…though the 24/7 Wall Street report which says it is misses all the most important reasons why.
Louisiana fell at the bottom of the list because of factors that include its unemployment rate, it credit rating and outlook and the state’s poverty level.
One of the major reasons was the high unemployment rate in the state. Researchers said one of the factors was that the state offers little assistance to people who are jobless.
“Some 6.1 percent of Louisiana’s labor force was unemployed in 2016, the third-highest unemployment rate in the country after only Alaska and New Mexico,” according to researchers.
To come up with its findings, 24-7 Wall Street compiled data from the U.S. Census Bureau and the Pew Research Center. Researchers also reviewed each state’s change in its labor force from 2011 to 2016.
“While some states have been hurt by or benefited from circumstances that are almost entirely out of lawmakers’ control — like the presence of natural resources — other states have been directly hindered by their own policymakers,” according to the study.
Louisiana’s high unemployment rate isn’t why the state is the worst-run. After all, the high unemployment rate is a temporary circumstance which will likely go away because either (1) the oil patch will recover and put a large number of those unemployed back to work or (2) those who want to work and cannot find jobs will simply move to Texas where there are tons of them to be had, thus driving Louisiana’s unemployment rate back down.
No, that’s not why this is the worst-run state in the union. Here are five factors 24/7 Wall Street didn’t bother to consider.
First, institutionalized political corruption. Louisiana has a disgusting tradition of crooked politicians, which our voters have accepted rather than make a practice of punishing. When Edwin Edwards, who had been a member of Congress disgraced through political corruption before running for governor the first time, wins four different gubernatorial elections – one of which coming after a federal indictment on corruption charges – you know you have a problem with your electorate.
But it isn’t just bad voters in this state. Those crooked politicians have set up a legal system which benefits them, because original jurisdiction for prosecuting political corruption cases resides with local district attorneys. That’s a recipe for disaster – in most places here and in other states, when the local courthouse mob is busy ransacking the treasury the DA is the last person you can count on to do anything about it since he’s usually PART OF THE LOCAL COURTHOUSE MOB.
And yet here, the DA has to recuse himself from a local corruption case before the state Attorney General can get involved. That only happens in high-profile cases like the one involving LaToya Cantrell’s City of New Orleans credit card; it doesn’t happen in smaller places with lower profiles. As such, small-town Louisiana politics is quite often a wretched hive of scum and villainy, and the only real effective check on it comes from the U.S. Attorney. We only have three of those, and there isn’t all that strong a history of U.S. Attorneys working to clean up local corruption. That comes and goes, and you can’t build a healthy fear of consequences for bad actions when those consequences are fleeting.
Second, the state’s vicious cycle of locking up taxpayer dollars in dedicated funds. This is a brilliant trick the tax-and-spend crowd has inflicted on Louisiana, and it works something like a perpetual motion machine. How? Like this – the politicians will craft some worthy cause everyone agrees should be a spending priority, and then they’ll build a funding mechanism for that cause that relies on some formula having little or nothing to do with the actual needs of the state. And that mechanism will be ensconced in the constitution with the approval of the voters who are paying little attention to what’s going on in the weeds – and you can bet it will generate well more funds than a properly-running government would need to solve the problem.
In short order, that dedicated fund will become a political sacred cow, to such an extent that no one will ever look to see if the money spent from it is being wasted – or if anyone does dare to look (and if they do they’ll uncover waste, fraud and abuse that would be right at home in a Third World banana republic) they certainly won’t dare to act on their findings for fear of being branded as someone who cares not about the noble cause that fund supports. The result being the dedicated fund becomes a severe drain on the state’s budget and other priorities not locked up in constitutional or statutory dedications go unfunded.
How do you fix that? By raising taxes, of course. Therein lies the trick. You can’t cut Louisiana’s bloated budget because if you do you’re putting developmentally disabled kids out in the swamps to be eaten by alligators, or you’re starving the elderly, or whatever. Meanwhile, the armies of clockwatchers in state bureaucracies honing their skills at computer solitaire for $65,000 per year continue unabated.
