Tag Archives: Regulation

WichitaLiberty.TV set 2014-03-03 1200

WichitaLiberty.TV: Kansas school finance and reform, Charles Koch on why he fights for liberty

In this episode of WichitaLiberty.TV: The Kansas legislature passed a school finance bill that contains reform measures that the education establishment doesn’t want. In response, our state’s newspapers uniformly support the system rather than Kansas schoolchildren. Then, in the Wall Street Journal Charles Koch explains why liberty is important, and why he’s fighting for that. Episode 39, broadcast April 20, 2014. View below, or click here to view at YouTube.

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Are you worried about global warming?

polar-bear-400To the extent that global temperatures are rising, and the extent that mankind is the cause, we should be concerned about global warming. Climate change I meant to say, please excuse me.

It’s no wonder that the term global warming has been replaced by climate change. As the following two charts show, the models that are in common use by climate scientists have predicted rising temperatures, but actual observations of temperatures have not conformed to predictions. Temperatures have been level in recent years.

Here’s a simplified chart of the temperatures predicted by climate scientists compared to actual temperatures. A more complicated version follows. Click on either chart for a larger version.

As you can see, actual temperatures have not risen as they should have, if only the Mother Earth would conform to the predictions of climate scientists. Despite this lack of predictive power, global warming alarmists (oops, I meant climate change alarmists) insist we should radically restructure our economy in order to accommodate the predictions of climate models that have been shown to be not very predictive — if we are concerned about accuracy.

Temperatures v Predictions 1976-2013

Temperatures v Predictions 1976-2013 b

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Regulation failure leads to tragedy in Wichita

wichita-taxi regulations

When the Wichita City Council passed new taxicab regulations in 2012, the focus was on dirty cabs and slovenly drivers who were not acting as goodwill ambassadors for the city. Mayor Carl Brewer said he was “tired” of hearing complaints about drivers.

So the council passed new regulations regarding taxicabs, including the requirement that drivers attend customer service training provided by Go Wichita Convention and Visitors Bureau. Other regulations determine taxicab office staffing levels and level of supervision.

Bryon Scott Spohn, a taxi driver accused of raping a passenger.

But something very important slipped through the cracks. The Wichita Eagle has reported the city didn’t competently enforce regulations designed to protect passenger safety:

A Wichita taxicab driver now in prison for raping a passenger last year shouldn’t have been allowed to operate a taxi in the first place.

That’s because at the time Bryon Scott Spohn applied for a taxi driver’s license in late 2012, he was on a state sex offender registry for possession of child pornography. A city ordinance that went into effect in July 2012 says a taxi driver’s license shall not be issued to anyone who “is now or has ever been registered as a sexual offender with any state, county or local government.”

Spohn shouldn’t have received a taxi license but did because the new change banning registered sex offenders wasn’t communicated to staff members doing background checks on taxi driver applicants, city officials told The Eagle on Friday. The city has fixed the problem that led to the oversight in Spohn’s case, they said. Taxi driver in prison for raping passenger was on sex offender registry, March 3, 2014

The regulations regarding customer service training were implemented. But the really important regulations? Lack of oversight, says the city.

I wonder: Who is regulating the regulators?

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What type of watchdog are you?

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To help citizens become government watchdogs, the Franklin Center for Government and Public Integrity is providing a new resource. It’s the Watchdog Quiz, and it will help you discover what type of role you will want to fill as a government watchdog.

The quiz takes just a few moments to complete, and answering the questions will help you discover all the things that citizens can do to be involved in government, especially at the local level. My Watchdog type is “Content Creator.” What is yours?

Click here to take the quiz.

Following is some material from Watchful Citizens Follow Founders’ Vision For America.

“The salvation of the state is watchfulness in the citizen.”

This quote inscribed on the state capitol building in Lincoln, Nebraska, has become our North Star here at Watchdog Wire. We believe that citizens can contribute to better and more efficient local government by staying involved in their communities and speaking up when something doesn’t add up.

But what does it mean to be “watchful?”

The answer is different for everyone, and has changed throughout American history. For Thomas Paine and Ben Franklin, staying watchful came in the form of pamphlets and newspaper columns. Later, being watchful was entrusted to elected representatives in Congress. Now, technology has made it easier than ever for citizens to stay informed and hold government accountable.

The medium used is ever-changing but the sentiment of keeping watch remains the same — to ensure the blessing of liberty to ourselves and our posterity.

So where do you fit into the American story? How do you keep watch on government and its expanding role in our lives? Take the Watchdog Quiz to find out.

Continue reading at Watchful Citizens Follow Founders’ Vision For America.

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WichitaLiberty.TV January 26, 2014

In this episode of WichitaLiberty.TV: The City of Wichita’s performance report holds a forecast for increasing debt in Wichita. Then, the government sector in Kansas has grown faster than the private sector. What does this mean? Finally: What can the story of “Bootleggers and Baptists” teach us about regulation? Episode 29, broadcast January 26, 2014. View below, or click here to view at YouTube.

In Wichita, more tax for more transit?

