Up Is Up, Down Is Down - Promoting Common-Sense Policies That Actually Work – with Jonathan Williams – [Ep. 200]

Linda J. Hansen: Welcome. Thank you for tuning in to this episode of the Prosperity 101® Breakroom Economics Podcast. My name is Linda J. Hansen, your host and the author of Prosperity 101® - Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck, and the creator of the Breakroom Economics online course, the book, the course and the entire podcast library can be found on Prosperity101.com.

I seek to connect boardroom to break room and policy to paycheck by empowering and encouraging employers to educate employees about the public policy issues that affect their jobs. My goal is to help people understand the foundations of prosperity, the policies of prosperity, and how to protect their prosperity by becoming informed, involved, and impactful.

I believe this will lead to greater employee loyalty, engagement and retention, and to an increased awareness of the blessings and responsibilities of living in a free society. Listen each week to hear from exciting guests and be sure to visit Prosperity 101.com.

Thank you so much for listening in today. In our ever-changing world, some things always remain the same. Up is up down is down. The force of gravity is real. And no matter what current math programs may say, 2 plus 2 still equals 4. The same is true regarding public policy.

There are principles and policies that are timeless in their relevance and application to our lives. We can see this clearly when we take an objective look at history, and if we are wise, in life and in policy-making, we will learn from the mistakes and successes of those who have gone before us.

America has 50 states, and my guest today often refers to them as laboratories of democracy. It's so true, and we will be discussing what can be learned from each state. My guest is Jonathan Williams. He is the Chief Economist and Executive Vice-President of Policy at the American Legislative Exchange Council, otherwise known as ALEC.

He works with state policymakers, congressional leaders, and members of the private sector to develop fiscal policy solutions for the states. He founded the ALEC Center for State Fiscal Reform in 2011 and co-authors Rich States, Poor States, ALEC-Laffer Economic State Competitiveness Index with Reagan economist Dr.

Art Laffer and Stephen Moore.

His work has appeared in many publications and he has spoken to audiences across all 50 states and provided testimony for the U.S. Congress as well as numerous state legislative bodies. You can see his full, impressive resume on the ALEC website and I encourage you to do so.

Jonathan has been a guest on my podcast several times, and I'm always delighted to share his insights with the listeners. So, Jonathan, thank you so much for returning.

Jonathan Williams: Well, absolutely. It's always a pleasure to join you, Linda, and I look forward to our conversation. Your work is so important across the country these days.

Linda J. Hansen: Well, thank you. I believe yours is, too, and that really leads into the first question I plan to ask you. On the ALEC website, it says, ALEC is America's largest nonpartisan organization of state legislators dedicated to the principles of limited government, free markets, and federalism. I'd like you to share with the listeners why this is so critically important, especially at this time in America's history.

Jonathan Williams: Well, it's a great question. And, you know, I think it's so important right now in that, you know, when we look at some of the biggest economic challenges that we face, cultural challenges that we face, constitutional challenges that we face as a nation, our founders, you know, wisely put together this system of constitutional government to protect against many of these threats that we see today, right?

And getting back to this original idea of what the founders had in store, like limited government, like free markets, and like this idea of federalism, I think it's going to be so essential as we talk about ways to, you know, get out from out some, some of the big problems that we face and to, you know, move America forward and to continue to build upon this great history that we have as a nation.

But, you know, one of the things that I often talk about as I'm out in the states, you know, the folks in the states that we work with, the men and women working on state policy issues and state capitals get this because they do it every day. But the vast majority of Americans that don't follow state policy, a lot of times there's an inclination to forget, you know, what the 10th Amendment to the Constitution is all about.

When people are polled, the man on the street, Jesse Waters style interview, you know, what is this concept of federalism that's so unique to the American experiment? A lot of times the answers that you get are so unsatisfying and there are even answers that are completely opposite, 180 degrees away from what the true answer is.

