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Winners and Losers


One of the many quirks of our political system is that each year there are winners and losers among politicians whose names are not actually on the ballot.  This year is no exception.  Neither Governor Tom Wolf nor State Senator Scott Wagner was up for election this year, but results of the balloting sent their career paths in opposite directions.

Governor Wolf has had a tough first two years in office dealing with a Republican-controlled legislature. His efforts to dramatically expand government spending, and to implement the historic tax hikes needed to pay for that agenda resulted in the longest budget stalemate in state history.  Legislative Republicans won.

Tuesday voters rewarded the GOP with even larger legislative majorities. Democrats in the state senate are now on life support.  Two Democratic incumbents were defeated by challengers; a third Democrat seat went Republican after the incumbent gave up several months ago and resigned from the ballot.  Combined, the three seats give Republicans a 34-16 edge and something rarely if ever seen in state government: a veto proof majority.

Meanwhile, across the rotunda in the House of Representatives Republicans saw their already historically high majority expand by three seats as four incumbent Democrats and one incumbent Republican lost.  The Republican pick-ups came in southwestern Pennsylvania which has been trending toward the GOP for several election cycles.  In fact, the most endangered species in Penn’s Woods might well be the non-urban legislative Democrat, with only a handful of Democratic lawmakers representing districts outside of the state’s urban cores.

All of this matters because next year’s state budget battle is shaping up to be even tougher than the first.  Republicans caved into Governor Wolf’s spending demands this year, but failed to fully fund the budget.  That coupled with revenue sources that either never materialized or have failed to meet projections presages a major fiscal fight next year.

Not only have Republicans added to their numbers, but this year’s legislative elections moved both chambers further to the Right.  Moderate state senators like Cumberland County’s Pat Vance and Lancaster’s Lloyd Smucker have been replaced by far more conservative legislators.  The continued drift of the House GOP caucus from moderate southeastern dominance to conservative central and western Pennsylvania influence means tougher sailing for those wanting to raise either taxes or spending.

Governor Wolf also saw his agenda rejected in another race; that the battle for Pennsylvania’s U.S. Senate seat.  The Democratic nominee, Katie McGinty, was Governor Wolf’s first chief of staff and architect of the tax and spend plan that triggered the epic budget battle.  Incumbent U.S. Senator Pat Toomey made hay of that effectively painting McGinty as out of touch with the financial needs of average Pennsylvanians. He won, she lost.

How then do the fortunes of one state senator rise on all of this? Senator Scott Wagner was an establishment pariah when he ran for an open seat in York County in 2014.  Shunned by his own party Wagner accomplished an historic first in Pennsylvania: He won a special election on a write-in defeating both party nominees.

The upstart senator has quickly gained clout and was tapped by his colleagues to lead the Senate Republican Campaign Committee.  The SRCC as it is known is tasked with recruiting, funding and electing Republicans to the state senate.  After playing a major role in helping to win several seats two years ago, Wagner effectively recruited candidates like Senator-elect John DiSanto of Dauphin County who upended Democratic incumbents last week.  Much of the credit for the senate’s now veto-proof majority goes to Wagner.

This is important because Scott Wagner has made no secret of his desire to run for governor in 2018 and is widely expected to announce his candidacy within weeks.  Having built a strong senate majority gives him a leg up both on the Republican nomination and on a grassroots organization for the battle against Tom Wolf who is expected to seek re-election.

Thus the 2016 election has set the stage for the beginning of the next big electoral battle in Pennsylvania. Political fortunes have risen and fallen. And the never ending cycle of campaigns has already begun anew offering no respite for weary voters.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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Leave Us Alone


It was a simple, yet revealing summary of the problems plaguing Pennsylvania’s businesses.  “Please stop trying to ‘fix’ it,” the business owner begged. “Leave us alone.”  That plaintive plea came as three new studies show our state’s economy is sagging under the weight of new regulations, higher taxes, and unsustainable government spending.

