Stirring up the Public to Lobby the Government for Private Gain
Pundits in favor of limiting the scope of government are sometimes said to be "pro-business." Yet that's not entirely true: one can be pro-free-enterprise but also against a particular business.

The distinction is made clear in a story by the Baltimore Sun. The Wal-Mart corporation plans to build a gas station in conjunction with a new Sam's Club. A local association of gas station-owners, fearing competition, used a sneaky trick called "astroturf lobbying" to try to derail the plan, which ultimately failed.

The distinction bears repeating: some of the most notorious opponents of free enterprise are businesses who, under the guise of promoting the public welfare, seek to enlist the hand of government to squash the competition. Thanks to "Hit and Run," the blog over at Reason magazine for the link. (I'll have to get the link later).
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The Market at a Neighborhood Near You
If you want to see how commerce promotes free exchanges of goods, services, and money to promote the general welfare, look for garage sale signs next time you're out driving. I just came back from a "100 house garage sale" not far from where I live. People were selling the buying the usual--old furniture, children's clothing and toys, and so forth. This reflects not only changing tastes (as with furniture) but stages of life (as with children's merchandise), all satisfied to one degree or another through the voluntary sales and purchases. The more entrepreneurial households went into the service business as well, selling cookies, candy bars, energy bars, bottled water, and soda pop. A church group was selling bratwurst, and one family was selling no merchandise, but was instead using their entire driveway and some of the front yard as a fast food outlet, selling cooked corn-on-the-cob. They even had a dining area for customers--a picnic table out by the street.

I went looking for a variety of items, especially sporting goods and perhaps an end table for a bedroom that I'm refurbishing. What did I come away with? A sunburn, and an amateur sociologist's observation of life in suburbia.


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Are You "Happy to Pay More Taxes?" Fine. Just leave me out of it.
You can see the strangest sites while driving around affluent neighborhoods. On my way home from a business meeting, I meandered through a wealthy neighborhood in the city of St. Paul. In between admiring the fine houses, I was startled to find a yard sign that read "Happy to Pay More Taxes for a Better Minnesota."

Just when I was thinking that the state had started to turn back socialist thinking--the legislature and governor recently wrapped up on the next fiscal year's budget without raising taxes--here I get jolted back into reality.

According to a report by Minnesota Public Radio [taxpayer supported?] offers a profile of a professional couple that has sold or donated 2,500 of the signs, and paid for another 20,000 postcards in a failed attempt to lobby the legislature to increases taxes. Not surprisingly, the husband gets his paycheck from a state university (taxpayers), and his wife "has a small recycling business she runs out of their home." (In most places, recycling doesn't have much of a market unless it's government-mandated, so both are, in effect, in government employment.)

Even the Republicans in Minnesota have a tradition of high-tax, high-service (as made clear by this review of the Happy campaign in the Minneapolis Star-Tribune), with a quote from a former Republican governor gracing the couple's web site.

Dr. Michael Thompson, writing to a Minneapolis community neighborhood newspaper, captures a more sensible approach very well:

I assume that everyone who has erected a "Happy to Pay for a Better Minnesota" sign has sent a check into the State of Minnesota. If those with these yard signs don't think the schools have enough money, send them a check. If they don't think human services have enough money, send them a check.

Ever think that morality can't be legislated? As Thompson finishes off his letter, he makes the point that calls for increased taxes are indeed an attempt to carry out a particular moral vision--legislating morality:

Taxes are not only a financial issue; they're a moral issue. Those whose morality dictates the forced appropriation of my income to meet the demands of their social agenda, without first contributing themselves, are truly hypocritical, unethical and dishonorable. I pay 40 percent of my income in taxes. If those of you who are "Happy to Pay for a Better Minnesota" don't believe that is enough, and feel it necessary to covet more of my income, please feel free to contribute more of yours first, and kindly leave me out of your moral passion play.

There's only one thing wrong with Thomas' letter: Even if the "happy" people actually did make extra, voluntary contributions to various government funds, there's still something wrong about demanding 40 percent of anyone's income, let anything more.
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State Budget Crises: What's the Cause?
It's over two months old by now, but an article on Stateline.org provides an even-handed overview of the debate over the cause of the budget deficits that nearly all states have faced this year:

Is overspending during the "go-go `90s" a primary cause of the state budget crunch?

