Tag Archives: Property rights

Franklin Roosevelt, contributor to modern nanny state

If you’ve wondered what was the genesis of the modern nanny state, listen to this speech by Franklin Delano Roosevelt. It’s part of his State of the Union Address from 1944.

The purpose of the original Bill of Rights is to protect our freedoms from government. But to provide the things Roosevelt calls for — food, clothing, a decent home, adequate medical care, and a good education — requires an expansive government. These rights are called positive rights because they require action by the government, in contrast to the negative rights found in the Bill of Rights. Richard A. Epstein explains the consequences of the “Roosevelt Rights”:

All of these are positive rights, which means necessarily that some unidentified individuals or groups have the duty to provide decent wages, home, health, and education to the people. The individual so taxed can discharge that duty only by forfeiting his own right to reap the fruits of his own labor. Yet the incidence and size of these hefty correlative duties are left unaddressed by Roosevelt.

We are witnessing today a modern rerun of Roosevelt’s incomplete strategy. Obama’s healthcare plan, for instance, designates a generous set of “essential health benefits” to a large number of individuals entitled to affordable care on the newly created government exchanges. But these benefits cannot be funded with higher taxes on the “millionaires and billionaires,” whose combined wealth falls short of what is needed. So what duty will undergird the new right?

This sort of funding crisis could never arise under the Bill of Rights 1.0, whose correlative duties are negative — or, put another way, they impose a “keep off” sign on other people. If I have the freedom of speech, your duty is to forbear from disrupting the speech with force, and vice versa. Each of us can demand forbearance from the use of force by all others.

David Kelley elaborates further in a chapter from The Morality of Capitalism:

By contrast, welfare rights are conceived as rights to possess and enjoy certain goods, regardless of one’s actions; they are rights to have the goods provided by others if one cannot earn them oneself. Accordingly, welfare rights impose positive obligations on others. If I have a right to food, someone has an obligation to grow it. If I cannot pay for it, someone has an obligation to buy it for me. Welfarists sometimes argue that the obligation is imposed on society as a whole, not on any specific individual. But society is not an entity, much less a moral agent, over and above its individual members, so any such obligation falls upon us as individuals. Insofar as welfare rights are implemented through government programs, for example, the obligation is distributed over all taxpayers.

From an ethical standpoint, then, the essence of welfarism is the premise that the need of one individual is a claim on other individuals. The claim may run only as far as the town or the nation. It may not embrace all of humanity. But in all versions of the doctrine, the claim does not depend on your personal relationship to the claimant, or your choice to help, or your evaluation of him as worthy of your help. It is an unchosen obligation arising from the sheer fact of his need.

Here is an excerpt from Roosevelt’s State of the Union Address, January 1944.

It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth- is ill-fed, ill-clothed, ill housed, and insecure.

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our Nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the Nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

Wichita City Hall

Wichita develops plans to make up for past planning mistakes

On several issues, including street maintenance, water supply, and economic development, Wichita government and civic leaders have let our city fall behind. Now they ask for your support for future plans to correct these mistakes in past plans.

Wichita/Sedgwick County Community Investment Plan logo.

Wichita/Sedgwick County Community Investment Plan logo.

In February the City of Wichita held a workshop where the Community Investments Plan Steering Committee delivered a progress report to the city council. The amounts of money involved are large, and portions represent deferred maintenance. That is, the city has not been taking care of the assets that taxpayers have paid for. When Wichita city leaders ask for more taxes to pay for this lack of stewardship, citizens need to ask for better accountability than what they’ve received.

The time frame of this planning process is the period 2013 to 2035. Under the heading “Trends & Challenges” we find some troubling information. Wichita Mayor Carl Brewer hinted at the problem last year in his State of the City Address when he said the city would need to spend $2.1 billion over 30 years on maintenance and replacement of water and sewer systems. The city’s performance measure report also told us that our pavement condition index has been deteriorating, and is projected to continue to decline.

So if we’ve been paying attention, it should not have been a surprise to read this in the presentation: “Decades of under-investment in infrastructure maintenance … 38% of Wichita’s infrastructure is in ‘deficient/fair’ condition.”

The cost to remedy this lack of maintenance is substantial. The document says that on an annual basis, Wichita needs to spend $180 million on infrastructure depreciation/replacement costs. Currently the city spends $78 million on this, the presentation indicates.

The “cost to bring existing deficient infrastructure up to standards” is given as an additional $45 to $55 million per year.

This is a lot of money. To place these numbers in context, here are some figures that help illustrate Wichita city finances:

Property tax collected in 2013: $105 million
Budgeted 2014 expenditures for fire department: $44 million
Budgeted 2014 expenditures for police department: $79 million

The amounts by which the city is deficient in maintaining its assets is staggering, compared to other expenses the city has. The size of the deficiency overwhelms possible sources of new revenue. A one cent per dollar increase in sales tax would not cover the deficiencies in maintaining our current assets. Then, remember the things Wichita wants to increase spending on — a new library, economic development, expanded public transit, new convention center, economic development, and perhaps other things.

The report lists three scenarios for future growth: Maintaining current trends, constrained suburban growth, and suburban and infill growth mix. Whenever we see words like “constrained” we need to be cautious. We need to be on guard. The Wichita Eagle reported this: “In the city’s recently completed series of 102 public meetings, citizens were clear, City Manager Robert Layton said: Redevelop the core. We’ve had enough suburban growth for awhile.”

It’s unclear how closely the findings from the public meetings reflects actual citizen preference. Cynics believe that these meetings are run in a way that produces a predetermined outcome aligned with what city officials want to hear. At any rate, when you ask people about their preferences, but there is no corresponding commitment to act on their proclaimed preferences, we have to wonder how genuine and reliable the results are.

There is a very reliable way to find out what people really want, however. Just let them do it. If people want to live downtown on in an inner city neighborhood, fine. If they want suburban-style living, that’s fine too. Well, it should be fine. But reading between the lines of city documents you get the impression that city planners don’t think people should live in suburban-style settings.

Community input

The survey that Wichita used has its own problems. Here’s an example of a question respondents were asked to agree or disagree with: “Local government, the school district, community organizations and the business community should work together to create an investment climate that is attractive to business.”

The meaning of an attractive investment climate means different things to different people. Some people want an investment climate where property rights are respected, where government refrains from meddling in the economy and transferring one person’s property to another. An environment free from cronyism, in other words. But the Wichita way is, unfortunately, cronyism, where government takes an active role in managing economic development. We in Wichita never know when our local government will take from us to give to politically-favored cronies, or when city hall will set up and subsidize a competitor to your business.

Wichita flights compared to the nation.

Wichita flights compared to the nation.

Sometimes the questions are misleading. A question relating to the subsidy program at the Wichita airport read “I’m willing to pay increased taxes or fees to support investment … that uses public dollars to reduce the cost and increase the number of commercial flights at Mid-Continent Airport.”

This is an example of a question which has a false premise. Since the subsidy programs have been in place, the number of flights from the Wichita airport has declined, not increased as the question would lead readers to believe. See Wichita flight options decrease, despite subsidies and Wichita airfare subsidy: The negative effects.

Leadership of city officials

On these and other issues, the Wichita Eagle quoted mayor Brewer: “We’ve put them off for too long. We didn’t want the challenges. We didn’t want the tax bills. But now, to maintain our quality of life, we’ve got to catch up.”

It’s almost as if the mayor is speaking as a bystander. But he’s been mayor for nearly seven years, and was on the city council before that time. During that time, he and other city leaders have boasted of not increasing property taxes. While the property tax rate has been (fairly) stable, property tax revenue has increased due to development of new property and rising assessment values. Still, of this, the city has a huge backlog of deferred maintenance. The way to interpret this is that the city has really been engaging in deficit spending under Brewer’s leadership. We didn’t spend what was needed to maintain our assets, and now the mayor tells us we need to increase spending to make up for this.

The economist Milton Friedman told us that it’s more important to look at government spending rather than the level of taxation. That’s because spending must eventually be paid for, either through current taxes or future taxation. The federal government generate deficits and can pay for spending through creating inflation. Fortunately, cities and states can’t do that.

But, as we’ve seen, cities like Wichita can incur costs without paying for them. This is a form of deficit spending. By deferring maintenance of our infrastructure, the city has pushed spending to future years. The report released in February gives an idea of the magnitude of this deferred spending: It’s huge.

This form of deficit spending is “off the books” and doesn’t appear in city financial statements. But it’s real, as the mayor now admits. The threat to our freedom to live where we want is real, too. We must be watchful and diligent.

children-arm-wrestling-beach-176645_1280

Competition in markets

children-arm-wrestling-beach-176645_1280Competition must surely be one of the most misunderstood concepts. As applied to economics, government, and markets, the benefits of competition are not understood and valued.

Usually when people think of competition they think of words like hostile, cut-throat, or dog-eat-dog. They may reference the phrase “survival of the fittest,” making analogies to the law of the jungle. There, competition is brutal. The winners kill and eat the losers. Or, they may refer to games or sporting events, where a competition is created specifically to produce a winner and a loser.

But as David Boaz of the Cato Institute explains in his essay Competition and Cooperation, it’s different in markets. There, as Boaz explains, people compete in order to cooperate with others, not defeat them:

The competitive process allows for constant testing, experimenting, and adapting in response to changing situations. It keeps businesses constantly on their toes to serve consumers. Both analytically and empirically, we can see that competitive systems produce better results than centralized or monopoly systems. That’s why, in books, newspaper articles, and television appearances, advocates of free markets stress the importance of the competitive marketplace and oppose restrictions on competition.

We often see people plead for cooperation, as being preferred over competition: “Can’t we all get along?” But Boaz says this: “What needs to be made clear is that those who say that human beings ‘are made for cooperation, not competition’ fail to recognize that the market is cooperation. Indeed, as discussed below, it is people competing to cooperate.”

Boaz says that cooperation is so essential to human flourishing that we don’t just want to talk about it; we want to create social institutions that make it possible. That is what property rights, limited government, and the rule of law are all about.

If we didn’t have well-defined property rights and rule of law, we would be continually fighting — competing, that is — over property and who owns it. Boaz says “It is our agreement on property rights that allows us to undertake the complex social tasks of cooperation and coordination by which we achieve our purposes.”

Cooperation and coordination in markets is what has allowed us to progress beyond the simple societies where each person has only what he himself produces, or what he can trade for with those in his immediate surroundings. Maybe it would be wonderful if this cooperation and coordination could be accomplished through benevolence, that is, by people doing good simply for good’s sake. Sort of like “From each according to his abilities, to each according to his needs.” During the last century we saw how political systems based on that philosophy worked out.

Human nature isn’t always benevolent. People are self-interested. They want more for themselves. In economies where property rights are respected and protected, the only legitimate way to get more stuff for yourself is by trading with others. You figure out what other people want, you produce it, and give it to them in exchange for what you want. And if you can figure out what people really want, that is, what they’re willing to trade a lot of their stuff in order to obtain, you can prosper. And since the trading is voluntary, both parties to the trade are better off.

In Adam Smith’s lasting imagery over two centuries ago: “By directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

Figuring out what others place high value on and providing it to them — and doing that better than someone else — is what competition in markets is about. As Boaz said, it is “people competing to cooperate.” When you generate success in this way, rather than by stealing from others, we all benefit. We experience what Boaz and others call the “civil society.” We cooperate with others to get what we want, instead of beating them over the head and stealing from them. Our desire for more stuff, coupled with property rights and rule of law, means that we compete to make others’ lives better, so that in turn our own lives can be better.

Who knows best what people should have? Each person knows best for themselves, of course. People place different values on things, but it each person who knows best what he values, and how much he values it.

That’s the way voluntary markets work. But government and politics works differently. Here’s what Milton Friedman had to say on this topic: “[The political system] tends to give undue political power to small groups that have highly concentrated interests; to give greater weight to obvious, direct and immediate effects of government action than to possibly more important but concealed, indirect and delayed effects; to set in motion a process that sacrifices the general interest to serve special interests rather than the other way around. There is, as it were, an invisible hand in politics that operates in precisely the opposite direction to Adam Smith’s invisible hand.”

So the benefits of market competition and cooperation are turned around and perverted in government and politics. There are many examples of this. Currently in Kansas we have a vivid example unfolding. The Blob — that’s the public school establishment — doesn’t want to allow competition, at least not competition using taxpayer funds in the form of charter schools, vouchers, or tax credit scholarships. It doesn’t want existing teachers to face competition from professionals who haven’t spent years earning a teaching degree and obtained a license.

Instead of the values of civil society, where people compete to cooperate with others in order to accomplish their goals, our public schools operate under a different system. Politicians and courts will tell us how much to spend on schools, and will pass laws to seize payment from people. Bureaucrats will tell us what schools will teach, and how they will teach it. If parents don’t like what government provides, they’re free to send their children somewhere else. But they still must pay for a product they’ve determined they have no use for.

The benefit of market competition, that is, the “constant testing, experimenting, and adapting” that Boaz writes about, is missing from government-run schools. Instead, the centralized monopoly of public schools plods along. We place all our eggs in the No Child Left Behind basket. That law is now considered by nearly everyone as a failure. So we attempt to impose another centralized, monopolistic system: the Common Core Standards.

Instead of peacefully and happily competing to cooperate in the education of Kansas schoolchildren, there is vitriol. Extreme vitriol, I would say. No one seems happy with the system. Great effort is spent fighting — jungle competition, we might say, rather than cooperating. And for some crazy reason, we use this system for many other things, too.

For more on this topic, see Competition and Cooperation: Two sides of the same coin by Steven Horwitz.

WichitaLiberty.TV set 2014-03-03 1200

WichitaLiberty.TV: Schools and the nature of competition and cooperation, Wind power and taxes

In this episode of WichitaLiberty.TV: A Kansas newspaper editorial is terribly confused about schools and the nature of competition in markets. Then, we already knew that the wind power industry in Kansas enjoys tax credits and mandates. Now we learn that the industry largely escapes paying property taxes. Episode 38, broadcast April 6, 2014. View below, or click here to view at YouTube.

Wichita/Sedgwick County Community Investment Plan logo.

Wichita planning documents hold sobering numbers

Wichita/Sedgwick County Community Investment Plan logo.

Wichita/Sedgwick County Community Investment Plan logo.

This week the City of Wichita held a workshop where the Community Investments Plan Steering Committee delivered a progress report to the city council. The documents hold information that ought to make Wichitans think, and think hard. The amounts of money involved are large, and portions represent deferred maintenance. That is, the city has not been taking care of the assets that taxpayers have paid for.

The time frame of this planning process is the period 2013 to 2035. Under the heading “Trends & Challenges” we find some troubling information. Wichita Mayor Carl Brewer hinted at the problem last year in his State of the City Address when he said the city would need to spend $2.1 billion over 30 years on maintenance and replacement of water and sewer systems. The city’s performance measure report also told us that our pavement condition index has been deteriorating, and is projected to continue to decline.

So if we’ve been paying attention, it should not have been a surprise to read this in the presentation: “Decades of under-investment in infrastructure maintenance … 38% of Wichita’s infrastructure is in ‘deficient/fair’ condition.”

The cost to remedy this lack of maintenance is substantial. The document says that on an annual basis, Wichita needs to spend $180 million on infrastructure depreciation/replacement costs. Currently the city spends $78 million on this, the presentation indicates.

The “cost to bring existing deficient infrastructure up to standards” is given as an additional $45 to $55 million per year.

This is a lot of money. To place these numbers in context, here are some figures that help illustrate Wichita city finances:

Property tax collected in 2013: $105 million
Budgeted 2014 expenditures for fire department: $44 million
Budgeted 2014 expenditures for police department: $79 million

It’s thought that an additional one cent per dollar city sales tax would generate around $80 million per year.

The amounts by which the city is deficient in maintaining its assets is staggering, compared to other expenses the city has. The size of the deficiency overwhelms possible sources of new revenue. A one cent per dollar increase in sales tax would not cover the deficiencies in maintaining our current assets. Then, remember the things Wichita wants to increase spending on — a new library, economic development, expanded public transit, new convention center, economic development, and perhaps other things.

The report lists three scenarios for future growth: Maintaining current trends, constrained suburban growth, and suburban and infill growth mix. Whenever we see words like “constrained” we need to be cautious. We need to be on guard. The Wichita Eagle reported this: “In the city’s recently completed series of 102 public meetings, citizens were clear, City Manager Robert Layton said: Redevelop the core. We’ve had enough suburban growth for awhile.”

It’s unclear how closely the findings from the public meetings reflects actual citizen preference. Cynics believe that these meetings are run in a way that produces a predetermined outcome aligned with what city officials want to hear. At any rate, when you ask people about their preferences, but there is no corresponding commitment to act on their proclaimed preferences, we have to wonder how genuine and reliable the results are.

There is a very reliable way to find out what people really want, however. Just let them do it. If people want to live downtown on in an inner city neighborhood, fine. If they want suburban-style living, that’s fine too. Well, it should be fine. But reading between the lines of city documents you get the impression that city planners don’t think people should live in suburban-style settings.

Sometimes we don’t have to read between the lines. Sometimes the attitude of planners is explicit. In 2010 the city — actually the Wichita Downtown Development Corporation — employed Goody Clancy, a Boston-based planning firm, to help plan the revitalization of downtown Wichita. In the article Goody Clancy market findings presented to Wichita audience I reported on some of what the planners said. For example, David Dixon, the Goody Clancy principal for this project, told how that in the future, Wichitans will be able to “enjoy the kind of social and cultural richness” that is found only at the core. “Have dinner someplace, pass a cool shop, go to a great national music act at the arena, and then go to a bar, and if we’re lucky, stumble home.”

This idea that only downtown people are socially and culturally rich is an elitist attitude that we ought to reject. By the way, when I presented to the Wichita City Council on this topic, I noted that no council members, except for possibly one, lived in neighborhoods that might be described as in “the core.”

Other speakers from Goody Clancy revealed a condescending attitude towards those who hold values different from this group of planners. One presenter said “Outside of Manhattan and Chicago, the traditional family household generally looks for a single family detached house with yard, where they think their kids might play, and they never do.”

This, again, is an elitist attitude. No, it’s worse than that. It’s condescending. It reveals that the professional planning class thinks that the ordinary people of Wichita can’t decide for themselves what they really want. Somehow, people are duped into buying homes that don’t really meet their needs, and they’re not smart enough to realize that. That is the attitude of the professional planning class. It’s an elitism that Wichitans ought to reject.

The planning process

The planners tells us that the process is based on data. “Data-driven” is a term they use. But when we look under the covers at the data, we realize that we need to be very skeptical of claims.

Returning to the Goody Clancy plan for downtown Wichita, the principal planner used Walk Score in a presentation delivered in Wichita. Walk Score is purported to represent a measure of walkability of a location in a city. Walkability is a key design element of the master plan Goody Clancy has developed for downtown Wichita.

Walk Score is not a project of Goody Clancy, as far as I know, and Dixon is not responsible for the accuracy or reliability of the Walk Score website. But he presented it and relied on it as an example of the data-driven approach that Goody Clancy takes.

Walk Score data for downtown Wichita, as presented by planning firm Goody Clancy. Click image for a larger version.

Walk Score data for downtown Wichita, as presented by planning firm Goody Clancy. Click image for a larger version.

The score for 525 E. Douglas, the block the Eaton Hotel and Wichita Downtown Development Corporation is located in and mentioned by Dixon as a walkable area, scored 91, which means it is a “walker’s paradise,” according to the Walk Score website.

But here’s where we can start to see just how bad the data used to develop these scores is. For a grocery store — an important component of walkability — the website indicates indicates a grocery store just 0.19 miles away. It’s “Pepsi Bottling Group,” located on Broadway between Douglas and First Streets. Those familiar with the area know there is no grocery store there, only office buildings. The claim of a grocery store here is false.

There were other claimed amenities where the data is just as bad. But the chairman of the Wichita Downtown Development Corporation at that time said that Walk Score has been updated. I should no longer be concerned with the credibility of this data, he told me through a comment left on my website.

He was correct in one regard: Walk Score had been updated. For the same location the walk score was revised to 85%, which is considered “very walkable.” The “grocery store” is no longer the Pepsi Bottling Group. It’s now “Market Place,” whose address is given as 155 N. Market St # 220.

Someone strolling by that location would notice that address, 155 N. Market number 220, is the management office for an office building whose name is Market Place.

Still no grocery store. Nothing even resembling a grocery store.

I looked this week at the Walk Score website. It’s been updated and redesigned. Now for the same block in the heart of downtown Wichita the walk score is 74, which is “very walkable,” according to the site. In a narrative explanation, the site says this: “The closest grocery stores are Ray Sales Co, Market Place and The Hot Spot Detox Shop.”

Ray Sales Co., in the shadow of Intrust Bank Arena.

Ray Sales Co., in the shadow of Intrust Bank Arena.

I don’t know if you’ve been to Ray Sales, but it’s a tiny store with a very limited product selection. It’s not the type of place that will attract people to downtown Wichita. We know that because officials say a grocery store is one of downtown’s most pressing needs, despite the existence of Ray Sales.

Market Place is listed again as evidence of a grocery store in downtown Wichita. Remember, Market Place is the name of an office building located on Market Street. It’s not a grocery store.

The third location listed as a grocery store is a shop that sells kits to help people pass drug tests. It’s nothing like a grocery store.

Again, David Dixon and Goody Clancy did not create the Walk Score data. But they presented it to Wichitans as an example of the data-driven, market-oriented approach to planning that they use. Dixon cited Walk Score data as the basis for higher real estate values based on the walkability of the area and its surrounding amenities. But anyone who relies on the evidence Dixon and Goody Clancy presented would surely get burnt unless they investigated the area on their own.