Recovery from the Great Recession of 2008-2009 has been one of the slowest in history.  But, some states have bounced back faster and farther than others.  Pennsylvania is not one of those states.  The Fall 2016 Keystone Business Climate Survey conducted by the Lincoln Institute of Public Opinion Research found half of the business owners/chief executive officers surveyed saying the state’s business climate has gotten worse over the past six months, and only five percent reporting improving business conditions.

Like other states the people who actually run businesses reported a dramatic deterioration in economic conditions in Pennsylvania during the Great Recession. Optimism returned briefly during the Corbett Administration, but tanked less than three months into Governor Tom Wolf’s tenure.

Governor Wolf began his administration pushing for historic increases in both state spending and in taxes.  The Republican-controlled legislature successfully derailed that effort last year, but then caved into $1.4 billion in higher spending this year – earning the disapproval of 86% of the owners/CEOs.  All of this creates a climate of uncertainty leaving one owner to comment: “We expect another shoe to drop making it difficult to operate in Pennsylvania.”

The biggest shoe that hasn’t dropped is who will pay to bail out Pennsylvania’s massively underfunded public pension system.  Business owners fear a significant portion of that burden will fall upon them.  And the problem is, to use a currently popular word, huge.

The American Legislative Exchange Council (ALEC) recently released a study of state pension systems entitled Unaccountable and Unaffordable.  It pegged Pennsylvania’s unfunded pension liability at nearly $212 billion dollars.  The commonwealth has amassed the 44th largest unfunded pension liability among the fifty states.

Compounding the problem is Pennsylvania has little room in which to maneuver in finding new revenue streams (taxes) to fund the public pension system.  The Tax Foundation’s State Business and Tax Climate Index found we have the 24th highest state tax burden in the nation.  We already have the most damaging taxes on the books: the Personal Net Income tax, Corporate Net Income tax, and a broad-based state sales tax.  Already suffering from a poor tax climate, any move to expand, increase or create new taxes would further erode our competitiveness.

These factors weigh heavily on the minds of business owners/CEO as they consider locating or expanding in Pennsylvania.  Forty percent said Governor Wolf’s proposed tax hikes have caused them to not expand their businesses.  That factor was second only to the explosion of new federal regulations in impeding business growth.

Why should non-business owners care about all of this?  Business relocation into Pennsylvania and the expansion of existing businesses will result in the creation of new jobs.  Penn’s Woods has lagged the national average in job creation in large measure due to state taxes and regulations.  The 2016 Keystone Business Climate Survey found 21% of the responding businesses reduced their employee compliment over the past six months while only 11% added employees.

Thus Pennsylvania continues on a downward spiral.  And there is little optimism among those on the front lines of business activity in the state for improvement at any point in the near future.  Uncertainty is Kryptonite to business development.  At the state level uncertainty abounds.  Governor Wolf continues to press for increased spending and higher taxes at a time when the commonwealth already faces a structural budget deficit.  The recent record of legislative Republicans has shaken confidence in their ability to either deal with cost drivers like the pension crisis or to successfully oppose future tax hikes.

The bottom line is Pennsylvania’s business climate will not improve, and significant job creation resume, until and unless state government gets spending under control, addresses the looming pension crisis, cuts onerous regulations and provides some measure of tax relief to businesses ready to expand but which are being held back by the heavy hand of government.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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Fixing America


Once again America is grieving.  The deaths of five Dallas police officers and two young men who died elsewhere having been shot by police have rocked the nation.  Set aside for a moment the politics and circumstances of these events and reflect on the fact that as a result today there are children without fathers, mothers without sons, wives without husbands, sisters without brothers.

The shootings, and the protests than inevitably follow, are becoming ever more common.  What has become abundantly clear is there are inequities in our criminal justice system. The growing violence stemming from those inequities has made the already difficult job of law enforcement even tougher, which in turn has yielded more violence.

This being a presidential election year the powder keg upon which we sit will become even more volatile.  President Obama is calling for more federal control over local police departments.  Donald Trump struck a traditional tough on crime posture.

