly nice house. I mean they spent 30 years and spent there dying days in it. So it’s the bogus, but that was declared blighted too. And it’s this “Bogus Blight� category, that’s what I’m talking about. What I would like to see is a Constitutional Amendment to the Ohio Constitution, which would prohibit the use of eminent domain, for transferring property from one private owner to another. There may have to be some provision there for truly condemned properties, properties that are unfit for human habitation, but it has to be very tightly worded. The Castle Coalition and the Institute for Justice have worked on it, sample wording for State constitutional amendments.
George Nemeth: Ok. Now the other part of that was “Lifting Roadblocks to Growth,� talking about eliminating the tax increases. Talk about that a little bit, because I think the economic development part is important.
Bill Peirce: Yes, well the thing that I’ve become quite disturbed about is the new tax, CAT (Commercial Activities Tax), and the budget reforms of last year took two steps forward eliminating this horrible tax on business inventories and equipment, and the corporate franchise tax, but there was one step backward, and that was this commercial activities tax, which is a tax on gross income of every enterprise, whether it’s a partnership or proprietorship or just your own Schedule C, or whether it’s a giant corporation. And it’s a tax on gross income, which no deductions for anything, except that now there is political maneuvering about who gets it. But in either case, what was on the radio this morning was they slipped into that law when it passed that the Columbus trade zone would escape this.
George Nemeth: Right.
Tim Russo: We just talked to Eric Fingerhut about that a couple of weeks ago.
Bill Peirce: Well and the new automobile deal would escape it if they trade in cars, were selling cars, and there are about 20 of these exemptions that are built in, and a lot of maneuvering to get new ones in. But, you know, even aside from that, it’s a horrible tax. It’s the tax that led the European nations to adopt the value added tax, which is bad in its own right, but trouble…
Jeff Verespej: Is it comparable to the value added tax?
Bill Peirce: No, because it’s gross income. The value added tax lets you deduct the tax on everything you’ve already bought to put into the product. Let me give an example. If you have an Ohio farmer who sells to some wholesaler, the farmer pays the tax on everything he sells. The wholesaler then pays the tax on the full value of everything he sells to the next-day distributor. It goes to a flour mill, then it gets taxed again when it’s sold there. If it goes to a baker, it gets taxed again, and it’s the full gross amount. And so by the time it gets to your grocery store, it has been taxed maybe six or eight times.
Jill Miller Zimon: And the price has gone up.
Bill Peirce: Yes, and meantime, if Wal-Mart bought it from China instead, it gets taxed only once when it’s sold to you.
George Nemeth: Now that’s the value added tax, right?
Bill Peirce: No. That’s the one we just adopted. That’s the commercial.
George Nemeth: And that’s different from the VAT tax?
Bill Peirce: The VAT tax would say, if the farmer sells it to the next-day wholesaler and pays the tax and he produces the receipts that the tax has been paid, then the wholesaler pays the tax on everything he gets, not on his gross. He can deduct whatever he paid to the farmer, and then at each stage, you deduct what was paid at the previous stage.
Tim Russo: So pardon me if I’m wrong, but the CAT tax is more oppressive than socialist Europe’s VAT tax.
Bill Peirce: Right.
Tim Russo: In Ohio, and this was just implemented by Republican government.
Bill Peirce: That is correct. That is correct.
Tim Russo: Ok. Just wanted to clear that one up.
George Nemeth: Does he want me to edit that out?
Tim Russo: No, you can leave that right in there.
George Nemeth: No, no. I mean like take that out so you can post that on…
Tim Russo: We need a transcript just for that.
George Nemeth: Yes. Ok.
Bill Peirce: The effect of it is to encourage political integration. It’s much easier for the, you know, to skip all these intermediate stages, and so it’s a barrier to the little guy in between who is trying to carve out his own deal.
Tim Russo: As a Libertarian, this one just drives…
George Nemeth: He turned bright red when he was talking about it.
Bill Peirce: It killed the cat is my motto.
Tim Russo: “It killed the cat.� I like that.
Bill Peirce: Yes.
Tim Russo: Eric was very… Eric Fingerhut, when we talked to him about it, he was very detail-oriented about this particular, especially on the Columbus deal for the airport. Is that the airport deal? It was an airport deal?
Bill Peirce: Yes. They’re going to word it. It doesn’t say “Columbus.� It says “Free trade zone located here,� so many miles from the airport, or so many miles or something else. But you know the other problem, the other irony of it, I guess, is that the old tax on manufacturing inventories was very oppressive to the old industries, to the steel, metal truncheon. It was very impressive to the old industries that we’re losing now, but this CAT, it’s all the new knowledge-based industry, because typically somebody doing some consulting work and not really very many expenses to write off against. No, I should turn that around. You have a lot of these people who are working together, but there may be a lot of sales in between and not much…
George Nemeth: A lot of transactions.