Keep in mind that the presentation of this Walk Score data was made after Goody Clancy staff had spent considerable time in Wichita. That someone there could not immediately recognize how utterly bogus the data is: That should give us cause for concern that the entire planning process is based on similarly shoddy data and analysis.

Constraining growth

Returning to the city’s presentation: How does the city “constrain” suburban growth? By taking away the freedom for people to live where they want. Why would the city want do that? City leaders say that suburban development is expensive. It’s not sustainable. Suburban living depends on the personal automobile. And remember the attitude of the professional planners Wichita Downtown Development Corporation hired: People can’t be trusted to know what they really want for themselves.

Special taxes paid on a residential home.

Special taxes paid on a residential home.

If it really is more expensive to develop new suburban areas, the city should simply charge what it costs. To some extent this already happens. Anyone who builds a new home in a new area will pay for the residential street and other infrastructure through special taxes. If the city feels it needs to charge for building arterial streets to serve new suburban areas, it should do so. But the city should realize that people spending their own money to buy or rent a residence — this is the best indication of their true preferences. What people say in focus groups or on paper survey forms is nowhere near as reliable.

Community input

The survey that Wichita used has its own problems. Here’s an example of a question respondents were asked to agree or disagree with: “Local government, the school district, community organizations and the business community should work together to create an investment climate that is attractive to business.”

The meaning of an attractive investment climate means different things to different people. Some people want an investment climate where property rights are respected, where government refrains from meddling in the economy and transferring one person’s property to another. An environment free from cronyism, in other words. But the Wichita way is, unfortunately, cronyism, where government takes an active role in managing economic development. We in Wichita never know when our local government will take from us to give to politically-favored cronies, or when city hall will set up and subsidize a competitor to your business.

Wichita flights compared to the nation.

Wichita flights compared to the nation.

Sometimes the questions are misleading. A question relating to the subsidy program at the Wichita airport read “I’m willing to pay increased taxes or fees to support investment … that uses public dollars to reduce the cost and increase the number of commercial flights at Mid-Continent Airport.”

This is an example of a question which has a false premise. Since the subsidy programs have been in place, the number of flights from the Wichita airport has declined, not increased as the question would lead readers to believe. See Wichita flight options decrease, despite subsidies and Wichita airfare subsidy: The negative effects.

Leadership of city fathers

On these and other issues, the Wichita Eagle quoted mayor Brewer: “We’ve put them off for too long. We didn’t want the challenges. We didn’t want the tax bills. But now, to maintain our quality of life, we’ve got to catch up.”

It’s almost as if the mayor is speaking as a bystander. But he’s been mayor for nearly seven years, and was on the city council before that time. During that time, he and other city leaders have boasted of not increasing property taxes. While the property tax rate has been stable, property tax revenue has increased due to development of new property and rising assessment values. In spite of this, the city has a huge backlog of deferred maintenance. The way to interpret this is that the city has really been engaging in deficit spending under Brewer’s leadership. We didn’t spend what was needed to maintain our assets, and now the mayor tells us we need to increase spending to make up for this.

The economist Milton Friedman told us that it’s more important to look at government spending rather than the level of taxation. That’s because spending must eventually be paid for, either through current taxes or future taxation. The federal government generate deficits and can pay for spending through creating inflation. Fortunately, cities and states can’t do that.

But, as we’ve seen, cities like Wichita can incur costs without paying for them. This is a form of deficit spending. By deferring maintenance of our infrastructure, the city has pushed spending to future years. The report released this week gives an idea of the magnitude of this deferred spending: It’s huge.

This form of deficit spending is “off the books” and doesn’t appear in city financial statements. But it’s real, as the mayor now admits. The threat to our freedom to live where we want is real, too. We must be watchful and diligent.

chart-rising-audience

Economic freedom, the key to improving lives

chart-rising-audience

Economic freedom, in countries where it is allowed to thrive, leads to better lives for people as measured in a variety of ways. This is true for everyone, especially for poor people.

This is the message presented in a short video based on the work of the Economic Freedom of the World report, which is a project of Canada’s Fraser Institute. Four years ago Robert Lawson, one of the authors of the Economic Freedom of the World report, lectured in Wichita on this topic. The current video is made possible by the Charles G. Koch Charitable Foundation.

One of the findings highlighted in the presentation is that while the average income in free countries is much higher than that in the least-free countries, the ratio is even higher for the poorest people in these countries. This is consistent with the findings that economic freedom is good for everyone, and even more so for those with low incomes.

Civil rights, a clean environment, long life expectancy, low levels of corruption, less infant mortality, less child labor, and lower unemployment are all associated with greater levels of economic freedom.

What are the components or properties of economic freedom? The presentation lists these:

  • Property rights are protected under an impartial rule of law.
  • People are free to trade with others, both within and outside the country.
  • There is a sound national currency, so that peoples’ money keeps its value.
  • Government stays small, relative to the size of the economy.

Over the last eleven years, the United States’ ranking has fallen relative to other countries, and the presentation says our position is expected to keep falling. The question is asked: “Will our quality of life fall with it?”

Economic freedom is not necessarily the platform of any single political party. It should be noted that for about eight of the past twelve years — a period in which our economic freedom has been falling — there was a Republican president, sometimes with a Republican Congress. The size of government rose. In 2005 the Cato Institute studied the numbers and found that “All presidents presided over net increases in spending overall, though some were bigger spenders than others. As it turns out, George W. Bush is one of the biggest spenders of them all. In fact, he is an even bigger spender than Lyndon B. Johnson in terms of discretionary spending.” This was before the spending on the prescription drug program had started.

Critics of economic freedom

The defining of what economic freedom means is important. Sometimes you’ll see people write things like “Bernie Madoff was only exercising his personal economic freedom while he ran his investment firm.” Madoff, we now know, was a thief. He stole his clients’ money. That’s contrary to property rights, and therefore contrary to economic freedom.

Or, you’ll see people say if you don’t like government, go to Somalia. That country, one of the poorest in the world — but not the poorest — is used as an example of how bad anarchy is as a form of government. The evidence is, however, that Somalia’s former government was so bad that things improved after the fall of that government. See Peter T. Leeson, Better Off Stateless: Somalia Before and After Government Collapse and History of Somalia (1991–2006).

You’ll also encounter people who argue that some countries are poor because they have no natural resources. But there are many countries with few natural resources that have economic freedom and a high standard of living. Most countries that are poor are that way because they are run by corrupt governments that have no respect for economic freedom, and follow policies that stifle it.

Some will argue that economic freedom means the freedom to pollute the environment. But it is in wealthy countries that the environment is respected. Poor countries, where people are struggling just to find food for each day, don’t have the time or wealth to be concerned about the environment.

WichitaLiberty.TV December 29, 2013

WichitaLiberty.TV.20

In this episode of WichitaLiberty.TV: Are Kansas school leaders being honest with schoolchildren and parents regarding Kansas school test scores? Then: Walter Williams on greed. Finally: Do we have too many laws? A look at the problem of overcriminalization. Episode 24, broadcast December 29, 2013. View below, or click here to view at YouTube.

In Wichita, ‘free markets’ used to justify business welfare

Wichita City HallIncredibly, a prominent Wichita business uses the free market to justify its request for economic development incentives. A gullible city council buys the argument.

At the December 10, 2013 meeting of the Wichita City Council, Bombardier LearJet received an economic development incentive that will let it avoid paying some property taxes on newly-purchased property. The amount involved in this particular incident is relatively small. According to city documents, “the value of the abated taxes on that investment could be as much as $1,980.”

(Bombardier receives millions each year in other government subsidies; see Kansas PEAK program: corporate welfare wrapped in obfuscation and Bombardier Learjet should pay just a little for examples.)

While the amount of the incentive granted in the December 10 action is small, the meeting was useful in letting us understand how some prominent members of Wichita’s business community have distorted the principles of free markets and capitalism. As illustrated by the fawning of Wichita City Council Member and Vice Mayor Pete Meitzner (district 2, east Wichita) and others, elected officials have long forsaken these ideas.

Bombardier’s argument

Don Pufahl, who is Director of Finance at Bombardier Learjet, addressed the council regarding this matter. He started his remarks on a positive note, telling the council “There are various aspects to a free-market economy. There’s the rule of law, there’s property rights, and another major aspect is incentives.”

We must be careful when using the term incentive. In a free-market economy or capitalism, incentive refers to the motivation of the possibility of earning profits. Another incentive — the flip side of the same coin — is avoiding losses. That’s why capitalism is called a profit-and-loss system. The losses are just as important as profits, as losses are a signal that the economic activity is not valued, and the resources should be shifted to somewhere else where they are valued more highly.

But in the field of economic development as practiced by government, incentive means something given to or granted to a company. That’s what the representative from Bombardier meant by incentive. He explained: “One party, in this case, the local government, uses incentives for another party, in this case our company, to invest in the community.”

A few thoughts: First, Bombardier is not investing in the community. The company is investing in itself.

Second, the free market system that the speaker seemed to praise is a system based on voluntary exchange. That flows from property rights, which is the fundamental idea that people own themselves and the product of their labor, and are free to exchange with others, or to not exchange. But when government uses incentives, many people do not consent to the exchange. That’s not a free market system.

Third, an important part of a free market system is market competition. That is, business firms compete with others for customers. They also compete with other business firms for resources needed for production, such as capital. When government makes these decisions instead of markets, we don’t have a free market system. Instead, we have cronyism. Charles G. Koch has described the harm of cronyism, recently writing: “The effects on government are equally distorting — and corrupting. Instead of protecting our liberty and property, government officials are determining where to send resources based on the political influence of their cronies. In the process, government gains even more power and the ranks of bureaucrats continue to swell.”

In the same article Koch wrote: “We have a term for this kind of collusion between business and government. It used to be known as rent-seeking. Now we call it cronyism. Rampant cronyism threatens the economic foundations that have made this the most prosperous country in the world.” (Charles G. Koch: Corporate cronyism harms America)

The representative from Bombardier also said that the city’s incentives would reduce Bombardier’s investment risk. There is little doubt this is true. What has happened, however, is that the risk has not been eliminated or reduced. It has merely been shifted to the people of Wichita, Sedgwick County, the Wichita public school district, and the State of Kansas. When government does this on a piecemeal basis, this is called cronyism. When done universally, we call this socialism.

We can easily argue that actions like this — and especially the large subsidies granted to Bombardier the by state — increase the risk of these investments. Since the subsidies reduce the cost of its investment, Bombardier may be motivated to make risky investments that it might otherwise not make, were it investing its own funds (and that of its shareholders).

The cost of Bombardier’s investments, and the accompanying risk, is spread to a class of business firms that can’t afford additional cost and risk. These are young startup firms, the entrepreneurial firms that we need to nurture in order to have real and sustainable economic growth and jobs. But we can’t identify these. We don’t know who they are. But we need an economic development strategy that creates an environment where these young entrepreneurial firms have the greatest chance to survive. (See Kansas economic growth policy should embrace dynamism and How to grow the Kansas economy.)

Now the city and Bombardier will say that these investments have a payoff for the taxpayer. That is, if Bombardier grows, it will pay more in taxes, and that constitutes “profit” for taxpayers. Even if we accept that premise — that the city “profits” from collecting taxes — why do we need to invest in Bombardier in order to harvest its “profits” when there are so many companies that pay taxes without requiring subsidy?

Finally, the representative from Bombardier said that these incentives are not a handout. I don’t see how anyone can say that and maintain a straight face.

wichita-chamber-job-growth-2013-12
It would be one thing if the Wichita area was thriving economically. But it isn’t. We’re in last place among our self-identified peers, as illustrated in Wichita and Visioneering peers job growth. Minutes from a recent meeting of Greater Wichita Economic Development Coalition, the primary organization in charge of economic development, holds this paragraph: “As shown in the Chart below Wichita economy suffered the largest loss of employment among peer cities and has not seen any signs of rebounding as the other communities have. Wichita lost 31,000 jobs during the recession principally due to the down turn in general aviation.”

Following is a fuller representation of the Bombardier representative’s remarks to the council.

There are various aspects to a free-market economy. There’s the rule of law, there’s property rights, and another major aspect is incentives.

One party, in this case, the local government, uses incentives for another party, in this case our company, to invest in the community.

As the company moves forward to invest in the community, those investments are not without risk. … Your incentives allow us to offset some of that risk so that we can move forward with those investments, which hopefully create new jobs and also then also improves the quality of life in our community. … These incentives are not a handout. They are a way that the local government uses such things to offset some of the risk that is involved in local companies as they invest in the community, bring jobs to the community, and improve the community overall.


Get Microsoft Silverlight

Walter Williams: How to do good

From September 2011.

Thursday’s lecture in Wichita by economist Walter Williams featured a section covering how greed, or what some call enlightened self-interest, is the best way to produce good acts.

This lecture was presented by the Bill of Rights Institute and underwritten by the Fred and Mary Koch Foundation.

When government is used in an attempt to do good, it requires either elimination or attenuation of private property and market forces, Williams told the audience. But it is private property and the desire by people for more that motivates people to do the difficult and laborious things that benefit their fellow man. It all happens without government. In fact, government involvement in the market reduces the motivation of people to acquire, protect, and improve private property.

Here’s a transcript of Williams explaining how this works:

But do-gooders fail to realize that most good done in the world is not done in the name of good.

If you were to ask me “Williams, what’s that human motivation that gets wonderful things done? What’s the human motivation that you like?” I tell them greed. I love greed.

I’m not talking about ripping off people, fraud, and misrepresentation. I’m talking about people trying to get as much as they can for themselves. Now consider the following, because a lot of people don’t understand greed.

Last winter we had Texas cattle ranchers getting up in the dead of winter, running down stray cattle and trying to feed them, making a huge personal sacrifice to make sure New Yorkers had beef on their shelves.

This summer we had Idaho potato farmers getting up in the morning, doing back-breaking work, sun beating down on them, bugs biting them, making this personal sacrifice so that New Yorkers would also have potatoes.

Now, why do you think they’re doing that? Do you think they’re doing that because they love New Yorkers? They may hate New Yorkers — I’m not that wild about New Yorkers myself — but they make sure beef and potatoes get to New York every single day of the week.

Why? Because they love themselves. They’re trying to get more for themselves. And this is what Adam Smith was talking about in The Wealth of Nations: That the public good is served best by the private interest. That is, by people trying to get more for themselves. And in the free market, in order to get more for yourself, you have to find ways to please your fellow man, to make your fellow man happy.

How much beef and potatoes do you think New Yorkers would have if it all depended on human love and kindness? I’d be worried about New Yorkers.

Let me give you another example. Some people tell me “Well Williams, instead of saying greed, you’re trying to win friends and influence people, why don’t you say enlightened self-interest?” Well, that’s okay, but I like greed instead.

Let me give you another example of the virtue of self interest and private property. I have often said that I don’t care much about future generations. Some people think that’s awful. People have sometimes asked “Williams, why don’t you care about future generations?” And I ask “What have future generations ever done for me?”

I mean, some kid being born in 2050, what has he done for me? And if he has not done anything for me, how then am I obliged to do anything for him? Where is the quid pro quo?

But however, if you watch my actual behavior, my behavior would belie that sentiment.

I have a very nice house and property in Valley Forge, Pennsylvania. Several years ago I took $400 that I could have used to buy two bottles of Chateau d’Yquem Sauterne wine and selfishly enjoyed it all by myself, but instead I planted some trees on my property.

Now when those trees reach full maturity, I’ll be dead. There will be some 2050 kid swinging in my trees. Mrs. Williams, who is now departed, made extensive improvements to our house — built a big sunroom — with my money of course. That sunroom is going to outlast both of us, and there’s going to be some 2050 kid tracking mud in my sunroom.

If you ask the question “why did I make those sacrifices of current consumption to produce something that’s going to benefit somebody in 2050,” the answer’s very easy: The nicer my house is, the longer it will provide housing services, and the higher the price I get when I go to sell it.

That is, by pursing my own narrow selfish interest, I can’t help but make a house available for future generations, whether I mean to or not.

Now, would I have the same incentives if the government owned my house? Would I have the same incentives if there were a 75 percent transfer tax when I went to sell my house? Whatever weakens my private property rights interest in that house, weakens my incentive to do the socially responsible thing, namely, conserve on the scare resources of our society.

Let me give you one other example. … I was listening to NPR, a number of years ago, and people were picketing the UN because they were concerned about the extinction of the giraffe, the gorilla, and the lion. So I wrote down a list of animals that people were in a tizzy over the possibility of their becoming extinct.

Then I wrote down another list of animals, very valuable to us, but people are not worried about them. I said “How come people are not marching for the chicken? Why are people not forming save the pig clubs?”

What’s the difference between these two lists of animals? The essential difference is that with this list of animals — cows, chickens, and pigs — they belong to somebody. Somebody’s personal private interest is at stake. But this other list of animals — they don’t belong to anybody. Nobody’s personal private wealth is at stake. If you’re concerned about the extinction of various animals, I would recommend trying to privatize them.

Economic freedom improves our lives

economic-chart-upwards-01Economic freedom, in countries where it is allowed to thrive, leads to better lives for people as measured in a variety of ways. This is true for everyone, especially for poor people.

This is the message presented in a short video based on the work of the Economic Freedom of the World report, which is a project of Canada’s Fraser Institute. Two years ago Robert Lawson, one of the authors of the Economic Freedom of the World report, lectured in Wichita on this topic. The current video is made possible by the Charles G. Koch Charitable Foundation.

One of the findings highlighted in the presentation is that while the average income in free countries is much higher than that in the least-free countries, the ratio is even higher for the poorest people in these countries. This is consistent with the findings that economic freedom is good for everyone, and even more so for those with low incomes.

Civil rights, a clean environment, long life expectancy, low levels of corruption, less infant mortality, less child labor, and lower unemployment are all associated with greater levels of economic freedom.

What are the components or properties of economic freedom? The presentation lists these:

  • Property rights are protected under an impartial rule of law.
  • People are free to trade with others, both within and outside the country.
  • There is a sound national currency, so that peoples’ money keeps its value.
  • Government stays small, relative to the size of the economy.

Over the last eleven years, the United States’ ranking has fallen relative to other countries, and the presentation says our position is expected to keep falling. The question is asked: “Will our quality of life fall with it?”

Economic freedom is not necessarily the platform of any single political party. It should be noted that for about eight of the past twelve years — a period in which our economic freedom has been falling — there was a Republican president, sometimes with a Republican Congress. The size of government rose. In 2005 the Cato Institute studied the numbers and found that “All presidents presided over net increases in spending overall, though some were bigger spenders than others. As it turns out, George W. Bush is one of the biggest spenders of them all. In fact, he is an even bigger spender than Lyndon B. Johnson in terms of discretionary spending.” This was before the spending on the prescription drug program had started.

Critics of economic freedom

The defining of what economic freedom means is important. Sometimes you’ll see people write things like “Bernie Madoff was only exercising his personal economic freedom while he ran his investment firm.” Madoff, we now know, was a thief. He stole his clients’ money. That’s contrary to property rights, and therefore contrary to economic freedom.

Or, you’ll see people say if you don’t like government, go to Somalia. That country, one of the poorest in the world — but not the poorest — is used as an example of how bad anarchy is as a form of government. The evidence is, however, that Somalia’s former government was so bad that things improved after the fall of that government. See Peter T. Leeson, Better Off Stateless: Somalia Before and After Government Collapse and History of Somalia (1991–2006).

You’ll also encounter people who argue that some countries are poor because they have no natural resources. But there are many countries with few natural resources that have economic freedom and a high standard of living. Most countries that are poor are that way because they are run by corrupt governments that have no respect for economic freedom, and follow policies that stifle it.

Some will argue that economic freedom means the freedom to pollute the environment. But it is in wealthy countries that the environment is respected. Poor countries, where people are struggling just to find food for each day, don’t have the time or wealth to be concerned about the environment.

The real free lunch: Markets and private property

As we approach another birthday of Milton Friedman, here’s his article where he clears up the authorship of a famous aphorism, and explains how to really get a free lunch. Based on remarks at the banquet celebrating the opening of the Cato Institute’s new building, Washington, May 1993.

I am delighted to be here on the occasion of the opening of the Cato headquarters. It is a beautiful building and a real tribute to the intellectual influence of Ed Crane and his associates.

I have sometimes been associated with the aphorism “There’s no such thing as a free lunch,” which I did not invent. I wish more attention were paid to one that I did invent, and that I think is particularly appropriate in this city, “Nobody spends somebody else’s money as carefully as he spends his own.” But all aphorisms are half-truths. One of our favorite family pursuits on long drives is to try to find the opposites of aphorisms. For example, “History never repeats itself,” but “There’s nothing new under the sun.” Or “Look before you leap,” but “He who hesitates is lost.” The opposite of “There’s no such thing as a free lunch” is clearly “The best things in life are free.”

And in the real economic world, there is a free lunch, an extraordinary free lunch, and that free lunch is free markets and private property. Why is it that on one side of an arbitrary line there was East Germany and on the other side there was West Germany with such a different level of prosperity? It was because West Germany had a system of largely free, private markets — a free lunch. The same free lunch explains the difference between Hong Kong and mainland China, and the prosperity of the United States and Great Britain. These free lunches have been the product of a set of invisible institutions that, as F. A. Hayek emphasized, are a product of human action but not of human intention.

At the moment, we in the United States have available to us, if we will take it, something that is about as close to a free lunch as you can have. After the fall of communism, everybody in the world agreed that socialism was a failure. Everybody in the world, more or less, agreed that capitalism was a success. The funny thing is that every capitalist country in the world apparently concluded that therefore what the West needed was more socialism. That’s obviously absurd, so let’s look at the opportunity we now have to get a nearly free lunch. President Clinton has said that what we need is widespread sacrifice and concentrated benefits. What we really need is exactly the opposite. What we need and what we can have — what is the nearest thing to a free lunch — is widespread benefits and concentrated sacrifice. It’s not a wholly free lunch, but it’s close.