The solution is none of the above. More federal regulation only hamstrings local police and social services agencies, and filling our prisons even further does nothing to address the root cause of the problem.  It is time to admit that, while government has a role, government alone cannot fix what is wrong.

What can government do?

Criminal justice reform is in fact one of the few areas of public policy where the Left and the Right have found some common ground.  Former Virginia Attorney General Ken Cuccinelli, speaking to the Pennsylvania Leadership Conference (http://www.paleadershipconference.org/2015-videos/205-ken-cuccinelli-2015) last year explained it well:  “Ninety-five percent of the people in our jails are coming back out.  So we can ignore that, or we can make the criminal justice system be what it was supposed to be and that is an opportunity for rehabilitation, for correction and for improvement.”

Some conservatives might recoil at that suggestion, but Cuccinelli explains: “I believe nobody is beyond redemption.  That doesn’t mean they don’t deserve punishment for doing wrong. But when you talk about literally or figuratively throwing away the key are you abandoning perhaps more important beliefs in your life?”

Those “more important beliefs” get to the heart of the ultimate solution, for our goal must be to prevent people from ending up in the criminal justice system in the first place.  The root cause of the current crisis is as much societal than it is governmental.

I served for four years as a Dauphin County Commissioner with oversight of human services.  During that time I watched many dedicated folks dealing with the result of what was a breakdown of family and community.  Simply put, government does not and cannot have the resources necessary to supplant the many individual support networks that family, church, and community provide.

While we must work with law enforcement and improve our criminal justice system, the ultimate solution comes down to three things: faith, family and education.  Until and unless we strengthen those institutions we cannot expect the situation to improve.

The removal of religion from the public square is not just some right wing talking point.  Religion – Christian or other – has throughout history provided the moral underpinning of our society.  It is through religion we learn not only rules of conduct, but find the most important of human yearnings including unconditional love, forgiveness and hope.  In the absence of these vital intangibles people, particularly the young, fill the void with drugs and crime.

There has never been born that person who did not need the guidance and discipline of strong family ties.  Define family in whatever way you will, but at the end of the day children and youth need someone who cares about them, provides for them, and nurtures them.  In particular, the absence of fathers has contributed to a breakdown of the family unit.  All of our institutions – government, school, church – must place an emphasis on responsible parenting.

The third fundamental building block of society is education.  Rather than endless debates over the minimum wage we should be focused on educating people for jobs that pay a living wage. And that includes preparing students for the hundreds of thousands of high paying jobs in manufacturing that go unfilled. Our education system must bring everyone up to the starting gate of their work life fully equipped.

Rather than looking at government, or the police, or around the room at others, repairing what is wrong with America begins with each of us.  We must strengthen our churches, our families and our communities.  Then, and only then will what we have witnessed in recent weeks become the exception rather than the rule.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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When in the Course of Human Events


This is the time of year when Americans celebrate the anniversary of our declaration of independence from Great Britain.  It is ironic that the United Kingdom itself a few days ago found it necessary “for one people to dissolve the political bands which have connected them with another.”  By leaving the European Union the British people have reconfirmed that the longing for liberty is an eternal emotion.

Meanwhile, here in the colonies, the very document that ensured our rights as a free people has been under relentless attack.  The Constitution of the United States has withstood the test of time. After the Articles of Confederation failed to provide the framework for an effective federal government delegates from the 13 colonies met in Philadelphia and in September of 1787 put their signatures to the document which, at least theoretically, remains our nation’s ultimate authority.

On June 21, 1788, New Hampshire became the ninth state to ratify theConstitution which then took effect on March 4, 1789.  The document was, however, viewed as incomplete and several states insisted on the inclusion of ten amendments, which became known as the Bill of Rights.  Those amendments were ratified and became effective on December 15, 1791.