The question is a political Rorschach test, and how you respond could reveal your political leanings. If you said yes, you're probably a fiscal conservative. If you said no, you're likely to be a liberal.

Stateline's reporter Jason White rounds up market-oriented Stephen Moore, government-oriented Nick Johnson, a few other analysts, and a government official or two.

Johnson, of the left-leaning Center on Budget and Policy Priorities, lays the blame on recent tax cuts:

Johnson said 43 states enacted large tax cuts during the period, totaling roughly 8.2 percent of state tax revenue nationwide. If states had socked this money away in rainy day funds, they would have no trouble weathering the current fiscal storm, he said.

But the numbers actually favor those who argument that spending has increased too much. Or at least that's the quick read from an institute named after someone not normally thought of as an advocate of small government:

"States as a whole increased spending quite significantly [during the 1990s] – by 28 percent, after adjusting for inflation and population growth. Put differently, state government per person increased by more than a quarter," said Don Boyd, fiscal chair of the nonpartisan Rockefeller Institute at the State University of New York, Albany.

White rounds up other possible explanations, including increased spending expectations on the states as a result of a devolution of power from Washington, and a shift in the economy (from manufacturing to services) that is eroding the base of the sales tax. Both "structural" explanations, merely obscure the contention that government spending has simply increased too much.



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Tax and Spending Restrictions: Which Work?
Cato Institute scholar Michael J. New observes the 25th anniversary of Propostion 13, the tax-cutting measure in California. He finds it more successful as a tax-cutting measure than a spending limit. It produced a $6 billion tax cut, which credits with not only putting the shine on the Golden State's economy, but also with prompting tax cuts from several state legislatures across the country, and Congress as well.

Since it affected only property taxes, however, Prop 13 has been a failure as a tax limitation measure, as other officials (most prominently, ex-Gov. Pete Wilson) raised other taxes. Seeing the track record of Proposition 13, efforts to control government growth turned to tax and expenditure limitations (TELs). There are various forms of TELs, as the National Conference of State Legislatures summarizes. New, like many commentators, finds the most effective limit in Colorado's Taxpayers Bill of Rights (being government related, this measure has an acronymn, too: TABOR).

TABOR is the most effective check on government growth because it sets a low spending limit, but because it takes money off the table. It mandates the immediate return to the taxpayer of surplus revenues, writes New. From 1997 through 2002, this provision has returned $3.2 billion to taxpayers. A check in hand makes the costs of increased government more explicit. This in turn makes voters more frugal, though not entirely so: they approved a statewide measure to increase taxes for government-owned and operated schools.



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I Can't Decide. You do it. Commission to close more obsolete military bases.
One danger in creating or expanding government programs is that even the most necessary of them tend to outlive their usefulness. Of course, a program has defenders from its beginning, but the number of people who depend on it--and thus, are eager to defend its existence and promote its growth--grows over time. A long-standing example of this phenomenon is the military base. Though created to respond to a particular threat or enhance a specific capability, military effectiveness was hampered by the large number of operationally obsolete or unnecessary bases. As the Washington Post puts it, military facilities generally play big roles in local economies and in local elected officials' political futures.

Fed up with the congressional tendency to block any base closings--"Don't close Fort Whatzit. My local economy needs it!"--then Congressman Dick Armey of Texas got Congress to enact legislation to establish a way around the impulse: let someone else make the decision. Five times now, Congress has authorized a BRAC--Base closings and Realignment Commission--to draw up a list of military installations to close. The non-Congressional group then submits its recommendations to Congress, which can either accept or reject the package. The all-or-nothing approach has been critical. Global Security gives a brief overview of the process, and summarizes the work of previous commissions. The Post story, meanwhile, reports that yet another series of recommendations are one step closer to being implemented. This must be one of Rep. Armey's most significant contributions to the country.


