March 2006

Dr. Lawrence McQuillan, Ph.D
Pacific Research Institute

Guest Speaker Dr. Lawrence McQuillan from Pacific Research Institute

Dr. McQuillan discussed economic freedom which he defined as the right to keep what you earn, the right to produce what you want and how you want, and the right to compete in product and labor markets without force or fraud.

Dr. McQuillan pointed out that there are over 100 restrictions mandated by different states that impact this economic freedom.  In his study, he analyzed 47 variables.  The main considerations were tax rates, state spending, occupational licensing, environmental regulations, income redistribution, right-to-work laws, prevailing wage laws, tort laws, and number of government agencies.

Of the 50 states in America, California is ranked #49 in economic freedom.  The only state ranked lower was New York.  The most economically free states were Kansas, Colorado, Virginia, Idaho and Utah.  It was interesting that 23 of the 25 economic free states voted for George W. Bush in 2004 while 17 of the 25 least free states voted for John Kerry in 2004.

Depending on the freedom of the state, the less free a state is, the cost can range from $2,000-3,000 per year per person.  These costs are causing the indigenous population of the states to move from blue states to red states.  The net effect is that red states are getting redder and the blue states are getting bluer.

Dr. McQuillan main point was that economic freedom has an impact on income.  He shared with us the 1/2% rule.  For that reason, the young and well-educated are moving from blue states to red states.

He took many questions.  He described the flat consumption tax as the best tax for promoting economic freedom.