Let me give a few examples. The Rural Electrification Administration was established to bring electricity to farms in the 1930s, when about 80 percent of the farms did not have electricity. When 100 percent of the farms had electricity, the REA shifted to telephone service. Now 100 percent of the farms have telephone service, but the REA goes merrily along. Suppose we abolish the REA, which is just making low-interest loans to concentrated interests, mostly electric and telephone companies. The people of the United States would be better off; they’d save a lot of money that could be used for tax reductions. Who would be hurt? A handful of people who have been getting government subsidies at the expense of the rest of the population. I call that pretty nearly a free lunch.

Another example illustrates Parkinson’s law in agriculture. In 1945 there were 10 million people, either family or hired workers, employed on farms, and the Department of Agriculture had 80,000 employees. In 1992 there were 3 million people employed on farms, and the Department of Agriculture had 122,000 employees.

Nearly every item in the federal budget offers a similar opportunity. The Clinton people will tell you that all of those things are in the budget because people want the goodies but are just too stingy to pay for them. That’s utter nonsense. The people don’t want those goodies. Suppose you put to the American people a simple proposition about sugar: We can set things up so that the sugar you buy is produced primarily from beets and cane grown on American farms or so the sugar in addition comes without limit from El Salvador or the Philippines or somewhere else. If we restrict you to home-grown sugar, it will be two or three times as expensive as if we include sugar from abroad. Which do you really think voters would choose? The people don’t want to pay higher prices. A small group of special interests, which reaps concentrated benefits, wants them to, and that is why sugar in the United States costs several times the world price. The people were never consulted. We are not governed by the people; that’s a myth carried over from Abraham Lincoln’s day. We don’t have government of the people, by the people, for the people. We have government of the people, by the bureaucrats, for the bureaucrats.

Consider another myth. President Clinton says he’s the agent of change. That is false. He gets away with saying that because of the tendency to refer to the 12 Reagan-Bush years as if they were one period. They weren’t. We had Reaganomics, then Bushonomics, and now we have Clintonomics. Reaganomics had four simple principles: lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy. Though Reagan did not achieve all of his goals, he made good progress. Bush’s policy was exactly the reverse of Reaganomics: higher tax rates, more regulation, more government spending. What is Clinton’s policy? Higher tax rates, more regulation, more government spending. Clintonomics is a continuation of Bushonomics, and we know what the results of reversing Reaganomics were.

On a more fundamental level, our present problems, both economic and noneconomic, arise mainly from the drastic change that has occurred during the past six decades in the relative importance of two different markets for determining who gets what, when, where, and how. Those markets are the economic market operating under the incentive of profit and the political market operating under the incentive of power. In my lifetime the relative importance of the economic market has declined in terms of the fraction of the country’s resources that it is able to use. And the importance of the political, or government, market has greatly expanded. We have been starving the market that has been working and feeding the market that has been failing. That’s essentially the story of the past 60 years.

We Americans are far wealthier today than we were 60 years ago. But we are less free. And we are less secure. When I graduated from high school in 1928, total government spending at all levels in the United States was a little over 10 percent of the national income. Two-thirds of that spending was state and local. Federal government spending was about 3 percent of the national income, or roughly what it had been since the Constitution was adopted a century and a half earlier, except for periods of major war. Half of federal spending was for the army and the navy. State and local government spending was something like 7 to 9 percent, and half of that was for schools and roads. Today, total government spending at all levels is 43 percent of the national income, and two-thirds of that is federal, one-third state and local. The federal portion is 30 percent of national income, or about 10 times what it was in 1928.

That figure understates the fraction of resources being absorbed by the political market. In addition to its own spending, the government mandates that all of us make a great many expenditures, something it never used to do. Mandated spending ranges from the requirement that you pay for antipollution devices on your automobiles, to the Clean Air Bill, to the Aid for Disability Act; you can go down the line. Essentially, the private economy has become an agent of the federal government. Everybody in this room was working for the federal government about a month ago filling out income tax returns. Why shouldn’t you have been paid for being tax collectors for the federal government? So I would estimate that at least 50 percent of the total productive resources of our nation are now being organized through the political market. In that very important sense, we are more than half socialist.

So much for input, what about output? Consider the private market first. There has been an absolutely tremendous increase in our living standards, due almost entirely to the private market. In 1928 radio was in its early stages, television was a futuristic dream, airplanes were all propeller driven, a trip to New York from where my family lived 20 miles away in New Jersey was a great event. Truly, a revolution has occurred in our material standard of living. And that revolution has occurred almost entirely through the private economic market. Government’s contribution was essential but not costly. Its contribution, which it’s not making nearly as well as it did at an earlier time, was to protect private property rights and to provide a mechanism for adjudicating disputes. But the overwhelming bulk of the revolution in our standard of living came through the private market.

Whereas the private market has produced a higher standard of living, the expanded government market has produced mainly problems. The contrast is sharp. Both Rose and I came from families with incomes that by today’s standards would be well below the so-called poverty line. We both went to government schools, and we both thought we got a good education. Today the children of families that have incomes corresponding to what we had then have a much harder time getting a decent education. As children, we were able to walk to school; in fact, we could walk in the streets without fear almost everywhere. In the depth of the Depression, when the number of truly disadvantaged people in great trouble was far larger than it is today, there was nothing like the current concern over personal safety, and there were few panhandlers littering the streets. What you had on the street were people trying to sell apples. There was a sense of self-reliance that, if it hasn’t disappeared, is much less prevalent.

In 1938 you could even find an apartment to rent in New York City. After we got married and moved to New York, we looked in the apartments-available column in the newspaper, chose half a dozen we wanted to look at, did so, and rented one. People used to give up their apartments in the spring, go away for the summer, and come back in the autumn to find new apartments. It was called the moving season. In New York today, the best way to find an apartment is probably to keep track of the obituary columns. What’s produced that difference? Why is New York housing a disaster today? Why does the South Bronx look like parts of Bosnia that have been bombed? Not because of the private market, obviously, but because of rent control.

Despite the current rhetoric, our real problems are not economic. I am inclined to say that our real problems are not economic despite the best efforts of government to make them so. I want to cite one figure. In 1946 government assumed responsibility for producing full employment with the Full Employment Act. In the years since then, unemployment has averaged 5.7 percent. In the years from 1900 to 1929 when government made no pretense of being responsible for employment, unemployment averaged 4.6 percent. So, our unemployment problem too is largely government created. Nonetheless, the economic problems are not the real ones.

Our major problems are social — deteriorating education, lawlessness and crime, homelessness, the collapse of family values, the crisis in medical care, teenage pregnancies. Every one of these problems has been either produced or exacerbated by the well-intentioned efforts of government. It’s easy to document two things: that we’ve been transferring resources from the private market to the government market and that the private market works and the government market doesn’t.

It’s far harder to understand why supposedly intelligent, well-intentioned people have produced these results. One reason, as we all know, that is certainly part of the answer is the power of special interests. But I believe that a more fundamental answer has to do with the difference between the self-interest of individuals when they are engaged in the private market and the self-interest of individuals when they are engaged in the political market. If you’re engaged in a venture in the private market and it begins to fail, the only way you can keep it going is to dig into your own pocket. So you have a strong incentive to shut it down. On the other hand, if you start exactly the same enterprise in the government sector, with exactly the same prospects for failure, and it begins to fail, you have a much better alternative. You can say that your project or program should really have been undertaken on a bigger scale; and you don’t have to dig into your own pocket, you have a much deeper pocket into which to dig, that of the taxpayer. In perfectly good conscience you can try to persuade, and typically succeed in persuading, not the taxpayer, but the congressmen, that yours is really a good project and that all it needs is a little more money. And so, to coin another aphorism, if a private venture fails, it’s closed down. If a government venture fails, it’s expanded.

We sometimes think the solution to our problems is to elect the right people to Congress. I believe that’s false, that if a random sample of the people in this room were to replace the 435 people in the House and the 100 people in the Senate, the results would be much the same. With few exceptions, the people in Congress are decent people who want to do good. They’re not deliberately engaging in activities that they know will do harm. They are simply immersed in an environment in which all the pressures are in one direction, to spend more money.

Recent studies demonstrate that most of the pressure for more spending comes from the government itself. It’s a self-generating monstrosity. In my opinion, the only way we can change it is by changing the incentives under which the people in government operate. If you want people to act differently, you have to make it in their own self-interest to do so. As Armen Alchan always says, there’s one thing you can count on everybody in the world to do, and that’s to put his self-interest above yours.

I have no magic formula for changing the self-interest of bureaucrats and members of Congress. Constitutional amendments to limit taxes and spending, to rule out monetary manipulation, and to inhibit market distortions would be fine, but we’re not going to get them. The only viable thing on the national horizon is the term-limits movement. A six-year term limit for representatives would not change their basic nature, but it would change drastically the kinds of people who would seek election to Congress and the incentives under which they would operate. I believe that those of us who are interested in trying to reverse the allocation of our resources, to shift more and more to the private market and less and less to the government market, must disabuse ourselves of the notion that all we need to do is elect the right people. At one point we thought electing the right president would do it. We did and it didn’t. We have to turn our attention to changing the incentives under which people operate. The movement for term limits is one way of doing that; it’s an excellent idea, and it’s making real progress. There have to be other movements as well.

Some changes are being made on the state level. Wherever you have initiative, that is, popular referendum, there is an opportunity to change. I don’t believe in pure democracy; nobody believes in pure democracy. Nobody believes that it’s appropriate to kill 49 percent of the population even if 51 percent of the people vote to do so. But we do believe in giving everybody the opportunity to use his own resources as effectively as he can to promote his own values as long as he doesn’t interfere with anybody else. And on the whole, experience has shown that the public at large, through the initiative process, is much more attuned to that objective than are the people they elect to the legislature. So I believe that the referendum process has to be exploited. In California we have been working very hard on an initiative to allow parental choice of schools. Effective parental choice will be on the ballot this fall. Maybe we won’t win it, but we’ve got to keep trying.

We’ve got to keeping trying to change the way Americans think about the role of government. Cato does that by, among other things, documenting in detail the harmful effects of government policies that I’ve swept over in broad generalities. The American public is being taken to the cleaners. As the people come to understand what is going on, the intellectual climate will change, and we may be able to initiate institutional changes that will establish appropriate incentives for the people who control the government purse strings and so large a part of our lives.

Kansas House votes for property rights

state-historic-preservation-environs

Today the Kansas House of Representatives passed a bill that will protect property owners from harm simply because their property is near a historic property.

The bill is HB 2118, as described by its supplemental note:

HB 2118 would delete provisions related to environs restrictions from historic property reviews.

Under current law, proposed projects within 500 feet of the boundaries of a historic property located in a city or within 1,000 feet of the boundaries of a historic property located in the unincorporated portion of a county are subject to historic design and appearance restrictions.

The bill would limit historic reviews conducted under the act to proposed projects that would directly involve, damage, or destroy a property included in the National Register of Historic Places or the State Register of Historic Places.

The bill passed today by a vote of 99 to 24. Those voting against this bill — those who wish to keep the current restrictions on private property rights — were Alcala, Ballard, Becker, Bridges, Burroughs, Carlin, Crum, Davis, Dillmore, Grant, Henderson, Henry, Hill, Kuether, Lane, Meier, Pauls, Ruiz, Sloop, Tietze, Weigel, Whipple, Wilson, and Winn.

Refuting the attacks on Koch

From KochFactsTV:

What do big government politicians mean when they say, “Koch?”

Nancy Pfotenhauer of Koch Industries explains that when big government politicians say “Koch,” they’re not talking about the successful American company that employs more than 50,000 people nationwide. They’re really attacking the principles of economic freedom that Koch has advocated for more than 50 years regardless of what political party holds power.

Economic freedom means property rights protected by an impartial rule of law, the freedom to trade and exchange goods and services, sound money, and a government that promotes prosperity rather than undermine it. Economic freedom also empowers individuals not governments. That’s why entrenched politicians will rarely say the words “economic freedom.” They’d rather say, “Koch.”

But with all the pressing issues challenging our nation, shouldn’t the big government advocates in Washington be talking about something else besides us?

A second Bill of Rights, by Franklin Roosevelt

If we wonder what was the genesis of the modern nanny state, listen to this speech by Franklin Delano Roosevelt. It’s part of his State of the Union Address from 1944.

The purpose of the original Bill of Rights is to protect our freedoms from government. But to provide the things Roosevelt calls for — food, clothing, a decent home, adequate medical care, and a good education — requires an expansive government. These rights are called positive rights because they require action by the government, in contrast to the negative rights found in the Bill of Rights. Richard A. Epstein explains the consequences of the “Roosevelt Rights”:

All of these are positive rights, which means necessarily that some unidentified individuals or groups have the duty to provide decent wages, home, health, and education to the people. The individual so taxed can discharge that duty only by forfeiting his own right to reap the fruits of his own labor. Yet the incidence and size of these hefty correlative duties are left unaddressed by Roosevelt.

We are witnessing today a modern rerun of Roosevelt’s incomplete strategy. Obama’s healthcare plan, for instance, designates a generous set of “essential health benefits” to a large number of individuals entitled to affordable care on the newly created government exchanges. But these benefits cannot be funded with higher taxes on the “millionaires and billionaires,” whose combined wealth falls short of what is needed. So what duty will undergird the new right?

This sort of funding crisis could never arise under the Bill of Rights 1.0, whose correlative duties are negative — or, put another way, they impose a “keep off” sign on other people. If I have the freedom of speech, your duty is to forbear from disrupting the speech with force, and vice versa. Each of us can demand forbearance from the use of force by all others.

David Kelley elaborates further in a chapter from The Morality of Capitalism:

By contrast, welfare rights are conceived as rights to possess and enjoy certain goods, regardless of one’s actions; they are rights to have the goods provided by others if one cannot earn them oneself. Accordingly, welfare rights impose positive obligations on others. If I have a right to food, someone has an obligation to grow it. If I cannot pay for it, someone has an obligation to buy it for me. Welfarists sometimes argue that the obligation is imposed on society as a whole, not on any specifi c individual. But society is not an entity, much less a moral agent, over and above its individual members, so any such obligation falls upon us as individuals. Insofar as welfare rights are implemented through government programs, for example, the obligation is distributed over all taxpayers.

From an ethical standpoint, then, the essence of welfarism is the premise that the need of one individual is a claim on other individuals. The claim may run only as far as the town or the nation. It may not embrace all of humanity. But in all versions of the doctrine, the claim does not depend on your personal relationship to the claimant, or your choice to help, or your evaluation of him as worthy of your help. It is an unchosen obligation arising from the sheer fact of his need.

Kansas and Wichita quick takes: Thursday May 17, 2012

Watchdog reporter at Pachyderm. This Friday (May 18th) the Wichita Pachyderm Club features Paul Soutar, Reporter for Kansas Watchdog, speaking on “The evolution of journalism and how the new media empowers citizens.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … The club has an exceptional lineup of future speakers as follows: On May 25th: Ron Estes, State Treasurer of Kansas, speaking on “A report from the Kansas Treasurer.” … On June 1st: Gary Oborny, Chairman/CEO Occidental Management and Real Estate Development, CCIM Designated member of the Storm Water Advisory Board to the City of Wichita, speaking on “What is the economic impact of EPA mandates on storm water quality in Wichita?”

Kansas senators vote for cronyism. Veronique de Rugy explains the harm of the Export-Import Bank of the United States in Why Would Anyone be Against the Export-Import Bank? “First, the Ex-Im Bank is nothing more than corporate welfare. This is an agency that is in the business of subsidizing private companies with taxpayer dollars. … An excellent paper by Cato Institute’s trade analyst Sallie James exposes just how unseemly, inefficient, and irrelevant the Export-Import Bank is. As James explains, the Bank not only picks winners and losers by guaranteeing the loans of private companies, but it also introduces unfair competition for all the U.S. firms that do not benefit from such special treatment.” The bill is H.R. 2072: Export-Import Bank Reauthorization Act of 2012. Both Kansas senators Jerry Moran and Pat Roberts voted for this bill. So did U.S. Representative Kevin Yoder of the Kansas third district. But Representatives Tim Huelskamp, Lynn Jenkins, and Mike Pompeo voted against it.

Koch = big oil? Politico: “The Koch brothers have an unlikely ally in the war of words with their liberal adversaries: the nation’s journalistic fact-checkers. Both The Washington Post’s Fact Checker blog and the nonpartisan site FactCheck.org have dinged critics of David and Charles Koch in recent weeks for referring to the billionaire brothers as Big Oil. Why? Because Koch Industries’ business interests extend well beyond the company’s involvement in petroleum refining and other oil-based operations. And while no corporate midget, the company isn’t anywhere near as big as true oil giants like ExxonMobil. ‘So even if all of Koch Industries’ revenues came from its refining business — which they do not — they would still be a fraction of the revenues of the companies that actually represent ‘Big Oil,” the FactCheck.org critique read.” More at Fact-checkers and Kochs’ ‘Big Oil’. Another example of how facts don’t get in the way of Koch critics. Or try For New York Times, facts about Kochs don’t matter.

Economic freedom. Why does the political left criticize Charles and David Koch? In the following video from last year, Koch Industries CEO and board chairman Charles G. Koch explains the principles of economic freedom, something that he and David Koch have worked to advance for many years. These principles, according to Koch, include private property rights, impartial rule of law, free trade, sound money which reduces boom and bust cycles, and a small and limited government. These principles are good for everyone, I should add, including those currently at the bottom of the economic ladder.

We aren’t Greece … yet. “Once again, Greece finds the international community questioning its ability to pay its debts. Default and an exit from the Euro Zone (or countries which share the Euro as a common currency) threatens on the horizon. Here in the U.S., we face high debts and have a lowered credit rating due to Washington’s inability to agree on deficit reduction. Just how alike are our two nations?” An infographic from Bankrupting America explains.


Bankrupting America

Walter Williams on government in a free society

Walter E.
Williams

Last September in Wichita economist Walter E. Williams spoke on the legitimate role of government in a free society, touching on the role of government as defined in the Constitution, the benefits of capitalism and private property, and the recent attacks on individual freedom and limited government.

Williams’ evening lecture was held in the Mary Jane Teall Theater at Century II, and all but a handful of its 652 seats were occupied. It was presented by the Bill of Rights Institute and underwritten by the Fred and Mary Koch Foundation.

Williams said that one of the justifications for the growth of government — far beyond the visions of the founders of America — is to promote fairness and justice. While these are worthy goals, Williams said we must ask what is the meaning of fairness and justice, referring to the legitimate role of government in a free society.

In the Constitution, Williams said the founders specified the role of the federal government in Article 1 Section 8. This section holds a list that enumerates what Congress is authorized to do. If something is not on the list, Williams said Congress is not authorized to do it.

The Article 8 powers that Williams mentioned are to lay and collect taxes, duties, imposts, and excises; to pay the debts and provide for the common defense and general welfare of the United States; to borrow money on the credit of the United States; to coin money; to establish post-offices and post-roads; and to raise and support armies. It is regarding these powers, plus a few others, that Congress has taxing and spending authority. “Nowhere in the United States Constitution to we find authority for Congress to tax and spend for up to two-thirds to three-quarters of what Congress taxes and spends for today.”

Farm subsidies, handouts to banks, and food stamps are examples Williams gave of programs that are not authorized by the Constitution. “I think that we can safely say that we’ve made a significant departure from the constitutional principles of individual freedom and limited government that made us a rich nation in the first place.”

The institutions of private property and free enterprise are the embodiment of these principles, Williams said. But there have been many successful attacks on private property and free enterprise. Thomas Jefferson, Williams said, anticipated this when he wrote “The natural progress of things is for government to gain ground, and for liberty to yield.”

Taxation and spending are the ways government has gained ground. Taxes represent government claims on private property.

But an even better measure of what government has done is to look at spending. From 1787 to 1920, federal spending was only three percent of gross domestic product, except during wartime. Today, that figure is approaching 30 percent, Williams said: “The significance is that as time goes by, you and I own less and less of our most valuable property, namely ourselves and the fruits of our labor.”

In the realm of economics, Williams said that the founders thought that free markets and capitalism was the most effective social organization for promoting freedom, with capitalism defined as a system where people are free to pursue their own objectives as long as they do not violate the property rights of others. An often-trivialized benefit of capitalism and voluntary exchange is that it minimizes the capacity of one person to coerce another, he told the audience. This applies to the government, too.

But for the last half-century, Williams said that free enterprise has been under unrelenting attack by the American people. Whether they realize it or not, people have demonstrated a “deep and abiding contempt” for private property rights and individual liberty.

Williams said that ironically, capitalism is threatened not because of its failure, but because of its success. Capitalism has eliminated things that plagued mankind since the beginning of time — he mentioned disease, gross hunger, and poverty — and been so successful that “all other human wants appear to us to be at once inexcusable and unbearable.”

So now, in the name of ideals other than freedom and liberty, we pursue things like equality of income, race and sex balance, affordable housing, and medical care. “As a result of widespread control by our government in order to achieve these higher objectives, we are increasingly being subordinated to the point where personal liberty in our country is treated like dirt.”

This ultimately leads to tyranny and totalitarianism, he said. To those who might object to this strong and blunt conclusion, Williams asked this question: “Which way are we headed, tiny steps at a time: towards more liberty, or towards more government control of our lives?” He said that the answer, unambiguously, is the latter.

It is the tiny steps that concern Williams, as they ultimately lead to their destination. Quoting Hume, he said “It is seldom that liberty of any kind is lost all at once.” Instead, Williams said it is always lost bit by bit. If anyone wanted to take away all our liberties all at once, we would rebel. But not so when liberties are taken bit by bit, which is what is currently happening.