That the Bill of Rights was necessary is evidenced by periodic efforts throughout our nation’s history to disregard, water down, or remove them entirely.  Perhaps no amendment has been so violated as the tenth which limits the power of the federal government.  Congress and the president, frequently with complicity by the Supreme Court, have consistently throughout the ages infringed on this right.  Today the assault continues, especially upon the second amendment governing our right to keep and bear arms.  The non-existent “right” of freedom from religion has replaced the “free exercise of religion” guaranteed in the first amendment.

It is safe to assume that the founding fathers would place in the first amendment those rights that they viewed as most vital to a free people.  It is here that the Constitution guarantees our right to freedom of speech and of the press.  Now obviously there was no electronic media or internet back in 1787, but freedom of speech and of the press clearly applies to all means of communication.

A free press was instrumental in our nation’s founding.  The only method of mass communication was through the printing press producing formal newspapers, pamphlets, and broadsides.  From Thomas Paine during the revolution to the Federalist Papers, the expression of opinion via the printed word was a vital means of exercising free speech.  Throughout our history we have depended on a free press to keep government in check, such as it did during the Watergate scandal of the 1970s.  So vital is a free press that it is often referred to as the “fourth estate,” or fourth branch of government.

It is therefore disturbing to see candidates and elected officials from the national to the local level trampling this vital right.  In just the last few weeks, Republican presidential candidate Donald Trump has banned the Washington Post from covering his campaign events.  Here in Penn’s Woods, the Democratic mayor of Harrisburg, Eric Papenfuse, has revoked the credentials of the capitol city’s newspaper the Patriot News/Penn Live. Papenfuse’s actions are especially curious in that he is the owner of a prominent bookstore, so you would think he might have some loyalty to the unfettered circulation of the printed word.

My goal here is not to defend the content of these publications – whose left-wing ideology frequently taints their reporting of the news – but to stand up for their right to do so.  If elected officials, from mayors to presidents can decide who can cover the news they can also then control the news.  This is not only a violation of the media’s constitutional rights, but an existential threat to our democracy and ultimately our individual liberty.

As we celebrate our freedom with fireworks and back yard barbecues let us always remember that the trampling of one right is the trampling of all rights.  The loss of any one right puts us on a very slippery slope which will ultimately lead to the loss of all rights.  From freedom of the press, to freedom of religion, to our right to keep and bear arms, we must fight to protect our God-given rights against those who would take them away.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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Déjà vu All Over Again


‘Tis budget season again in Harrisburg.  Governor Tom Wolf and the state legislature face a June 30th deadline for enacting the 2016-17 spending plan. If it seems like we just finished the budget; that is because it took until April for the longest fiscal stand-off in state history to be resolved.  And now, it is time to begin anew.

Hopefully, not the lengthy stand-off part.

June is typically when the heavy lifting on crafting the new budget is done, particularly the last week of the month when legislators act like college students pulling an overnighter to get their assignments finished.  In this case though, there is no penalty for tardiness.

The big question under the capitol dome is will there be a summer re-run of the 2015-16 budget drama, or will the state budget actually get done relatively close to the constitutional deadline?  So far, the signals are mixed – but ominous.

Will it be, as Yogi Berra once said, “déjà vu all over again?”  Two factors point to another epic battle.  First, Governor Wolf’s “budget address” last winter lacked any content actually pertaining to the budget. Instead, he unleashed a tongue lashing at the legislature for failing to approve his historic tax and spending increases.  This was as well received as an illegal alien at a Trump rally.  Second, not a single legislator lost in April’s primary as a result of the budget battle.

That second factor is significant.  With all House members and half of the Senate up for re-election this year pressure is normally on to avoid anything even remotely controversial so as not to upset the electorate.  However, Republicans in particular are emboldened because they stood their ground, bested Governor Wolf in round one, and were rewarded by voters.  This gives them no incentive to cave to the governor’s tax hike demands.  Quite the opposite, voters in their districts clearly don’t want expanded state spending and the taxes needed to pay for it.

Conversely, Democrats – who have become essentially an urban party in Pennsylvania – represent districts that benefit from state taxpayer largesse.  Their constituents want more spending because they are on the receiving end, thus those voters returned their representatives to office as well.