Wichita City Hall

In 2014 it is likely that Wichitans will be asked to pay an increased sales tax, part of which would fund the existing bus transit service, as the system is not sustaining itself. Another part of the increased sales tax might expand the service. Wichitans ought to think twice before voting to spend additional taxpayer funds for either reason. In fact, Wichita ought to consider spending less on public transit, and look to the private sector to provide transit that people want to use, and which meets their real needs.

Transit is expensive. To be more precise, government-provided transit is expensive. I’ve gathered data from the National Transit Database and provided it in a more useful format that that provided by the government. You may click here to use this interactive visualization of operating costs. (This table provides the codes that are used.) As for Wichita, the nearby excerpt (click for a larger version) shows that for 2011, the cost per passenger mile for the “regular” bus service was $0.97. This is not the cost to move a bus one mile. It is the cost to move one passenger one mile. This value is not out of line compared to other cities.

wichita-transit-2014-01

If Wichita were to expand its transit service to offer wider coverage and longer hours of service, the cost per passenger mile probably would not go down. We would still have a system that is very expensive, especially considering the level of service that would still be provided.

Can the private sector do better? One thing we could do is to outsource or privatize the transit system. Government would still pay for the system, but the private sector would operate the buses. This would likely be an improvement, as outsourcing almost always results in lower costs and improved service.

(By the way, many people would be surprised to learn of the fraction of expenses paid for through fares. Considering operating expenses only, the number is 13.5 percent. Considering operating and capital costs, just 12.1 percent comes from fare revenue. The remainder is provided by taxpayers. So when a bus rider puts a dollar in the farebox, taxpayers contribute an additional six dollars to fund the system.)

What Wichita could do to really improve service is to allow private competition to the existing transit system. Here’s an example of what could happen:

Brooklyn’s dollar van fleet is a tantalizing demonstration of how we might supplement mass transit with privately-owned mini-transit entrepreneurs.

America’s 20th largest bus service — hauling 120,000 riders a day — is profitable and also illegal. It’s not really a bus service at all, but a willy-nilly aggregation of 350 licensed and 500 unlicensed privately-owned “dollar vans” that roam the streets of Brooklyn and Queens, picking up passengers from street corners where city buses are either missing or inconvenient. The dollar van fleet is a tantalizing demonstration of how we might supplement mass transit to include privately-owned mini-transit entrepreneurs, giving people alternative ways to get around, and creating jobs. (The (Illegal) Private Bus System That Works, The Atlantic.)

This is not an example of government paying a private-sector company to do a job that government formerly did. Instead, this is allowing the private sector to operate on its own, free to succeed or fail based on how well it provides service. It’s allowing the private sector to be flexible and innovative in ways that government bureaucracy, like our transit system, is not able.

There are other things we could do to help improve transit service in Wichita. On his television show, John Stossel recently had a segment on a system called “Lyft.” This is a system available in about a dozen large cities in America, and there are other similar systems. You might sign up to be a driver. You go through a background check, and if you pass, you’re a driver for Lyft. Then people who need a ride use their smart phone to request a trip. You, as a Lyft driver, can decide if you’d like to provide the ride.

After the driver drops off the rider, the rider — that is the customer — decides how much to pay the driver for the ride. The system makes a suggestion, but other than that it’s up to the customer to decide how much to pay. As you might imagine, the system uses feedback to rate both drivers and customers. People in the Lyft system have an incentive to be good providers of service, and also good consumers of service.

Isn’t that a tremendous contrast to the way government works? Government works through force — through taxation — requiring all of us to pay to support a bus system that very few people use. And few people use the system because — like most government programs — the service is lousy. It’s a self-perpetuating feedback loop. Lousy government service leads to few people using the service, which leads to the need for more subsidy. But in the Lyft system people willingly cooperate, aided by technology.

Could Lyft work in Wichita? Not likely, because government stands in the way. I’m pretty sure Lyft would be illegal in Wichita. The city recently passed taxicab regulations that are quite strict: Taxi companies must have a central office, staffed at least 40 hours per week; a dispatch system operating 24 hours per day, seven days per week; enough cabs to operate city-wide service, which the city has determined is ten cabs; and a supervisor on duty at all times cabs are operating.

These regulations stifle innovation and entrepreneurship. Things like Lyft and the dollar vans aren’t compatible with these regulations. These regulations mean that our present transit and taxi service — which no one seems happy with — is all that we will ever have.

Here’s something else: In the Lyft system, passengers ride in the front seat of the car next to the driver. Total strangers do that! Can you imagine if you asked to sit in the front seat of a taxicab in Wichita? This is the private sector versus government-regulated monopolies.

transit-service-in-wichita

Recently the director of the Wichita transit system made a presentation to Wichita City Council members outlining various possibilities about what Wichita could do with bus service. Was allowing the private sector a role in providing transit a possibility? Not that I heard. It’s just not in the DNA of government bureaucrats and unfortunately, many elected officials, to consider letting the private sector do a job.

Exchange data security breaches don’t require notification

The breach of consumer data at Target has brought the issue of data security in focus. Yesterday a senator called for more protection and accountability for consumers and retailers. The following story from Watchdog.org tells us that government does not want to hold itself to the standards it wants the private sector to observe. There has been legislation proposed. Rep. Diane Black [R-TN6] has introduced H.R. 3731: Federal Exchange Data Breach Notification Act of 2013, whose title is “To require an Exchange established under the Patient Protection and Affordable Care Act to notify individuals in the case that personal information of such individuals is known to have been acquired or accessed as a result of a breach of the security of any system maintained by the Exchange.”

