Opponents of Golf-Course Conversion in the Rough
Minnesota has too many golf courses, even if golf is popular there. Owners of money-losing courses are retiring, and want to cash in by selling to developers. Building new golf courses that make money off of charging premiums for course-side lots is more profitable than running a closed-in, decades-old course. Developers find old courses attractive: they've got trees, and roads to get to the course are already there. And finally, there are always people who will jump at the chance to buy a new house.

Put these factors together, and you get a controversy over whether privately owned courses should be allowed to be developed into housing. Says one manager, speaking of closer-in courses, "In the long run, if municipalities don't develop golf courses, there are not going to be golf courses."

As a golfer, I lament that possibility. I'd rather drive 15 minutes to an old, scruffy course than an hour to an immaculate course that combines stunning design with super-high greens fees. At this point in my game, I play too poorly to appreciate a higher-priced course.

But as a policy analyst, I have to ask ... if governments doesn't develop golf courses, so what? It's not as if golf is like education funding or public safety--something so vital to everyone's well being that we decide it is necessary to invoke the power of taxation to make sure that the service is provided.
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Hate Your HMO? Blame Congress
Ever wonder where some basic facts of life today came from? Like why you have a "health care provider" rather than a family physician? Where did HMOs come from?

Twila Brase, president of the Citizens Council on Health Care, says Blame Congress for HMOs. The short version: after creating Medicare, Congress had to do something to contain costs. HMOs were the answer. As is often the case with public policy, this had been an unqualified success.
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TIME For Socialism
The February 2 issue of Time hit a relative's mailbox yesterday, where I picked it up while doing some housesitting. The cover story on the prescription drug controversy (motto: We want drugs, we want them cheap.) is an exercise in populism, economic ignorance, and socialism. To read the whole treatment online, you either have to be a subscriber, or read it through a library or other service that subscribes, but here's a link to excerpts.

I've identified roughly 20 themes in this cover story. Here they are:

1. Guess what? Corporations and government have conspired to cheat you out of the good things in life. (Sometimes this is true, but the authors call for more government, not less.)

2. People who are wealthy (never defined, by the way) got that way through luck, or political manipulation. (To be sure, this is true of some people, such as, oh, the Kennedys.)

3. Life is becoming more complicated; people have to take on more risk. That's unfair. Government ought to "take care" of people. (Waa! Me want bottle!)

4. Off-shoring is bad and should be stopped. (I guess we should be making our own underwear rather than letting Bangladeshis have a job making Fruit-of-the-Looms).

5. Congress is responsible for high drug prices and the fact that some people have no health insurance. (True enough--but not for the reasons the authors have in mind. State and federal tax codes, along with state and federal regulations on insurance, as well as an out-of-control tort system are responsible. Of course, all these contributing factors have been sold as what is good for us.)

6. Anyone who buys a high-deductible insurance policy is a sucker. (In fact, more people ought to be able to buy such policies, but state and federal laws make that nearly impossible.)

7. It's unfair that cash-paying patients pay more than people in Medicaid/Medicare, and private insurance. (This is indeed a problem--precisely because we ought to be using cash more often for medical purchases. The high list price of services is a direct response to the bureaucratic command-and-control system we are using currently--a system that Barlett and Steele (the authors) want to use even more.

8. Congress ought to ensure that all people have "the same incentives and rewards." (Since this is not possible--we all start out with different family and social endowments, for example--this is a call for socialism, a leveling of all differences.)

9. People who buy prescription drugs in Canada are not breaking the law; they are in fact heroes striking against The System. (On a human level, one can understand what these folks are doing; but they are responding to failed government policy more than anything else.)

10. Marketing of prescription drugs is expensive, artificially inflates demand, and is bad. (But how would people know of the drugs that are, by the author's worldview, their birthright?)

11. Congress, the FDA, and Big Pharma are in collusion. (It is true to this extent: the requirements for FDA approval of drugs raises the barrier to entry for new companies as well as new drugs. As such, they do raise consumer prices.) Congressional negotiations are in secret, and the FDA is doing the work of Big Pharma. (True enough--though that's hardly the problem with drug prices.)

12. Consumer prices are artificially high, due to political and other manipulation, especially when we look at the prices paid in Canada. (See number 11; also, the series pays little attention to the damage inflicted by price controls, which is why Canada pays less-and why there is no significant drug industry there.)

13. Drug companies are just plain evil. They are "raping the American people," says Dan Burton, a Congressman whose district includes research drug maker Eli Lilly. (Maybe people in Indiana ought to fire him and get a new congressman who understands why his constituents have jobs.)

