Thanksgiving is a critically important American holiday. The reason is simple. The survival of the United States as an independent nation of free peoples depends upon gratitude.

If Americans do not remain forever grateful for the system we inherited, we will lose it.

If this sounds a bit dramatic, take it up with Abraham Lincoln.

Preserving America’s political institutions was an obsession of Lincoln’s.

His famous 1838 Lyceum Address, titled “The Perpetuation of Our Political Institutions,” marked the foundation of his political career.

“We, when mounting the stage of existence, found ourselves the legal inheritors of these fundamental blessings. We toiled not in the acquirement or establishment of them–they are a legacy bequeathed us, by a once hardy, brave, and patriotic, but now lamented and departed race of ancestors. Their’s was the task (and nobly they performed it) to possess themselves, and through themselves, us, of this goodly land; and to uprear upon its hills and its valleys, a political edifice of liberty and equal rights; ’tis ours only, to transmit these, the former, unprofaned by the foot of an invader; the latter, undecayed by the lapse of time and untorn by usurpation, to the latest generation that fate shall permit the world to know. This task of gratitude to our fathers, justice to ourselves, duty to posterity, and love for our species in general, all imperatively require us faithfully to perform.”

Gratitude was a theme of Lincoln’s throughout his life, which is why the word “posterity” appears so often in his speeches.

As he put it in his First Inaugural Address:

“The mystic chords of memory, stretching from every battle-field, and patriot grave, to every living heart and hearthstone, all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.”

Today, it would be a stretch to say that our politics are governed by the better angels of our nature. The nation Lincoln preserved is again strained by internal discord.

Forces that dwell deep within all of us — the desire to belong, to be a part of something larger than ourselves — are finding meaning in tribal affiliations that define themselves as apart from and in conflict with groups of other Americans.

For a people nurtured by rich instruction in our cultural inheritance, this would be little cause for worry. (It might not even exist.) But more and more American children are either not learning about their inheritance or are being taught to despise rather than treasure it.

The New Hampshire Historical Society warned two years ago that New Hampshire elementary students were showing an alarming decline in basic civics knowledge.

If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be,” Jefferson wrote in 1816. “If we are to guard against ignorance and remain free, it is the responsibility of every American to be informed.”

The good news is that Americans generally are a grateful people. A Pew survey in 2015 found that 78% of Americans feel a profound sense of gratitude on a weekly basis.

But are they grateful for being raised in a country that flourished by embracing free enterprise, self-reliance, personal responsibility, decentralized political power, and strong communities?

A lot of evidence suggests that they are not.

If you were lucky enough to attend last year’s Libertas Award Dinner with columnist and author Jonah Goldberg, you’ll remember his reminder that before we debate the merits of this or that change to our political order, it’s crucial to first be grateful for what the dynamic duo of capitalism and limited government have created — namely the wealthiest and happiest people in all of human history.

Every political discussion has to start from that basic understanding.

If you are grateful for having inherited the greatest economic and political systems ever devised by human beings, then you have one tremendous civic obligation.

Teach your children to be grateful too.

A handful of Democratic politicians on Wednesday stood in the snow outside an obsolete power plant and reversed their party’s customary line of attack when an industrial facility closes. Instead of blaming greed or billionaires or out-of-state corporations or winged monkeys for the recent closure of two N.H. biomass power plants, they blamed the government.

Wait, what?

Yes.

Well, not the government in general, just Republican Gov. Chris Sununu. They objected to his having vetoed bills that would have forcibly taken money from average people and given it to large, out-of-state corporations.

Wait, what?

Yes.

These Democratic politicians were attacking a Republican for opposing corporate welfare.

Specifically, the vetoed legislation would have created new ratepayer subsidies for biomass power plants. The vetoes caused two of the six plants (ones owned by a private New Jersey corporation) to close, they alleged.

Never mind the plants that didn’t close (one of which did get new state subsidies).

Never mind that the governor doesn’t run the shuttered power plants, didn’t make the decision to close them, and didn’t prevent their parent company from investing in them more heavily.

Also ignore a 2018 study published by none other than the State of New Hampshire, which showed the state’s biomass power plants to be expensive and inefficient compared to rival power producers.

The Office of Strategic Initiatives study showed two unmistakable trends, both driven by consumer demand for lower energy prices:

The removal or reduction of artificial price supports over many years.
The innovation-driven drop in the cost of other fuel sources.

Supposedly, the state has to force all Granite State residents and businesses to subsidize biomass power plants because they buy and burn wood pulp, thus keeping New Hampshire’s tiny timber industry alive.