Feds not required to report security breaches of Obamacare exchange website

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HACKED OFF: Hackers or careless bureaucrats could cause private information to be spilled across the Internet. But the federal government, unlike most states, don't have to tell users when they have been compromised.

HACKED OFF: Hackers or careless bureaucrats could cause private information to be spilled across the Internet. But the federal government, unlike most states, don’t have to tell users when they have been compromised.

By Eric Boehm | Watchdog.org

Americans who buy health insurance through the federal Obamacare exchange website could have their personal information stolen by hackers and never even know it.

Most of the state-run health exchange websites will be covered by state laws that require notification when government databases are breached by hackers. But there is no law requiring notification when databases run by the federal government are breached, and even though the Department of Health and Human Services was asked to include a notification provision in the rules being drawn up for the new federal exchange, it declined to do so.

Other protections for individuals’ privacy, like the Health Insurance Portability and Accountability Act, or HIPAA, do not apply to the government-run exchange, only to health providers and insurance companies operating within the exchange.

Privacy advocates and cyber-security experts have had concerns about the lack of a federal notification law for years and hope the scrutiny of the Obamacare exchange will finally bringchange.

“The notification requirement is a very important part of overall security,” saidDeven McGraw, director of the Health Privacy Project at the Center for Democracy and Technology. “People should be told when their information is at-risk.”

The lack of a notification requirement is particularly bad for the health insurance exchange website because of all the questions surrounding the site’s security. Poor security, coupled with the website’s high-profile problems, could make it a target for hackers either seeking to steal identities or embarrass the government.

Unfortunately, security is often an afterthought for the government, said David Kennedy, CEO of TrustedSEC, an Ohio-based cyber-security firm. Kennedy has testified before Congress about security threats in the Obamacare exchange and the need for notification laws.

“All we need is something that says if the federal government is breached, all we have to do is alert the public,” he told Watchdog.org. “Healthcare.gov is just one website of hundreds that have had these issues going back through the years.”

Together it creates a possible nightmare scenario. Without strong security on the front end, the hastily built and not fully operational website could become a treasure trove for hackers looking to steal identities. But without any laws requiring that those victims be notified by the federal government users of the Federal health exchange will be in the dark about any potential security breaches of their private data.

When the federal Obamacare exchange was being developed by HHS prior to its troubled launch on Oct. 1, experts told the department that it should include a data-breach provision in its policies for the website even though one was not required under federal law.

The department flatly declined to do so.

The final rules for the exchanges were approved on March 27, 2012, meeting of HHS officials, according to the Federal Register.

At that meeting, two commenters asked HHS to ensure the exchanges would promptly notify affected enrollees in the event of a data breach or unauthorized access to the exchange’s databases. One suggested that a full investigation be launched each time such a breach occurred, with the goal of holding hackers legally and financially accountable for breaking into the website.

The department’s response: “We do not plan to include the specific notification procedures in the final rule. Consistent with this approach, we do not include specific policies for investigation of data breaches in this final rule.”

Since there is no federal notification requirement, breaches of any and all federal databases can occur without the public ever being informed.

The only way to find out a hack has occurred is when the government decides to disclose it — as several federal law enforcement agencies did last month in response to attacks from Anonymous, a group of super-hackers who threatened to take down the FBI website and others.

But hacks that happen behind the scenes —potentially stealing everything from Social Security numbers to Department of Homeland Security watch lists — never have to be reported.

“That’s alarming because there could be a number of federal databases that are compromised already and we don’t know about it,” Kennedy said. “The exchange is part of a bigger problem.”

Federal privacy protections contained in HIPAA also do not apply to the databases created by the federal exchange website, McGraw said, even though health insurers doing business through the exchange must be HIPAA compliant.

In other words, the health plan itself is covered by HIPAA and any breaches of security that affect a consumer who has purchased a specific plan would have to be reported. But the process of choosing and purchasing a plan through the federal exchange — along with any information entered into the federal exchange as part of that process — is not subject to HIPAA protections.

“The problem with the exchanges is that they are such new entities, and they are so unique that existing laws don’t really cover them,” McGraw said.

But 48 states have laws on the books requiring that they give notification to individuals who may have had personal information stolen or leaked from a government database. Many states require that government agencies and departments alert the state attorney general so investigations can be launched.

In states that opted to run their own health insurance exchanges, those laws generally cover security breaches of the exchanges, McGraw said, though it depends on the specific wording of each state law.

Those state laws are how data breaches of several state-level health insurance exchange websites have come to light.

In September, Watchdog.org reported on a data breech of the Minnesota health exchange — known as “MNsure” — that potentially affected as many as 2,400 people.

In Florida, concerns about data breaches of the state-run exchange website prompted Gov. Rick Scott to send a letter to Congress saying Floridians would not exchange privacy for insurance.

On the federal exchange, such breaches are possible, maybe even likely, since the site was launched without comprehensive testing of the security controls for the system.

