Increasing Mobility of Low Income People to Higher Incomes

I am going to comment on an article by W. Bradford Wilcox posted at the American Enterprise Institute on income mobility in the United States.  He has presented some data of Harvard economist Raj Chetty, a principal investigator at the Equality of Opportunity Project, based on local variations of local income growth, the share of single mother households locally, and local government spending.  The mobility is question here was actually one with a very high bar.  A child born into a lowest quintile household has to be a highest quintile earner by age 30.  Most highest quintile earners are well into their careers and tend to be much older 30.

Wilcox has fit these data sets with linear functions.  The data are interesting, though the linear fits are problematic for two of his three plots of the data.  In light of the recent renewal of Obama's redistributionist efforts, only partially and even falsely carried out by ObamaVaporCare, this is a good time to talk about what really affects income mobility.

The first plot, which is reasonably fit with a linear function, is:

This is not surprising.  Where income growth is strong in America, labor is more valued and those who want to work hard have many opportunities to make money.  Of course Obama's anti-business policies, high energy costs, excessive regulations, and the costs of ObamaVaporCare decrease income growth and are therefore likely to decrease income mobility on the national scale.  Nonetheless, local government efforts to suppress the free market will still leave a strong imprint on local mobility variations.  There is no question that it is much easier to start a business in some areas than in others, as an example with important affects on mobility.

Another critical effect on income mobility is:

Clearly an increasing share of households run by a single mother has a very negative effect on income mobility for their children.  The linear fit here is nonsense.  The proper fit is with a hyperbolic curve, which indicates a much stronger impact of single mother households on income mobility than a linear effect.  It has long been understood that there was a strong effect, but this data makes it very clear how strong and dominant that effect is.  It is well-understood that entitlement programs tend to increase the number of single mother households, so most of Obama's likely efforts to decrease income inequality will likely make it worse.  One of the many impacts of his policies already has been to increase energy costs, which really hurts those with little income badly.  How local government welfare programs are run will have a big impact on the number of single mother households.  Generally, the more money spent on such programs, the more single mother households.

The third plot is:

The thought here was that local government spending supports education, so with better local education systems, income mobility would be increased.  There probably is some such effect in some school districts, but we also know that generally increased spending on schools does not really correlate well with greater learning.  In some school districts, the people do have a high regard for education, but in many other districts it is just another labor union entitlement program to gain the teachers union votes.  Many inner city school systems are well-funded, but horribly managed.  So it is not surprising that the data does not follow any definable dependence in this case.  The data more nearly resembles a hand print with the palm pressed firmly and the fingers splayed out and pressing lightly.  Indeed, the thumb is nearly straight up, indicating that one can get virtually any result from spending $2,000 per capita on income mobility.  Clearly, neither local government spending nor local education spending is the primary effect on income mobility.  This is not to say that real learning is not important.  That I am sure is a critical effect.  But, sad to say, real learning is not something Obama is interested in.

Income mobility depends upon the opportunity to earn a living, which is heavily dependent upon government policies not shutting down or over-regulating opportunities.  Because freedom of contract is heavily suppressed in the USA, many opportunities to earn are decreased.  One such egregious way to decrease opportunity to earn and to develop a career is to increase the minimum wage.  Doing so hurts the under-educated the most by keeping them from getting their first jobs.  This keeps them from acquiring skills and from establishing a record as a worthy employee.  It forces many to turn to crime.  The high costs of providing health insurance under ObamaCare and the minimum wage increases that took effect just before and during the start of the Great Socialist Recession have already had a disproportionate impact on ensuring the unemployment and part-time employment of those in the lowest quintile income households.  Obama has been no friend to the small businesses that often hire young people and give them their first opportunity to prove themselves.

It is another Obama farce to claim that he is going to do something to increase income mobility and to reduce income inequality.  As always, he will cause effects opposed to those he claims he will achieve.  Of course his main purpose in this income inequality rhetoric is to distract the American People from the disasters he has already caused in the economy and with our medical care.

Taxpayer Unapproved State and Local Government Debt: $7.3 Trillion

Steven Malanga, senior fellow at the Manhattan Institute, says that state and local governments have $7.3 trillion of hidden debt.  These debts were not approved by taxpayers, despite the fact that most state constitutions and many city charters limit borrowing and require voter approvals.