But the state doesn’t have similar subsidies for paper companies or home construction, which are more important for the timber industry. Biomass accounts for only 3 percent of the value of a timber harvest, but sawlogs account for 90 percent, according to New Hampshire Business Review.

The state’s report showed that biomass plants might not have become so reliant on subsidies if they had invested more cost-savings initiatives or experimented with new business models. To conclude that the governor alone, rather than company officers and directors, was responsible for the fate of 1/3 of New Hampshire’s biomass plants (just the ones that closed) is a rather interesting position to take.

The state’s report concluded that biomass plants would continue to struggle because they inefficiently produce expensive electricity while most competitors, even other renewable power generators, more efficiently produce cheaper electricity.

“As new projects are connected to the grid, predominantly wind and solar, biomass will cede its market share to other forms of generation. These more flexible resources will contribute to more volatile, but lower market prices, leaving biomass generation at a steeper competitive disadvantage. New Hampshire ratepayers would likely need to provide continuous subsidies at above market prices to sustain Class III biomass generation.”

In short, burning wood (at least with existing technologies) is not the way to power a 21st century economy. A March U.S. Energy Information Agency report on the future of U.S. power generation didn’t even mention biomass, concluding that “most of the electricity generating capacity additions installed in the United States through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).”

Biomass power generation is dying a natural death. That’s why companies that own biomass plants are reluctant to sink any more money into them. Forcing ratepayers to make up the difference between what people are willing to pay for power and what biomass power costs is neither compassionate nor morally defensible. It is massively wasteful — of other people’s money.

Explaining the incredible prosperity of New England in the colonial era and early American republic, Alexis de Tocqueville noted first that the people were left largely alone by the government.

“It seemed as if New England was a region given up to the dreams of fancy and the unrestrained experiments of innovators.

“The English colonies (and this is one of the main causes of their prosperity) have always enjoyed more internal freedom and more political independence than the colonies of other nations; but this principle of liberty was nowhere more extensively applied than in the States of New England.”

Today, only one New England state retains that independent spirit, and we live in it. (Except for you poor suckers who subscribe to this newsletter across state lines.)

As we wrote last week, New Hampshire was just ranked the most economically free state by Canada’s Fraser Institute. That study is remarkable in that New Hampshire ranks No. 1 not just in the U.S. but in all of North America.

Our cultural attachment to low taxes and limited government has made us both free and prosperous. Crucially, it’s a choice we’ve been free to make for ourselves just as our countrymen in other states have been at liberty to create their own destinies.

Vermonters don’t want to be Granite Staters (and vice versa). Montanans don’t want to be New Yorkers. (Nobody really wants to be a Rhode Islander, but inertia is a powerful force.)

Federalism leaves us all free to govern ourselves.

Until it doesn’t anymore.

And that’s the real threat from the ideological movement that bills itself as “democratic socialism” these days.

Vermont and Colorado really, really, really wanted to create a single-payer health care system. After lengthy planning, both states abandoned the project. The price was so astronomically high that even in Vermont, a state with an actual Progressive Party and a “socialist” U.S. senator, people realized that socialist Utopian dreams can’t always come true.

But as Sen. Ted Cruz pointed out during Thursday night’s Libertas Award Dinner (what, you didn’t attend?), some politicians (including one from Vermont) want to impose this Utopian dream upon every resident of every American state, leaving no American with any hope of escape.

What is being called socialism is a dark, continent-wide cloud full of plans that require 100 percent compliance. Whatever the issue, there’s a plan, and that plan brooks no dissent. All must comply. All most obey.

Under such a national regime, there can be no more “unrestrained experiments of innovators.”

Our laboratories of democracy would be transformed into ministries of compliance.

From the dictates of the state, there would be no escape.

Sen. Cruz, who hails from Texas, loves to point out that the price of a moving van going from California into Texas is three to four times as expensive as one going the opposite direction. Mark Perry at the American Enterprise Institute has documented this.

There’s little demand for a moving truck traveling one-way from Houston to L.A., but a lot of Los Angelenos are desperate to escape to Houston.

That’s because our American system leaves the people of the various states free to run their own experiments in self government (as long as they don’t violate their neighbors’ constitutional rights).

This experimentation is the essence of American republicanism. It’s what economists call permission-less innovation. Instead of government telling people what they’re allowed to do, it leaves them free to innovate, to create, to craft the future that they choose rather than the one some prince or minister chooses for them.

If Americans don’t defend their right to create and innovate, to live their own “dreams of fancy,” they will find themselves one day living the dreams of others and wondering what happened.

New Hampshire is the most economically free state in the union, according to a report by the Fraser Institute, an independent, non-partisan Canadian public policy think tank.