A Sept. 27 memo to Medicare chief Marylin Tavernner said insufficient testing of the website before the Oct. 1 launch “exposed a level of uncertainty that can be deemed a high risk,” the Associated Press reported in October.

Even though the federal government does not have to report any breaches of security, at least a few already have occurred.

The most high-profile case so far is that of Thomas Dougall, a South Carolina lawyer who had his personal information accidentally leaked to another person after using the Obamacare exchange last month.

We logged on and compared some prices,” Dougall later told Fox News’ Greta Van Susteren. “We came home last Friday night to have a young man from a completely different state calling to tell me that when he logged on … he got all my personal information in exchange.

Dougall only found out about that breach of security because the recipient was kind enough to give him a call.  Without a requirement that the exchanges report such problems — whether the result of nefarious hackers or glitches in the programming — it is impossible to tell how many other Americans have had their private information released by the federal exchange.

Kennedy said he would not recommend that anyone use the federal exchange until it is more secure and until breaches of security are reported.

“I would say think twice about it, at least until we get more details,” he said.

Kennedy says he supports universal health care and his criticisms of the website are not rooted in political motivations. But the former U.S. Marine whose firm provides computer security to several Fortune 100 companies says there have been “zero changes” to the security of the health insurance exchange website in the run-up to the much-touted Dec. 1 re-launch.

Congress has debated a federal notification law in each of the past three years, but one has never been passed.

In July, during a hearing of the House Committee on Energy and Commerce, lawmakers heard testimony from a variety of experts who explained the need for a federal breach notification requirement.

David Thaw, a law professor at the University of Connecticut who specializes in cyber-security and the legal framework around it, said data breach notification laws, combined with comprehensive data security, are an essential part of protecting consumers and businesses.

I analogize the effects of breach notification alone to locking the bank or vault door while leaving a back window wide open,” he said.

With the federal health insurance exchange, there are questions about whether the vault door has been adequately locked.

But there is no doubt that the back window is still wide open.

Boehm is a reporter for Watchdog.org and can be reached at EBoehm@Watchdog.org. Follow him on Twitter @EricBoehm87

WichitaLiberty Podcast, episode 2

Voice for Liberty logo with microphone 150In this episode of WichitaLiberty Podcasts: David Boaz, Executive Vice President of the Cato Institute, visits the WichitaLiberty.TV studios and explains the ideas behind libertarianism and its approach to government and society. New figures from the Kansas State Department of Education show that spending on public schools in Kansas is rising, and at a rate higher than the year before. Is Wichita economic development being managed? The problem of overcriminalization. City of Wichita proves Einstein’s definition of insanity. Episode 2, October 25, 2013.

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Shownotes

WichitaLiberty.TV October 27, 2013. David Boaz, Executive Vice President of the Cato Institute, visits the WichitaLiberty.TV studios and explains the ideas behind libertarianism and its approach to government and society.
Kansas school spending rises
Wichita economic development not being managed
USA versus You: The problem of overcriminalization
City of Wichita proves Einstein’s definition of insanity

USA versus You: The problem of overcriminalization

Events in recent months have justifiably caused Americans to ask whether a powerful, activist, and interventionist government and bureaucracy is good to have. Those who have been looking at overcriminalization, however, have known that government and regulatory agencies have been targeting and oppressing Americans for a long time. And it’s getting worse.

USA vs. You cover

The new website USAvsYOU.com holds useful information for Americans to know about how law has changed in recent years, compared to how it operated for centuries before. The booklet available for reading is titled USA vs. You: The flood of criminal laws threatening your liberty.

As an example, here is a troubling trend:

In many criminal laws, the “guilty mind” requirement has been removed or weakened. This means people can go to prison regardless of whether they intended to break the law or knew their actions were in violation of the law.

Traditionally, crimes had two components: (l) mens reu (guilty mind), and (2) actus reus (bad act).

Today, many criminal laws and regulations have insufficient or no mens rea (guilty mind) requirement — meaning, a person need not know that his or her conduct is illegal in order to be guilty of the crime.

An example story is the following:

THE CRIME: Rescuing a baby deer

Jeff Counceller, a police officer, and his wife Jennifer spotted an injured baby deer on their neighbor’s porch. Instead of turning a blind eye to the dying fawn, the Councellers took the deer in and nursed it back to health.

An Indiana Conservation Officer spotted the fawn (named Dani) in the Councellers’ yard — and promptly charged the couple with unlawful possession of a deer, a misdemeanor offense. Fortunately for her, the day that “Little Orphan Dani” was to be euthanized by the state, the deer escaped into the wild. Due to public outrage, the government dropped the charges.

The website and booklet is a product of Heritage Foundation and it partners such as the American Civil Liberties Union. Heritage has been covering the issue of overcriminalization here. It describes the problem as this: “Overcriminalization describes the trend to use the criminal law rather than the civil law to solve every problem, to punish every mistake, and to compel compliance with regulatory objectives. Criminal law should be used only if a person intentionally flouts the law or engages in conduct that is morally blameworthy or dangerous.”