It is people’s desire for government to do good — helping the disadvantaged, elderly, failing businesses, college students — that leads to the attack on private property and economic freedom. But Williams explained that government has no resources of its own, meaning that for government to give one person money it must first — “through intimidation, threats, and coercion” — confiscate it from someone else.

Williams told the audience that if a private person used coercion to take money from someone and give it to another person, that act would universally be considered theft and a crime. It doesn’t matter how needy or deserving the recipient, it would still be theft. But Williams asked if there is any conceptual difference between that act and when agents of the government do the same. Williams says no, except that in the second act, where Congress takes the money, the theft is legal.

But mere legality doesn’t not make something moral. Slavery was legal in America for many years, but not moral. The purges of Stalin and Mao were legal under the laws of those countries. So legality does not equate to morality, Williams explained, and he said he cannot find a moral case for taking what belongs to one person and giving it to another to whom it does not belong.

Charity is “praiseworthy and laudable” when it is voluntary, but it is worthy of condemnation when government reaches into others’ pockets for charity. Those who accept the forced takings are guilty, too, he explained.

“The essence of our relationship with government is coercion,” Williams told the audience. This, he said, represents our major problem as a nation today: We’ve come to accept the idea of government taking from one to give to another. But the blame, Williams said, does not belong with politicians — “at least not very much.” Instead, he said that the blame lies with us, the people who elect them to office in order to get things for us. A candidate who said he would do only the things that the Constitution authorizes would not have much of a chance at being elected.

The further problem is that if Kansans don’t elect officials who will bring federal dollars to Kansas, it doesn’t mean that Kansans will pay lower federal taxes. The money, taken from Kansans, will go to other states, leading to this conundrum: “That is, once legalized theft begins, it pays for everybody to participate.”

We face a moral dilemma, then. Williams listed several great empires that declined for doing precisely what we’re doing: “Bread and circuses,” or big government spending.

But there is a note — only one — of optimism, Williams believes. The first two years of the Obama administration, along with the Democratic Senate and House of Representatives, has been so brazen in their activities in “running roughshod over our liberties” that people are starting to argue and debate the Constitution. State attorneys general are bringing suits against the federal government over Obama’s health care plan. State legislatures are passing tenth amendment resolutions. The tea party and other grassroots movements give him optimism, too.

We must also ask ourselves if we are willing to give up the benefits we get from government, he said. But most people want cuts in spending on other people, not ourselves, as “ours is critical and vital to the national interest.” With all of us feeling this way, Williams said the country is in danger.

Young people have the greatest stake in the struggle for limited government and economic freedom, as the older generations have benefited from a relatively free country and the economic mobility that accompanied it. He said he’s afraid we’re losing that: “I’m hoping that future generations will not curse us for bequeathing to them a nation far less robust, far less free, than the nation that our parents and our ancestors bequeathed us.”

In answering a question from the audience, Williams said he would be afraid of a constitutional convention to be held today, as some are advocating. We wouldn’t be sending people like John Adams. Instead, he said we’d be sending people like Barney Frank and others who have “deep contempt” for personal freedom.

In response to a question on regulation, Williams said that regulations like health care and uncertainty over taxation cause businesses to be afraid to commit money to long term investments. Uncertainty “collapses the time horizon” causing firms to look for investments that pay off in the short term rather than the long term. This contributes to unemployment, he said.

Williams also talked about the economic history of America. From its beginning to 1930, there were recessions and depressions, but there were not calls for the federal government to intervene and stimulate the economy. It wasn’t until the Hoover administration and the New Deal that the federal government intervened in the economy in order to “fix” the economy. Williams said that what should have been a “sharp two or three-year downtown” was turned in to the Great Depression — which was not over until after World War II — by government intervention. The measures being taken today are similarly postponing the recovery, he said. He added that most serious economic downturns are caused by government. It’s also futile for the government to spend the country out of a recession, which he likened to taking water from the deep end of a pool to the shallow end in order to raise the level of the shallow end. Government taking money from one person, giving it to another, and expecting the economy to rise is similarly futile.

A question about mainstream media and their representation of the issues of today brought this response: “You have to make the assumption, I believe implied in your question, that those people are ignorant, and if only they knew better, they would change their behavior. Human ignorance is somewhat optimistic, because ignorance is curable through education. I’m very sure that many of these people want government control. The elite have always wanted government control, and the media was very responsible in getting President Obama elected.”

In an interview, I asked what President Obama should say in his jobs speech. Williams recommended the president should reduce regulation and lower taxes, especially capital gains and corporate income taxes. The spending programs of the past will not help. But Obama’s constituency will not favor this approach. The spending on roads and bridges benefits labor unions, for example.

On those who accept who accept and benefit from government spending, Williams said that “one of the tragedies of our nation” is that the growth of government has turned otherwise decent people into thieves, because they participate in the taking of what belongs to someone else. But because of the pervasiveness of government, sometimes this is unavoidable.

I asked do we need better politicians — ones who will work to limit government — or do we need different rules such as a balanced budget amendment or spending constraints? Williams said that the bulk of the blame lies with the people, as politicians are simply doing what voters ask them to do. “The struggle is to try to convince our fellow Americans on the moral superiority of liberty and its main ingredient, limited government.” Politicians will then follow, he added.

I asked if we’ve passed some sort of tipping point, where people look first to government rather than voluntary exchange through markets. He said perhaps so, and mentioned another problem: Close to 50 percent of Americans pay no federal income tax. These people become natural constituents for big-spending politicians. As they pay no taxes — “no stake in the game” — they don’t care if taxes are raised or lowered.

On the issue of the subsidy being poured into downtown Wichita, Williams said the issue is an example of the “seen and unseen” problem identified by Frederic Bastiat. We easily see the things that government taxation and intervention builds, such as a convention center. But what is not easily seen is what people would have done with the money that was taken from them through taxation. While the money taken from each person may be small, it adds up.

On government funding for arts, an issue in Kansas at this time, Williams said that it ought to be an insult to artists that their work has to be funded through government forcing people to pay, as opposed to voluntary payments.

Born in Philadelphia, Pennsylvania, Dr. Walter E. Williams holds a B.A. in economics from California State University, Los Angeles, and M.A. and Ph.D. degrees in economics from UCLA. He has served on the faculty of George Mason University in Fairfax, Virginia, as John M. Olin Distinguished Professor of Economics, since 1980. His website is Walter Williams Home Page.

Kansas and Wichita quick takes: Monday March 26, 2012

Pachyderms to feature talk on sustainable development. This Friday (March 30rd) the Wichita Pachyderm Club features Tom DeWeese, President, American Policy Center, speaking on U.N. Agenda 21: Sustainable Development. Tom DeWeese is one of the nation’s leading advocates of individual liberty, free enterprise, private property rights, personal privacy, back-to-basics education and American sovereignty and independence. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … The club has an exceptional lineup of future speakers as follows: On April 6th: Jordan A. Poland, who will discuss his Master of Arts thesis in Public History at Wichita State University, titled “A case study of Populism in Kansas. The election of Populist Governor Lorenzo Lewelling from Wichita, and the Legislative War of 1893.” … On April 13th: Alvin Sarachek, Ph.D., Geneticist, Distinguished Professor Emeritus of Natural Sciences at Wichita State University, speaking on “Human Genetic Individuality and Confused Public Policy Making.” … On April 20th: Senator Steve Morris, President of the Kansas Senate, speaking on “Legislative update.” … On April 27th: Dr. Malcolm C. Harris, Sr., Professor of Finance, Friends University, speaking on “The Open Minded Roots of American Exceptionalism, and the Decline of America’s Greatness.”

PPACAction. That is, where should you go to keep up with action surrounding PPACA, commonly known as Obamacare, as the legislation is argued before the U.S. Supreme Court this week? Try PPACAction, a project of Texas Public Policy Foundation. Also featured on the site is Experts’ Guide to the Issues.

The seven rules of bureaucracy. In this article, authors Loyd S. Pettegrew and Carol A. Vance quote Thomas Sowell: “When the government creates some new program, nothing is easier than to show whatever benefits that program produces. … But it is virtually impossible to trace the taxes that paid for the program back to their sources and to show the alternative uses of that same money that could have been far more beneficial.” In order to understand the foundation of America’s morass, we must examine bureaucracy. At the root of this growing evil is the very nature of bureaucracy, especially political bureaucracy. French economist Frédéric Bastiat offered an early warning in 1850 that laws, institutions, and acts — the stuff of political bureaucracy — produce economic effects that can be seen immediately, but that other, unforeseen effects happen much later. He claimed that bad economists look only at the immediate, seeable effects and ignore effects that come later, while good economists are able to look at the immediate effects and foresee effects, both good and bad, that come later. … Both the seen and the unseen have become a necessary condition of modern bureaucracy. (Bastiat: That Which Is Seen, and That Which Is Not Seen.) The first rule? “Maintain the problem at all costs!”

Civil society. Edward H. Crane, speaking nearly twenty years ago. I think things have become worse since then: “In a civil society you make the choices about your life. In a political society someone else makes those choices. And because it is not the natural order of things for someone other than you to make those decisions about your life, the political society is of necessity based on coercion. … Civil society, on the other hand, is based on voluntarism and predicated on giving the widest possible latitude to the individual so that he has sovereignty over his own life, so long as he respects the equal rights of others in society. It’s a simple concept, really, but a radical one nevertheless. It’s the concept on which this great nation of ours was founded and which was so revolutionary that it motivated tens of millions of people from around the globe to come here, often giving up everything, just to live in the ‘land of the free.’ … It does seem ironic that so many politicians in this country hold this curiously benign view of government as some kind of giant nanny, that will make everything okay if we just give it more money. Because as we enter the 21st century, government activities beyond its legitimate function of the protection of life, liberty, and property have pretty much been exposed as one of the great failures of civilization. Coercive, political society simply doesn’t work very well. Most people, whether they’re willing to admit it or not, know that now. There is a reason why East Germany produced the smoke- belching bucket-of-bolts Trabant, and West Germany produced the Mercedes, the BMW, the Porsche, the Audi, and the Volkswagen. Same people, same culture, different political system. Civil society worked; political society didn’t. Yet politicians in America continue to give credence to the idea that the political society can address our problems better than the institutions of the civil society. As Milton Friedman has observed, we seem to be saying that we know that socialism is a failure and that capitalism is a success, therefore we need more socialism.”

One down, 48 to go. “‘Building better communities’ was the slogan of the California Redevelopment Association. But the critics charged that redevelopment agencies ‘deprived tens of thousands of working and lower-income residents of their homes and livelihoods while granting vast subsidies to billionaires.’ In the end, the social justice questions didn’t matter, but the subsidies did, so to save the state billions of dollars a year, California redevelopment agencies shut down for good last week. … California invented TIF in 1952. Since then, 48 other states have passed similar laws. Now a pioneer in ending such crony capitalism, the Antiplanner hopes the other 48 states will soon follow California’s example. Good riddance to a waste of money that benefited few people other than a few politicians and developers.” More from Randal O’Toole at One Down, 48 to Go. O’Toole also authored the Cato Institute Policy Analysis Crony Capitalism and Social Engineering: The Case against Tax-Increment Financing.”

Economic freedom in America: The decline, and what it means. “The U.S.’s gains in economic freedom made over 20 years have been completely erased in just nine.” Furthermore, our economic freedom is still dropping, to the point where we now rank below Canada. The result is slow growth in the private sector economy and persistent high unemployment. This is perhaps the most important takeaway from a short new video from Economic Freedom Project, which is a project of the Charles Koch Institute. The video explains that faster growth in government spending causes slower growth in the private economy. This in turn has lead to the persistent high unemployment that we are experiencing today. … To view the video at the Economic Freedom Project site, click on Episode Two: Economic Freedom in America Today. Or, click on the YouTube video below.

Sustainable planning: The agenda and details

Sedgwick County Commissioner Richard Ranzau has produced a document that explains the dangers contained with the “sustainable development” movement that is spreading across the country. Recently both the City of Wichita and Sedgwick County voted to participate in a planning grant devoted to starting the implementation of this ideology that government can plan better than markets can.

In the document Ranzau writes: “Proponents of these grants often speak in general terms that make it difficult to disagree. But as they say, the devil is in the details. It is very important for you to know what they are not telling you. We all need to look beyond the fancy talk and find out what the agenda is really about. … The intent of this paper is to share information and insight about ‘sustainable development’ so that citizens and elected officials can have a more complete understanding of what the planning grants will entail and what possible consequences our communities may face if these policies are implemented.”

One of the concerns Ranzau identifies is the attack on the automobile-based suburban lifestyle that many in Wichita and the surrounding area prefer, based on their revealed choices: “One of the most important reasons to be concerned about the agenda behind these grants is the effect it could have on housing costs and property rights. Smart Growth supporters decry suburban development (single family home with a yard) as unsustainable and work to push people into high density housing (and government transportation).”

This attitude is creeping into Wichita. At a January 2010 presentation by Goody Clancy, the planning firm that developed the plan for downtown Wichita, I reported on the attitudes expressed by planners and how they believe they know what people should want, if only the people were as smart as the planners:

At a presentation in January, some speakers from Goody Clancy revealed condescending attitudes towards those who hold values different from this group of planners. One presenter said “Outside of Manhattan and Chicago, the traditional family household generally looks for a single family detached house with yard, where they think their kids might play, and they never do.

David Dixon, who leads Goody Clancy’s Planning and Urban Design division and was the principal for this project, revealed his elitist world view when he told how that in the future, Wichitans will be able to “enjoy the kind of social and cultural richness” that is only found at the core.

The document holds many links to valuable resources, a timeline of sustainable planning activities, and contact information for local officials.

Sustainable Planning Grants and UN Agenda 21

Kansas and Wichita quick takes: Wednesday December 14, 2011

Property rights in Wichita. At yesterday’s meeting of the Wichita City Council, the city approved its legislative agenda. The city incorporates the agenda of the League of Kansas Municipalities. One plank: “We support increased flexibility for local governments to use eminent domain for economic development purposes, including blight remediation, without seeking legislative approval.” Susan Estes of Americans for Prosperity appeared before the council, asking members to strike this provision, as the taking of property by eminent domain for the purposes of giving it to someone else is one of the worse violations of property rights and freedom. No council member was moved to make such a motion.

Importance of open records. In a press release from 2008, the Kansas Sunshine Coalition for Open Government noted the problems with open and transparent government in Kansas: “Kansas recently failed an open government test by the Better Government Association, an independent non-partisan government watchdog group based in Chicago. Among other things, the BGA researches solutions that promote transparency and accountability in government. ‘The threat today is real,’ said Randy Brown, executive director of the Kansas Sunshine Coalition for Open Government. ‘We are seeing closed government problems popping up around the state. Some local governments are doing well. But for Kansans who understand that open government at all levels is essential to democracy, things are getting worse, not better.’” … Yesterday the Wichita City Council provided another example in how open and transparent government is not valued.

Wichita city news. The communications staff of the City of Wichita maintains a city news and announcements page. Staff has ample time (and a half-million dollar budget) to write articles covering — in detail — when carolers will be at the airport. But substantive news that the city is opposed to — say the successful filing of a petition challenging a Wichita city ordinance — doesn’t make it on this page.

Cronyism in America. The harm of crony capitalism is explained in a short video from Economic Freedom Project. Susan Dudley says this in the video: “Crony capitalism means that your success as an entrepreneur depends less on how well you meet your customers’, and more on how well you curry favor from the government. It’s a problem because it means that valuable resources — including the best and brightest minds — are diverted from productive uses towards unproductive seeking government favors.” … In its conclusion, the video sates: “Without special protections that can only be provided by an increasingly powerful government, big businesses would have to compete to earn their profits, instead of taking them straight from taxpayers. We all agree: Businesses should succeed or fail based on the value they provide to their consumers, not based on their ability to influence the political system. And that’s what happens in a free market.” … It should be noted that the economic development policies of Wichita are firmly rooted in crony capitalism.

Kansas and Wichita quick takes: Wednesday November 23, 2011

Standing up for fundamental liberties. A particularly troubling objection that those who advocate for liberty face is that we want to deny freedom and liberty to others — as if the quantity of liberty is fixed, and I can have more only if you have less. This is the type of false accusation that leftists make against Wichita-based Koch Industries. In this excerpt from the company’s Koch Facts page, the work that Koch does to advance liberty for everyone is explained: “Throughout Koch’s long-standing record of public advocacy, we have been strong and steadfast supporters of individual liberties and freedoms. These values permeate all that we do as a company and every part of our public outreach. We help fund public and school-based educational programs across the country in an effort to increase citizens’ understanding of the relationship between economic liberty and democracy. We support voter registration efforts in the communities where we live and work, and for our tens of thousands of employees. We support civil rights programs through numerous organizations. We also help build entrepreneurial initiatives that foster the fundamental reality that economic freedom creates prosperity for everyone, especially the poor, in our society. … For many years, we have directly contributed to Urban League, Andrew Young Foundation, Martin Luther King Center, Latin American Association, 100 Black Men, Morehouse College, United Negro College Fund, and dozens of other worthy organizations pursuing similar civic missions. We founded and continue to support Youth Entrepreneurs in schools throughout Kansas, Missouri and Atlanta. This year-long course teaches high school students from all walks of life the business and entrepreneurial skills needed to help them prosper and become contributing members of society. … Many of the attacks against Koch in recent months are cynical posturing at best and deliberate falsehoods divorced from reality at worst. For proof, look no further than the false claim from groups like SEIU that we are somehow trying to suppress the right to vote. … Our freedom as individual Americans relies on the ability to hold the government accountable through the direct exercise of voting rights and the exercise of other individual liberties. We are unwavering in our commitment to these rights and we stand firmly behind our track record in defending them.”

Private property saved the Pilgrims. At Thanksgiving time, the Economic Freedom Project reminds us how an early American experiment with socialism failed miserably, and how private property rights and free enterprise saved the day. See So, Is That My Corn or Yours?

Did Grover Norquist derail the Supercommittee? To hear some analysts, you’d think that Grover Norquist of Americans for Tax Reform is responsible for no deal emerging from the United States Congress Joint Select Committee on Deficit Reduction (the “Supercommittee”). It’s ATR’s pledge to not increase taxes that is blamed, so they say. All members of the Kansas Congressional Delegation except Kevin Yoder signed the pledge. Paul Jacob is thankful for Norquist and that a tax increase was averted.

Drive-through petition signing. From Americans for Prosperity, Kansas: The Wichita area chapter of the free-market grassroots group Americans for Prosperity (AFP) and other local groups have been working to collect signatures for a petition to put the hotel guest tax ordinance to a public vote. Volunteers will be collecting signatures this weekend during a “drive-thru” petition signing Friday, Saturday and Sunday at two Wichita hotels. Wichita activists are continuing their efforts to collect signatures for a petition to put the hotel guest tax ordinance to a public vote. Registered voters simply drive up to the listed locations and volunteers will bring a petition out to them. The times are from 9:00 am to 5:00 pm Friday and Saturday (Nov. 25 and 26), and 12:00 noon to 5:00 pm Sunday (Nov. 27). The locations are Wichita Inn East (8220 E. Kellogg Dr.) and Best Western Airport Inn (6815 W. Kellogg/US-54).

Job creation. Governments often fall prey to the job creation trap — that the goal of economic development is to create jobs. We say this today in Wichita where several labor union leaders appeared before the Sedgwick County Commission to encourage the county to grant a subsidy to Bombardier Learjet. The labor leaders, naturally, pleaded for jobs. To them, and to most of our political and bureaucratic leaders, the more jobs created, the better. Our business leaders don’t do any better understanding the difference between capitalism and business. In his introduction to the recently-published book The Morality of Capitalism, Tom G. Palmer writes: “Capitalism is not just about building stuff , in the way that socialist dictators used to exhort their slaves to ‘Build the Future!’ Capitalism is about creating value, not merely working hard or making sacrifices or being busy. Those who fail to understand capitalism are quick to support ‘job creation’ programs to create work. They have misunderstood the point of work, much less the point of capitalism. In a much-quoted story, the economist Milton Friedman was shown the construction on a massive new canal in Asia. When he noted that it was odd that the workers were moving huge amounts of earth and rock with small shovels, rather than earth moving equipment, he was told ‘You don’t understand; this is a jobs program.’ His response: ‘Oh, I thought you were trying to build a canal. If you’re seeking to create jobs, why didn’t you issue them spoons, rather than shovels?” … After describing crony capitalism — the type practiced in Wichita, Sedgwick County, and Kansas, with deals like the complete funding by taxpayers of the Bombardier LearJet facility, Palmer explains: “Such corrupt cronyism shouldn’t be confused with ‘free-market capitalism,’ which refers to a system of production and exchange that is based on the rule of law, on equality of rights for all, on the freedom to choose, on the freedom to trade, on the freedom to innovate, on the guiding discipline of profits and losses, and on the right to enjoy the fruits of one’s labors, of one’s savings, of one’s investments, without fearing confiscation or restriction from those who have invested, not in production of wealth, but in political power.”

Experts. David Freedman and John Stossel discuss experts, our reliance on them, the political advocacy that’s often involved, and how often experts are wrong.

Economic freedom in America: The decline, and what it means

“The U.S.’s gains in economic freedom made over 20 years have been completely erased in just nine.” Furthermore, our economic freedom is still dropping, to the point where we now rank below Canada. The result is slow growth in the private sector economy and persistent high unemployment.

This is perhaps the most important takeaway from a short new video from Economic Freedom Project, which is a project of the Charles Koch Institute.

What are the components or properties of economic freedom? These are the factors:

  • The size of government based on expenditures and taxes.
  • Whether property rights are protected under an impartial rule of law.
  • Whether there is a sound national currency, so that peoples’ money keeps its value.
  • Whether people are free to trade with others, both within and outside the country.
  • The regulation of credit, labor, and business.