New Hampshire scored a 7.93 out of 10 in this year’s report, well above its New England neighbors and far above lowest-ranked New York (4.49), which placed last for the fifth year in a row.

No other New England state made the top ten. Connecticut ranked 13th, Massachusetts 17th, Maine 36th, Rhode Island 38th, and Vermont 47th.

“New Hampshire’s low-tax, limited-government political culture continues to make the Granite State the envy of both New England and the nation,” said Andrew Cline, president of the Josiah Bartlett Center for Public Policy, which partnered with the Fraser Institute in releasing the study. “New York and Vermont, on the other hand, continue to show us that economic freedom retreats when under attack from high taxes and heavy regulations.”

The Economic Freedom of North America report measures government spending, taxation and labor market restrictions using data from 2017, the most recent year of available comparable data.

“When governments allow markets to decide what’s produced, how it’s produced and how much is produced, citizens enjoy greater levels of economic freedom,” said Fred McMahon, report co-author and the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute.

Rounding out the top five freest states are Florida (2nd), Tennessee (3rd), Virginia (4th) and Texas (5th). Rounding out the bottom five are West Virginia (49th), Alaska (48th), Vermont (47th) and Oregon (46th).

The report also includes an additional all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states, 32 Mexican states and 10 Canadian provinces.

From 2003 to 2017, the average score for U.S. states in the all-government index fell from 8.23 to 7.92. Across North America, in the most-free jurisdictions, the average per capita income in 2017 was 9.2 percent above the national average compared to 3.4 percent below the national average in the least-free jurisdictions.

“Higher levels of economic freedom lead to more prosperity, greater economic growth, more investment, and more jobs and opportunities,” said Dean Stansel, report co-author and economics professor at Southern Methodist University.

The Economic Freedom of North America report, also co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter-century of work by more than 60 scholars, including three Nobel laureates.

Detailed tables for each country and subnational jurisdiction can be found at www.fraserinstitute.org/economic-freedom.

A big argument for mandatory paid family leave is that it would help close the gender pay gap and level the playing field with men. Women who had access to paid leave would stay in their jobs and not derail their careers to care for newborns, the theory goes. Turns out, the opposite has happened in California, according to a comprehensive new study.

A study published this week by the National Bureau of Economic Research examined the landmark 2004 paid leave law’s employment effects on first-time mothers. The “results run contrary to claims that California’s 2004 Paid Leave Act improved women’s short- or long-term career outcomes,” the authors concluded.

The researchers found that “paid leave is associated with a statistically significant short-run decrease in employment of 2.1 percentage points and a long-run decrease of 4.1 percentage points.

“Moreover, we find little evidence that California’s 2004 Paid Family Leave Act increased women’s wage earnings,” the authors wrote.

The study found that “first-time moms who used the policy saw their employment fall by 7% and annual wages fall by 8% over the next decade,” a University of Michigan summary of the report noted. “Cumulatively, new moms taking up paid leave had fewer children and had earned about $25,681 less by 2014.”

“We were surprised that this modest policy seems to be nudging mothers out of the labor force,” University of Michigan economist and lead author Martha Bailey said.

The study, which examined tax returns, found that some women replaced a portion of their lost income with alternative sources, “suggesting that paid leave encourages women to transition to more flexible working arrangements.”

That’s important because proponents of paid leave insist that government must mandate this particular benefit instead of others that polls show employees would rather have, one of the most popular being flexible working arrangements.

As we pointed out in February, 88 percent of employees in a Harvard survey said they’d accept lower pay in exchange for more flexible work hours, but only 42 percent said the same of paid leave.

Flex time or remote working arrangements could encourage mothers to stay with an employer — something California’s paid leave program did not achieve.

“Contrary to predictions that paid leave policies increase attachment to pre-birth employers (and, thus, help women retain valuable firm-specific human capital), women who had access to paid leave were no more likely to remain with their pre-birth employer than women without paid leave access, both in the short and long run.”

California’s paid leave law did not rebalance traditional gender roles, either.

“Despite the fact that California’s PFLA also gave men paid leave for family and infant care, the study found no impact on men’s employment or annual wage earnings. California’s PFLA seems to be encouraging men and women into traditional gender roles rather than leveling the playing field at work, according to Bailey.”

New mothers who took advantage of paid leave spent more time with their children, the researchers found. That tends to happen when mothers leave the labor force.

So, in sum, the law pulled women out of the workforce, reduced their career earnings, and reinforced traditional gender roles.

One could like any or all of those outcomes, but they cannot be called “progressive” and they do not achieve paid leave proponents’ stated goals of keeping women in the workforce and shrinking the gender pay gap.

