Marketplace of Ideas Blog

The MacIver Institute’s Brian Fraley suggests that the fallout over the relationship between Assembly Speaker Mike Sheridan and a lobbyist for payday loan businesses could have negative effects for the readers of Marketplace:

That some of the more liberal members of the Assembly caucus have been concerned with Sheridan’s tepid support for many of the anti-business planks of their agenda is well known in and around the Capitol. In fact, the much-reported lengthy caucus which took place last week centered on more than just Sheridan’s perceived reluctance to advance new regulations on the payday loan industry and included the airing of grievances on multiple issues. …

There are two scenarios as to how the next few days/weeks will play out, and neither one is good for Wisconsin’s business community.

Scenario one has Mike Sheridan maintaining his position as Assembly Speaker. Maintaining his hold on power, however, would require him to appease the more liberal members of his caucus.

Scenario two has Sheridan being ousted by those same liberal members, who would be empowered to show that such a change delivered more results than the shuffling of offices in the Capitol.

The result of either scenario, according to Fraley, would be the advance of three anti-business pieces of legislation:

• Wage Lien — Establish the priority of a wage lien over the pre-existing lien of commercial lenders. This would remove the current $3,000 cap in the state’s wage claim lien law (already the most generous in the nation). This would make it impossible for a lender to calculate how much of a business’ collateral can be pledged against a line of credit or other loan. This severely hampers businesses’ access to credit at a time when we need businesses to expand and provide more jobs.

• Minimum Wage — Increase the state minimum wage from $6.50 per hour to $7.60 per hour and indexes the rate as of June 1, 2009. In addition, the bill repeals the state preemption of local living wage ordinances in Wisconsin. Making it more expensive to create entry level jobs will prolong Wisconsin’s participation in the current economic crisis.

• Mental Health Parity — Require all group health plans to provide mental health and substance abuse disorder benefits at the same level as benefits for physical conditions. This would make it more expensive to employ any and every person, if the employer provides medical health benefits. Employers will either stop providing the benefits, or employ fewer people as they absorb this new cost.

Whether or not you agree with Fraley’s analysis, this is inarguable: “That one politician’s ‘dating’ habits could have such a sweeping impact on Wisconsin’s economy should serve as exhibit one for why government should not wield so much power over the private marketplace.”