Bill Peirce: Yes, a lot of transactions and not much physical inventory or equipment.
George Nemeth: Right. Our inventory equipment is right here.
Bill Peirce: So you wouldn’t have been hit by that old tax, but you will be hit by the new one, if your receipts go up over $150,000 a year.
Tim Russo: Receipts? What are those?
George Nemeth: Yes, go ahead, Jill.
Jill Miller Zimon: Trying to help shape for the people who listen to Pod Cast and read hopefully a transcript. Two questions. One is, who would you say in the U.S. political history is a model for you, some politician who represents as close to what you would want to, how you would want to be perceived and improve upon perhaps? And then the second thing I wanted to know somewhat related to that is, who do you see as your strongest constituency?
Bill Peirce: Well political heroes, that’s difficult in the modern era, because most politicians have their good moments and their bad moments. Some of the, if we go way back, some of the Goldwater rhetoric was correct, “We don’t know how we would have performed,� but in the end he turned out to be quite libertarian. Some of Reagan’s rhetoric was ok, but then other things happened. I think the intellectual heroes, it’s easy to see, see Milton Friedman as the model, but he’s fair as politician.
There’s one Libertarian in Congress now. That’s Ron Paul. He ran as a Republican last time or two, because if you run as a Libertarian, it doesn’t give you much, any place to sit in Congress, I guess.
Tim Russo: Which state is he from?
Bill Peirce: Texas.
Jill Miller Zimon: Really?
Bill Peirce: He’s a physician. He’s been in Congress for quite a while. But I haven’t dealt really. I mean I’ve been focusing on the state level, so I haven’t really adopted policies on a lot of these national issues.
George Nemeth: Let me jump in, because I’m reading your… It’s “BackTalk.net,� right? That’s how you say it, the interviewer? I don’t see his name here.
Bill Peirce: Oh, that was Steve; Steve Bond.
George Nemeth: Steve Bond. Correct. In the very last statement that you make, in the printed text, is he asks you, “What advice would you give other Libertarians campaigning for office?� and you respond, “Stress the issues which would make a difference if elected. Don’t talk about a rank if you are running for City Council. In my case, I have to talk about improvements to Medicare, rather than scrapping the program.�
Jeff Verespej: Medicaid.
George Nemeth: Medicaid. I’m glad you are reading. Talk about that. Talk about the improvements that you would make, instead of scrapping the program.
Bill Peirce: Yes, I mean the program is creating pressure in every state, because it is threatening to eat up the whole budget of every state. It’s up to something like 30% of the Ohio budget now. It’s 40% in New York State. So something clearly has to be done, and the main problem with that program is that every incentive that’s built into it is wrong and leads in a terrible direction. As the cost went up, then the payment rates to providers went down, and so a lot of good providers don’t want to deal with Medicaid patients, and so they get squeezed into Medicaid bills, so they don’t get the greatest care. There’s no incentive for anybody to save any money.
And so South Carolina and Florida have been experimenting with trying to introduce some choice, some economizing into it, without eliminating services for the poor. You know, the other approach is to say, the Oregon approach, “This is the list of things that we will do, and we won’t do anything else, no matter how sick or old you get;� or the British parts of England adopted that too. “If your body mass index is over 30, you don’t get a new hip or a new knee.�
George Nemeth: Right, “If you smoke, this; If you drink alcohol, this.� You don’t drink coffee, well…
Bill Peirce: Yes. Right. So somehow the incentives have to be built in, and that’s the Libertarian approach. And the way they are experimenting with it in South Carolina is to look at the medical history of each person, each patient, and say, “All right. You’re in a high-risk group. You have diabetes and heart problems. It would cost so much to insure you. This is the amount that is assigned to you. You don’t get any cash, but you have a variety of programs you can buy. One is the traditional one. You can stay in that, if that satisfies you.�
But the other possibility is a high deductible medical insurance policy, combined with a medical savings account, and the gimmick here is that the medical savings account is something that is in your name and will be in your name even if you don’t spend it this year, so it carries over year to year.
Tim Russo: Let me quickly follow up on that, before… What’s the Libertarian response to rising healthcare costs (and we’re talking about Medicaid as a program and the governmental side of it)? What would be the Libertarian approach to lowering the cost of healthcare generally, pharmaceuticals?
Gloria Ferris: And expanding coverage.