14. Prescription drugs are so important to human well-being that the industry ought to be run by government. Says John Edwards, pharmaceutical efforts to hold back Canadian importation (read: price controls) is an act of "taking the democracy away from the American people." Says Gil Gutknecht, a Minnesota Republican, pharma companies are profiteers. (How much more explicit can you get about the need for socialism than by stating that the people ought to set prices? As for what kind of service that would produce, think: Postal Service, IRS, inner-city public schools, etc.)

15. Drug companies just make too much money. They can afford price controls. (Folks, how many drugs have charities developed? The Salvation Army is a fine organization, but I don't recall that they have developed treatments for diabetes, cancer, high blood pressure, etc.)

16. The federal government is wrong to stop cheap imports. (Funny how that line of reasoning doesn't apply to foreign-made steel or, well, anything sold at Wal-Mart.)

17. The recent addition of prescription drug benefits to Medicare is a political sop, a scam. (They're right, though of course, for the wrong reasons.)

18. People are right to resent having to pay for drugs. (And houses, and bread, and cable tv, and ....)

19. There are many causes of higher drug spending (they get this one right).

20. The feds ought to "negotiate ... to get better prices." The VA already does. Medicare ought to do the same. (Yes, and the VA, as important as it is, does not make up half of all spending on health care--so the goose that lays the golden, err, drugs, has not yet been killed. And have you heard that some doctors are so fed up with Medicare red tape and low payments that they have stopped selling their services to government patients? You want to extend that model?)

21. Pharma efforts to defend themselves--lobbying Congress (golly, they have more lobbyists than Congress has members), lobbying the FDA, enforcing contracts with Canadian pharmacies to get them to not sell their drugs on the sly to Americans--are evil. Remember, that's because Pharma is evil. Why, those greedy fiends even refuse to let the feds audit their books. (Sigh).

22. The argument that reimportation of drugs is dangerous is a scam. (Not exactly, but it is not the strongest argument against reimportation and price controls. See point 15.)

23. Don't be worried about socialism in drug production; with NIH and university research, we already have it, and we're doing fine. (The article grossly over-estimates the importance of taxpayer-funded research.)

******

Charlatans. Demagogues. Economic illiterates. Too bad so many people will read this TIME report uncritically. Then again, most are graduates of government schools--institutions known for poor performance in delivering any form of literacy.
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Free Loans in Michigan?
It's expected that the governor will ask the legislature to develop a no-interest loan program for college students. Well, some college students. This news report suggests that the students must be in "technical" fields. It's all part of a plan to promote "cool cities" by keeping youth in the state.

Unfortunately, this suggestion rolls several policy mistakes into a single package. First, the benefits of a college degree accrue more towards the graduate than to society--suggesting that subsidizing more time in college is a bad thing. Second, it is a sort of industrial policy for higher education financing--get this bonus, but only if you study in an approved field. Finally, it continues a social policy that focuses on "being hip" rather than making the state more attractive to people as a whole.
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Creative Finance for Local Governments
Budget shortfalls are never enjoyable for government officials, but they have an upside: they force people to find creative ways to raise income and lower expenses. Some cities in Michigan are considering adding advertisements to city owned property, such as water towers, selling excess capacity in sewer systems, pooling resources with nearby communities, and other measures.
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Bread and Circuses--and Commemorative Quarters
This isn't exactly a strong story about public policy, but yesterday the U.S. Mint introduced the new commemorative quarter for Michigan. The Detroit News has a short intro to the coin, complete with a good photo that shows the new coin. Though images of an antique car and the Mackinac Bridge were more popular candidates, Governor Jennifer Granholm made the right choice by going with a simple image of the state--two peninsulas surrounded by four great lakes. With a slogan of the "Great Lakes State" already in place, how could you go with anything else? As a native of Michigan, I'm looking forward to seeing the new quarter.
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Toll Roads Proposed for Minnesota
Toll roads are under discussion for Minnesota, and none too soon. Twin Cities traffic is the second worst in the country, if you figure out where congestion is increasing the most.

The pay-as-you-go concept gets qualified support from the Texas Transportation Institute. Bill Stockton, the associate director of the Texas Transportation Institute, says "They're not a panacea; everyone wants a silver bullet to solve transportation problems. This allows you to make better use of the facilities you have instead of surrendering to gridlock."

Stockton adds, "I'm a traffic engineer, and I can tell you you'll never be able to build all the capacity you could possibly need." Well, of course, since there's something of a disconnect between road usage and the price that a person pays to be on the road. True, fuel taxes do roughly correspond with the number of miles traveled. But there's nothing to concentrate the mind on the actual cost of roads like having to hand over some change to a toll booth attendant, dropping coins in a collection basket, or hearing the "beep" of a transponder as the car passes a traffic monitor. Plus, fuel taxes don't allow for congestion pricing, or charging higher rates during the busiest times of day.
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