Stuck in the middle are the endangered species of suburban Democrats who represent so-called “swing districts.”  Largely located in western Pennsylvania, these districts have been flipping from Democrat to Republican in recent cycles.  This is where the biggest electoral battles of 2016 will be fought, and those Democrats are on the hot seat.

This brings us to the one factor that could bring about a prompt budget resolution: Democratic desires not to lose even more of their seats.  Already Republicans hold legislative majorities not seen in over a half century.  The electoral map does not offer Democrats much hope.  At least three Senate Democrats are imperiled while the GOP faces no significant opposition to holding their seats.  In the House, most battles will again be fought on the little remaining Democrat turf in the western part of the state.

In each of those districts the trend line has been favorable for Republicans, and the Democrat constituencies are far more conservative than those found in urban areas.  Thus, Democratic candidates in each of those districts can ill afford to be tagged with supporting Governor Wolf’s tax and spend agenda.  This is incentive for Democratic leadership to postpone until next year any epic battle over the budget.

Should that occur Pennsylvania taxpayers will have only a brief respite.  Governor Wolf must stand for re-election in 2018 meaning his last shot at enacting his bold plans to expand the size and scope of state government will come next year.  Lose, and his image as an isolated and ineffective chief executive will be cemented into place.  But for Tom Wolf, even winning comes with some risk: will statewide voters actually reward a governor who just imposed upon them a historically large tax hike?

The only thing we can say for sure is it will be interesting to watch.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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The Worm in the Education Apple


There is an old saying in politics that “perception is reality.”  That is how former Governor Tom Corbett got blamed for cuts in funding to public education that never happened.  To this day many Pennsylvanians believe he took an axe to education funding when in fact he left office with more state dollars being spent on K-12 education than at any point in the commonwealth’s history.

To drive the point home, Governor Tom Wolf campaigned promising to be the education governor.  He has done more to damage public education than any governor in recent history. This reality has been cloaked in the perception that he is pro-education.  In fact Wolf is really just pro-union, propping up a system that fails both students and taxpayers.

It is true he has proposed historic increases in education spending – and the higher taxes to fund that spending.  But, the proposed increases in both taxing and spending are so large they have proven politically impossible to implement. The untenable nature of these increases are such that even in the hyper-partisan atmosphere of the state capitol some Democrats have refused to go along.

The chances of Governor Wolf getting Republican support for more reasonable increases in k-12 public education spending are high if, as demanded by GOP leadership, reforms to cost drivers are included.  But the governor has adopted a “my way or the highway” attitude which gridlocked the process and produced a historic budget stand-off.

In the process of fighting that battle, the so-called education governor pushed school districts across Penn’s Woods to the cusp of closing due to the lack of state dollars flowing into their coffers.  Worse, many had to borrow money to keep their doors open, incurring costs that took dollars away from students.  His administration, willing to spend money to keep state bureaucracy operating, turned down appeals from school districts for relief.

Even if Governor Wolf were to push his education spending increases through the legislature precious few dollars would ever be spent benefitting students.  That is because the state’s pension system has become fiscally unsound. Its investments are under-performing projections and too generous benefits are draining the system faster than current employees add new dollars.  At the school district level, property taxes are rising to cover costs and the preponderance of any new state dollars directed to education must go to prop up the system as well.

June a year ago the legislature passed significant pension reform.  It was immediately vetoed by the governor who parroted the union line that the system is fine, just underfunded.  Thus an opportunity to at least partially address a major cost driver was missed.  The end result: fewer dollars available to directly benefit students.

Governor Wolf has also been waging a war on charter schools.  Even more so than traditional public schools, charters operate with minimal cash flow.  The epic budget battle resulted in teacher lay-offs, and even the closing of some charter schools.  More will likely close as the governor implements administrative policies aimed at forcing charter schools out of existence.  These policies are designed to deny parents and students valuable educational choices in an effort to preserve the union-dominated monopoly of public schools.