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The Trivialization of Crime for Political Gain
One of the ongoing controversies in Illinois is whether (or beyond that, how) to expand O'Hare International Airport. As is usually the case of politics anywhere (though especially Illinois, it seems) the conflict is over money: an expansion would create lots of jobs (and hence, revenue) for the City of Chicago, not only during the expansion itself, but beyond. The northwest suburbs, whose interest lies not only in keeping property from falling into the hands of the city (through eminent domain) but in keeping aircraft noise levels from taking off, have vigorously fought the expansion, enlisting a variety of politicians, including Henry Hyde on the right and Jesse Jackson, Jr. on the left.

It's easy to understand the emotional concern of all involved, especially the suburbanites who, after all, will bear some significant costs. (Some, however, will enjoy benefits as well). Still, a suburban lawmaker made the Daily Herald with some intemperate remarks. State Rep. Rosemary Mulligan (R-Des Plaines) said that the expansion plan "totally raped" the northwest suburbs.

Mayor Daley (yes, there's still a Daley in charge of Chicago, but the younger one now) is not known for his skillful use of the English language, but he got it right in his rejoinder: "I'm shocked that she used that as a lady," the mayor said. "That's not a good word to use, because when you use that word 'rape,' that signifies a violent crime, mostly against a woman. I think that's an inappropriate word to be used."

Of course, Daley has plenty of political capital at stake in making sure the expansion occurs, but he's right. Loonies in the Democratic party equate tax cuts to the activities of the KKK. At least, thanks to Rep. Mulligan, language abuse is officially a bipartisan sport.


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Risk Aversion and Unintended Consequences
Andrew Ferguson comments on the U.S. Department of Transportation's campaign to increase the use of seatbelts, which will encourage states to conduct "satuation patrols" to hand out tickets to those not wearing seatbelts, and promoting the passage of "primary" seatbelt laws.

Ferguson notes that traffic safety is greatly improved over 50 years ago, because of seat belt use, and for other reasons, such as better cars and roads. Even as the number of miles driven each year has gone up, the rate of fatalities has gone down, he says.

But traffic safety points out three facts that many public debates--whether over clean water standards, whether or not to continue the space shuttle program, and yes, traffic laws--ignore.

First, safety cannot be the only goal that drives public policy. This is a fact. If we wanted to eliminate auto fatalities, the optimal speed limit would be zero.

Second, attempts to promote safety can be counterproductive, due to what scholars call "compensating behavior." Jeremy Lott describes it this way:

Drivers who feel insulated from harm are more likely to drive recklessly and smash other cars up. Many safety advocates argue for precisely this point in their ongoing campaign against SUVs, and then turn around and insist that it's ridiculous as applied to seatbelt usage.

Third, beware the law of unintended consequences, which will lead us in a spiral of one regulation being proposed to deal with the ill consequences of a previously issued regulation. Ferguson concludes his essay with a conversation about why the increased use of air bags (the result of another public safety campaign) is now being used to call for increased seatbelt use enforcement.

Lon Anderson, a spokesman for the Mid- Atlantic AAA, was telling me last week about his organization's energetic lobbying for primary seat-belt laws.

"But now that we've made air bags mandatory," I asked, "why do we need seat belts? Aren't they redundant?"

His voice rose an octave.

"Are you serious?" he said in exasperation. "Are you kidding? Do you know what an air bag does? An air bag is an explosion in the closed passenger compartment of an automobile. This thing exerts nearly a ton of pressure as it inflates."

"Jeez," I said.

"Exactly," he said. "You need the seat belt to protect you from the air bag."

Hey, I wear seatbelts, and one of my cars has an air bag. But let's not forget that there is no free lunch--life is full of trade-offs and unintended consequences.

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Bloggers and the Presidential Election
Writing in The Weekly Standard, Hugh Hewitt predicts that bloggers, particularly the "Big Four," will have an effect on the presidential primary season that starts way too soon.

When the blogosphere ignores a story, that story is marked as boring or insignificant or both. If a story cannot hold the interest of the web's news hounds, it is hardly likely to interest the general reading or viewing public.

If the web seizes on a story, however, it is a huge signal to editors and assignment desks to pay attention. The media dinosaurs can ignore these currents in opinion-making, of course, but not for long.