You'll get answers like, "Well, that just means more federal control of things." Right? And it's like, no, the founders wanted a system that is anti central planning, anti-central control. They didn't want a big city, whether it was New York and central planners there at the time in Philadelphia at the time, or in Washington, DC at the time to dictate what is going on with the lives of individuals and businesses and civic institutions and churches and synagogues across the United States.

They wanted those decisions to be made as much as possible by the individuals themselves, of course, was this idea of self government, but then if their decision had to be made by a government level, that government should be that, that's closest to the people.

And that view was the 13 colonies at the time. And of course, now the 50 states, and it was the states that created the federal government, not the other way around. Of course, as President Reagan always reminded us of. And so that is a huge area that I think, you know, ALEC has led at the forefront.

Now, we just celebrated our 50-year anniversary, that was last year in 2023. And as Linda, you know, we were founded by a small group of state legislators and mostly Midwesterners like ourselves that came together to say we really need a conservative caucus, a resource to share these best practices and ideas across these laboratories of democracy in order to make sure that this idea that is pretty unique to the American experiment of federalism would continue to succeed.

And, of course, at the end of the day when federalism succeeds, I think it's so much easier for limited government and free markets to succeed because when competition is working and is allowed to thrive, the best ideas come to the forefront. And I think if there's anything that's to be, I think, most criticized out of Washington these days, and there's a lot to work with there, we could spend an hour or two talking about all the bad ideas here in this land of make believe, as I like to call it, Washington, D.C, but I think the most dangerous is this consistent war on federalism from the Biden administration and in many previous administrations in Washington wanted to take away more authority from the states and the people and private business and centralize that in Washington. And that's got to be something we fight at all costs.

Linda J. Hansen: Definitely. We have to fight at all costs. And, you know, when we talk about business friendly policies, having those business friendly policies that are made closest to the business. You know, Herman Cain always used to say, the way to solve a problem is to go to the person closest to the problem to find the solution.

And, you know, when we can decide these policy proposals and policy issues, at that local or state level, we're going to find policy programs that are much better for each individual, for each business, for the communities involved, and ultimately for our nation.

Jonathan Williams: Absolutely, and you know, and even from a perspective, I don't care folks that may be listening or Republicans, Democrats, Independents, you know, when you go and try to meet with a local elected official or your state legislator, many times they love to meet with you, would love to even take you up for a cup of coffee and have a chance to connect and hear what's going on, that there's something of real concern to them in their districts in their backyards. They might be family friends with your local elected official, for instance. You may go to church with them.

Setting up a meeting with a member of Congress, as you know, Linda, is a little bit more difficult, right? And just the idea that you should be able to access those individuals that have those pieces of authority over businesses and individuals at the state level. And, you know, those folks ought to be accessible.

That's I think a pretty clear, common sense, nonpartisan, just good government way of doing things. And I think we ought to get back to more of that.

Linda J. Hansen: Exactly. Well, all politics is local, and that comes into why I do what I do with Prosperity 101®, too, because other than our family or neighborhood, you know, where do we go to work?

Every day we go to work and politics affects that local workplace. And so, what you are doing with ALEC and coming up with these policy proposals, and we're showing what works, what doesn't work to make states more competitive, more business friendly, more family friendly, that is so important because as we look at those policies at the state level, we can look and say, "Okay, well, what works at the county level?

What works at the city level? What what works?" And we can learn from the mistakes and successes of others like I mentioned in my intro.

Jonathan Williams: Well, you know, and then just down to one of the most basic goals of a state, really the requirements of a state. If there's one thing that states are required to do constitutionally, in every case, is to pass a budget every year.

That's something that we haven't done in a very long time in Washington, D.C. And in fact, if you want to get even more common sense and pass a balanced budget, 49 out of the 50 states have balanced budget requirements in their state constitution or state law. Some are better than others. But of course, Washington D.C. doesn't.

And the last time we've actually balanced a budget, it was during the speakership of Newt Gingrich, more than 30 years ago. And so you, really have to look at the practical how do ends meet at the state level and whether we like the outcomes or we don't like the outcomes. We're seeing some states obviously go in one direction of higher taxes and bigger government, like California, New York, and Illinois.