The latest example of Governor Wolf placing union interests over student interests involves legislation that would replace the seniority-based system for determining teacher lay-offs with a merit based system.  In other words, instead of “last in, first out” the best teachers would be retained.  At present, the legislation is on Governor Wolf’s desk – and he has vowed a veto.

Unless you are doing Common Core math, when you add all these factors together what you get is a governor whose every action has harmed students and made the state’s system of public education even more fiscally fragile than it was when he took office.  All of this is being done to prop up the very labor unions that financed the governor’s election.  For taxpayers, and for students, it is a very large worm in the education apple.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

 

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Budget Battle Ends With Electoral Dud


The final pieces of legislation ending Pennsylvania’s longest budget stalemate fell into place just days before the April primary election. And the story that dominated state news for over nine months had no apparent impact on voters who meted out no electoral punishment for the fiscal fray that had school districts on the cusp of closing, nonprofits cutting services, and politicians at each other’s throats.

This budget stand-off was different from those that took place during the Rendell era notably due to the lack of public pressure placed on Governor Wolf and the legislature.  There were no daily protests on the capitol steps. State employees did not go without pay.  When the battle commenced last summer Governor Wolf’s first salvo was an attack ad campaign. It fell flat. Outside the halls of state government and the few remaining news media that cover it, the budget battle went largely unnoticed.

Despite Governor Wolf’s threats of electoral retribution, lawmakers did not pay a political price for engaging in the budget battle.  The first clue that the fiscal free-for-all was not impacting the electorate came in February when there was no wave of candidates filing to oppose incumbent legislators.  Looking at the primary election results it would be difficult if not impossible to point to a single lawmaker who lost his or her seat because of the sustained budget stand-off.

In fact few lawmakers lost for any reason.  And those that did lose were a result of local political divisions rather than anything that happened in Harrisburg.  In Philadelphia, for example, Democrats engaged in their biannual exercise of primary fratricide.  The state’s longest serving House member – State Representative Mark Cohen – was defeated by a challenger who claimed he had been in office too long and was out of touch with his constituents.

Another rare defeat of a House incumbent took place in Lackawanna County where State Representative Frank Farina lost to former legislator Kevin Haggerty.  The two former colleagues found their districts merged in redistricting a couple of years ago and have been battling over the seat ever since.

While voters were busy returning incumbents to office some lawmakers even got a promotion.  State Representative Mike Regan ran for and won the Republican nomination to replace outgoing state Senator Pat Vance in Cumberland County.  In what was a hard fought and nasty campaign the budget crisis did not register as a key issue.

For Republicans looking to hold onto historic majorities in both the Senate and the House the future looks bright.  Senate Republicans could actually achieve a veto proof majority as the fall battles will be fought over swing seats currently occupied by Democrats.  On the House side, the primary yielded solid GOP nominees for open seats like Dawn Keefer in Cumberland County and Frank Ryan in Lebanon County.  Conversely, Democratic retirements in western Pennsylvania provide the opportunity for additional Republican pick-ups in an area already trending toward the GOP.

Further evidence of the impotence of the state budget battle on the electoral process can be found in the race for the Democratic nomination for the U.S. Senate.  Governor Wolf’s first chief of staff, Katie McGinty, was one of the prime architects of the budget proposal that triggered the lengthy stand-off.  She resigned last summer to run for the U.S. Senate and prevailed against three opponents in the primary.

Why did the epic budget battle fall so flat with voters?  Chalk it up to a lack of attention being focused on state government.  Or the fact the absence of a state budget had little impact on the daily lives of Pennsylvanians.  Timing was also a factor.  With the nation transfixed by the presidential race scant coverage has been afforded other matters.

And so we find ourselves back to where we began.  Another budget season is underway in Harrisburg.  Governor Wolf is pushing for more spending and higher taxes, Republicans are adamant in their refusal.  The fight will continue, apparently without consequence for anyone involved.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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