We have problems like this in Wichita, believe it or not. An ordinance passed by the Wichita City Council in 2010 might ensnare anyone visiting city hall, if they happen to have a broad-tip marker in their purse or briefcase:

Animated marker

“Possession of Graffiti Implements Prohibited in Public Places. It is unlawful for any person to have in his/her possession any graffiti implement while in, upon or within one hundred (100) feet of any public facility, park, playground, swimming pool, skate park, recreational facility, or other public building owned or operated by the city, county, state, or federal government, or while in, under or within one hundred (100) feet of an underpass, bridge, abutment, storm drain, spillway or similar types of infrastructure unless otherwise authorized.”

“Graffiti implements” are defined broadly earlier in the ordinance.

If you’re thinking about a career in taxicab driving, be advised that the city has ordinances punishing you if you’re found to have violated these standards: “Fail to maintain their personal appearance by being neat and clean in dress and person” and “Fail to keep clothing in good repair, free of rips, tears and stains.”

We could use the shutdown as a teachable moment

The United States government is in the third day of a partial shutdown. It’s quite a coincidence that Chapter 9 of Henry Hazlitt’s book “Economics in One Lesson” talks about government employees right at the time we’re in a government shutdown.

Here, Amanda BillyRock illustrates this chapter of “Economics in One Lesson.” (Click here to view at YouTube.)

You know how on a day when it has snowed or there’s been an ice storm, you hear on the news that “only essential government employees should report to work today.” When I hear that, I’ve wondered “Why do we have non-essential government employees?”

EPA logo

Here’s something that’s a little shocking. I didn’t believe it when I first heard it. The news agency Reuters is reporting that the Environmental Protection Agency — the EPA — has decided that only seven percent of its employees are essential. The others are non-essential. So why do we have them, if they are not essential?

At the Department of Education, only five percent of the employees are considered to be essential and will work during the shutdown. How, I wonder, are we going to educate children during this time?

Do private sector companies have non-essential employees? Of course. But market competition provides a balancing force, a motivation to avoid waste. That’s not present as strongly in government, if at all.

I understand that we depend on government for so many things that during a shutdown — be it partial or whatever — people’s lives will be disrupted. We’re seeing news stories of people showing up at our great national parks, for example, and being turned away because the park is closed. The solution to these problems is to take these products and services away from government and let the private sector operate them.

That’s something that seems very foreign to a lot of people. Take the inspection of airplanes, for example. Right now people are saying that if government inspectors are not available to inspect airplanes, they’re going to crash. Well ask yourself this question. Does an airline strive to operate its airplanes safely only to satisfy government inspectors, or does it wish to protect the lives of its customers and employees, and safeguard its physical assets like the expensive airplanes?

Or consider a meatpacking plant. Does it endeavor to produce safe beef only because inspectors are watching, or because it is concerned for its customers and wants to avoid the terrible publicity and economic harm of a recall?

I’m not saying that beef and airplanes should not be inspected. But they shouldn’t be inspected by government. It’s very difficult to hold government accountable. When we see episodes where government breaks down, such as perhaps government inspectors who might not be doing a good job inspecting beef, the proposed solution is always more money for government. More money for more inspectors and bureaucrats. But, what if we had a private market for inspection services? If there was a failure of inspection, in other words, if a private inspection company was not being thorough, that would become known. The reputation of that company, which is its primary asset, would be harmed. No longer would we trust that company when it says the beef is safe. The company would likely fail, and someone else would provide these services. We can’t really do this with government.

Markets can provide a very strong form of regulation, if we let them work.

To some extent, this happened during the financial crises of 2008. The credit rating services were not owned by government, but they had a government-granted monopoly on providing credit rating services, and many say that their failure to produce accurate assessments of the risks of securities was pivotal in contributing to the collapse. Might it have been different if there was a free market for credit rating services? We don’t really know.

This government shutdown is an opportunity to realize what we really need government to do, what can be better done by the private sector, and maybe even what doesn’t need to be done at all.

Robosquirrel

It’s a tough battle, though. Last week Nancy Pelosi said there was nowhere to cut. How about this: $325,000 was spent on a robotic squirrel named “RoboSquirrel.” This National Science Foundation grant was used to create a realistic-looking robotic squirrel for the purpose of studying how a rattlesnake would react to it. Can’t we cut that? I’m sure Pelosi would say “what would the scientific researchers do if we didn’t fund this program?” As Hazlitt tells us, they’d do something else. Hopefully something else that the market — that is, you and I — value enough to buy it because we want it, not because government taxed us to pay for it. But we can’t see that right now, while we do see robosquirrel. The seen and unseen, again.

I don’t know. Maybe I shouldn’t be so harsh in my criticism. We did learn that a successful rattlesnake attack on a squirrel involves three steps. First, striking and hitting a prey animal, and that’s usually from only about 10 inches away. Then envenomating the prey animal, and the animal may attempt to escape. Then the rattlesnake must relocate the envenomated prey animal after it succumbs to the venom.

Envenomating. I’d never heard that word before. Maybe we really need to get government back to work after all.

ObamaCare chart updated

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Republicans of the Joint Economic Committee of the U.S. Congress have released an update of a chart to help us navigate ObamaCare. (Click on it for a larger version.) From the July 2010 press release accompanying the original chart: “Four months after U.S. House Speaker Nancy Pelosi famously declared ‘We have to pass the bill so you can find out what’s in it,’ a congressional panel has released the first chart illustrating the 2,801 page health care law President Obama signed into law in March. Developed by the Joint Economic Committee minority, led by U.S Senator Sam Brownback of Kansas and Rep. Kevin Brady of Texas, the detailed organization chart displays a bewildering array of new government agencies, regulations and mandates.”