We can talk about their economic slide as a result, but then you have other side of states, probably 25 states in the last three years that have substantially cut taxes, have looked to ways to reduce the cost of government, whether that's regulatory or tax costs. And that's right. I mean, under the system of federalism, these states ought to be able to choose which direction we go and then allow for the free movement of individuals and businesses across for state lines.

At the end of the day, like the old insurance car company, insurance commercial would go, when car insurance companies have to compete, people win, right? Consumers win. And when states have to compete, who wins? It's we, as Americans. The American people win because we get to choose our own form of government.

And every year as we see, we show this in our book, Rich States, Poor States, every year, as you know well, that Americans continue to vote with their feet towards states that value that framework of limited government, free markets, federalism, lower taxes, and that mix of services. But under a system of federalism, states get to decide which path they they choose.

I think it's just very clear based on the evidence that it's more prosperous. It's more beneficial to their citizens. If you want to have a successful state, successful private sector, you're going to choose a course of free markets and limited government.

Linda J. Hansen: Exactly. And the states like California, Illinois, New York, they've seen such a mass exodus, especially in the last three years or so since the Biden administration actually. And those state governments that have aligned with those leftist policies and the fiscal policies that tax the citizens and give so many benefits to illegals, whether it be education or housing or, you know, everything, transportation.

I mean, the list goes on and that's a whole other topic, which I've covered in other episodes, the border and immigration, but those policies are very clearly not fiscally responsible. You cannot have fewer people putting into a pot of money than those taking out of a pot of money.

So, you can't have fewer taxpayers putting into the government than you have those taking out of the government. Yet we continue to bleed the taxpayers, not only at the federal level, but in so many of these states and it just isn't viable. So, that's why you see this mass exodus. And you can see that these business-friendly states, these states with lower taxes and stuff are really becoming a haven for people.

Jonathan Williams: Absolutely. I mean, and that's why you've seen, you know, 25 states, like I said, in the last three years substantially cut taxes, on income taxes, for instance. That's one of the best ways to become more competitive. Obviously, there's nine states in America that we outline every year that don't even have a personal income tax whatsoever.

Like, to the biggest growth states, Texas and Florida. Tennessee is booming right now. If anyone's been to Nashville recently, you know what I mean. And then you compare that with California with the, you know, high taxes and the double digits now at the state level and raising taxes. Even with Gavin Newsom, you know, having a surplus earlier this last yea now saying we have a massive budget deficit.

And one of the reasons why he actually alluded to was this over reliance on investment style income taxes, such capital gains and dividends taxes that California relies on. And so, I think it's an interesting point because the progressive left likes to say, "Well, taxes should be about redistributing income, right?" Which we would disagree with the theory.

I think the best theory of taxation is, you know, taxes raise the amount of revenue you need for core government functions, right? That you need to take care of individual safety and provide for things like roads and basic government services that you need.

But the left sees a tax policy as a way to soak the rich and to have this class warfare and redistribution, right? The problem with that in this system of federalism that we've been talking about is when you soak the rich, you lose the rich in a lot of cases at the state level, because the rich don't stick around and take it many cases.

And as we've seen with California, I mean, the new census numbers came out just around the holidays, and there's a lot to unpack there. But California is now losing well over 300, 000 Americans on net per year. That was the numbers coming out of the 2023 census that we just released several weeks ago. So, nearly 1, 000 Americans per day, think about that, are leaving California on net and going to one of the other 49 states.

So, when they say they're charging 13, 14 percent on high income earners that they're going to soak the rich, well, guess how much the rich pay when they move from California a few miles to the east in Nevada, let's say? They're paying 0 percent of that income. And California, by the way, is going to get zero on that income going forward every single year, not to mention all the other economic activity and charitable contributions that those individuals leave behind when they leave a state.