Economic freedom is associated with longer lifespans and a higher standard of living, says the video. Excessive government spending and unnecessary regulation are two primary causes for the decline in economic freedom.

A press release accompanying the video explains the harm government is causes when it destroys economic freedom: “The video illustrates how excessive government spending and regulations are eroding economic freedom in the United States, hampering the growth of the economy and leading to record-breaking unemployment. To make this relationship more tangible to viewers, the video translates current statistics into concrete effects that have a direct impact on viewers’ lives. For example, the video notes the fact that it costs U.S. businesses $1.75 trillion to comply with government regulations and that this money would be enough to hire 43 million workers — more than one-quarter of the U.S. work force.”

The video explains that faster growth in government spending causes slower growth in the private economy. This in turn has lead to the persistent high unemployment that we are experiencing today.

This is the second video that the Economic Freedom Project has produced. For coverage of the first, see Economic freedom leads to better lives for all, says video.

To view the video at the Economic Freedom Project site, click on Episode Two: Economic Freedom in America Today. Or, click on the YouTube video below.

Kansas and Wichita quick takes: Monday September 26, 2011

Who creates jobs? Paul Jacob of Citizens in Charge Foundation knows that it’s not government that creates jobs. It’s people that do. And, there is one presidential candidate who knows this too. This candidate said during a recent debate “The fact is I can unequivocally say that I did not create a single job while I was governor.” Read more at Who Creates Jobs?

Pompeo to address Pachyderms. This week’s meeting (September 30th) of the Wichita Pachyderm Club presents U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On October 7, John Locke — reincarnated through the miracle of modern technology — speaking on “Life, Liberty, and Property.” … On October 14, Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On October 21, N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.”

Supremes to make road trip. This week the Kansas Supreme Court will conduct sessions in Greensburg and Wichita. On Wednesday September 28th, the court will meet in the Kiowa County Courthouse beginning at 9 am. The next day the court will meet in the Wichita City Council chambers, starting at 9:00 am. Details about the cases the justices will hear may be read here: Greensburg Appeal Summaries, Wichita Appeal Summaries.

March for the chicken. The recent visit to Wichita by economist Walter E. Williams produced many memorable moments, such as when Williams explained how private property works to save animal species from extinction: “I was listening to NPR, a number of years ago, and people were picketing the UN because they were concerned about the extinction of the giraffe, the gorilla, and the lion. So I wrote down a list of animals that people were in a tizzy over the possibility of their becoming extinct. … Then I wrote down another list of animals, very valuable to us, but people are not worried about them. I said ‘How come people are not marching for the chicken? Why are people not forming save the pig clubs?’ … What’s the difference between these two lists of animals? The essential difference is that with this list of animals — cows, chickens, and pigs — they belong to somebody. Somebody’s personal private interest is at stake. But this other list of animals — they don’t belong to anybody. Nobody’s personal private wealth is at stake. If you’re concerned about the extinction of various animals, I would recommend trying to privatize them.”

Economic freedom. In a short video, Professor Aeon Skoble explains the linkage between economic freedom and personal liberty. Often the two are portrayed as competing forces, but this is not true at all. In the video, Skoble explains: “The truth is, there’s no real distinction between civil liberties and economic liberties. They’re one and the same, and it’s a mistake to separate them out and defend one at the expense of the other.” Economic freedom, explains Skoble, provides the means to express civil liberties, such as the right to publish your thoughts, and the right of someone else to read them: “When we make transactions in the economic realm, we are putting into physical reality in the social setting the choices we make. So if I don’t have the freedom to transact then my freedom of choice is hollow — an abstraction. … Economic liberties simply are the physical, social manifestations of the freedom of choice or freedom of conscience that we take so seriously.” The video is from LearnLiberty.org, a project of Institute for Humane Studies.

Kansas and Wichita quick takes: Monday September 12, 2011

TIF not good for everyone, it seems. One of the criticisms of tax increment financing (TIF) is that it diverts tax revenue away from the general operations of government and into the hands of private concerns. Supporters of TIF deny this, using a variety of arguments. But as always, actions speak louder than words. In this case, examination of city documents finds that the Wichita Downtown Development Corporation, which is funded by a special property tax district, is exempt from the TIF district. (Actually, it’s the SSMID that’s exempt, but the only reason the SSMID exists, and the only thing it spends its tax revenue on, is the WDDC.) In other words, the city is willing to use TIF to divert money from police, fire, and schools, but not from the Wichita Downtown Development Corporation.

Wichita City Council. The Wichita City Council in its Tuesday meeting considers these items: The largest item is the Douglas Place project, a downtown Wichita hotel being considered for many layers of taxpayer subsidy. … The council will also have a public hearing on water rates, described as “Citizen input will assist in determining whether the enhanced revenue should come from across-the-board increases or if the current imbalance should be gradually phased out, beginning with cost-based rate structure changes in 2012.” No rate changes will be contemplated at this meeting. … The council will also consider changes to regulations involving slab-on-grade construction standards for one and two family dwellings. There have been high-profile news stories about the failure of some such homes’ foundations. … The council will consider approval of a grant for a Regional Air Quality Improvement Program. … As always, the agenda packet — all 691 pages for this week’s meeting — is available at Wichita city council agendas.

Williams lecture not noticed. Last Thursday about 650 people attended a lecture by an economist in Wichita, and traditional news media didn’t notice. Fortunately there are other sources: Williams: Constitutional Principles the Source of Fairness and Justice (complete video included in this story), Walter Williams: Government must stick to its limited and legitimate role, and Walter Williams on doing good.

Energy and politics to be topic. This week’s meeting (September 19th) of the Wichita Pachyderm Club features Merrill Eisenhower Atwater, President of Fox Fuels, speaking on “Infrastructure, energy, and politics.” Atwater is great grandson of President Dwight D. Eisenhower. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On September 23, Dave Trabert, President of Kansas Policy Institute, speaking on the topic “Why Not Kansas: Getting every student an effective education.” … On September 30, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” … On October 7, John Locke — reincarnated through the miracle of modern technology — speaking on “Life, Liberty, and Property.” … On October 14, Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On October 21, N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.”

Pompeo on ideological internships. Have you heard of a government program called Environmental Justice (EJ) eco-Ambassadors? U.S. Representative Mike Pompeo of Wichita has. According to a press release from his office, the application process is tilted along ideological lines: “The requirements outlined the EPA’s stated desire to recruit and hire, at taxpayer expense, only those college students who are ideologically in line with the Obama Administration’s radical environmental policies.” He has introduced legislation to prevent “any paid internships or other student recruitment programs that discriminate based on ideology or policy viewpoint.” Said Pompeo: “At a time when millions of Americans cannot find work and are saddled with record deficits and crippling environmental regulations, spending $6,000 of taxpayer money per student to act as tools of this Administration’s radical policies is clearly not acceptable — nor is it ever the role of the federal government to indoctrinate.” … The legislation Pompeo introduced is H.R. 2876: To prevent discrimination on the basis of political beliefs by the Environmental Protection Agency in its student programs.

Spending to create jobs. Burton Folsom: “How are jobs created? In the last hundred years, the U.S. has seen tens of millions of jobs created by entrepreneurs like Henry Ford, who put a car in every garage, Willis Carrier, who gave us air conditioning, and Chester Carlson, who invented and marketed the Xerox machine. These men created products people wanted to use, and therefore millions of jobs came into existence to hire people to make those products as cheaply as possible. How do we encourage people like Henry Ford, Willis Carrier, and Chester Carlson to take the risks that might create those jobs? We do that by limiting government, protecting property rights, and allowing entrepreneurs to keep most of what they earn. In other words, do not overregulate, do not overtax, and do not allow the federal government to create instability by intrusive meddling. … Thus, we have President Obama, a disciple of FDR and John Maynard Keynes, frustrated because his stimulus package failed, his bailout of General Motors failed, and his cash for clunkers failed. His Obamacare overhaul is also in the process of failing. Alas, the U.S. has a stagnant economy and is mired in more than 9 percent unemployment. What to do? Why, more stimulus spending, of course! Only it will now be labeled ‘investment’ — along with more targeted spending for green jobs and more small targeted tax cuts.” More at The Sad Story of Presidents Who Think They Can Spend to Create Jobs.

Kansas education summit. On Thursday September 15th, Kansas Policy Institute is holding a summit on education in Kansas. In its announcement, KPI writes: “Kansas can expand educational opportunities for students in need — even in our current economic climate. Join a “Who’s Who” of the nation’s education reformers in a discussion on how Kansas can give every student an effective education. … Invited participants include Gov. Sam Brownback, the Kansas Department of Education, Kansas National Education Association, Kansas Association of School Boards, state legislators, and other public education stakeholders.” … KPI notes that we increased total aid to Kansas public schools by $1.2 billion between 2005 and 2011, that 25 percent of Kansas students are unable to read at grade level. The event will be held at the Holiday Inn & Suites, Overland Park West. The cost is $35, which includes breakfast and lunch for the all-day event. … RSVPs are requested. For more information, click on Kansas Policy Institute Education Summit.

Why should liberals like libertarian ideas? Last week we saw Dr. Stephen Davies explain why conservatives should consider libertarian ideas. Today, he explains why liberals, or progressives, should also consider libertarian ideas. The video is from LearnLiberty.org, a project of Institute for Humane Studies.

Walter Williams on doing good

Thursday’s lecture in Wichita by economist Walter Williams featured a section covering how greed, or what some call enlightened self-interest, is the best way to produce good acts.

This lecture was presented by the Bill of Rights Institute and underwritten by the Fred and Mary Koch Foundation.

When government is used in an attempt to do good, it requires either elimination or attenuation of private property and market forces, Williams told the audience. But it is private property and the desire by people for more that motivates people to do the difficult and laborious things that benefit their fellow man. It all happens without government. In fact, government involvement in the market reduces the motivation of people to acquire, protect, and improve private property.

Here’s a transcript of Williams explaining how this works:

But do-gooders fail to realize that most good done in the world is not done in the name of good.

If you were to ask me “Williams, what’s that human motivation that gets wonderful things done? What’s the human motivation that you like?” I tell them greed. I love greed.

I’m not talking about ripping off people, fraud, and misrepresentation. I’m talking about people trying to get as much as they can for themselves. Now consider the following, because a lot of people don’t understand greed.

Last winter we had Texas cattle ranchers getting up in the dead of winter, running down stray cattle and trying to feed them, making a huge personal sacrifice to make sure New Yorkers had beef on their shelves.

This summer we had Idaho potato farmers getting up in the morning, doing back-breaking work, sun beating down on them, bugs biting them, making this personal sacrifice so that New Yorkers would also have potatoes.

Now, why do you think they’re doing that? Do you think they’re doing that because they love New Yorkers? They may hate New Yorkers — I’m not that wild about New Yorkers myself — but they make sure beef and potatoes get to New York every single day of the week.

Why? Because they love themselves. They’re trying to get more for themselves. And this is what Adam Smith was talking about in The Wealth of Nations: That the public good is served best by the private interest. That is, by people trying to get more for themselves. And in the free market, in order to get more for yourself, you have to find ways to please your fellow man, to make your fellow man happy.

How much beef and potatoes do you think New Yorkers would have if it all depended on human love and kindness? I’d be worried about New Yorkers.

Let me give you another example. Some people tell me “Well Williams, instead of saying greed, you’re trying to win friends and influence people, why don’t you say enlightened self-interest?” Well, that’s okay, but I like greed instead.

Let me give you another example of the virtue of self interest and private property. I have often said that I don’t care much about future generations. Some people think that’s awful. People have sometimes asked “Williams, why don’t you care about future generations?” And I ask “What have future generations ever done for me?”

I mean, some kid being born in 2050, what has he done for me? And if he has not done anything for me, how then am I obliged to do anything for him? Where is the quid pro quo?

But however, if you watch my actual behavior, my behavior would belie that sentiment.

I have a very nice house and property in Valley Forge, Pennsylvania. Several years ago I took $400 that I could have used to buy two bottles of Chateau d’Yquem Sauterne wine and selfishly enjoyed it all by myself, but instead I planted some trees on my property.

Now when those trees reach full maturity, I’ll be dead. There will be some 2050 kid swinging in my trees. Mrs. Williams, who is now departed, made extensive improvements to our house — built a big sunroom — with my money of course. That sunroom is going to outlast both of us, and there’s going to be some 2050 kid tracking mud in my sunroom.

If you ask the question “why did I make those sacrifices of current consumption to produce something that’s going to benefit somebody in 2050,” the answer’s very easy: The nicer my house is, the longer it will provide housing services, and the higher the price I get when I go to sell it.

That is, by pursing my own narrow selfish interest, I can’t help but make a house available for future generations, whether I mean to or not.

Now, would I have the same incentives if the government owned my house? Would I have the same incentives if there were a 75 percent transfer tax when I went to sell my house? Whatever weakens my private property rights interest in that house, weakens my incentive to do the socially responsible thing, namely, conserve on the scare resources of our society.

Let me give you one other example. … I was listening to NPR, a number of years ago, and people were picketing the UN because they were concerned about the extinction of the giraffe, the gorilla, and the lion. So I wrote down a list of animals that people were in a tizzy over the possibility of their becoming extinct.

Then I wrote down another list of animals, very valuable to us, but people are not worried about them. I said “How come people are not marching for the chicken? Why are people not forming save the pig clubs?”

What’s the difference between these two lists of animals? The essential difference is that with this list of animals — cows, chickens, and pigs — they belong to somebody. Somebody’s personal private interest is at stake. But this other list of animals — they don’t belong to anybody. Nobody’s personal private wealth is at stake. If you’re concerned about the extinction of various animals, I would recommend trying to privatize them.

Walter Williams: Government must stick to its limited and legitimate role

Walter E.
Williams

At two events in Wichita today, economist Walter E. Williams spoke on the legitimate role of government in a free society, touching on the role of government as defined in the Constitution, the benefits of capitalism and private property, and the recent attacks on individual freedom and limited government.

The evening lecture was held in the Mary Jane Teall Theater at Century II, and all but a handful of its 652 seats were occupied. It was presented by the Bill of Rights Institute and underwritten by the Fred and Mary Koch Foundation.

Williams said that one of the justifications for the growth of government — far beyond the visions of the founders of America — is to promote fairness and justice. While these are worthy goals, Williams said we must ask what is the meaning of fairness and justice, referring to the legitimate role of government in a free society.

In the Constitution, Williams said the founders specified the role of the federal government in Article 1 Section 8. This section holds a list that enumerates what Congress is authorized to do. If something is not on the list, Williams said Congress is not authorized to do it.

The Article 8 powers that Williams mentioned are to lay and collect taxes, duties, imposts, and excises; to pay the debts and provide for the common defense and general welfare of the United States; to borrow money on the credit of the United States; to coin money; to establish post-offices and post-roads; and to raise and support armies. It is regarding these powers, plus a few others, that Congress has taxing and spending authority. “Nowhere in the United States Constitution to we find authority for Congress to tax and spend for up to two-thirds to three-quarters of what Congress taxes and spends for today.”

Farm subsidies, handouts to banks, and food stamps are examples Williams gave of programs that are not authorized by the Constitution. “I think that we can safely say that we’ve made a significant departure from the constitutional principles of individual freedom and limited government that made us a rich nation in the first place.”

The institutions of private property and free enterprise are the embodiment of these principles, Williams said. But there have been many successful attacks on private property and free enterprise. Thomas Jefferson, Williams said, anticipated this when he wrote “The natural progress of things is for government to gain ground, and for liberty to yield.”

Taxation and spending are the ways government has gained ground. Taxes represent government claims on private property.

But an even better measure of what government has done is to look at spending. From 1787 to 1920, federal spending was only three percent of gross domestic product, except during wartime. Today, that figure is approaching 30 percent, Williams said: “The significance is that as time goes by, you and I own less and less of our most valuable property, namely ourselves and the fruits of our labor.”

In the realm of economics, Williams said that the founders thought that free markets and capitalism was the most effective social organization for promoting freedom, with capitalism defined as a system where people are free to pursue their own objectives as long as they do not violate the property rights of others. An often-trivialized benefit of capitalism and voluntary exchange is that it minimizes the capacity of one person to coerce another, he told the audience. This applies to the government, too.

But for the last half-century, Williams said that free enterprise has been under unrelenting attack by the American people. Whether they realize it or not, people have demonstrated a “deep and abiding contempt” for private property rights and individual liberty.

Williams said that ironically, capitalism is threatened not because of its failure, but because of its success. Capitalism has eliminated things that plagued mankind since the beginning of time — he mentioned disease, gross hunger, and poverty — and been so successful that “all other human wants appear to us to be at once inexcusable and unbearable.”

So now, in the name of ideals other than freedom and liberty, we pursue things like equality of income, race and sex balance, affordable housing, and medical care. “As a result of widespread control by our government in order to achieve these higher objectives, we are increasingly being subordinated to the point where personal liberty in our country is treated like dirt.”

This ultimately leads to tyranny and totalitarianism, he said. To those who might object to this strong and blunt conclusion, Williams asked this question: “Which way are we headed, tiny steps at a time: towards more liberty, or towards more government control of our lives?” He said that the answer, unambiguously, is the latter.

It is the tiny steps that concern Williams, as they ultimately lead to their destination. Quoting Hume, he said “It is seldom that liberty of any kind is lost all at once.” Instead, Williams said it is always lost bit by bit. If anyone wanted to take away all our liberties all at once, we would rebel. But not so when liberties are taken bit by bit, which is what is currently happening.

It is people’s desire for government to do good — helping the disadvantaged, elderly, failing businesses, college students — that leads to the attack on private property and economic freedom. But Williams explained that government has no resources of its own, meaning that for government to give one person money it must first — “through intimidation, threats, and coercion” — confiscate it from someone else.

Williams told the audience that if a private person used coercion to take money from someone and give it to another person, that would universally be considered theft and a crime. It doesn’t matter how needy or deserving the recipient, it would still be theft. But Williams asked if there is any conceptual difference between that act and when agents of the government do the same. Williams says no, except that in the second act, where Congress takes the money, the theft is legal.

But mere legality doesn’t not make something moral. Slavery was legal in America for many years, but not moral. The purges of Stalin and Mao were legal under the laws of those countries. So legality does not equate to morality, Williams explained, and he said he cannot find a moral case for taking what belongs to one person and giving it to another to whom it does not belong.

Charity is “praiseworthy and laudable” when it is voluntary, but it is worthy of condemnation when government reaches into others’ pockets for charity. Those who accept the forced takings are guilty, too, he explained.

“The essence of our relationship with government is coercion,” Williams told the audience. This, he said, represents our major problem as a nation today: We’ve come to accept the idea of government taking from one to give to another. But the blame, Williams said, does not belong with politicians — “at least not very much.” Instead, he said that the blame lies with us, the people who elect them to office in order to get things for us. A candidate who said he would do only the things that the Constitution authorizes would not have much of a chance at being elected.

The further problem is that if Kansans don’t elect officials who will bring federal dollars to Kansas, it doesn’t mean that Kansans will pay lower federal taxes. The money, taken from Kansans, will go to other states, leading to this conundrum: “That is, once legalized theft begins, it pays for everybody to participate.”

We face a moral dilemma, then. Williams listed several great empires that declined for doing precisely what we’re doing: “Bread and circuses,” or big government spending.

But there is a note — only one — of optimism, Williams believes. The first two years of the Obama administration, along with the Democratic Senate and House of Representatives, has been so brazen in their activities in “running roughshod over our liberties” that people are starting to argue and debate the Constitution. State attorneys general are bringing suits against the federal government over Obama’s health care plan. State legislatures are passing tenth amendment resolutions. The tea party and other grassroots movements give him optimism, too.

We must also ask ourselves if we are willing to give up the benefits we get from government, he said. But most people want cuts in spending on other people, not ourselves, as “ours is critical and vital to the national interest.” With all of us feeling this way, Williams said the country is in danger.

Young people have the greatest stake in the struggle for limited government and economic freedom, as the older generations have benefited from a relatively free country and the economic mobility that accompanied it. He said he’s afraid we’re losing that: “I’m hoping that future generations will not curse us for bequeathing to them a nation far less robust, far less free, than the nation that our parents and our ancestors bequeathed us.”

In answering a question from the audience, Williams said he would be afraid of a constitutional convention to be held today, as some are advocating. We wouldn’t be sending people like John Adams. Instead, he said we’d be sending people like Barney Frank and others who have “deep contempt” for personal freedom.

In response to a question on regulation, Williams said that regulations like health care and uncertainty over taxation cause businesses to be afraid to commit money to long term investments. Uncertainty “collapses the time horizon” causing firms to look for investments that pay off in the short term rather than the long term. This contributes to unemployment, he said.

Williams also talked about the economic history of America. From its beginning to 1930, there were recessions and depressions, but there were not calls for the federal government to intervene and stimulate the economy. It wasn’t until the Hoover administration and the New Deal that the federal government intervened in the economy in order to “fix” the economy. Williams said that what should have been a “sharp two or three-year downtown” was turned in to the Great Depression — which was not over until after World War II — by government intervention. The measures being taken today are similarly postponing the recovery, he said. He added that most serious economic downturns are caused by government. It’s also futile for the government to spend the country out of a recession, which he likened to taking water from the deep end of a pool to the shallow end in order to raise the level of the shallow end. Government taking money from one person, giving it to another, and expecting the economy to rise is similarly futile.

A question about mainstream media and their representation of the issues of today brought this response: “You have to make the assumption, I believe implied in your question, that those people are ignorant, and if only they knew better, they would change their behavior. Human ignorance is somewhat optimistic, because ignorance is curable through education. I’m very sure that many of these people want government control. The elite have always wanted government control, and the media was very responsible in getting President Obama elected.”