• Illinois is rolling pension debt and state officials are being sued because they failed to disclose the debt and misrepresented it.
• Chicago city employees retiree health care annual expenses will increase by a factor of 5 in ten years.
• Each and every resident of Sacremento, CA is obligated with $4200 of debt they did not approve and the debt is 5.5 times the annual city budget.
• New Jersey legislators wanted $8.6 billion for school refurbishing projects and knew voters would not approve it.  So, they set up an independent borrowing commission for the purpose.  After spending $7 billion, the commission disbanded and left the taxpayers the debt.
• 95% of New York's $63 billion debt was never given voter authorization.

Malanga recommends that governments are forced to stop providing defined benefit pension plans.  Independent borrowing authorities must be denied and debts should only be allowed with voter approval.

The total state and local debt is mentioned twice in the article.  The first time it is mistakenly given as $7.3 billion.

Obama's Jobs Creation Mythology

Obama gave a speech upon wrapping up the G20 Summit Meeting in Seoul, South Korea on 12 November in which he said that 1 million jobs had been created in the U.S. in the last year.  Let us check this statement out.

The year for which jobs statistics are available as of now and as of his talk was November 2009 through October 2010.  In November 2009, 139,132,000 Americans had jobs.  In October 2010, the number of Americans with jobs was 139,749,000.  This is an increase of 617,000 jobs.  These numbers are for the actual numbers of Americans working and are not seasonally adjusted.  This deep into a recession, the seasonally adjusted numbers may not be very meaningful.  They are also subject to some judgment, which makes them wobbly figures, as evidenced by their frequent adjustment in subsequent months after they are announced even though the unadjusted number remains rock steady.

Now, perhaps Obama was rounding off the number of jobs created to the nearest million.  Reasonable rounding practice would say that was fine if the number being rounded was quite a few million, but at 617,000, the reasonable rounding would have been to the nearest 100,000 or to 600,000 in this case.  On the other hand, we never know if he is only counting new jobs and not subtracting the jobs lost in that time-frame.  Or maybe he is still trying to convince us that his stimulus programs created many more jobs than they destroyed.  We cannot know what he had in mind.  But, we know that most people who heard him talk think he was saying that 1 million more people are working now as compared to a year ago.  That is not the case.

Worse yet, the American population is growing and we have an increase in the number of people of working age and therefore need more jobs now than we did one year ago.  To maintain a constant percentage of the population in jobs, the economy has to create many new jobs each year.  Since looking at the unemployment rate when long into a recession commonly tells us little about how many jobs are desired, I largely ignore the so-called unemployment number.  On examining the history of employment numbers, I found that few Americans were unemployed in the late 1990s and that in January 2000, at the start of the decade, the unemployment rate was 4.04% and 67.49% of the working age, non-institutionalized, population was employed or actively looking for work.  If the economy were robust and able to generate jobs that people would want as much as they did then, we should figure that 67.49% of the working age population would still want jobs today.  This allows us to calculate the number of jobs needed to satisfy those who would work if the jobs were available and reasonably enticing.

The Great Socialist Recession began in December 2007 in the United States.  It started earlier in most other areas of the world, having been kicked off by a spike in oil prices, which soon caused a financial crisis since much of the world was working on easy credit.  Our jobs problem in this decade did not start in December 2007, however.  In January 2000, we needed another 5,689,000 jobs to put everyone looking for work in a job.  That number corresponded to a 4.04% unemployment rate with some fraction of the unemployed being unemployable due to minimum wage laws and some fraction due to people changing jobs by choice.  By December 2007, the number of missing jobs had already grown to 11,023,000 jobs due to a growing population and a higher unemployment rate of 4.80%.  It also appears that the desirability of jobs had fallen somewhat by then.  I believe this was caused by the huge growth of local, state, and federal governments throughout the decade.  By December 2007, these excessive governments were already draining the private sector of much of its wealth and had dragged down its job creation powers.  The growth of government mandate expenses on businesses had grown even faster than had the governments themselves.

By December 2008, the U.S. economy was missing 15,287,000 jobs.  By December 2009, it was missing a gigantic 22,108,000 jobs.  Let us examine the number of missing jobs by month from November 2009 to the latest statistics of October 2010.