The business tax cuts that took effect this past January made New Hampshire more economically competitive, as supporters predicted, not less, as opponents suggested.

New Hampshire rose one spot this year to post the sixth-best business tax climate in the nation, according to the Tax Foundation’s 2019 rankings.

No other New England state ranks in the top 30. Maine (33), Massachusetts (36) and Rhode Island (39) are in the 30s, while Vermont (44) and Connecticut (47) are in the bottom ten.

This is exactly what the rate cuts were intended to do.

Many states are attractive to investors and entrepreneurs because of natural or cultural amenities. Massachusetts, with an excellent deep water harbor and numerous top universities, is the perfect example. States that lack big harbors, long coastlines, natural trading centers, etc., have to rely on their own ingenuity to create a more vibrant economic environment.

New Hampshire, relatively remote and mountainous, is at a natural economic disadvantage, relatively speaking. Yet “the New Hampshire Disadvantage” is not a thing. (It’s more of a Vermont thing.)

Instead, we boast of the New Hampshire Advantage, which is the result of policies deliberately crafted to make the state more economically attractive than its remote location would suggest.

Those policies have worked, and they continue to work. With no broad-based tax and, finally, regionally competitive business tax rates, Granite Staters have made their home a more attractive place to do business than either of our also remote northern New England neighbors.

Low business tax rates along with an overall low tax burden is the combination that produces the most business-friendly tax environment, the Tax Foundation report shows. Eight of the top ten states lack at least one broad-based tax, such as an income or a sales tax.

Of the top ten, only the bottom two (Utah, 9, and Indiana 10) have all major taxes. But they differ from many other states in levying those at low rates among a broad base.

With the recent success in lowering business tax rates, lawmakers will find it challenging to further enhance the New Hampshire Advantage through the manipulation of tax rates in the near future.

This suggests that more promising gains can be achieved by working on other impediments to growth and entrepreneurship, such as housing and occupational licensing regulations, overly burdensome business regulations and energy policy.

Economic development tax incentives continue to shrivel under the gaze of the green eye shades.

Recent scandals involving these corporate welfare programs in Maryland and New Jersey offer cautionary tales for lawmakers tempted to join this money-losing game.

On Thursday, an executive admitted to a New Jersey task force that his company’s application for that state’s tax incentive program contained false information. The application stated that the company, Rainforest Distribution, was considering moving to Orangeburg, N.Y.

“At that point in time we had no intention of moving to Orangeburg,” the CEO said.

The application was filled out with the help of a consultant who was familiar with the state’s tax credits. To meet the tax credit criteria, she falsely claimed that the company might move out of state. The state never verified the claim before awarding the business $2.4 million in incentives to move to Bayonne, N.J.

The New Jersey tax credit program has been plagued by scandals, more of which continue to be discovered by reporters. The Philadelphia Inquirer reported this week how weak controls and questionable deals allowed connected investors to make millions on a property sold for about $20 million less than market value. The building, coincidentally, had been built in the 1990s as part of another publicly funded effort to keep GE from moving. (GE moved.)

Meanwhile, in Maryland, a state audit (DOC19) published in September exposed a shocking lack of controls in that state’s numerous tax credit programs, which hand out tens of millions of dollars.

The Maryland Department of Commerce “failed to monitor recipients of its programs for compliance” with applicable laws and regulations, the audit concluded.

For programs that required companies to create certain numbers of jobs, for instance, the department did not check payroll records but took company statements at face value.

In one case, the department awarded $5.5 million for a project that was ineligible because it consisted of “a sale and purchase transaction between related parties.”

Rather than being a valuable economic development tool, state tax incentives create incentives and opportunities for insider dealing and abuse of taxpayer funds.

Companies have incentives to cozy up to elected officials and bureaucrats, and to fudge forms. Public officials famously have less rigorous standards for giving away other people’s money than investors have for giving away their own, which is why these programs are infamous for well-connected businesses getting the better of taxpayers.

Elected officials have incentives to produce headlines and ribbon-cutting ceremonies, not returns on investment.

These latest stories offer additional cautionary tales for legislators.

Connecting younger audiences with the ideas that drive the capitalism vs. socialism debate is challenging. If done right, it can be fun, though. Here’s the latest effort from the American Institute for Economic Research: A rap battle between Karl Marx and Ludwig von Mises. Share it with your friends, boyee.

Last November, Ontario’s government scrapped rent controls for new rental properties. Activists called it class warfare against low-income renters and predicted huge rises in rents.