Read all about it at Health Care Chart — Updated Chart Shows Obamacare’s Bewildering Complexity.

Like it or not, we’re coming to plan for you

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
– H.L. Mencken

thinktomorrowtoday-website-2013-09-16

We’ve learned that the government planners will plan for you, whether or not you want it. Despite having voted against participation, two Kansas counties are still listed as members of a regional planning consortium. Further, a month after the Butler County Commission sent a letter asking that references to its participation be removed, its name still appears.

The new website thinktomorrowtoday.org promotes and supports the sustainable communities government planning process in South-Central Kansas. The planning effort has been rebranded as “South Central Kansas Prosperity.”

reap-website-partners-2013-09-16

In the logo, on a map, and in narrative, Butler and Sumner counties are listed as participants. But these newspaper headlines say something else about what the elected officials in these counties thought about joining the plan:

Sumner County isn’t on board with fed’s sustainable communities planning grant

Sumner County isn’t on board with fed’s sustainable communities planning grant (Wichita Eagle, July 30, 2012): “One of the counties served by a sustainable communities planning grant recently declined to be a partner in the effort, expressing concerns about federal intrusion in local government.”

Butler County decides not to support REAP planning grant

Butler County decides not to support REAP planning grant (El Dorado Times, August 23, 2012): “The issue at the center of the Butler County Commission’s discussion about a sustainable communities planning grant was local control.”

I can understand why these counties decided to opt out of the planning process and why two Sedgwick County Commissioners voted against participation.

Cato Institute Senior Fellow Randal O’Toole, in his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, explains the danger and harm of government plans. I remember two passages in particular:

Somewhere in the United States today, government officials are writing a plan that will profoundly affect other people’s lives, incomes, and property. Though it may be written with the best intentions, the plan will go horribly wrong. The costs will be far higher than anticipated, the benefits will prove far smaller, and various unintended consequences will turn out to be worse than even the plan’s critics predicted.

And this:

The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan.

We see the vision of moral absolutism on display: Despite two counties voting against participation, their overseers will, nonetheless, create a plan for them.

It’s for their own good, after all.

WichitaLiberty.TV August 4, 2013

WichitaLiberty.TV logo

In this episode of WichitaLiberty.TV, host Bob Weeks explains a complicated economic development mechanism used in Wichita that hides the true business welfare and cronyism taking place. Then Bob notices that the City of Wichita has banished disagreement, and then shows how the unintended consequences of regulation can be deadly. Episode 7, broadcast August 4, 2013.

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.

Laws that do harm

As we approach another birthday of Milton Friedman, here’s his column from Newsweek in 1982 that explains that despite good intentions, the result of government intervention often harms those it is intended to help.

There is a sure-fire way to predict the consequences of a government social program adopted to achieve worthy ends. Find out what the well-meaning, public-interested persons who advocated its adoption expected it to accomplish. Then reverse those expectations. You will have an accurate prediction of actual results.

To illustrate on the broadest level, idealists from Marx to Lenin and the subsequent fellow travelers claimed that communism would enhance both freedom and prosperity and lead to the “withering away of the state.” We all know the results in the Soviet Union and the People’s Republic of China: misery, slavery and a more powerful and all-encompassing government than the world had ever seen.

Idealists, from Harold Laski to Jawaharlal Nehru, promised the suffering Indian masses that “democratic economic planning” would abolish famines, bring material prosperity, resolve age-old conflicts between the castes and eliminate inequality. The result has been continued deprivation for the masses, continued violence between the castes and widened inequality.

To come down to less sweeping cases rent control has been promoted for millenniums as a way to hold down rents and ensure more housing for the disadvantaged. Wherever it has been adopted, the actual result has been precisely the opposite for all but a few favored tenants. Rent control has encouraged the wasteful use of housing space and has discouraged the building of more housing units. As a result, rents actually paid — whether legally or under the table — by all tenants except those who do not move have skyrocketed. And even the tenants who do not move complain about not being able to.

Over two years ago, when the San Francisco supervisors were contemplating a form of rent control, I republished in a local paper a NEWSWEEK column of mine on rent control, prefacing it with the comment that only a “fool or a knave” could support rent control after examining the massive evidence on its effects. Needless to say, that did not prevent the majority of a board of supervisors, consisting of neither fools nor knaves, from enacting the ordinance I objected to. And the lessons of experience have not prevented the adoption of rent control in other cities — or the repetition of that same experience.

Urban renewal programs were urged to cure “urban blight” and improve the housing available to the poor. The result was a “Federal Bulldozer,” as Martin Anderson titled his searching examination of urban renewal. More dwelling units were torn down than were constructed. The new units constructed were mostly for middle- and upper-income classes. Urban blight was simply shifted and made worse by the still higher density created elsewhere by removing the poor from the “renewed” area.

In education, professionalization, integration, bilingualism, massive doses of federal assistance — all have been promoted to improve the quality of schooling and reduce racial tension and discrimination. The result was predictable: a drastic lowering of educational performance and an increase in actual segregation of races, at least in the North.