In an interview, I asked what President Obama should say in his jobs speech tonight. Williams recommended the president should reduce regulation and lower taxes, especially capital gains and corporate income taxes. The spending programs of the past will not help. But Obama’s constituency will not favor this approach. The spending on roads and bridges benefits labor unions, for example.

On those who accept who accept and benefit from government spending, Williams said that “one of the tragedies of our nation” is that the growth of government has turned otherwise decent people into thieves, because they participate in the taking of what belongs to someone else. But because of the pervasiveness of government, sometimes this is unavoidable.

I asked do we need better politicians — ones who will work to limit government — or do we need different rules such as a balanced budget amendment or spending constraints? Williams said that the bulk of the blame lies with the people, as politicians are simply doing what voters ask them to do. “The struggle is to try to convince our fellow Americans on the moral superiority of liberty and its main ingredient, limited government.” Politicians will then follow, he added.

I asked if we’ve passed some sort of tipping point, where people look first to government rather than voluntary exchange through markets. He said perhaps so, and mentioned another problem: Close to 50 percent of Americans pay no federal income tax. These people become natural constituents for big-spending politicians. As they pay no taxes — “no stake in the game” — they don’t care if taxes are raised or lowered.

On the issue of the subsidy being poured into downtown Wichita, Williams said the issue is an example of the “seen and unseen” problem identified by Frederic Bastiat. We easily see the things that government taxation and intervention builds, such as a convention center. But what is not easily seen is what people would have done with the money that was taken from them through taxation. While the money taken from each person may be small, it adds up.

On government funding for arts, an issue in Kansas at this time, Williams said that it ought to be an insult to artists that their work has to be funded through government forcing people to pay, as opposed to voluntary payments.

Born in Philadelphia, Pennsylvania, Dr. Walter E. Williams holds a B.A. in economics from California State University, Los Angeles, and M.A. and Ph.D. degrees in economics from UCLA. He has served on the faculty of George Mason University in Fairfax, Virginia, as John M. Olin Distinguished Professor of Economics, since 1980. His website is Walter Williams Home Page.

Guitar makers and players targeted by onerous laws

Today the Wall Street Journal reports again on startling examples of overcriminalization, with federal authorities conducting raids on businesses based on aggressive enforcement of broad and vague laws.

This time it’s the famous Gibson Guitar company, which is charged with importing wood that may have been illegally harvested. But individual guitar owners are targeted, too, if they travel across international borders with a guitar that might possibly have been made from banned wood. If the traveler doesn’t have the proper documentation, the guitar might be seized. As a result, a law professor says he doesn’t leave the country with a wooden guitar.

Gibson had tried to comply with the law. It had used the services of Forest Stewardship Council, an organization that, according to its website, provides a certification service: “FSC certification provides a credible link between responsible production and consumption of forest products, enabling consumers and businesses to make purchasing decisions that benefit people and the environment as well as providing ongoing business value.”

According to Gibson, FSC certification means the wood was not obtained illegally.

The law under which Gibson is charged, the Lacey Act, creates many problems for U.S. importers. According to Gibson, “The U.S. Lacey Act does not directly address conservation issues but is about obeying all laws of the countries from which wood products are procured. This law reads that you are guilty if you did not observe a law even though you had no knowledge of that law in a foreign country. The U.S. Lacey Act is only applicable when a foreign law has been violated.”Gibson says it has statements and documents that wood seized in an earlier raid was legally exported from Madagascar. That’s right — this is not the first time for Gibson, and the earlier case is still pending.

Interestingly, the wood that is in controversy — Madagascar ebony — provides an example of how lack of property rights causes shortages of a desirable product. Further, this is an example of how lack of property rights and economic freedom keeps a country poor, instead of being able to benefit from its natural resources.

Among the countries of the world, Madagascar ranks very low in legal structure and property rights. According to the 2011 Index of Economic Freedom for Madagascar compiled by the Heritage Foundation and Wall Street Journal: “Secured interests in property are poorly enforced. Restrictions on land ownership by foreigners impede investment. … The judiciary is influenced by the executive and subject to corruption, and investors face a legal and judicial environment in which the enforcement of contracts cannot be guaranteed. … Corruption is perceived as widespread. ”

This illustrates the importance of economic freedom, which is rooted in property rights and respect for the ability of parties to contract. When property rights are not felt to be secure and people believe that the government will not enforce contracts, it’s difficult to get people to make investments, especially in things like trees that require investment and stewardship over a period of years. Who will nurture trees for decades to maturity, only for them to be stolen, either by a corrupt government or by thieves who have no fear that the government will protect the property of others?

Sweatshops best alternative for some workers

From April, 2010.

While sweatshops are not the place most Americans would choose to work, they are often the best alternative available to workers in some countries. Pay is low compared to U.S. standards because worker productivity is low, and the process of economic development will lead to increases in productivity and pay. But most policies promoted to help the purported plight of sweatshop workers actually lead to harm.

That’s the message of Benjamin Powell, who spoke to a group of university students and citizens last night in Emporia on the topic “In Praise of Sweatshops.” Powell is a professor of economics at Suffolk University in Boston and is affiliated with The Beacon Hill Institute. His appearance was part of the Emporia State University “Lectures on Liberty” series.

“Often when people say there’s something wrong with sweatshops, implicitly what they’re saying is ‘while this is bad, the alternative must be better.’ Often the alternatives in these countries are much, much worse.” The alternatives are often subsistence agriculture and working in farm fields, Powell said.

A sweatshop, according to Powell, is a workplace with low wages (compared to U.S. standards), and poor, possibly unsafe, working conditions and benefits, again compared to U.S. standards. The sweatshops that Powell is defending are those where people voluntarily choose to work. Sweatshops where workers are forced to work under the threat of violence constitute slave labor, which cannot be defended. These are not better than the alternatives available to the forced workers, the evidence being that the workers are forced to work in these sweatshops.

As evidence of non-sweatshop working conditions is some countries, Powell mentioned the case of a Cambodian girl and her working conditions, as reported by Nicholas D. Kristof in the New York Times in 2004:

Nhep Chanda is a 17-year-old girl who is one of hundreds of Cambodians who toil all day, every day, picking through the dump for plastic bags, metal cans and bits of food. The stench clogs the nostrils, and parts of the dump are burning, producing acrid smoke that blinds the eyes.

The scavengers are chased by swarms of flies and biting insects, their hands are caked with filth, and those who are barefoot cut their feet on glass. Some are small children.

Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory — working only six days a week, inside instead of in the broiling sun, for up to $2 a day — is a dream.

Generally, sweatshop workers are paid much more than most other workers in the country, and their working conditions are much better. Powell mentioned that working inside — rather than outside — is very desirable in most countries. The fact that sweatshops pay higher wages and have better working conditions than the workers’ alternatives is important to remember.

Powell explained the factors that determine how much workers are paid. The upper bound that employers are willing to pay workers is based on the amount of value that a worker can create. In economic terms, this is called the marginal productivity of labor.

The lower bound, the minimum employers can pay, is the value of workers’ next best alternative.

If we want to increase the earnings of sweatshop workers, we have to create policies that raise both the upper and lower bounds, Powell said, adding that about three-fourths of the variation in earnings across countries is explained by the upper bound. This points to the importance of increasing worker productivity.

In one debate, Powell said his opponent wanted to take the question of sweatshop wages off the table, admitting that pay is higher in them. Instead, she wanted to focus on worker health and safety. But it’s important to remember, Powell told the audience, that working conditions, even those related to health and safety, are part of a total compensation package. Wages and working conditions are interconnected and can’t be separated.

Sometimes people ask why apparel companies — the largest users of sweatshops — can’t simply pay the workers more, pointing to large profits and highly paid executives at these companies. But Powell said that apparel companies usually aren’t excessively profitable.

Additionally, businesses are not charities. Forcing them to pay workers more means that companies will begin to look at ways to reduce the amount of labor they use. They may replace workers with machines, or use more productive workers in other countries. The result is sweatshop workers will lose their jobs.

Powell reminded the audience that it’s important to remember that in most countries where sweatshops are used, these jobs are much better — both in terms of pay and working conditions — than what the workers face as alternatives. Anything that causes companies to shut down sweatshops or employ fewer workers, then, means that workers lose these better jobs and return to harder work at lower wages, or perhaps no work at all.

In discussing the anti-sweatshop movement, Powell said that some groups sincerely want to help sweatshop workers, but don’t understand the economic realities in sweatshop-using countries. But labor unions such as UNITE do understand economics. The policies they advocate to help sweatshop workers — international labor standards and minimum or “living” wages, for example — increase the cost of sweatshop labor, causing companies to use less of it. It also makes unionized garment workers more attractive, and may lead to more employment in developed countries like the United States.

“So unions advocate this not out of love for third world workers. They do it quite maliciously, actually, to unemploy third world workers for the benefit of already relatively wealthy union members in the United States and Western Europe countries.”

The worst thing that advocates for sweatshop workers can do is to call for boycotts of products produced in sweatshops. If a boycott decreases demand for a product, the company must reduce its price, and the upper bound of what sweatshop workers can earn goes down. Then workers either have their wages reduced, or they lose their jobs.

Powell presented the results of his research examining sweatshop wages. In many countries that use sweatshops, wages are very low, compared to U.S. wages. But that isn’t the appropriate comparison. Instead, when comparing the wages of sweatshop workers to the average income in the workers’ own country, we find that sweatshop workers do very well, often earning from two to seven times as much as the average worker in each country.

Powell said that “ethical branding” is an idea that might help sweatshop workers. This is a marketing strategy where a company uses the fact that products are produced in sweatshops as a way to increase demand and prices. This, in turn, would increase the demand for sweatshop workers and increase their wages. But this has to be a voluntary strategy, Powell said. Companies must see this as a business success. If it is not successful in increasing demand but companies are forced to implement this strategy, it will lead to less sweatshop employment.

Also, demand — in terms of the number of units sold — must not fall. This is a problem with “fair trade” coffee, where people purchase less of the more expensive fair trade coffee.

The real solution for improving sweatshop wages and working conditions, Powell said, is the process of economic development. Sweatshops existed in Great Britain and the United States at one time. As capital is accumulated, better technologies are developed, and workers become more educated, workers become more productive and earn more, both in income and better working conditions.

This process took over a century in the U.S., but countries like Hong Kong, Singapore, and South Korea, which were sweatshop countries in the 1950s and 1960s, made very rapid improvements in wages and working conditions. Capital and technology is available from abroad, Powell said, and this process can be repeated. But anti-sweatshop policies risk stalling this development, resulting in a permanent sweatshop country with low incomes.

The real question, Powell said, is not why some countries are poor, but why some countries are rich. Rule of law, respect for property rights, and respect for individual liberty and economic freedom are policies that promote rapid economic growth. Countries that do not have these stagnate and do not increase their standard of living.

In conclusion, Powell said that sweatshop wages and working conditions are better than what many workers face as alternatives, and that’s why people voluntarily choose to work in them. While wages are low compared to developed countries, this is because productivity is low. The process of economic development is the way to raise productivity and wages. Much of the work of anti-sweatshop groups risks undermining the economic development processes that will raise living standards.

A question from the audience asked about the proliferation of sweatshops abroad leading to the loss of American jobs. Powell replied that sweatshops lead to the decline of the American apparel industry. But it is in the interest of America, he said, to get garments at lower cost overseas, freeing up high-skilled U.S. labor and capital to do what we’re relatively better at. This increases the wealth of America.

Another question referred to the human costs of sweatshop labor, contrasting those workers to Nike executives who earn millions. What is the cost in terms of damage to human dignity? Powell replied that businesses are not charities, and they don’t pay executives high salaries simply because they want to. The extremely high pay of the top executive serves as an incentive for underlings to work harder in jobs that are hard to observe quality of effort. Most people do not understand this, Powell said.

He also said that if we’re concerned about the dignity of sweatshop workers in third world countries, we should be even more concerned about those who don’t have sweatshop jobs. These people either have no jobs, or jobs with much lower pay and worse working conditions than sweatshop workers.

Another question asked if it would help the economies of third world countries if we simply raised the wages of sweatshop workers, referring to companies that are making millions in profits. Powell said that laws mandating higher wages will change the behavior of sweatshop companies, resulting in a loss of sweatshop jobs. But voluntary programs like ethical branding could work.

Related material on this topic by Powell includes a Christian Science Monitor op-ed Don’t get into a lather over sweatshops, a working paper titled Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat?, and an article In Defense of “Sweatshops.”

The ESU Lectures on Liberty was conceived by Greg Schneider, professor of History at Emporia State University, to bring in important academics who support the idea of research and scholarship on critical issues regarding liberty in American history. The lecture series is underwritten by the Fred C. and Mary R. Koch Foundation in Wichita.

Kansas and Wichita quick takes: Monday August 1, 2011

Debt deal seen as victory for smaller government. Wall Street Journal Review & Outlook A Tea Party Triumph: The debt deal is a rare bipartisan victory for the forces of smaller government. “If a good political compromise is one that has something for everyone to hate, then last night’s bipartisan debt-ceiling deal is a triumph. The bargain is nonetheless better than what seemed achievable in recent days, especially given the revolt of some GOP conservatives that gave the White House and Democrats more political leverage. .. The big picture is that the deal is a victory for the cause of smaller government, arguably the biggest since welfare reform in 1996. Most bipartisan budget deals trade tax increases that are immediate for spending cuts that turn out to be fictional. This one includes no immediate tax increases, despite President Obama’s demand as recently as last Monday. The immediate spending cuts are real, if smaller than we’d prefer, and the longer-term cuts could be real if Republicans hold Congress and continue to enforce the deal’s spending caps.” … Most commenters, from all political viewpoints, say the fuss over the raising of the debt ceiling would not have happened but for tea party activists.

Wichita city council. This week the Wichita City Council accepts comment on the city budget at its Tuesday morning meeting. The final public hearing on the budget will be at the August 9th meeting. The city has a page with the budget, supporting documents, presentations, and video at 2012-2013 Proposed Budget. … As always, the agenda packet is available at Wichita city council agendas.

Sedgwick County Commission. This week the Sedgwick County Commission will adopt — or not — its budget. The only remaining opportunity for public input, at least in a public hearing situation, is Tuesday evening at 7:00 pm in the county commission meeting room. At its Wednesday morning meeting the commission will vote whether to adopt the budget, and no input from the public will be taken at that time. More information about the county’s budget is at Sedgwick County Division of Finance. … The commission will also consider an interesting road vacation item that has advocates of property rights split on the matter. The agenda information is at Sedgwick County Commission, August 3, 2011.

Obama on the debt ceiling, 2006 version. As a United States Senator from Illinois in March 2006, President Barack Obama said this: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” It’s not uncommon for politicians of all stripes to undergo shifts in thought like this. But, the very real question that we need to ask is this: Did his core values really change, or does he say whatever advances the political goal he wants to accomplish at the moment? … This is not limited to Democrats, as a Republican member of the House — I can’t remember his name — insisted that the Boehner plan had bipartisan support, despite receiving just five votes from Democrats.

New Wichita city council members. This Friday’s meeting (August 5th) of the Wichita Pachyderm Club spotlights the three newest members of the Wichita City Council: Pete Meitzner (district 2, east Wichita), James Clendenin (district 3, south and southeast Wichita), and Michael O’Donnell (district 4, south and southwest Wichita). Their topic will be “What it’s like to be a new member of the Wichita City Council?” … Upcoming speakers: On August 12 Kansas Representative Marc Rhoades, Chair of the Kansas House of Representatives Committee on Appropriations, will speak on “The impact of the freshman legislators on the 2011 House budgetary process.” … On August 19, Jay M. Price, Ph.D., Associate Professor and Director of the public history program at Wichita State University, speaking on “Clashes of Values in Kansas History.” His recent Wichita Eagle op-ed was Kansas a stage for “values showdowns.” … On August 26, Kansas State Representatives Jim Howell and Joseph Scapa speaking on “Our freshmen year in the Kansas Legislature.” … On September 2 the Petroleum Club is closed for the holiday, so there will be no meeting. … On September 9, Mark Masterson, Director, Sedgwick County Department of Corrections, on the topic “Juvenile Justice System in Sedgwick County.” Following, from 2:00 pm to 3:00 pm, Pachyderm Club members and guests are invited to tour the Sedgwick County Juvenile Detention Center located at 700 South Hydraulic, Wichita, Kansas. … On September 16, Merrill Eisenhower Atwater, great grandson of President Dwight D. Eisenhower, will present a program with the topic to be determined. … On September 23, Dave Trabert, President of Kansas Policy Institute, speaking on the topic Why Not Kansas,” an initiative to provide information about school choice. … On September 30, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.”

Project moves forward, despite missing welfare. The project didn’t qualify for tax exemptions via Wichita’s industrial revenue bond program, but nonetheless the project will proceed. The project is Pixius Communications and its expansion at 301 N. St. Francis Street. According to the Wichita Business Journal, the project will proceed, but on a smaller scale. Moving forward despite the claim that corporate welfare of one form or another is required reminds me of the Save-A-Lot grocery store now under construction in Wichita’s Planeview neighborhood. Rob Snyder, the initial developer was insistent that subsidies were required. But someone else found a way to do it without subsidy.

Wichita downtown restaurants. There are mixed opinions, writes the Wichita Business Journal.

Cato University. Last week I was away attending Cato University, a summer seminar on political economy. (That’s why the articles from last week were reruns.) Besides attending many very informative lectures and meeting lovers of liberty from across the world, I became aware of several brilliant Cato scholars and executives whom I had not paid much attention to. One in particular is Tom G. Palmer, who is Senior Fellow and Director of Cato University, besides holding a position at Atlas Economic Research Foundation. He delivered many of our lectures and is the author of Realizing Freedom: Libertarian Theory, History, and Practice. An important chapter from this book is Twenty Myths about Markets. In this video he discusses being effective in bringing about change.

Charles Koch: Advancing economic freedom

In recent years Charles Koch and his brother David Koch have emerged as prominent defenders of economic freedom and the freedom and prosperity it promises. In today’s Wichita Eagle, Charles Koch explains the importance of economic freedom and warns of the threats to freedom and prosperity that our country faces.

A key component of economic freedom is property rights. In his 2007 book The Science of Success: How Market-Based Management Built the World’s Largest Private Company, Mr. Koch explained the importance of property rights: “Countries that clearly define and protect individual private property rights stimulate investment and grow. Those that threaten and confiscate private property lose capital and decline. They also lose the capability and efforts of the individuals who would be the greatest contributors to economic growth.”

In the Economic Freedom of the World report, there are five broad areas that are measured to determine the relative economic freedom of countries:

  • Size of Government: Expenditures, Taxes, and Enterprises;
  • Legal Structure and Security of Property Rights;
  • Access to Sound Money;
  • Freedom to Trade Internationally; and
  • Regulation of Credit, Labor, and Business.

We can see the importance of property rights to economic freedom. When government taxes, it takes our property and gives it to someone else — often to business firms in the form of corporate welfare. Without a developed legal system, property rights are not secure. Without sound money, government takes our property by devaluing our savings through inflationary monetary policies.

It is the advancement of policies that promote economic freedom that, as Koch writes, “help societies prosper.” We see this in the rankings of countries on the economic freedom index. Countries with high levels of economic freedom, like Hong Kong, are prosperous even through they often have little in the way of natural resources. And countries that are rich in resources but not in economic freedom: Their people suffer, although corrupt leaders usually live richly.

Economic freedom is not just for rich people. Everyone — especially those on the lowest rungs of the economic ladder — benefits.

Charles Koch: Economic freedom key to improving society

By Charles G. Koch

My brother David and I have long supported the principles that help societies prosper. I have actively done so for nearly 50 years, as has my brother for more than 40.

In recent years, we have stepped up our efforts to deal with the enormous threats to the future well-being of the people of this country. This has prompted some extreme criticism. From the White House to fringe bloggers, we are now being vilified, mischaracterized and threatened.

In a perverse way, these attacks indicate that we are having a positive effect on public awareness and policymaking. That is why we are working even harder to advance economic freedom and prosperity.

We do so because we believe economic freedom is essential for improving the well-being of society as a whole, especially those who work hard to provide for their families, as well as our most vulnerable. History and sound theory are clear on this point. If we allow our government to waste scarce resources and become the ultimate decision maker, almost everyone will suffer a lower standard of living.

Continue reading at The Wichita Eagle. A slightly different version of Mr. Koch’s editorial is available on the Koch Industries website at Advancing economic freedom.

Kansas and Wichita quick takes: Wednesday May 4, 2011

Stripper bill III Ric Anderson of the Topeka Capital-Journal looks at some of the issues surrounding the “Community Defense Act,” which applies broad regulation to strip clubs. This year the serious issue of human trafficking has been used to promote this bill as necessary. Anderson pokes some large holes in that argument, most notably: “But if authorities know the problem [underage girls stripping] is happening and also know where it’s taking place, why haven’t they been able to stop it?” … The bill has passed the House but not the Senate. … Beside regulation of behavior inside strip clubs, the bill regulates everyone in a way that is unacceptable: “No person shall establish a sexually oriented business within 1,000 feet of any preexisting accredited public or private elementary or secondary school, house of worship, state-licensed day care facility, public library, public park, residence or other sexually oriented business.” These entities don’t have, and should not be given, the right to choose their neighbors. … House Republicans bucking leadership and voting — correctly — against this bill include Clay Aurand, Mike Burgess, Lana Gordon, Willie Prescott, Charles Roth, Sharon Schwartz, Tom Sloan, Kay Wolf, and Ron Worley.

Arts Commission funding in. It appears that funding for the Kansas Arts Commission will make its way into the budget that will be presented to Kansas Governor Sam Brownback. Now the governor faces a test: will he use his line-item veto power to cancel this funding? Brownback issued an Executive Reorganization Order that would have killed the commission, but the Kansas Senate, using its power to do so, overrode the order. But with the veto pen, the governor can still accomplish the same effect. See Kansas governor should veto arts commission funding.