Hewitt cites the attention focused on Trent Lott's comments about Strom Thurmond and the Dixiecrats (which lead, of course, to Lott's resignation as Majority Leader of the U.S. Senate) as an example of an issue first raised by bloggers.

Hewitt's "big four" bloggers, by the way, are Instapundit, Andrew Sullivan, Mickey Kaus, and The Volokh Conspiracy.




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The Myth of the Underpaid Teacher
One of the widespread--and wrong--beliefs about schooling today is that teachers are underpaid. Out with a new study on the subject is Michael Podgursky, chairman of the economics department at the University of Missouri. He finds that teachers make salaries nearly identical to engineers, architects and surveyors. The Detroit News provides a quick run down of the Podgursky's study.

The Michigan Education Report [select June 3] offers a quick summary:

[The study] claims teachers are better paid than computer programmers, accountants, and auditors.

The study says that teachers work approximately 190 days per year, 30 percent less than the average professional job. Podgursky broke down salaries of several professions by the hour and concluded that the hourly rate for teachers was $30 per hour in 2001, about the same as many mid-level professional jobs.

Some contest the findings, saying that teaching is a complex and demanding job that sometimes extends beyond the hours teachers spend in a classroom. "It's common sense and common wisdom that they are underpaid for the work they do," said Sandra Feldman, president of the American Federation of Teachers.

Sorry, Ms. Feldman. Some teachers are indeed underpaid. But many are overpaid. Everyone can look back at teachers who merely coasted through the school year, while others worked hard, with imagination, concern, skill, and a lot of knowledge. Under the union contracts that most teachers work under, nothing matters but seniority and number of college credits earned by the teacher.

The Michigan Education Report offers a weekly email news summary of stories across the nation. Click to subscribe.
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Blogging Reinvigorates Academics
The Chronicle of Education takes a long glance at blogging in the university. Perhaps blogging will cure (or at least ameloriate) some of what ails the university.

The article in the Chronicle cites several advantages to blogging for the development of academic theory, including politics and policy. Among other benefits, blogging:

- frees writers from tone constraints of academic journals (much of which are impenetrable, even to those inside the discipline)
- opens the field of public discussion by lowering the cost of publishing to almost nil
- provides for instant feedback. Says one prof: "Compared to what we're all used to in academia, where you submit something and then maybe when you have grandchildren you'll hear whether it's going to be published, the immediacy is something that we're all unaccustomed to. I think a lot of people feel sort of like kids in a candy store."
- provides greater exposure for academic professionals: "What many scholars find most thrilling about blogging is the knowledge that anyone at all can read and comment on their discussions."
- promotes discussion. Says another prof: "certainly the level of discourse is higher than what I get at a cocktail party."
- has elements of peer review, since blog readers are free to provide comments
- exposes professors to a wider variety of viewpoints than they would otherwise find (most of academia in the social sciences and humanities is drearily one-sided)
- contains the marketplace of ideas, where the content of a writer's ideas matters rather than his position or university affiliation

Like any new, popular medium (the printing press, most recently, talk radio), blogging is accused of contributing to polarization and shrillness. And certainly polarizing personalities have an easier way of finding a soapbox. But then again, the ability to blog does not guarantee an audience for the blog. And blogs have a way of self-correcting; as the story notes, bloggers sniff out each other's frauds.

Thanks to Powerlineblog for the link.
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Consumption Taxes a More Stable Base than Income Taxes
Stateline.org reports on a recent study from the Rockerfeller Institute of Government on state revenue trends. (Too bad they didn't discuss state spending trends as well.) What is interesting for tax policy is that the collections for the various kinds of taxes respond in the same way to a weakened economy. As Stateline notes, state tax takes were down 5.6 percent from 2002 over 2001. Not surprisingly, corporate income tax collections were down the most of all categories--nearl18.8 percent. Personal income tax revenues were down 10.8 percent, but sales tax revenues were actually up 0.6 percent. Since consumption is actually a more valid measure of personal well-being, perhaps tax policy should move towards sales taxes. As a bonus, it leads to a more predictable income stream than other taxes.
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Is the Sky Falling in Minnesota?
Readers outside Minnesota may be forgiven for thinking that posts about the state are not for them. After all, it's always more interesting to read about your own state, where you at least know the players without a scorecard. But hold on for another entry. Why? Case studies are a powerful tool for learning; as my graduate school advisor (over)stated it: "everything we learn, we learn by comparison."