And so, this whole idea that states are able to build these walls around themselves to keep the rich in or keep businesses in when they want to talk about this progressive kind of just confiscatory style fiscal policy, it just doesn't work. And of course, what does California have now? We're the largest budget deficit in America with tens of billions of dollars with the highest income taxes in America. Think about that for a second.

Linda J. Hansen: Well, it's like what Art Laffer said. If you tax something more, you get less of it. If you tax something less, you get more of it. And so, it goes for your products and services, but it also goes for the people in your state. You tax them less, they will want to live there. So--

Jonathan Williams: I mean, it's economics 101, right? I mean, and this is not that difficult for folks to understand. And that's why I think we're seeing this great movement of state lawmakers and ALEC members that are across the country realizing to compete you have to get it right on the basic economics. We're winning more than we're losing on this. But unfortunately, some of the coastal elites like those in New York and California just haven't gotten the picture yet.

You have to ask yourself, how much is it going to cost these states of the outmigration before they get a clue of what's going on with the bad economics? In fact, California, as you probably know lost its first congressional seat in the last round of reapportionment after 2020. I think last time we talked, we talked about this, but that was the first time in statehood since 1850, when California became a state, that California has ever lost a congressional district.

And if you look at some of the most recent numbers from these new estimates I was talking about, and especially how bad it's gotten post COVID is California is on track to potentially lose four or five congressional districts in the 2030 census. So, I mean, this is going to really have a political hit to these states as well as the economic hit that we always know has gone on.

Linda J. Hansen: Exactly. And it's really important for us to pay attention to this. And so, for businesses, you know, as you know, I'm always trying to encourage business owners to share with their employees, the effects of all these policies on their business. This affects the businesses bottom line.

So, when you have these people leaving, it's like you said, they leave their businesses, they leave their philanthropy, they leave all of that behind, or I mean, they don't leave it behind, they take it with them. So, their business goes to the new state, those jobs go to a new state, and unless the employees want to up and move to the new state, their jobs go with them.

So, I think it's so important for employees to understand how all of these policies matter so much to their day-to-day life, their jobs, their, you know, the impact it has on businesses is so understated because every business owner knows what happens when more taxes, more regulations, more compliance fees, you know, more inspections, more, more, more, more big government comes upon them. And that big hand of big government can have a big negative effect.

Jonathan Williams: It's such a great point. I was just down and flying out of Jacksonville, Florida the other day for a talk I was giving in South Georgia and happened to just get a kick out of this. It goes directly to this point about donors leaving.

You know, it's gotten so bad for New York that Governor Kathy Hochul, who's presided over a huge increase in the budget and taxes in New York since she became governor after disgraced Governor Cuomo. She actually had to come down to South Florida to do one of her re-election fundraisers because there were so many former New Yorkers that now live in Florida, that that's where a ton of the capital is that she actually had to leave the state to go down and do a fundraiser recently. I happened to see that.

But no, to your point that you just mentioned, I mean, Prosperity 101® is so important for employers to have their employees read to just realize what are the basics of this Economics 101 we've been talking about. Because as we see businesses move across state to state, employees are following the jobs.

You know, a lot of times people are so busy in their lives and rightly so getting their kids to soccer practice on time and doing what it takes to run a household and and keep things on track and making ends meet, that they don't necessarily put two and two together and why is it that you have a job in Texas and Florida and Tennessee and Arizona, and you didn't have a good job in Illinois or in New York or in Maryland or in California.

It's not always that intuitive. People don't follow this every day like you and I do. And so, resources like that are, I think, are just so important to have folks read this underlying Economics 101 that, you know, it doesn't take rocket surgery as Art Laffer always likes to say. This is just basic economics.

Linda J. Hansen: It is. It is very basic economics and civics, helping people understand what they then can do to protect their own economic vibrancy of their own job, their business that they work in or may own, and for their family. So, it really is simple.

And for businesses out there, we have the online course. We have books. I can come and speak, do workshops, whatever. But also, I want you to take a look at the ALEC website and be able to take advantage of the great resources they have there as well,. Because even just the Rich States, Poor States that we have discussed is so informative and helps to provide great policy information.

