Kansas Liberty – Government watchdog group says state government spending makes recovery more difficult

Link: http://www.kansasliberty.com/liberty-update-archive/13oct2008/publicly-traded-companies-in-kansas-take-it-on-the-chin/

Kansas Liberty: 07 October 2008

Government watchdog group says state government spending makes recovery more difficult

Kansas businesses hit in Monday trading

Publicly-traded companies headquartered in Kansas took it on the chin Monday when the Dow Jones Industrial Average plummeted by 800 points before recovering some value late in the afternoon.

A basket of 10 Kansas stocks declined an average of 6.22 percent as the gloom on Wall Street spread across the country and around the world.

If some experts are right, finding a way out may be blocked by the one area of growth Kansans need least: more state government expansion.

Alan Cobb, state director of Americans for Prosperity, a grassroots free-market advocacy group, told Kansas Liberty that since the year 2000 government wages have increased by 27.22%, whereas private sector wages have seen an increase of 26.75%.

“The State budget, even with a recession during this time frame, increased more than 28%,” Cobb said. “For every dollar the state takes in, that means a dollar not in the pocket of a business owner in order to pay higher wages.”

As the government increases the budget every year, it inevitably hurts the economy a little more, Cobb explained, making recovery more difficult.

“The growth of our government in Kansas has held back economic growth compared to the U.S. and most of our region,” he said. “Higher paying private jobs are not as available as they would be if our economy were growing faster.”

Those favoring a faster growing state economy advocate allowing the percentage of increase in the private sector to outpace the growth of government. However, taxpayers may have little choice in the matter when the actual budget is voted on.

“I believe an out of control budget will forever continue until there is protection in place for the taxpayer,” said Benjamin Hodge, a former Kansas State Representative.

Here’s a look at how a few publicly traded Kansas companies fared Monday:

  • Sprint Nextel, down 7.37 percent or .42 cents a share
  • Embarq, down 6.77 percent or $2.82 a share
  • Ferrelgas Partners LP, down 13.22 percent or $2.33 a share
  • H&R Block, down 8.35 percent or $1.98 a share
  • Waddell & Reed, down 7.90 percent or $1.70 a share
  • Boeing, down 4.72 percent or $2.54 a share
  • Ash Grove Cement, down 1.70 percent of $4 a share
  • Garmin, down .42 percent or .12 cents a share
  • Seaboard, down 8.33 percent or $100 a share
  • Westar Energy, down 3.50 percent of .79 cents a share

The decline in the Dow was an echo of markets around the world. In Japan, the Nikkei was down sharply.

According to Radio Netherlands International, Europe was hardest hit Monday, with losses of nine percent in Amsterdam and Paris, the worst since the stock market crash of 1987. London closed down nearly 8 percent and Frankfurt lost 7 percent. Various EU governments are rushing to stablize banks and calm fears.

Markets opened slightly higher in Europe Tuesday.