The recent legislative session in Minnesota produced some fascinating and significant changes: a conceal carry law that liberalizes the permit process; a "women's right to know" law that places a speedbump (though certainly not a roadblock) on the road to an abortion; extending bar hours to 2am, for those who don't like to do their late-night drinking at home, and in a case of what didn't happen, tax rates were not increased.

Digging through the archives of the St. Paul Pioneer Press, I found that columnist Joe Soucheray has a lively take on the reaction to the session.

Many people have been writing letters to the editors of both Twin Cities newspapers asking, "Is this Minnesota?'' By this they mean that any day now they expect pistol-packing drunks to stumble out of the bars at 2 a.m. and shoot not only each other but anybody who doesn't favor holding the line on taxes.

Is the "blue" state moving "red?" (Ramesh Ponnuru thinks so.) Is there really a trend away from a heavy-handed government (save when it comes to abortion, which is protected by a state court decision that would leave abortion legal even if the U.S. Supreme Court overturns Roe v. Wade) and high taxes, or is this collection of new laws merely an abberation? I don't know, but it is encouraging to see old verities come under fire.

To give credit where credit is due, Marxist scholars have pointed out that the most effective kind of power exists not when one side beats back an unfavorable legislative proposal, but when the vote doesn't even take place, because the proposal at hand doesn't enter anyone's mind. For a modified version of this, think of how political correctness squashes one debate after another.

It turns out that certain previously "unthinkable" thoughts are being expressed in the Blue state--and enacted--resulting in "the sky is falling" logic. Soucheray (mockingly) summarizes this viewpoint:

To be a truly progressive state you must prohibit guns, restrict bar hours but feature no state intervention whatsoever when it comes to abortion, except to provide state assistance in the event the woman decides to actually have a child. That's even more illogical than the gun stuff. Keep your government hands off my body but you better be there to help me raise the child if I have one.

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Remember the Unseen Consequences
One of the great introductions to the dismal science of economics is Henry Hazlitt's "Economics in One Lesson." The lesson, as applied to public policy, is this: money spent on a government program has visible benefits. The cost of the government program has unseen costs. Certainly, the appropriations amount is a visible cost, but that dollar amount is not merely an accounting entry: who knows what opportunities, goods and services people who surrendered that money gave up when they handed over their taxes?

The recently concluded Minnesota legislative session saw cuts to some programs, increases to others, some accounting gimmicks, and most importantly, no increase in the state marginal income tax rate or any sales tax. Listening to radio news reports and discussions, I hear the conventional wisdom: this new budget will devastate Minnesota.

A few years ago, someone pointed out the prevailing wisdom regarding taxes and the size and scope of government in the state, the reasoning behind these public comments: The quality of life is good here. Taxes are high. People assume that the second caused the first.

A few illustrations may help. Minnesotans are very outdoors-oriented. That's obvious when you consider the number of people who purposely sit on frozen lakes for hours at a time (ice fishing). In the Twin Cities metro, there are hundreds of miles of paths for walking, skating, or cycling--on government land. Money spent on parks, then, has an obvious and visible benefit to the residents. People take pride in the relatively high achievement of K-12 students (high only if compared with the rest of the country), and they assume it's because of the high taxes paid for education (ignoring the fact that many Catholic schools around the country regularly outperform the competition from government-operated schools, at a fraction of the price). From these two cases of government spending (out of many), people assume that "Spending is good. You get what you pay for. We like the high quality of services that high taxes bring." But lost is Hazlitt's lesson: what unseen opportunities are seen when we increase government size? As the entry on volunteerism (5/29) points out, the private sector leaks money when it pays taxes. But it loses something equally important: the civil society of cooperative, voluntary associations, cedes a little more ground to the political world.
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