But there's many more things. They have task forces. Maybe you can just tell the listeners a little bit about individual task forces and how that impacts different industries, because ALEC isn't just about, you know, fiscal policy. I mean, it is, but it's fiscal policy on how it affects all these different industries, too.

Jonathan Williams:  That's right. Yeah, we have a really wide array of different policymaking task forces, as you say, that where we have lawmakers and business leaders and non-profit folks get together to say, "What does free market policy look like in X, Y, or Z area?"

I mean, one of the things we're known for after now 50 years as an organization is trusted policy solutions. And whether that's something like a piece of model policy that comes out of our task forces that are voted on and reviewed by the business community to make sure that they're pro business and free market and by the legislators that bring them to us and then finally approve them in ALEC.

And we have nearly 1,000 pieces of these model policies on our website that's searchable for any individual to go that's interested to see what's out there in terms of free market resources in a given area. But then we also have great publications across our 10 different issue area task forces that we have in addition to our Rich States, Poor States report, which richstatespoorstates.org is a complete micro site by the way that I know we've talked about that if you're interested to see how your state ranks, you can go to that site and pull up your state page and actually see in each and every one of the policy areas that are covered by many of our task forces, you know, how does that economic competitiveness in our state rank versus the others.

Utah has been number 1. New York's been number 50. Where does your state fall in the middle? It's an interesting resource for that. But outside of that, we have a brand new report on energy affordability, for instance, on the price of electricity, and the price of gasoline, and what kind of role that taxes and regulations have to play and how expensive electricity and gas and diesel is in your state, for instance. That's a brand new report just out of the late part of 2023.

Another great new report that just came out in the fall of 2023 as well is one of the big things that we haven't talked about on this episode yet, but I think is really one of the biggest stories out of the states that the corporate media in D.C., the liberal media at least in D.C. and New York really tried to ignore.

And that has been this school choice revolution, the idea that parents should be involved in their kids education, right? I mean, Glenn Youngkin here in Virginia. He is the governor of Virginia because of that reason that Terry McAuliffe made the mistake of being with the Teachers Union President Randi Weingarten and saying that kids, you know, and parents shouldn't be involved in their kids' education and deciding what they're taught in schools. They don't want them. They want some central government to decide that for parents.

And so, we've seen this massive pushback, right? In West Virginia and Arizona starting in those places. And now, you know, 10 states in the last three sessions have embraced universal parental empowerment and school choice. I mean, that's been an incredible movement. We have a brand new ALEC report grading the states on economic freedom and parental rights. And so, that's an incredible resource to check out.

But basically outside of, we don't get into the social issues at ALEC as you know, but outside of that, almost every other issue that your state lawmaker in your state deals with, ALEC has a task force or maybe one of our subcommittees that deals with vetting model policy and ideas and putting together these resources, whether it's health and human services and trying to fix the out of control health care costs and health system that we have.

Whether it's the energy area that we talked a little bit about, whether it's technology policy and innovation, whether it's the tax and fiscal policy, we've got something for every state legislator and really every American that cares about this idea of decentralized control, federalism, and really bringing America back to its roots of a country that's based on idea of individual, empowering individuals and enhancing their rights and ability to become more prosperous going forward.

Linda J. Hansen: It is true that you have something for everyone. And so, listeners, whether you're a business leader, business owner, whether you're a parent or a student, you know, I invite you to go to their website and take a look at some of these guides. You can download them for free. You can see these things and then it's up to us as citizens to make sure we use our voice to talk to our elected officials.

So, our state representatives, our state senators, our federal elected officials, we need to let them know how we feel about these issues. So, part of that is making sure we're educated enough to make a well-informed decision about the issues and to understand how they do affect us. And so, that's why I do Prosperity 101®.

