Doing Business in DC

DC Progress notes that Washington, DC has ranked 51st – dead last – in the annual Small Business Survival Index every year since the mid-1990s.

Part of the problem is that taxes and spending are both sky-high in DC. Per capita government spending exceeds that in any state, and is roughly double the national average. High corporate, income, and sales taxes have been very effective at driving away businesses to nearby Virginia and Maryland.

One of DC’s other problems is regulatory. The District is notorious for its thorough, exacting, and bureaucratic regulatory regime. Mayor Fenty and the City Council should ease the burden. It would save taxpayers money and encourage more businesses to locate in DC. The fixes that CEI’s Wayne Crews identifies for the federal government in his annual Ten Thousand Commandments also apply to DC and the states.

High Art Reborn?

It is not a controversial statement to say that the art of painting declined in the 20th century, and remains at a low ebb. For most people, paintings of soup cans don't compare favorably to Botticelli, Titian, or Rembrandt.

Could a revival be underway? Historian Paul Johnson (The Birth of the Modern, The Renaissance, etc.) has a short article, worth reading, about Charles Cecil's attempt to revive the lost art of portraiture.

While I wish Cecil well, and would love to see some of his work, I think his revival of the masters' techniques is ultimately a lost cause. The future of art will probably have more to do with the pixel than the paintbrush.

Most digital artwork out there is dreck, true. But its sheer quantity almost guarantees that quality work will emerge. Good art will have life after its ironic postmodern death.

Prince Fielder Wins Home Run Derby

Congratulations to Prince Fielder, the first Brewer to win baseball's annual home run derby. His longest hit traveled an estimated 503 feet(!). He hit the four longest home runs of the evening, and eight of the top ten.

I remain more impressed that Fielder, who weighs 270 pounds, has two career inside-the-park home runs.

Freestyle Injuries

I'm not one to laugh at other peoples' pain. But I couldn't help but crack a smile at the Chicago Tribune's compilation of the Cubs' Strange but True Injuries, inspired by Ryan Dempster's recent less-than-graceful return to the dugout. He is now on the disabled list with a broken toe.

Highlights include Sammy Sosa's sneeze-induced back spasms and Carlos Zambrano's elbow injury caused by spending too much time on his laptop.

A Second Stimulus?

There has been some chatter recently that the economy needs another stimulus package. The Brookings Institution’s Martin N. Baily cautions against one — unless growth remains sharply negative through the end of the year. Then he’d like to see a stimulus in the form of tax rebate checks, such as President George W. Bush issued twice during his presidency.

One problem: any stimulus proposal is, by its very nature, less than a zero-sum proposition. Stimulus involves taking some money out of the economy, wasting some of it on bureaucracy, then putting it back in.

Rebate check-style stimulus is less harmful than the pork-laden American Recovery and Reinvestment Act. But the same logic still applies. There are transaction costs to sending out millions of checks.

And if the rebate increases the budget deficit, then tomorrow’s taxes will have to be raised to pay off today’s rebate.

Worse, one-time stimulus checks don’t change peoples’ spending behavior very much. This is because of what economists call the Permanent Income Hypothesis; people base their spending behavior on their expected long-term income, not on short-term windfalls. People tend to save their checks instead of spend them.

If you’re wondering why no stimulus package has ever had much discernible effect, those would be the reasons why.

Instead, I would urge a deregulatory stimulus.