Sunshine needed on public pensions and benefits. Investor’s Business Daily: As debates heat up in states across the country over budget shortfalls, more and more focus is being placed upon the runaway growth in health and pension benefits for state and local government workers. These excessive benefits are a major factor behind the exploding costs of government in many states. It is time to bring these costs under control before they completely overwhelm state and local budgets. … negotiations between governments and public sector unions lack transparency and accountability. Taxpayers are rarely made aware of the costly promises that public-sector unions are able to extract from state and local governments. Politicians often find it easier to reward unions with deferred payments for pensions and health care instead of offering salary or wage increases that appear immediately on the budget. Thus they are able to buy peace today by selling out the future.” … In Kansas, news media and editorial writers don’t help citizens learn the full magnitude of the problem, as few refer to the actual unfunded balance in KPERS, the Kansas Public Employees Retirement System.

Beyond the debt ceiling headlines. Will the country default on its debt if its ability to borrow more is not extended? Bankrupting America looks at the issue in the video Beyond the debt ceiling headlines. … Cutting spending is the key to avoiding default.

Kansas and Wichita quick takes: Monday March 28, 2011

Wichita Eagle endorsements. Yesterday the Wichita Eagle released its endorsements for Mayor, Wichita City Council, and Wichita school board. It is no surprise that in each case the newspaper editorial board recommended that voters select the candidate most likely to support the board’s big-government interventionist policies, thereby (unwittingly?) providing a guide as to who not to vote for, if you value limited government and economic freedom.

Wichita City Council this week. As it is the fifth Tuesday of the month, the Wichita City Council will not meet. While some might say the mayor and council members need to get to work and do their jobs, I’m more aligned with Will Rogers when he quipped: “Be thankful we’re not getting all the government we’re paying for.”

Sedgwick County commission this week. At Wednesday’s meeting, the Sedgwick County Commission has two economic development incentives to consider. These are forgivable loans, essentially grants of money, to be made to MoJack Distributors, LLC and Apex Engineering International LLC. Each has already received a forgivable loan from the City of Wichita, as well as other subsidy of various forms from governments state and local. More discussion is at Wichita again to bet on corporate welfare as economic development. The commission’s agenda is available at Board of Sedgwick County Commissioners, March 30, 2011.

Kansas judicial selection. A legislative maneuver could force the Kansas Senate to debate and possibly vote on the method of selecting judges for the Kansas Court of Appeals. This is despite the efforts of Senator Tim Owens, an attorney and Republican from Overland Park, to block the bill in his committee. See Method of choosing judges could see debate.

Kansas Department of Labor computer system. From Kansas Reporter: “A $50 million, six year project to upgrade unemployment claims technology within the Kansas Department of Labor was grossly mismanaged, resulting in massive system flaws according to Labor Secretary Karin Brownlee.” Brownlee took office earlier this year after being appointed by Kansas Governor Sam Brownback. More at Massive waste, inefficiency in Labor Department technology upgrade, secretary says .

General Electric: no taxes for me. Competitive Enterprise Institute explains how General Electric, one of the largest companies in the world, earns large profits and manages to pay no income tax.

Freeloaders come in all types. This weekend John Stossel had an hour-long special show that focused on freeloaders. Not just panhandlers, although Stossel did work in disguise as a panhandler and discovered he could make over $90 a day. Tax free, he added. One segment of the show uncovered farmers who received $50,000 because they were discriminated against by lenders. But — some of these farmers merely grew potted plants or fertilized their lawn to qualify as a farmer. Another reported on homeowners who stopped paying their mortgages on advice of a website. The homeowners and the website operator said there is no moral obligation to pay their mortgage loans. Corporate freeloaders didn’t escape, as General Electric was mentioned as a large recipient of government handouts. And, they won’t pay taxes: “Despite billions in profit, they’ll pay no taxes this year,” reported Stossel. … The severe poverty of American Indian tribes that live on government-managed reservations and living on government handouts is contrasted with a tribe that accepts no handouts and has no casinos. … Stossel covered his own beach house, which was covered by low-cost subsidized federal fund insurance. It suffered losses twice. … Standing in front of the U.S. Capitol, Stossel said “We rich people freeload off you taxpayers all the time, because the over-promisers in there keep churning out special deals for politically-favored groups. And they tend to be rich people, because the rich can afford lobbyists. … Think about how much money we could save if these guys just didn’t pass so many laws that encourage freeloading. But they do, year after year. They micromanage life with subsidies. And the winners are not so much the needy, but people like Bon Jovi, Ted Turner, Maurice Wilder, and — me. So let’s hope for an end to all this freeloading.”

New York City may seek waiver from ObamaCare. One of the strongest advocates for ObamaCare may seek an exemption for the city he represents. Politico reports in Anthony Weiner: Waiver might work for New York. … So far over 1,000 waviers have been issued, exempting businesses, labor groups and a handful of states from at least some of the requirements of the Affordable Health Care Act.

Economic freedom and a better life. Economics professor Josh Hall explains that economic freedom leads to greater human well-being. If we look at average income, life expectancy, income of the poorest 10%, and other factors, we see that when governments let citizens make economic decisions for themselves, this leads to greater human flourishing. This video refers to the Economic Freedom of the World index, which was the subject of a lecture delivered last year in Wichita by Robert Lawson. In that lecture, Lawson warned of the path of the United States in terms of economic freedom, as I reported: “Speaking about the United States, Lawson said that the numbers are likely to go down in the future. While the U.S. ranks above the world average, its measurement of freedom has been declining since 2000. At the same time, the rest of the world is on an upward trend. ‘It’s no longer accurate to say the United States is among the very top tier in the economic freedom index,’ Lawson said, adding that he blames George Bush for this. The decline is partly due to the increasing size of government, but the largest cause of the decline is in the area of property rights. This area is measured largely by surveys asking people how they feel about property rights in America. The perception, Lawson, said, is that the security of property rights are on the decline.”

Government investment specialty. Gene Callahan, in his book Economics for Real People: An Introduction to the Austrian School, explains some of the problems inherent in government acting as investor. Writing about a plan to build a sports stadium in Hartford: “The Public Choice School has pointed out another force weakening that incentive, indeed, in most cases, completely negating it. Strong incentives exist for politicians to favor special-interest groups at the expense of the general public. Those upon whom benefits are concentrated are motivated to campaign hard for those benefits. As the costs of most political actions are spread across the public as a whole, the average person has little motivation to become involved. In the context of the stadium project, we can see that, even at a total cost of $374 million, the cost to each Connecticut resident is only about $100. It is simply not worth much of any individual citizen’s time to become devoted to the cause of stopping the stadium. However, for the construction companies who hope to get work on the stadium and the owners of businesses and land nearby, the potential benefits are enormous. They have a strong incentive to lobby hard for the project, to donate to the campaigns of politicians who support it, and to sponsor studies that will make the project look good. In fact, if there were a profit to be made in some particular investment, private investors would be likely to act quickly to take advantage of the opportunity with their own funds. … Private investors will turn to the risky business of lobbying the government to support a project only when it is not clear to them that it is profitable without taxpayer subsidies. Thus, the government is likely to specialize in money-losing projects.”

Kansas and Wichita quick takes: Sunday March 13, 2011

Wichita city council this week. There is no meeting of the Wichita City Council this week, as most members will be attending a meeting of the National League of Cities in Washington, DC. These conferences are designed to help council members be more effective. But for three of the council members that will be attending, their future service on the council is measured in days, not years. These three lame duck members — Sue Schlapp, Paul Gray, and Roger Smith — will be leaving the council in April when their terms end. Their participation in this conference, at taxpayer expense, is nothing more than a junket — for lame ducks.

How attitudes can differ. At a recent forum of city council candidates, one candidate mentioned the five or six police officers conducting security screening of visitors seeking to enter Wichita city hall, recognizing that this doesn’t create a welcoming atmosphere for citizens. Vice Mayor Jeff Longwell said he thought the officers are “accommodating and welcoming.” It should be noted that Longwell carries a card that allows him to effortlessly enter city hall through turnstiles that bypass the screening that citizens endure. Further, it’s natural that the police officers are deferential to Longwell, just as most employees are to their bosses. … This attitude of Longwell is an example of just how removed elected officials can be from the citizens — and reality, too. Coupled with the closing of the city hall parking garage to citizens and the junket for lame ducks described above, the people of Wichita sense city hall elected officials and bureaucrats becoming increasingly removed from the concerns of the average person.

Private property and the price system. In The Science of Success, Charles Koch succinctly explains the importance of private property and prices to market economies and prosperity, how government planning can’t benefit from these factors, and the tragedy of the commons: “Private property is essential for both a market economy and prosperity. There cannot be a market economy without private property, and a society without private property cannot have prosperity. To ensure ongoing innovation in satisfying people’s needs, there must be a robust and evolving system of private property rights. Without a market system based on private property, no one can know how to effectively allocate resources. This is because they lack the information that comes from market prices. Those prices depend on voluntary exchanges by owners of private property. Prices and the resulting profit and loss guide entrepreneurs toward satisfying the needs of consumers. Through this system, consumers are able to direct entrepreneurs in efficiently allocating resources through knowledge and incentives in a way no central authority can. … The biggest problems in society have occurred in those areas thought to be best controlled in common: the atmosphere, bodies of water, air, streets, the body politic and human virtue. They all reflect aspects of the ‘tragedy of the commons’ and function much better when methods are devised to give them characteristics of private property.”

Toward a free market in education. From The Objective Standard: “More and more Americans are coming to recognize the superiority of private schools over government-run or ‘public’ schools. Accordingly, many Americans are looking for ways to transform our government-laden education system into a thriving free market. As the laws of economics dictate, and as the better economists have demonstrated, under a free market the quality of education would soar, the range of options would expand, competition would abound, and prices would plummet. The question is: How do we get there from here?” Read more at Toward a Free Market in Education: School Vouchers or Tax Credits?. … This week in Kansas a committee will hold a hearing on HB 2367, known as the Kansas Education Liberty Act. This bill would implement a system of tax credits to support school choice, much like explained in the article.

Are lottery tickets like a state-owned casino? This week a committee in the Kansas House of Representatives will hear testimony regarding HB 2340, which would, according to its fiscal note, “exempt from the statewide smoking ban any bar that is authorized to sell lottery tickets under the Kansas Lottery Act.” The reasoning is that since the statewide smoking ban doesn’t apply to casinos because it would lessen revenue flowing to the state from gaming, the state ought to allow smoking where lottery tickets are sold, as they too generate revenue for the state.

Money, Banking and the Federal Reserve. This month’s meeting of the Wichita chapter of Americans for Prosperity, Kansas features a DVD presentation from the Ludwig von Mises Institute titled “Money, Banking and the Federal Reserve.” About the presentation: “Thomas Jefferson and Andrew Jackson understood “The Monster.” But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.” The event is Monday (March 14) at 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Wichita-area legislators to meet public. Saturday (March 19th) members of the South-Central Kansas Legislative Delegation will meet with the public. The meeting will be at Derby City Hall, 611 Mulberry Road (click for map), starting at 9:00 am. Generally these meetings last for two hours. Then on April 23 — right before the “wrap-up session” — there will be another meeting at the Wichita State University Hughes Metropolitan Complex, 5015 E. 29th Street (at Oliver).

Pompeo to meet with public. If you don’t get your fill of politics for the day after the meeting with state legislators, come meet with United States Representative Mike Pompeo, who is just completing two months in office. Pompeo will be holding a town hall meeting at Maize City Hall, 10100 W. Grady (click for map) starting at 1:00 pm on Saturday March 19th.

Losing the brains race. Veronique de Rugy writing in Reason: “In November the Organization for Economic Cooperation and Development (OECD) released its Program for International Student Assessment scores, measuring educational achievement in 65 countries. The results are depressingly familiar: While students in many developed nations have been learning more and more over time, American 15-year-olds are stuck in the middle of the pack in many fundamental areas, including reading and math. Yet the United States is near the top in education spending.” … A solution is to introduce competition through markets in education: “Because of the lack of competition in the K–12 education system. Schooling in the United States is still based largely on residency; students remain tied to the neighborhood school regardless of how bad its performance may be. … With no need to convince students and parents to stay, schools in most districts lack the incentive to serve student needs or differentiate their product. To make matters worse, this lack of competition continues at the school level, where teacher hiring and firing decisions are stubbornly divorced from student performance, tied instead to funding levels and tenure.” The author notes that wealthy families already have school choice, as they can afford private schools or can afford to move to areas with public schools they think are better than the schools in most urban districts.

Teachers unions explained. A supporter of the teachers unions is questioned about her belief that the unions need more money and power. In Kansas, the teachers union in the form of Kansas National Education Association (KNEA) and its affiliates consistently opposes any attempt at reform.

Kansas and Wichita quick takes: Wednesday March 2, 2011

Duplication in federal programs found. Washington Examiner Editorial: “Nobody with even minimal knowledge of how public bureaucracies work should be surprised by the Government Accountability Office’s conclusion that there is a ‘staggering level of duplication’ in the federal government. Duplication is inevitable when professional politicians in both major parties go for decades using tax dollars to buy votes among favored constituencies, and reward friends, former staffers, family members and campaign contributors with heaping helpings from the pork barrel. With the inevitable program duplication also comes an endless supply of official duplicity as presidents, senators and representatives rationalize spending billions of tax dollars on programs they know either don’t work as promised, or that perform the same or similar functions as existing efforts and are therefore redundant.” … And they say it’s tough to cut spending.

Public school town hall meetings. Walt Chappell, Kansas State Board of Education member, is holding two public meetings in Wichita this week. Chappell writes: “You are cordially invited to share your top 4 priorities for what Kansas K-12 students should learn at a Town Hall meeting this week. Your Kansas State Board of Education is deciding how to improve our schools at a Board retreat on March 7th. As your elected representative on the KSBOE, I look forward to hearing your suggestions before we vote.” The first meeting is Thursday March 3rd from 6:30 pm to 8:30 pm at Lionel D. Alford Library located at 3447 S. Meridian (just north of I-235). A second meeting will be on Saturday March 5th from 2:30 pm to 4:30 pm at Westlink Public Library, 8515 W. Bekemeyer, just North of Central and Tyler.

Wichita school board candidates. This Friday (March 4th) the Wichita Pachyderm Club features candidates for the board of USD 259, the Wichita public school district. For the at-large seat, the candidates are Sheril Logan, Carly Miller, and Phil Neff. For district 4, the candidates are Michael Ackerman, Jr., Jeff Davis, and Clayton Houston. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

Bureaucrats can’t change the way we drive … but they keep trying. More from the Washington Examiner, this time by Fred Barnes. “For most Americans — make that most of mankind — the car is an instrument of mobility, flexibility and speed. Yet officials in Washington, transportation experts, state and local functionaries, planners and transit officials are puzzled why their efforts to lure people from their cars continue to fail.” While Barnes writes mostly about automobiles vs. transit from a nationwide perspective, the issue is important here in Wichita. The revitalization of downtown Wichita contains a large dose of public transit as a way for people to get around downtown. It’s also likely that various streets will be restructured to make them less friendly to automobiles. .. More broadly, a major reason for some to support public funding of downtown is their hatred of “sprawl” and its reliance on the automobile, despite that being the lifestyle that large numbers of Wichitans prefer. They see this as something that government needs to correct.

Wednesdays in Wiedemann tonight. Today (March 2) Wichita State University’s Lynne Davis presents an organ recital as part of the “Wednesdays in Wiedemann” series. These recitals, which have no admission charge, start at 5:30 pm and last about 30 minutes. … Today is an all-Bach program, and Davis writes: “This is music for the soul, music for when the weather isn’t quite what it needs to be, music to heal our coughs and colds, music to meditate by — however this grand yet simple composer speaks to you.” … The location is Wiedemann Recital Hall (map) on the campus of Wichita State University. For more about Davis and WSU’s Great Marcussen Organ, see my story from earlier this year.

Americans for Prosperity website attacked. The website of Americans for Prosperity has been attacked by a group that disagrees with AFP’s position on issues. AFP President Tim Phillips issued a statement: “Americans for Prosperity has established itself as a leading voice in one of the great political debates underway in this country over government spending and how best to restore the fiscal solvency of governments at both the state and federal level. Yesterday, a group claimed credit for an attempt to silence our voice and to stifle that debate through an illegal attack on our website. While the political debate over government spending can be heated, we hope that even our opponents will join us in condemning this illegal attack on our free speech rights as unacceptable and irredeemable. Our country cannot meet the great challenges before us if we cannot have a free and open discussion about the threats that we face. Americans for Prosperity will not be intimidated and will not be deterred from our effort to support responsible economic policies, including the efforts of Governor Walker and other democratically elected leaders in that state to balance the budget through common-sense reforms.” … While I agree with Phillips that free and open discussion is necessary to resolve the issues we face, the disruption of AFP’s website is really more a property rights issue than a speech issue.

Kansas presidential primary pitched as economic development. Washburn University political science professor Bob Beatty: “Why the dash by states to be early on the [presidential primary] calendar? The first is political power and ego. Early primary and caucus states merit attention from the presidential candidates to party big-wigs and power brokers within these early states. But a second reason has rapidly risen in prominence: The economic impact that candidate visits and media coverage of same brings a state. One economist has argued that the economic impact of the Iowa caucuses on the Iowa economy in 2004 was in the neighborhood of $50-$60 million. Other states want a piece of that action.” The complete editorial is Insight Kansas Editorial: Creative Thinking About 2012 GOP Presidential Caucus Can Benefit State.

Huelskamp joins Tea Party Caucus. Tim Huelskamp, a new member of the United States Congress from the Kansas first district, has joined the Congressional Tea Party Caucus headed by Michele Bachmann. The two other new members of the House of Representatives from Kansas have not joined.

How government works. The myth of George W. Bush as a small-government conservative, hiding information from the press and public, and the revolving door between government and lobbying. From Rollback: Repealing Big Government Before the Coming Fiscal Collapse by Thomas E. Woods, Jr. “Of the $96.5 trillion in unfunded Medicare liabilities, $19.4 trillion was added by the ‘small government’ George W. Bush administration’s prescription drug benefit, known as Medicare Part D. The story of that bill’s passage is the story of America in the twenty-first century. The White House did not want to risk the bill’s passage by letting accurate estimates of its cost leak out. Richard Foster, Medicare’s chief actuary, reported that its administrator, Bush appointee Thomas Scully, threatened him with his job if he revealed cost estimates to Congress — a claim that email correspondence from a Scully subordinate appeared to corroborate. The pharmaceutical industry was thrilled with the bill, which would yield perhaps an additional $100 billion in industry profits over the next eight years. Ten days after the bill’s passage, Scully left to join a lobbying firm and represented several large pharmaceutical companies. The bill’s principal author, Billy Tauzin, went on to head the drug companies’ main lobbying organization, a position that paid $2.5 million per year.”

Eminent domain reserved for use in Wichita

As part of the plan for the future of downtown Wichita, the city council was asked to formally disavow the use of eminent domain to take private property for the purpose of economic development. The council would not agree to this restriction.

Susan Estes noted that the legislative agenda that the city council passed earlier in the meeting supported “home rule and local control as the most valid solution for recurring legislative issues.” High on the list of these issues is eminent domain.

Estes asked that the city adopt a statement that the city will not use eminent domain to take property for someone else’s use.

Answering her, Mayor Carl Brewer said it is the council’s record not to use eminent domain. “But,” he said, the city needs that opportunity and flexibility. He said that the city has been asked by developers to use eminent domain, but they’ve resisted. Nonetheless, he described it as one of the tools that is available to the city.

Council member Janet Miller said that the Kansas legislature has placed restrictions on eminent domain, which she characterized as a prohibition.

While Miller is correct — the Kansas legislature would have to pass a statute authorizing specific use of eminent domain, and the law is now more in favor of property owners than in the past — that protection, in my opinion, is weak.

We can easily imagine a scenario where a developer — promising a grand development — wants a large tract of land, perhaps a city block or more. The mayor and others will travel to Topeka and testify that the city desperately needs the jobs and tax revenue the development will create. (Forgetting the fact that the development will probably be in a tax increment financing district and therefore not contributing increased tax revenue to the city’s general government.) The city’s lobbyist will work the halls, a case of a taxpayer-paid lobbyist working against the interest of taxpayers. The case will be made to other lawmakers that if they ever want to use eminent domain in their home towns, they’d better vote for Wichita’s request. Other forms of legislative logrolling will be in full behind-the-scenes use.

So now property owners, instead of having to contest the city’s lawyers before a judge, have to lobby the entire legislature. The case — instead of being heard in a forum where the rule of law is respected — will be contested in a political body which in many cases has shown us that it cares little for private property rights.

This was a moment in time where the city council could have taken leadership in protecting property owners from eminent domain abuse. The city — particularly Mayor Brewer and Council Member Miller — failed to grasp the importance of protecting this form of liberty and economic freedom.

Kansas and Wichita quick takes: Tuesday December 7, 2010

Political pretense vs. market performance. What is the difference between markets and politics or government? “There is a large gap between the performance of markets and the public’s approval of markets. Despite the clear superiority of free markets over other economic arrangements at protecting liberty, promoting social cooperation and creating general prosperity, they have always been subject to pervasive doubts and, often, outright hostility. Of course, many people are also skeptical about government. Yet when problems arise that can even remotely be blamed on markets, the strong tendency is to ‘correct’ the ‘market failures’ by substituting more government control for market incentives.” The article is The Political Economy of Morality: Political Pretense vs. Market Performance by Dwight R. Lee. Lee explains the difference between “magnanimous morality” (helping people) and “mundane morality” (obeying the generally accepted rules or norms of conduct). Markets operate under mundane morality, which is not as emotionally appealing as as magnanimous morality. But it’s important, as it is markets — not government — that have provided economic progress. There’s much more to appreciate in this article, which ends this way: “The rhetoric dominating the public statements of politicians and their special-interest supplicants is successful at convincing people that magnanimous morality requires substituting political action for market incentives, even though the former generates outcomes that are less efficient and moral than does the latter. The reality is that political behavior is as motivated by self-interest as market behavior is. … As long as there are people who cannot resist the appeal of morality on the cheap, the political process will continue to serve up cheap morality. And the result will continue to be neither moral nor cheap.”