That's why ALEC does what they do and why Jonathan works so hard at what he does. And so, for all of you listening, don't take for granted the freedom that you have. Don't take for granted that your business is going to be able to grow because the government's going to allow it to grow. That's not necessarily true.

We can see so many regulations coming upon businesses, whether it's gas stoves or you're the type of dishwasher, or the type of car you drive. All these different things impact us in ways that we don't think about day to day. Like Jonathan said, when we're taking our kids to sports practice or we're taking care of elderly relatives, you know, it's hard to keep up with all the issues, but that's why places like ALEC or what I do with Prosperity 101® are so important for not only you to take advantage of, but to support, because we can't do any of this without you supporting it.

So, ALEC needs your support. I need your support. A quick plug, go to the prosperity partner link on the website, prosperity101.com and support with whatever you can provide to help keep these podcasts on the air so people can actually learn more. I think that because of COVID and because of all that's happening in America, Americans are waking up a little bit more.

They're seeing. Well, maybe they're not because mainstream media doesn't show it that much, but they're seeing the uprisings in Poland and Germany as the citizens there are fighting against the globalist agenda and the lack of freedom that they're experiencing. And I think there's people now beginning to understand that we are losing our freedoms bit by bit by bit.

And so, we're just really thankful for what you do, and I will keep doing what I do so that we can help promote freedom and that individual rights and states rights, and that's what makes America strong. It is that freedom that we have at that lower level. We don't want a big government telling everybody how to think, what to do, what to eat, where they can travel, and how they can conduct business. That doesn't help anyone be prosperous or free.

Jonathan Williams: Well, that's exactly right. And I appreciate the kind words. And, you know, if you've got state legislators that, you know, ask them if they're a member of ALEC. We'd love to have each and every state legislator across the country join us or businesses that want to be involved.

But, you know, getting back to just kind of my thoughts on kind of where we're at right now. I think, you know, this is a perilous time that we're in. I mean, we are the greatest nation on the face of the earth, in the history of the world. And the reason we've been able to do that was constitutional rights given to individuals. Right?

These are rights given by God, not by governments. This is a unique form of government. Federalism is a unique facet of that we've been focusing on. That as Reagan always, what really put out there as a warning to us was, you know, we're only one generation away from losing it potentially, right?

Freedom is only one generation away from extinction. We have to continue to foster it and nurture it, and pass it on to our children and our grandchildren, right? And that's so important and that American ideas and freedom are under attack all over the world today, more than ever. And so, we need to double down on really what makes America great and what has always made America great. And that is constitutional rules based government that empowers individuals and disempowers big government.

Linda J. Hansen: Well, that's a great place to pause for this episode and have you back again another time. But we just thank you so much and thank you for encouraging employers to share all this information with their employees. And thank you for all that you do to get the message out to average citizens all over America.

I know you speak all over. You do hundreds of interviews and it really helps to educate people, and thank you so much. So ,if people want to go to the ALEC website, please give them the website and then also the Rich States Poor States site again.

Jonathan Williams: Yeah, so it's ALEC.org and richstatespoorstates.org to check out all the free resources we've talked about. But Linda, thanks so much for having me back on. It's always a pleasure to join you. Keep up the great work you're doing and I hope employers are out there working with their employees to get Prosperity 101® and to listen to all the great podcasts that you're putting out every week.

Linda J. Hansen: Thank you so much. I look forward to having you back again.

Jonathan Williams: All right. Anytime.

Linda J. Hansen: Thank you again for listening to the Prosperity 101® Podcast. If you enjoyed this episode, please subscribe, share, and leave a great review. Don't forget to visit Prosperity101.com to access the entire podcast library, to order my newest book, Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck or to enroll you or your employees in the Breakroom Economics online course.

You can also receive the free e-book, 10 Tips for Helping Employees Understand How Public Policy Affects Their Paychecks. Freedom is never free. Understanding the foundations of prosperity and the policies of prosperity will help you to protect prosperity as you become informed, involved, and impactful. Please contact us today at Prosperity101.com to let us know how we can serve you. Thank you.