Bill Peirce: Yes, well it’s to get the markets working again. This is the one segment of the economy that the government controls almost 100%, and it’s the one sector that’s performing most poorly.
Jeff Verespej: There is a correlation there.
Bill Peirce: I believe there’s a correlation, yes. All of the medical reimbursement rates, payments to physicians, it’s the only sector of the economy where wages are controlled by government, and that creates incentives for doing extra procedures. I mean part of it is paperwork, to see if you can break down a procedure into making the cut and then extracting something and then closing up the cut again, make it three procedures.
Tim Russo: Sounds like practicing law. Break that up.
Bill Peirce: Well, ok. You have to say in billing, the same problems in billing. So somehow we’ve got to get more choice into it. I hope that the combination of high deductible insurance policies and medical savings accounts is going to help there too, but for people below the Medicare age… I haven’t taken a position on how to solve the Medicare problem, because that’s outside the purview of the Governor. But clearly individuals have to start exercising more responsibility.
Gloria Ferris: I want to go back to this Medicaid issue, and I have a very close friend. Because of arthritis, she no longer can work and she’s on Medicaid and, believe me, a high deductible is not an option for her. One of her major problems with the Medicaid program in Ohio (and I think that you might be able to expand on this) is that there is nothing preventive. She can no longer, because of the Medicare D, it is really tied in with Medicaid, first of all, so the State should be very concerned about the Medicare D program. She no longer can get the asthma medicine. It’s no longer offered. So therefore, she will probably end up in the Emergency Room four more times a year than she would would they keep her on this preventative. And I think you spoke to that: you’re saying that people need choices. But I think part of the reason we’re in this medical crisis in America is medical insurance doesn’t pay for preventive care. We don’t pay for preventive care for kids. That, I think, is an issue. We’re not looking towards wellness.
Bill Peirce: Well, but of course your remarks take me back to the discussions of medical care in the U.S. 30 years ago, and somebody kept repeating, “You know, Chinese doctors get paid to keep people well, and American doctors get paid when they get sick, and that’s the incentive.� So the solution that came out of that was these HMOs, like Kaiser, and that was supposed to solve all the problems, and no, on paper it does. You know, you join up, you pay your fee and they take care of you. Now my doctor friends call that not Health Maintenance Organizations, but “Health Non-Maintenance Organizations.�
And I think people have different experiences. If you’re really aggressive, you do all right with an HMO, but not everyone is that aggressive and watchful. So what’s left? You said your friend wouldn’t be left helped by a high deductible.
Gloria Ferris: She couldn’t afford it.
Bill Peirce: Well, but see, if the amount that you get from the State, if it’s a State program, the amount you get is enough to pay for the high deductible insurance, plus a medical savings account.
Gloria Ferris: Now you’re saying the government would pay for the high deductible insurance and the medical savings account.
Bill Peirce: Well, yes. I mean it’s a substitute for the existing Medicaid program.
Gloria Ferris: So then she would have more choices to what she did with it.
Bill Peirce: Right. So she could use her medical savings account to get those things that keep her out of the hospital.
Gloria Ferris: Ok. Well I’m glad I asked you that, because that’s a clarification of what… I mean this woman lives on less than $500 a month. When you were talking about that, I’m thinking of a traditional deductible, and I’m thinking, “No way.�
Bill Peirce: No. I mean it’s clear that in this stage anyway, until we reach the Libertarian ideal of very low taxes, cut them in half, cut them by three-quarters, we have to do something for the least fortunate. Now if we could get rid of most of these taxes, maybe private charity would pick it up, but that’s not in my lifetime. But we have to make what we’re doing for the people who are having these problems a lot more sensible or economical, and a lot more charitable.
George Nemeth: Yes. It’s been about an hour. I’ve got one more question. Does anybody have another question? Mine will be the last question. Jill?
Jill Miller Zimon: Yes, I kind of do.
George Nemeth: You’ve got to go back to the education thing?
Jill Miller Zimon: No. No. I’m not going back to education. No. You were talking about this South Carolina, what they’re trying, and then England and this Oregon saying, you know, “This is who you are. This is what we’ll treat and you’re over.� Isn’t that making social policy? And you had said at the beginning that Libertarians are kind of against government making social policy. I would agree that it’s implied, but in another way, it’s pretty obvious, if you are disqualifying people from coverage based on social choices that they’ve made over time. That is implicitly…
Bill Peirce: Right. Let me make it clear that I don’t like the approach that this particular part of England adopted, and I don’t like the approach that Oregon adopted. I really like the idea of medical decisions being made by the patient in consultation with the physician, but see, once the government or even your employer takes over paying your health costs, your medical costs, the next step is to take over your body and control it. The local example is, Scott’s Miracle Grow announced a few weeks ago that no employee would be permitted to smoke, even at home. Well, you know, if you work for Scott’s, Scott’s owns your body.