President Nixon introduced price controls on Aug. 15, 1971, to eliminate inflation, which at the time was running at about 4 to 5 percent per year. When controls ended in 1974, inflation soared into double digits.

The Interstate Commerce Commission was promoted in the 1880s and 1890s by the Ralph Naders of the day to discipline monopolistic railroads and benefit their customers. One group in today’s Nader conglomerate has published a devastating study of the ICC demonstrating that it strengthened the monopoly power of the railroads, and later of trucking. The users of transportation have had the dubious privilege of paying higher prices for poorer service.

Need I go on? I challenge my readers to name a government social program that has achieved the results promised by its well-meaning and public-interested proponents. I keep repeating “well-meaning and public-interested proponents” because they have generally been the dupes of others who had very clear self-interested motives and often did achieve the results that they intended — the railroads in the 1890s for example.

The amazing thing to me is the continued gullibility of intellectuals and the public. I wish someone would explain that to me. Is it simply because no one has given this widely documented generalization a catchy name – like … (suggestions welcome)?

Wichita airport statistics: the visualization

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
– Frederic Bastiat

While the program to reduce airfares in Wichita has probably met that goal, there have been consequences.

In particular, the availability of air travel in Wichita is lower than it has been, and the trend is in the wrong direction. In some aspects the Wichita trend mirrors that of the nation and other airports, and in others Wichita is falling farther behind.

wichita-airport-dashboard-2013-07-29

The illustration nearby (click it for a larger version) is a static snapshot of data for the nation as a whole (blue line), Wichita (brown), and a few other airports in cities that Wichita’s Visioneering effort identifies as our peers. For each series, I show the percentage change over time, so that all series operate on the same scale. Data is through the end of 2012.

Of particular concern should be the trend in departures and seats. Both are declining in Wichita, as they are also for the nation. But the gap between Wichita and the nation is widening in recent years.

This trend is an example of unintended consequences of government intervention and regulation. The Affordable Airfares program imposes a rough form of price control on airfares in Wichita. If the program didn’t do that — and it appears it succeeds at this goal — then there would be no point in having the program.

The inevitable effect of price controls is that less is supplied, compared to what would have been supplied. This economic phenomenon is reliable and predictable. While travelers prefer low air fares to high, this is not the only consideration. For those who need to travel on short notice, the availability of flights is very important, and on this measure, Wichita is doing much worse than the nation.

For more about the subsidy programs in use at the Wichita airport, see these articles:

Wichita flight count continues decline. “A program designed to bring low air fares to Wichita appears to meet that goal, but the unintended and inevitable consequences of the program are not being recognized. In particular, the number of flights available at the Wichita airport continues to decline.”

Affordable Airfares audit embarrassing to Wichita. “An audit of Affordable Airfares produced by the Kansas Legislative Division of Post Audit is an embarrassment to City of Wichita elected officials and staff, the Kansas Regional Area Economic Partnership, and the Wichita State University Center for Economic Development and Business Research.”

Mixed message on Southwest subsidies. “Now that Southwest Airlines has announced that it will offer service in Wichita, the question is this: Will Southwest tap the subsidy?”

To help you explore this data, I’ve created an interactive visualization. Click here to open the visualization in a new window. You may add or remove any number of airports. Or, if you’d like to watch a video, click on Wichita Airport statistics: The video.

Data is from Research and Innovative Technology Administration (RITA), which is part of the U.S. Department of Transportation. Visualization created by myself using Tableau Public.

WichitaLiberty.TV July 28, 2013

WichitaLiberty.TV logo

In this episode of WichitaLiberty.TV, economist Dr. Russell Sobel joins host Bob Weeks. Topics include local economic development incentives, the environment of favor-seeking, how regulation stifles entrepreneurship, the seen and the unseen, the broken window fallacy, and Dr. Sobel’s research on how intergovernmental grants lead to higher taxes. Episode 6, broadcast July 28, 2013.

Links to material mentioned in this episode:
Dr. Sobel’s page.
Unleashing Capitalism.
Do intergovernmental grants create ratchets in state and local taxes?
Bastiat: What is seen and not seen, and the broken window.

Warning signs still missing

Two weeks after the City of Wichita learned that two prominent downtown hotels are not in compliance with city policy regarding signage, the hotels are still in violation.

Broadview Hotel 2013-07-09 004
Drury Plaza Hotel Broadview

The hotels are located in Community Improvement Districts and are able to collect an extra sales tax that is routed back to the two hotels. Merchants located within a CID are supposed to display a sign. These two hotels — Drury Plaza Hotel Broadview and Fairfield Inn at Waterwalk — aren’t displaying the signage.

For background and photographs, see CID signs missing at some Wichita merchants.

WichitaLiberty.TV July 21, 2013

WichitaLiberty.TV logo

In this episode of WichitaLiberty.TV, host Bob Weeks recommends the Crony Chronicals website and explains the harm of cronyism. Westar, our electric utility, is asking for a rate increase, and cronyism is part of the application. Finally, Wichita Mayor Carl Brewer feels he can’t shop for his personal car in Wichita, but dishes out no-bid contracts and millions in subsidies to his cronies. Episode 5, broadcast July 21, 2013.