Third, Louisiana has put its local governments on overly generous welfare payments. This is a leftover from the Longite socialist years, in which the poor and rural parishes couldn’t afford schoolbooks for the kids or concrete for the roads – so as a result, there are more state highways in Louisiana than practically anywhere else and the state subsidizes K-12 education, which is a function of local government and run by local school districts with taxing power in their own right, to the tune of some $4 billion per year. Not to mention the state funds supplemental pay for cops and firemen and, until recently, the state has fully subsidized local governments charging an economically uncompetitive inventory tax nobody else in the country inflicts on local business at such a level.
That’s among other things the state does. Think all that largesse has lifted the poor rural parishes out of their deplorable circumstances? Yeah, sure. Go and have a look at St. Helena or Tensas, and tell us about how we’ve taxed ourselves into their prosperity. There is no incentive for those places to offer their citizens honest, efficient government or for them to promote private-sector economic growth. And guess what – they don’t do those things. As for the K-12 education subsidy, which is done through a dedicated fund called the Minimum Foundation Program, it actually disincentivizes the formation of a worthwhile local school district, because the funding formula offers more for a district with a higher percentage of kids on free or reduced school lunches – and that means middle class voters whose kids tend to be higher educational achievers get neglected and run off in favor of catering to the poor kids. See the East Baton Rouge Parish Schools for a prime example.
Fourth, Louisiana has the nation’s highest property tax homestead exemption at $75,000. Nobody else is even close. This compounds the poisonous relationship between the politicians at the Capitol and the often crooked and dysfunctional local hacks, because of two things. First, that $75,000 exemption means that in the less-populated and poorer places in Louisiana there is no tax base. In a lot of these rural places it’s only a few families who are paying all of the property taxes – and because of that, those families exercise a huge portion of political influence locally by making sure they control the local politicians. That’s a recipe for lots of favors being done, of the corrupt kind, with the majority of the citizenry unconcerned – after all, they’re not paying for it.
And second, because there’s no property tax base in a lot of the state, those parishes become dependent on welfare from the Capitol. DOTD, the state highway department, doles out funds for the roads, the MFP pays for the schools, the state pays for the cops and firemen, LED, the state’s economic development arm, calls the shots on whatever economic development efforts are being made. And worse, it’s all paid for out of the state’s tax base – which is made up of sales taxes, income taxes and severance taxes, all of which are highly variable depending on factors which can’t be controlled in Baton Rouge. The price of oil will be what it will be, the national economy will likely drive sales and income tax receipts and so on. So it’s inevitable Louisiana’s treasury will careen from boom to bust and back again with no ability or incentive to make intelligent fiscal decisions.
Finally, Louisiana is the worst-run state in the country because our legal and constitutional system is derived, unlike any of the other 49 states, from the Napoleonic Code rather than English common law. This matters, because for all the gibberish you might hear about the Napoleonic Code it is distinctly inferior to common law as a source of legality and constitutionality. Common law is a set of rules which came about over centuries of experience in settling disputes and creating successful governmental systems, and as a result it stands on principles which evolved over those centuries while being flexible in their application. The Napoleonic Code, by comparison, rests on the proclamations of “experts” who deliver us law and constitutionality based on what flows from their gigantic brains.
William F. Buckley’s famous quote about preferring to be governed by the first 500 names in the phone book rather than the faculty at Harvard is appropriate to remember here.
Our Napoleonic Code-inspired legal system gives us a criminal code which has in it a specific crime for Theft Of An Alligator, and yet despite its agonizingly stupid specificity we rank yearly as a Judicial Hellhole thanks to the litigiousness and corruption of our courts. I counted, on a trip this weekend from downtown Baton Rouge to the Millerville exit on I-10 and I-12, no less than ELEVEN billboards for the insufferable plaintiff attorney Gordon McKernan; in no other state do chasers of ambulances so dominate the advertising media. That’s a systemic issue you simply don’t see on this level in other states, and by the way it’s a reason other places whose law derives from the Napoleonic Code – think Africa and Latin America, for example – so often exhibit the corruption and dysfunction you see here.
And yes, if your state is fraught with problems of this magnitude you will see unemployment rates superficial list-makers like 24/7 Wall Street will recognize. But don’t kid yourself – this place is the worst-run in the country for far deeper reasons than that report will ever cover.