Jill Miller Zimon: The only good thing about that would be that then, if anybody gets ill, they’d be able to rule out that it was anything they did at home and they could blame it on Scott’s chemicals.
George Nemeth: I’m not mad, though. They probably didn’t think of that.
Gloria Ferris: Workmen’s Comp.
George Nemeth: Ok so, last question. I’m looking at your web page that talks about farmers and rural communities. I grew up in Thompson, Ohio, which is kind of the far east side of Lake County, and so I’d like you to talk for a minute about how you address… A huge part of Ohio, I mean anything outside of the urban core and the suburbs is completely rural, and there’s still a lot of agriculture there, you know. So I’d like to hear a little bit about your kind of urban/rural strategies.
But then also I have to bring up the whole gun control thing, because there is a picture on your web page where you’re sitting on the tractor that you own, and then there’s a picture of you and you’re wearing your Inner 8 cap.
Bill Peirce: Well as far as gun control goes, I think people should control their own guns very carefully.
George Nemeth: Use both hands, right? See, I’m sorry, but I have to mention this, because most people who read my blog have no idea that I grew up working farms. In fact, some of the farmers still carry guns on their tractors. I guess that would be my question is, as you’re on your tractor, do you actually shoot groundhogs from it?
Bill Peirce: Well I don’t.
George Nemeth: That’s probably a good thing.
Bill Peirce: No. As far as I’m concerned, guns, that’s just part of the Bill of Rights, and I don’t want to control them.
But as far as the agricultural strategy, I strongly believe in the market. The market has been distorted greatly by federal programs and subsidies, and we have to sort of go with the flow a bit. There isn’t too much the State can do, aside from just getting out of the way of the kinds of agricultural business, the next-stage processing and so on. But I don’t want to see State resources going into subsidized particular activities, like a giant ethanol plant or something like that. You know, that, as far as I’m concern, that’s in the same category with other corporate welfare. It’s what we argued in as it reaps the benefits of that one.
So I mean the other point that bears on this and bears on the eminent domain question is that I suggested exempting all improvements from the property tax, whether imposed only on land values. Farmers historically have been afraid of that, although the land values are primarily concentrated in the big cities and in the suburbs, not in the rural areas, and the smaller the farm, the higher the proportion of its value that is made up of buildings and other structures that are taxed. So that would help small farmers, although perhaps not the person that has 10,000 acres.
George Nemeth: That’s not a small farm.
Bill Peirce: That’s not a small farm.
Gloria Ferris: But that in itself might be a good thing, because it would stop this growth of mega-farming maybe. I have a question, which is on this urban/rural thing. What about, you’re for the markets working, but we have a real tendency of just moving farther and farther out and taking up farmland and just developing more and more, this kind of crazy development?
Bill Peirce: Some of that is directly subsidized by particular government decisions to put in a highway in a particular location, and I find those kinds of decisions haven’t justified, but I wouldn’t stand in the way of people trying to move to the place they like, you know, but not everyone wants to live in downtown Cleveland. Downtown Cleveland will thrive when the population of the area starts growing again, because then it becomes difficult to commute, and then people will want to live downtown. But I don’t like these artificial restrictions on growth (Oregon has done a lot of this), and you end up with very strange situations. People buy a farm, but can’t put a house on it, because it’s outside the area where you can put houses, and all sorts of odd restrictions on human behavior. There’s room for urban planning, but not at this heavy end of sort.
Gloria Ferris: But you would agree that the government, at this point, the State government, has kind of helped fuel that outward growth by making the highways larger, easier to, all of that kind of thing?
Bill Peirce: Yes, some of that is correct, although we do still need highways, particular commuter routes. I think the thing that has fueled a lot of this movement out to the outer suburbs is the poor quality of the schools in the inner cities and in some of the inner ring suburbs, because that’s the first thing families with children want is good schools, and so they move out to get them. Usually it’s not an all or nothing. “Do I really want to mow two acres of lawn, or do I want to live in Cleveland Heights on a small lot?� Usually it’s a weigh of these different factors, and if you can make the inner ring suburbs more pleasant to live in, then it slows down the rate at which people move out.
George Nemeth: Bill, I want to thank you for meeting with the bloggers today.
Bill Peirce: Well thank you for the opportunity. I enjoyed it.
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
You must log in to post a comment.