Begging for Billionaires. The documentary film Begging for Billionaires will be shown in Wichita next week. The film’s synopsis is this: “In 2005, a divided U.S. Supreme Court gave city governments the authority to take private homes and businesses by eminent domain and transfer ownership to private developers for the purpose of building things like shopping centers, corporate office towers and professional sports arenas. According to the court, the community economic development benefits of such private projects qualified them as being for ‘public use’ under the 5th Amendment’s ‘takings clause.’ The Court’s ruling immediately sparked public outrage and was broadly criticized as a gross misinterpretation of the constitution. Through a mix of guerrilla journalism, expert interviews, and the stories of victims; Begging For Billionaires reveals the fallout of the Kelo case, exposing how city governments brazenly seize property after property from the powerless and give it to the powerful for the pettiest of non-essential ‘economic development’ projects, many of which are subsidized with taxpayer money. Meanwhile, poor and disadvantaged families are forced from their homes. Everyday citizens watch helplessly as their family histories are bulldozed to smithereens. In some cases, homeowners scramble to save their life’s possessions as demolition crews pulverize the walls around them, and Centuries-old neighborhoods are wiped from existence despite rich histories and beautifully maintained homes. Begging for Billionaires begs the question: are we losing sight of the balance between individual property rights and those of the community?” The movie, sponsored by Americans for Prosperity, will be shown on Monday, December 13 from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

O’Toole on urban planning. As Wichita considers approving a plan for the revitalization of downtown Wichita, we should consider the wisdom of Randal O’Toole: “Urban planners want to shape our cities. And they want our cities to shape you. That’s the conclusion of Cato Institute Senior Fellow Randal O’Toole. He argues that the rationales for most urban planning collapses upon examination.” O’Toole visited Wichita earlier this year. Click here to view a short video of him speaking on urban planning.

Kansas House of Representatives leaders elected. “House Speaker Mike O’Neal, R-Hutchinson and Rep. Arlen Siegfreid, R-Olathe, will hold pivotal leadership positions in the Kansas House after voting Monday among GOP members who re-elected O’Neal to the chamber’s top job and selected Siegfreid as the new House majority leader.” More from Tim Carpenter in the Topeka Capital-Journal.

School lessons learned. Joel Klein, Chancellor of New York City public schools, writing in the Wall Street Journal: “Over the past eight years, I’ve been privileged to serve as chancellor of the New York City Department of Education, the nation’s largest school district. Working with a mayor who courageously took responsibility for our schools, our department has made significant changes and progress. Along the way, I’ve learned some important lessons about what works in public education, what doesn’t, and what (and who) are the biggest obstacles to the transformative changes we still need. … Traditional proposals for improving education — more money, better curriculum, smaller classes, etc. — aren’t going to get the job done. … Bureaucrats, unions and politicians had their way, and they blamed poor results on students and their families. … The people with the loudest and best-funded voices are committed to maintaining a status quo that protects their needs even if it doesn’t work for children. … As I leave the best job I’ve ever had, I know that more progress is possible despite the inevitable resistance to change. To prevail, the public and, most importantly, parents must insist on a single standard: Every school has to be one to which we’d send our own kids. We are not remotely close to that today. We know how to fix public education. The question is whether we have the political will to do it.” This is more evidence of how far behind the rest of the states is Kansas.

Kansas and Wichita quick takes: Sunday November 7, 2010

Wichita City Council this week. Spirit AeroSystems asks for $7.5 million in Industrial Revenue Bonds (IRB). IRBs are not loans made by the city. In fact, in this case the bonds will be purchased by Spirit itself, says the agenda report: “Spirit AeroSystems, Inc. intends to purchase the bonds itself, through direct placement, and the bonds will not be reoffered for sale to the public.” The reason for the bonds is the property tax exemption on property purchased with the bond proceeds. Additionally, Spirit may not have to pay sales tax on the purchases. This is a public hearing designed to solicit citizen input on this matter. … Then POET Ethanol, Inc. asks for an additional five years of property tax exemption. Five years ago POET — then known as Ethanol Products, LLC — received a “five-plus-five-year” exemption, meaning that exemptions were granted for five years, with a review to take place to see if the company met the goals it agreed to as a condition of receiving the exemption. At this five year review, city staff says POET has met the goals and recommends that the property tax exemptions be granted for another five years. … The Finance Department will also present a quarterly financial report. The agenda and accompanying material is at Wichita City Council Meeting, November 9, 2010.

The election means something. “Elections have consequences,” writes Burdett Loomis, professor of Political Science at the University of Kansas in an Insight Kansas editorial available at State of the State KS. He writes: “The broad and deep GOP set of victories means that conservatives have the opportunity to put forward an agenda of social, fiscal, and tax issues that have been built up over the past two decades. Unquestionably, many of those items will quickly find their way into law.” But Loomis thinks things are pretty good already in Kansas: “In general, things may need some tinkering, but there’s very little that’s broken in Kansas. Governor Brownback should understand his power, and the need to act responsibly as he works on behalf of all Kansans to better their health, education, and quality of life.”

Wichita Eagle publisher at Pachyderm. This week’s meeting (November 12) meeting of the Wichita Pachyderm Club features as the presenter William “Skip” Hidlay, President and Publisher of The Wichita Eagle. His topic will be “The Eagle’s transformation in the digital age.” Hidlay is new to Wichita, having started at the Eagle in March after working at newspapers in New Jersey. The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

Property rights experiment to be conducted. This Monday Americans for Prosperity, Wichita Chapter, presents “I, City: An Exercise.” Presenters will be John Todd and Susan Estes. Todd says: “You are invited to participate in an experimental exercise involving private property rights, and experience the impact of taxes, regulations, and economic incentive programs mandated by government on those property rights.” Todd says that suggested reading prior to the meeting is “I, Pencil” an essay by Leonard E. Read of the Foundation For Economic Education. You may click here to read this short essay. This event is on Monday November 8, from 7:00 pm to 8:30 pm, at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Kansas taxes in perspective. Governor elect Sam Brownback wants to take a look at the tax structure in Kansas. Possible actions could include eliminating the corporate income tax. Context: The one cent per dollar increase in the statewide sales tax is expected to bring in an additional $300 million per year. According to the Kansas Legislature Briefing Book, in fiscal year 2009 the corporate income tax brought in $294.2 million, just about the same as the increase in the sales tax. Personal income taxes brought in $2,755.3 million. Excise taxes — sales and compensating use taxes, alcohol and cigarette taxes, and severance taxes — brought in $2,286.7 million.

Huelskamp to Washington. Mark Reagan of the Dodge City Daily Globe interviews Tim Huelskamp, the new congressman for the first district of Kansas. Some of the matters Huelskamp has to deal with include orientation, hiring a staff in Washington and in the home district, his hope to serve on the agriculture committee, and voting for leadership. He notes that the federal government has been borrowing 37 cents of each dollar it spends. … Tim and his wife Angela have four young children, all adopted, some from Haiti. I would imagine a big decision he has to make is whether to travel home each weekend — as did predecessor Jerry Moran — or move his family to Washington. It’s not a quick and simple matter to travel from Washington to his home in Fowler. It usually takes about six hours to fly from Washington to Wichita, and then another three hours to drive to Fowler. That’s a lot of time spent traveling, and most of it is idle, wasted time. … I’ve observed Huelskamp in several debates on the floor of the Kansas Senate. Whoever is selected to fill his remaining term has some big shoes to fill.

Election was about the economy. Cato Institute executive vice president David Boaz contributes an excellent analysis of the election and a cautionary warning. In GOP Won on Economy, So Focus on It he writes: “The usual pattern is that after the election, voters and the activists go back to their normal lives, but organized interests redouble their efforts to influence policymakers. The people who want something from government hire lobbyists, make political contributions and otherwise do all they can to get their hands on taxpayers’ money. Meanwhile, the average taxpayer cannot be expected to exert influence on each particular spending bill. Tea partiers must change that pattern. They must keep up the pressure on Congress and state legislators. They must demand actual performance, not just promises. To keep momentum going, tea partiers should also insist that Republicans stay focused on the economic agenda that created their winning coalition, and not get bogged down in divisive social issues, which will split the movement and alienate independents.” In Kansas, this may be a problem. While incoming governor Sam Brownback is already exploring ways to cut taxes in Kansas, there are also proposals for various social legislative agendas, such as restrictions on abortion and requiring photo ID for voting. While these measures are important, I believe our state’s fiscal status is very important and must be dealt with.

Organ recital this Tuesday. This Tuesday German organist Ludger Lohmann visits Wichita to present a recital as part of the Rie Bloomfield Organ Series. The event is at 7:30 pm Tuesday, November 9, at Wiedemann Recital Hall (map) on the campus of Wichita State University. Tickets are $10 with discounts available. For more information call the fine arts box office at 316-978-3233. I’ve not heard Mr. Lohmann live, but I own several of his recordings, and this is a recital that music lovers should not miss.

Kansas and Wichita quick takes: Thursday November 4, 2010

The future of politics is here, now. After noting how California reached way back to the past to elect a governor, Denis Boyles writes in National Review Online about the future, and how it’s being made right here: “If you want to see the bright and shining politics of the future, you have to go to the country’s heartland, and specifically to Kansas, a place most Democrats only know from Thomas Frank’s liberal folklore. There, the election has yielded two new congressmen — Mike Pompeo and the remarkable Tim Huelskamp — who were not created by the Tea Party movement because their politics were already ahead of that helpful wave. Here‘s a local paper’s coverage. Pompeo is a natural leader, while Huelskamp is something even more — an inspiration, maybe. (He’s briefly sketched in Superior, Nebraska). Mark these guys. Politically, they’re how it’s going to be.”

Schools hope we won’t notice. Kansas Reporter tells of the new Kansas school funding lawsuit, filed on Election Day. Schools must have hoped that news of the filing would get swamped by election day news, which is what happened. The remedy asked for is more money, which has been shown not to work very well in terms of improving student performance … but it makes the education bureaucracy happy. I would suggest that students sue the Kansas State Department of Education for the inadequate education many have received. For a remedy, ask for things that have been shown to work: charter schools and widespread school choice.

Kansas House Republicans. Yesterday I reported that Republicans gained 15 seats in the Kansas House of Representatives. Double-checking revealed that I had made a data entry error. The actual number of Republican gains is 16, for a composition of 92 Republicans and 33 Democrats.

Kansas House Conservatives. In the same article it was noted that since some Kansas House Republicans — the so-called moderates or left-wing Republicans — vote with Democrats more often than not, there was a working caucus of about 55 conservatives. It is thought that conservatives picked up four seats in the August primary, bringing the number to 59. With most of the Republicans who defeated Democrats expected to join the conservative cause, it appears that conservatives now fill over 70 seats, constituting a working majority in the 125-member Kansas House of Representatives. Conservatives do not enjoy a majority of votes in the Kansas Senate, however.

Local smoking bans still wrong. As noted in today’s Wichita Eagle, there might be a revisiting of the relatively new Kansas statewide smoking ban. Incoming Governor Sam Brownback believes that such decisions should be left to local governments, presumably counties or cities in this case. For those who believe that the proper foundation for making such decisions is unfoundering respect for property rights — plus the belief that free people can make their own decisions — it doesn’t matter much who violates these property rights.

GOP: Unlock the American Economy Daniel Henninger in the Wall Street Journal on spending and what Congress really needs to do: “It is conventional wisdom that what voters, tea partiers and talkers want the Republican Party to do is cut the spending. … Getting the spending under control matters a lot.” But Henninger says controlling spending is not enough: “The new GOP has to find an identity beyond the Beltway power game, a way to make the nation’s most important activity not what is going on in Washington, as now, but what is done out in the country, among the nation’s daily producers and workers. The simplest way for the Republican Party to free itself and the economy from this unending Beltway hell is by reviving a core belief of one of the country’s most successful presidents: If the government will get out of the way, Ronald Reagan argued, there’s no limit to what the American people can achieve.” Government getting out of the way was one of freshly-minted Congressman Mike Pompeo’s campaign themes. National figures are warning Republicans that they have one chance to get things right in Washington or risk losing the support they won in this election. And Pompeo urged his supporters, more than once, to hold him accountable in Washington. Maybe Raj Goyle might want to linger in Wichita for a few years to see how things work out.

Kansas restrictive covenants eased regarding political yard signs

It’s common for neighborhoods to have restrictive covenants that prohibit homeowners from placing any signs in their yard, except for signs advertising homes for sale. But a 2008 Kansas law overrides these restrictive covenants to allow for the placement of small political yard signs starting 45 days before an election. Still, residents of covenant neighborhoods may want to observe their neighborhood’s restrictions, even though they are not valid.

The bill was the product of then-Senator Phil Journey of Haysville. Journey is now a judge in the Kansas 18th Judicial District. The bill passed unanimously in both the Kansas House and Senate.

According to the First Amendment Center, some 50 million people live in neighborhoods with homeowners associations. And laws like the 2008 Kansas law are not without controversy, despite the unanimous vote in the Kansas Legislature.

While the U.S. Supreme Court has ruled that governmental entities like cities can’t stop homeowners from displaying political yard signs, a homeowners association is not government. Instead, it is a group that people voluntarily enter.

Generally, when prospective homeowners purchase a home in a neighborhood with restrictive covenants, they are asked to sign a document pledging to comply with the provisions in the covenants. If those covenants prohibit political yard signs, but a Kansas law says these covenants do not apply, what should a homeowner do?

In his monumental work For a New Liberty: The Libertarian Manifesto, Murray N. Rothbard argues that the right to free speech is not based on some “vague and wooly” concept that protects the “public interest,” such as prohibition of falsely crying “fire” in a theater. Instead, it should be based on property rights. (page 43)

In the case of falsely crying “fire” in the theater, Rothbard argues that this act violates the contract between the theater owner and patrons to enjoy the presentation without interruption. It violates their property rights.

While a homeowner certainly owns the yard in front of his house, he does so based on the voluntary agreements entered into, such as payment of an agreed-upon amount of money to the previous owner. Another agreement entered into is between the new homeowner and all the other homeowners in the neighborhood through the restrictive covenants.

So if those restrictive covenants prohibit political yard signs, that restriction is something that has been mutually agreed to. It is part of the property rights that homeowners in the neighborhood enjoy. It cannot be violated without violating the property rights of those who bought their homes with the understanding that the covenants are part of the property they purchased.

Practically: Should you display signs in your yard?

While Kansas law makes it legal for those living in communities with covenants that prohibit political yard signs, residents may want to observe these convents. Here’s why: If neighbors are not aware of this new Kansas law and therefore still believe that the yard signs are not allowed in your neighborhood, that may cause them to think badly of those with yard signs, and by extension, the candidates that are being promoted.

Yes, these people who believe the covenants against yard signs are still valid are misinformed, but they vote, too. Whether to display yard signs in a covenant neighborhood is a judgment that each person will have to make for themselves.

The Kansas statute

K.S.A. 58-3820. Restrictive covenants; political yard signs; limitations. (a) On and after the effective date of this act, any provision of a restrictive covenant which prohibits the display of political yard signs, which are less than six square feet, during a period commencing 45 days before an election and ending two days after the election is hereby declared to be against public policy and such provision shall be void and unenforceable.

(b) The provisions of this section shall apply to any restrictive covenant in existence on the effective date of this act.

Or, as described in the 2008 Summary of Legislation: “The bill invalidates any provision of a restrictive covenant prohibiting the display of political yard signs, which are less than six square feet, 45 days before an election or two days after the election.”

‘The Power of the Poor’ to be shown in Wichita

On Monday October 11, the video “The Power of the Poor” will be shown in Wichita, with discussion following.

“The Power of the Poor is a compelling look at the surprising and vital role of inclusive laws and titled property in establishing peace and prosperity. It is also the story of real people with real struggles — all of whom share a commitment to entrepreneurship.”

“De Soto and his team have proven that, even hobbled by great obstacles, the world’s hard-working poor entrepreneurs have created far more wealth than anyone had ever imagined possible — even with the absence of the legal frameworks people in the rich north take for granted. Prosperity is possible, if only we simplify the rules of the game. That means giving the poor titled property and the legal business tools we in the West enjoy. Such will enable them to harness the power of their considerable assets, as these stories illustrate.”

The presentation will be at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The time is from 7:00 pm to 8:30 pm.

For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Kansas restrictive neighborhood covenants don’t apply to political yard signs

It’s common for neighborhoods to have restrictive covenants that prohibit homeowners from placing any signs in their yard, except for signs advertising homes for sale. But a 2008 Kansas law overrides these restrictive covenants to allow for the placement of small political yard signs starting 45 days before an election.

The bill was the product of then-Senator Phil Journey of Haysville. Journey is now a judge in the Kansas 18th Judicial District. The bill passed unanimously in both the Kansas House and Senate.

According to the First Amendment Center, some 50 million people live in neighborhoods with homeowners associations. And laws like the 2008 Kansas law are not without controversy, despite the unanimous vote in the Kansas Legislature.

While the U.S. Supreme Court has ruled that governmental entities like cities can’t stop homeowners from displaying political yard signs, a homeowners association is not government. Instead, it is a group that people voluntarily enter.

Generally, when prospective homeowners purchase a home in a neighborhood with restrictive covenants, they are asked to sign a document pledging to comply with the provisions in the covenants. If those covenants prohibit political yard signs, but a Kansas law says these covenants do not apply, what should a homeowner do?

In his monumental work For a New Liberty: The Libertarian Manifesto, Murray N. Rothbard argues that the right to free speech is not based on some “vague and wooly” concept that protects the “public interest,” such as prohibition of falsely crying “fire” in a theater. Instead, it should be based on property rights. (page 43)

In the case of falsely crying “fire” in the theater, Rothbard argues that this act violates the contract between the theater owner and patrons to enjoy the presentation without interruption. It violates their property rights.

While a homeowner certainly owns the yard in front of his house, he does so based on the voluntary agreements entered into, such as payment of an agreed-upon amount of money to the previous owner. Another agreement entered into is between the new homeowner and all the other homeowners in the neighborhood through the restrictive covenants.

So if those restrictive covenants prohibit political yard signs, that restriction is something that has been mutually agreed to. It is part of the property rights that homeowners in the neighborhood enjoy. It cannot be violated without violating the property rights of those who bought their homes with the understanding that the covenants are part of the property they purchased.

The Kansas statute

K.S.A. 58-3820. Restrictive covenants; political yard signs; limitations. (a) On and after the effective date of this act, any provision of a restrictive covenant which prohibits the display of political yard signs, which are less than six square feet, during a period commencing 45 days before an election and ending two days after the election is hereby declared to be against public policy and such provision shall be void and unenforceable.

(b) The provisions of this section shall apply to any restrictive covenant in existence on the effective date of this act.

Or, as described in the 2008 Summary of Legislation: “The bill invalidates any provision of a restrictive covenant prohibiting the display of political yard signs, which are less than six square feet, 45 days before an election or two days after the election.”

For the August 3rd primary election, the first day for signs in restricted neighborhoods is June 19th.

For the general election on November 2, the first day for signs is September 18th.

Letters on Wichita Bowllagio

Letters recently appeared in the Wichita Eagle regarding the proposed Bowllagio project, a west side entertainment destination. Bowllagio is planned to have a bowling and entertainment center, a boutique hotel, and a restaurant owned by a celebrity television chef.

The developers of this project propose to make use of $13 million in STAR bond financing. STAR bonds are issued for the immediate benefit of the developers, with the sales tax collected in the district used to pay off the bonds. The project also proposes to be a Community Improvement District, which allows an additional two cents per dollar to be collected in sales tax, again for the benefit of the district.

—-
Property rights

Imagine paying your mortgage and taxes for many years, only to get a knock on your door one day. A real estate developer tells you he wants your land.

That’s what happened to a couple on South Maize Road in the boundaries of the proposed Bowllagio sales-tax-and-revenue (STAR) bonds district. They were offered the county-appraised value, plus 10 percent, for their home. But they don’t want to move, as they couldn’t find a comparable property for what the developer offered.

Now the homeowners are concerned they may be forced out of their home through the process of eminent domain. This forceful taking of property by government is one of the worst possible violations of private property rights.

Wichita Mayor Carl Brewer said that the city does not intend to use eminent domain for the proposed Bowllagio entertainment complex.

That’s good news. The city can and should affirm this promise by writing it into the Bowllagio authorizing ordinance. Supporting private property rights is essential; the use of public funds for private projects is bad policy.

Susan Oliver Estes
Wichita

—-
Let developer fill funding gap

Bowllagio’s representative told the Wichita City Council last week that the developer needed $13 million in public money to fill the projected funding shortfall for the project to be economically feasible. I believe the developer needs to dig deeper into his own pocket to fill this funding gap, or seek private venture capital.

As an experienced real estate practitioner, I am aggrieved that the Wichita mayor and City Council members lack the necessary experience to properly evaluate these projects. They have proved to be little match in protecting the public treasury against sophisticated developers accustomed to using the public purse as part of their real estate funding formulas.

The investment of public money in bowling alleys, restaurants, shops and hotels that compete with existing businesses that offer the same services is not a proper role for government to play and is wrong. It creates an unlevel playing field for those businesses that compete in the same market using their own money.

If the Bowllagio development venture is an economically feasible project, the private developer will find the private money he needs to fund it.

John R. Todd
Wichita