Please note that bottom of each bar for the missing jobs starts at 20 million jobs, so we can observe the variation in the number of missing jobs more readily.  Also, in November 2009, the number of missing jobs was 20,646,000 jobs and in October 2010 the number of missing jobs had increased by 589,000 jobs to a total of 21,235,000 jobs.  So, contrary to Obama's claim of creating 1 million jobs and the implication that most people would draw from that of progress in supplying the demand for jobs, we find that the problem of missing jobs has actually become worse.  617,000 more people are working but just to remain in the bad situation we had already been in during November 2009, we needed to have created 1,206,000 jobs rather than about half that number which were created.  Things are still getting worse.

Examining the graph, we see that the job situation worsened in December 2009 and again in January 2010.  It then slowly improved through July 2010.  But it got worse again in August, September, and October 2010.  Obama has nothing to crow about.  But, that does not stop him from trying to convince us that he does.

Government Employees Union is Lord of Campaign Spenders and Master Thief

The ultra special interest group in elections would be that which has the most to gain from Big Government.  The Lord of all the independent election campaign spenders is the government employees union, the American Federation of State, County and Municipal Employees, or AFSCME, union.  This union now has 1.6 million members and that membership has grown by 25% in the last decade, making it a very powerful union.

In comparison, the total number of non-farm workers in the U.S. grew by 5.0% from September 2000 to September 2010 and that number includes the large increase in government workers.  The U.S. population grew by about 6.5% in the last decade.  The AFSCME union grew by leaps and bounds because state and local government spending from 2000 to 2008 soared upward by 55% and federal government spending skyrocketed by 66.7%!  AFSCME grew rich on this huge transfer of wealth from the private sector to the government sector.  This bloodsucking of the private sector resulted in a decade of little job growth and little increase in the standard of living for other Americans.

The 22 October 2010 Wall Street Journal reported that AFSCME has spent or is spending $87.5 million on the Democrats to continue the transfer of wealth from the private sector to the government sector.  In comparison, the U.S. Chamber of Commerce, the 2nd biggest spender, is spending $75 million and the American Crossroads and Crossroads GOP is spending $65 million.  The Service Employees International Union, SEIU, which spend so heavily to get Obama elected and whose members pension fund is critically underfunded, is spending $44 million.  The next biggest campaign spender is another government sector employees union, the National Education Association, which is spending $40 million to keep the government spending spigots fully open.  It is clear that the unions are expecting to be paid back for their efforts with bundles and bundles of taxpayer money.  Meanwhile, the U.S. Chamber of Commerce and American Crossroads are simply trying to reduce the damage to the American People caused by the huge confiscation of private wealth by the governments and politicians who lust for power.

In the private sector, unions have come to represent a smaller and smaller fraction of those employed, with union members being more than 30% of workers in 1965, but only about 8% now.  In comparison, about 40% of state and local government workers are union members now.  That percentage has been fairly constant since the early 1980s, though there has been a recent Socialist Recession increase.  Those government employees in unions, when compared to state or local governments with no unions, are receiving 31% more pay and 68% more in benefits.  The states with the greatest incidence of unionized government workers are states with higher pay generally, so one has to correct for that.  The result is that they are paid 10% more with that correction, but such a correction to the huge benefit packages still leaves a large windfall to the unionized government worker.  The recent increase in union workers has been most noticeable on the West Coast, where 16.7% of workers in California are now union.  This is part of the reason why the local and state governments of California are in such financial straits.  It is also contributing to the anti-business climate of California and causing many businesses to leave the state or build new facilities outside the state.

Governments controlled by the Democrats are kind and generous to the unions.  But, the Tea Party movement has the Republicans much less inclined to be so generous.  On principle, they are in favor of smaller, limited governments.  They have become very aware that the growth of government has resulted in a loss of their freedoms and deprived them of personal choices.  The Tea Party is putting the screws to those long-tenured Republican politicians who have favored the growth of government.  The Tea Party people are aware that the transfer of wealth from the private sector to the government sector is hurting the economy and putting our children and grandchildren into unbelievable debt.  AFSCME is the opposition and is spending a hefty fraction of its members $390 per year dues to counter the Tea Party and the Constitution itself, which calls for a very limited federal government.