“The class war fare (sic) launched by Doug Ford’s mean-spirited government continues. Their regressive policies including removal of rent control is going to make Toronto and Ontario less affordable and livable. That’s unacceptable. We must fight this,” tweeted a self-described “human rights activist” in Toronto.

A Toronto city councilor tweeted: “Doug Ford’s decision to remove rent control from new buildings will make Toronto even less affordable. It removes tenants’ rights & drives young people out of our city.”

Eight months later, Bloomberg reported that a spike in new apartment construction and permits had created a “record apartment surge” in Toronto. The rapid addition of new units pushed the vacancy rate up to its highest level in four years and slowed the high rate of rent increases.

“The vacancy rate rose to 1.5% in the second quarter, the highest since 2015, when research firm Urbanation began tracking the data. Rent increases eased to 7.6% from 10.3% last year, bringing the cost of an average-sized unit of 794 square feet to C$2,475 ($1,894).”

This outcome should have been as surprising as hearing a Canadian say “eh.”

Reams of research show that removing rent control laws raises rental property values, encouraging construction and leading to an increase in the supply of rental housing. That increase in supply, if not artificially restricted, puts downward pressure on rents.

A Stanford University study published in March found that rent control in San Francisco reduced the supply of rental housing by 15 percent. “Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.”

“In addition, the conversion of existing rental properties to higher-end, owner-occupied condominium housing ultimately led to a housing stock increasingly directed towards higher income individuals. In this way, rent control contributed to the gentri􏰃cation of San Francisco, contrary to the stated policy goal. Rent control appears to have increased income inequality in the city by both limiting displacement of minorities and attracting higher income residents.”

New Hampshire has its own version of rent control: Local land use regulations.

Needlessly burdensome restrictions on the size, location and type of apartments reduces the number of available units. These government-imposed constraints on the supply of rental units raise rents.

That, in turn, makes it harder for high-school and college graduates to afford to stay in New Hampshire after they leave the nest. And a shortage of rental units makes it more challenging for employers to recruit new talent, which puts an artificial restraint on economic growth.

It’s been widely reported this summer that many New Hampshire employers face a severe shortage of workers. A contributing factor is that many local governments have priced younger people out of the housing market.

More apartments would mean lower rents, which would make the state (Rockingham and Hillsborough Counties in particular) more accessible and attractive to the people employers are trying to hire. The same goes for single-family homes.

Through a combination of one-time expenditures and increases in baseline formulas, the new state budget produces significant increases in education funding over the next two years. It is no wonder that state officials hailed the compromise as a windfall for public schools.

The budget was built upon an education funding compromise that dramatically reduced the budget’s structural deficit by shifting more than $60 million in recurring education spending to one-time spending.

But the other part of that compromise built into the budget several increases in baseline education spending that will require additional revenues in the future.

As part of the deal, increases in fiscal capacity disparity aid and free-and-reduced-price meal aid expire at the end of the 2021 fiscal year rather than continue indefinitely. Those bumps in aid are financed with $62.5 million in one-time money from the state’s budget surplus.

But other education aid increases are built into the baseline budget.

The budget changes the formula for kindergarten aid to count all kindergarteners as full-day rather than half-day students. That change will cost about $9.5 million a year above what Keno revenues had previously covered, according to the Office of Legislative Budget Assistant.

The budget also eliminates the formula by which stabilization grants were being gradually reduced. Stabilization grants are supplemental funds school districts receive as compensation for student enrollment declines. That is, schools get state funds to “stabilize” their budgets as they lose students (and the state adequacy aid that comes with those students).

The stabilization grants had been scheduled to decline by four percent of the 2012 grant level each fiscal year. The compromise budget restores them to 100 percent, permanently.

That change in state law increases 2020-2021 education spending by $56 million and adds about $6.2 million a year to the state budget going forward, according to the Office of Legislative Budget Assistant.

Finally, the budget increases the base per-pupil adequacy grant from $3,363 to $3,708. This increase was already scheduled under previous law, so it is not a new change. But it does drive state education spending higher.

Figures from the Office of Legislative Budget Assistant show that, including one-time and recurring expenditures, the budget spends $196 million more on education from FY19 through FY21, a 19.9% increase in appropriations over the 2019 budget.

Of that, $41 million is added for FY 2019, and $155 million for fiscal years 2020-21.

The line-item increase in total budgeted state education spending from FY19 to FY21 weighs in at 9.6%.

Adequate education aid accounts for the largest portion of the added spending. It rises by $111.9 million over the FY 2019 numbers approved in the previous budget.

Those are substantial spending increases, celebrated by both the Republican governor and Democratic Legislature. Yet we can’t help but suspect that political attack ads next year will frame things somewhat differently.