The Socialist Recession we are still staggering in for the third year, has caused a large reduction in state and local government income.  Many of these governments increased taxes on the People who were themselves staggering due to the Socialist Recession.  At least $160 billion of the $787 billion Stimulus Package was given to state and local governments so that AFSCME workers would not suffer from the recession as those of us in the private sector have.  The increased taxes and the federal Stimulus largesse allowed the states to have only a small reduction of employees, while local governments actually had a net increase in workers during the recession.  The Republicans must counter this privileged government worker nonsense as they gain strength in this election in Congress and in the states.  Republican Gov. Chris Christie has proposed that public employee unions in New Jersey be limited in the use of member dues for political purposes.  The National Right to Work Legal Defense Foundation wants to make government employee unions voluntary organizations, which is a viewpoint with which I agree and to which I have contributed.

The AFSCME union has a great desire to grow, which means it is invested in the growth of governments at the local, state, and federal levels.  It has another pressing reason to control the politicians: the defined benefits retirement plans for many state and local government employees in the union are unsound.  Illinois, Louisiana, New Jersey, Connecticut, Indiana, Oklahoma, and Hawaii have defined benefit legal contracts which they will not be able to meet by the end of the decade according to Prof. Joshua Rauh of the Kellogg School of Management at Northwestern University and Prof. Robert Novy-Marx of the University of Chicago Booth School of Business.  Illinois is in the worst shape, perhaps due to the legacy of the Chicago politicians such as Obama.  Assuming that the Illinois pension fund has an surprising 8% rate of return and the state makes the contributions planned, the pension fund runs out of money in 2018.  After that, the state must raise taxes by $14 billion a year.  The other states in the list will not last through 2020.  By 2030, 31 states may be unable to meet their defined benefit pensions requirements.  They will be going to the federal government with hat in hand to come up with the money to meet these requirements.  The resulting bailouts will match or exceed the bailouts of this Socialist Recession.

I recently discussed the defined benefit multiemployer pension failures of the private sector labor unions in a post called Union Pension Fund Swindles, Their Democrat Henchmen, and the Beknighted Taxpayer.
These private sector unions with very underfunded pension plans have been hoping to get the federal government and the Democrats to bail them out also.  Again the scale of the bailout is comparable to that of the bailouts in this Socialist Recession.

The legacy of the Democrat, and of some long-tenured Republican, politicians has been unfunded liabilities that are likely to total many times the staggering sums we recently paid in this Socialist Recession.  It is now clear that we still have huge payouts to make for Fanny Mae and Freddy Mac as well.  The payouts for their unmet obligations may be $300 billion.  The management of American government has been horribly mishandled and we will be paying the consequences with a lowered standard of living for a very long time.  It would have been so much wiser if we had lived by the principle that governments should be limited in power and that the People were capable of choosing their own individual values and managing their own lives.  The Nanny State has proven to be a thief operating on a scale to beggar us all.

High-Risk Local Government and Bankruptcy

One recurring theme of my posts is that when governments expand their operations and powers beyond those needed to provide for the equal protection of our individual rights, they generally do a very poor job of providing the given service, they inevitably end up failing to protect our individual rights, and they fail very unequally in protecting our rights as well.  When governments fail, they often put all of that government's operations at risk.  This is the situation in such states as Rhode Island, New York, New Jersey, and California where terrible state debt and massive liabilities clearly exceed the level that taxation can support.  Higher taxes there will simply lead to more economic stagnation and the flight of many capable and often wealthier people from the state with lower tax revenues resulting.  After a point of government ineptitude, there is no way out but to drastically cut even the most legitimate services.

Here is another example of how a local government put its essential services at risk by trying to perform services which should have been left to the private sector.  Responsible local government has no business departing from the few legitimate services such as police protection and the courts, because other activities increase the need for involuntary taxes and also the risk of the failure of the government.  Businesses in the private sector fail more often than not and there is no reason to expect that city, county, and state governments can operate more efficiently than do private sector businesses.  Of course, however badly they operate a business, they can call upon a large tax base to subsidize the poor operation, which will commonly allow a government to avoid acknowledging that they are operating the business they have take on poorly.  This usually leads to further deterioration of the operation of the business with time, since incentives are missing to improve the operation.

The capital city of Pennsylvania, Harrisburg, is considering a Chapter 9 bankruptcy because it lost so much money in one operation it could have left to the private sector that the entire city government is now at risk of collapse.  This case was reported in today's issue of The Wall Street Journal.  Harrisburg incurred a debt of $288 million in an attempt to renovate an incinerator!  It owes $68 million in payments this year on this debt, but its entire annual budget is less than that amount.

Chapter 9 bankruptcy entails:

• A municipal government can reduce its debt even if the chief creditors oppose such a reduction.
• The settlement must have the support of at least one class of impaired creditors.
• An automatic stay of all litigation against the city occurs.
• The city can reject union contracts.
• Bankruptcy prevents judges from forcing asset sales or liquidation of the municipality.
• Pennsylvania's Community and Economic Development Dept. must approve the Chapter 9 bankruptcy and work with the city in the bankruptcy proceedings.
• The city must expect to pay huge fees to lawyers and accountants.
• The outcome of the request for bankruptcy is uncertain.  It could be rejected.
• Assured Guaranty Municipal, which assured the bond payments, will have to make the payments at great loss to it.
• Covanta Energy operates the incinerator and gave the city a loan of $25 million, which the city cannot repay in whole.

City Controller, Daniel C. Miller, favors this Chapter 9 way out of the city's predicament.   The first Pennsylvania municipality to use Chapter 9 bankruptcy was Westfall Township in Pike County.  They faced a legal claim of more than $20 million to a real estate developer.  The settlement was reduced to $6 million over a 20 year repayment period with no interest.  But, its bill from the lawyers and accountants was $600,000.  If its request for bankruptcy had been rejected, the lawyers and accountants fees would have put Westfall Township into even worse shape.

Of course a Chapter 9 bankruptcy may allow the city of Harrisburg to go on.  But, after the loses that creditors and bond guarantors will take, the city will still be in a tough situation.  First, it will still have to pay a substantial amount of money.  Second, it will have impaired its credit for quite some time.  These factors are likely to force a reduction of other services the city has provided its residents.  Some of these impaired services are likely to be its legitimate services.  In addition, the city's irresponsible actions will certainly hurt its creditors and those who invested in them.  Governments have no business causing such harm.

All of this grief could and should have been avoided by simply leaving to the private sector what is the private sector's.  Leave unto Commodore Vanderbilt what is Commodore Vanderbilt's.  Leave unto J. J. Hill what is J. J. Hill's.  Leave unto John D. Rockefeller what is John D. Rockefeller's.  When government leaves unto the private sector all functions which are not legitimate to it, any risk is taken only by those who have chosen to undertake it voluntarily and the legitimate functions of government are not put at risk.

Chris Edwards - Public-Sector Unions

Labor unions in the private sector have long had a decreasing membership, especially as a percentage of the private sector workforce, which in 2009 was 7%.  Public sector unions have retained a high and nearly constant percentage of the public sector workforce, presently at 39%.  Since this workforce is growing and since government workers have an out-sized political influence and power, this 5.6 times greater presence in the government workforce is a troubling circumstance.  It is causing a great deal of income produced by the productive private sector to be transferred into the parasitical public sector, where workers are paid much better and have much, much better benefits.  The workforce percentages are plotted below.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute has written a good article on Public-Sector Unions and their growth in the Cato Institute Tax & Budget Bulletin, No. 61, March 2010.  Important points in the historical background and the present situation are:

• Before 1960, unions represented less than 15% of state and local government workers.
• The courts generally did not allow public-sector employees the collective bargaining allowed private-sector workers by the 1935 Wagner Act.
• In the 1960s and 1970s, states passed laws that required or encouraged collective bargaining by state and local government workers.  Many states passed laws to require union-represented government workers to pay union dues and fees.
• 26 states have collective bargaining for nearly all state and local government workers today.
• 12 states have it for some local and state workers now.
• 12 states do not allow collective bargaining for government workers.
• The states that require collective bargaining all have half or more of government workers unionized.
• States with no collective bargaining average 17% union membership.
• 28 states have agency shop rules, which require workers to join the union or to pay it fees.
• 22 states are right-to-work states where workers cannot be forced to join a union or pay union fees.
• Some states allow some government workers to strike and some require arbitration, which usually favors the unions.

Union representation increases the cost of government greatly.  Union members are paid 31% more in wages and have an incredible 68% greater benefits.  Since states with higher wages generally are also more unionized at the state and local government levels, the wage advantage corrected for that is about 10%.  But unions promote inefficient government by protecting poor performing workers, emphasizing rules rather than getting the job done, push for excessive staffing, and they discourage volunteer work.  They also go on strikes, such as the recent Philadelphia transit worker strike which for six days wrecked havoc on the 800,000 city residents who used the transit system.  Government unions, unlike private-sector unions, do not need to worry that excessive employee pay increases will put the employer out of business.

The 22 states with 40% or more of government workers unionized are almost uniformly in serious trouble with huge future taxpayer liabilities for these pampered government union workers.  My state of Maryland, with 41% government worker unionization, for instance, has very serious future liability problems.  We hear more frequently about the problems of state and local employees and their benefits and high pay in California with a 58% government worker unionization rate and New York with a 73% union rate.  In Rhode Island, with the second highest government employee unionization rate of 71%, the government unions have long been dominated by organized crime.  The same is true of the Cleveland city workers unions, where I used to have a neighbor whose father was an important city union leader who used to come over periodically and shout at his son that even he had to go to work sometimes for the sake of appearances.  His son was a ghost worker.

The largest public-sector labor unions are the National Education Association (NEA), the American Federation of Teachers (AFT), the American Federation of State, County, and Municipal Employees (AFSCME), and the Service Employees International Union (SEIU).  We hear a lot about the SEIU lately due to its close ties with Obama and the many special interest joint activities of the two.  The NEA and the AFT collect about $2 billion a year in membership dues and fees, mostly from states with agency shop rules, so they have deep pockets.  In the last two decades, AFSCME was the second-largest contributor to election campaigns in the U.S.  The NEA was the 7th largest contributor, the SEIU was the 10th largest, and the AFT was the 15th largest.  The SEIU pulled out all the stops in its effort to get Obama elected.  Public service workers also vote in higher percentages than most Americans.  These unions strongly favor increased government spending and higher taxes, they hate school choice and privatization efforts, and generally oppose any efforts to improve government efficiency.

Edwards points out that collective bargaining is inconsistent with our Constitutional right to freedom of association.  He advises that states should follow the examples of Virginia and North Carolina, who do not allow collective bargaining by government workers.  This avoids such problems as Governor Chris Christie is having in New Jersey, with a 66% government worker unionization rate, with the state budget and government worker wages and benefits.

I believe that the legitimate functions of government are so vital that they should not be entrusted to workers who may strike or go on work slowdowns.  Their workers should not have other allegiances than to the citizens they serve.  Many of them, certainly including teachers, should be professionals who should shun labor unions.  Labor unions are for unskilled and semi-skilled workers, not professionals.  When people who are supposed to be professionals join labor unions, they quickly lose their professional work ethic.  This is one of the key reasons why American education has become so deficient.  Of course, governments have greatly exceeded their legitimate functions and this seems to undermine the argument against government worker unionization.  This is just another reason why it is critical to force governments to limit their powers to those which are legitimately protecting and preserving the sovereign rights of the individual to life, liberty, and the pursuit of happiness.

Government Abuse of Building Permit Power

The Cato Institute Daily Podcast for 14 May 09 features Tim Sandefur, an adjunct scholar at Cato, discussing examples of local government abusing their control of building permits to deny the permit requester the right to vote or to charge them exorbitant fees. Permits are supposed to be the means to eliminate public safety hazards, but they are actually now used for much more. They are used with high fees to reduce general taxes. They were used in the most famous case on such matters to impose beach access for the general public over the land of a family who wanted a permit to add a second story to their home. That case went to the Supreme Court, where the argument that the home blocking the view of the beach from the highway was ruled no excuse to impose an unrelated requirement for a public easement on the property owners.

The featured issue in the podcast is that of the Griswolds of Carlsbad, CA. They wanted a permit to add two rooms to their home for their grandchildren when they came visiting. Carlsbad said they would grant the permit if the Griswolds would give up their right to vote "No" on property assessments! You might think this is really unreal. But, similar permit cases in Santa Rosa, CA and Missoula, MT have occurred in which the requester was required to give up the right to vote if they were to receive the permit.

While we are the subject of permits, I will add that permits are also used as a tool to enforce building codes, many of which require the use of expensive and old-fashioned materials which are difficult to install. These requirements are often not updated often and are designed to require the permit requester to use expensive, licensed tradesmen. They are also designed to keep pre-built housing from competing with the local builders who will hire local workers. In reality, permits and building codes are used for many purposes other than safety purposes. They are another tool in the hands of the power seekers in local government.