Regulations, even well-intentioned, may be dangerous

A regulation intended to save children resulted in many more deaths. The reason is the lulling effect.

Do well-intentioned regulations ever produce the opposite effect? In 1972 the Food and Drug Administration introduced regulations requiring child-resistant bottlecaps for aspirin and some other medications. The goal was to reduce aspirin poisonings among children. Surely this is a laudable goal. If government has the capability to reduce these tragedies, why wouldn’t we implement laws or regulations?

When W. Kip Viscusi looked at data, he found something striking and very sad: After the implementation of the regulations, there was no significant impact on the rate of aspirin poisonings. The intended goal of the regulation was not met.

But here’s the real problem, writes Viscusi: “… there has been an alarming, upward shift in the trend of analgesic ingestion rates since 1972. The source of this pattern appears to be attributable to a general reduction in parental caution with respect to such medicines, which has had an adverse spillover effect on unregulated products. The economic mechanisms involved can be best understood by considering the nature of individuals’ response to regulatory protection.”

Because of the response of people to the regulations, Viscusi estimates an additional 3,500 children died each year. This is a regulation intended to protect children.

The research is presented in The Lulling Effect: The Impact of Child-Resistant Packaging on Aspirin and Analgesic Ingestions. I’ve excerpted from the conclusion:

Analgesic poisoning rates for children under age 5 escalated from 1.1 per 1,000 in 1971 to 1.5 per 1,000 in 1980. Even after taking into account increases in analgesic sales, 47 percent of this increase is attributable to an unexplained upward shift in the analgesic poisoning rate beginning in 1972. The coupling of the absence of any shift in the trend of aspirin poisoning rates with an upsurge in analgesic poisoning rates is consistent with the hypothesis that there is a significant indivisibility in safety precautions. Moreover, absence of a significant effect of safety caps on aspirin poisonings and the 47 percent unexplained shift in analgesic poisonings suggests that the impact of the regulation on balance was counterproductive, leading to 3,500 additional poisonings of children under age 5 annually from analgesics.

It is possible but unlikely that such a strong impact could emerge from fully rational consumer decisions. Moreover, this effect is not only large but reasonably widespread, as I have identified a similar pattern for prescription drugs, and for cleaning and polishing agents. A more likely explanation for these dramatic effects is that consumers have been lulled into a less-safety-conscious mode of behavior by the existence of safety caps. The presumed effectiveness of the technological solution may have induced increased parental irresponsibility.

A variety of regulatory efforts have sought to reduce individual risks through mandated technological changes. These measures will be effective if individual actions remain unchanged. In practice, these regulations will produce a lulling effect on consumer behavior because the perceived need for precautions will decline, potentially producing adverse spillover effects on the safety of other products. The strength of these impacts should highlight the importance of taking individual behavior into account when designing regulations intended to promote safety.

So we see regulations lulling people into assuming safety, assuming that all is well, but danger is actually increased.

Do you remember Bernie Madoff? He operated in the highly-regulated securities investment industry, yet he was able to steal billions from his clients over a long period of time. Did his clients assume that regulations would keep their money safe? I’m sure that many did.

Recently John Stossel has an episode of his television show devoted to the subject of regulations. He said: “America drowns in law. There are 175,000 pages of federal regulations that you must obey, or some lawyer can wreck your life. For every pound of good the regulations do, they do a ton of harm. 175,000 pages alone strangles life.”

Stossesl also recently wrote: “EBay’s business model is also threatened by fraud. How can a buyer trust that, say, a seller will actually deliver a $25 pack of baseball cards and that the cards will be what he claims they are? In theory, you could sue; but in practice, our legal system is too slow and costly for that. So eBay came up with self-regulation: The buyers rate the sellers.”

When we look to government to solve problems, we can end up with systems that actually make the problem worse. When trading baseball cards, that’s not good. When investing for retirement, regulatory failure is very harmful. But when trying to protect children from poisoning, and then actually causing more deaths — that’s a man-made disaster of the highest order.

Wichita flight count continues decline

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
– Frederic Bastiat

A program designed to bring low air fares to Wichita appears to meet that goal, but the unintended and inevitable consequences of the program are not being recognized. In particular, the number of flights available at the Wichita airport continues to decline.

Of particular note is that over the past two or three years, the trend of flights nationally is level, while the trend of flights available in Wichita is declining. The gap between Wichita and the nation is increasing.

According to Regional Economic Area Partnership, the goal of the Kansas Affordable Airfares Program (KAAP) is “to provide more air flight options, more competition for air travel, and affordable airfares for Kansas.”

Is the Affordable Airfares program meeting its goals? If we look at “air flight options,” and if we consider the number of monthly departing flights as a measurement, Wichita isn’t doing well compared to the nation. The chart at the end of this article illustrates.

In its Kansas Affordable Airfares Program Fiscal Year 2011 Report, REAP addresses the goal of “more air flight options” and reports:

“Air service through Wichita Mid-Continent Airport addresses the statutory objective of more flight options, as follows: A total of 11 airlines provide service from Wichita to seven nonstop destinations with connecting service and four nonstop destinations with no connecting service. Overall, there are on average 38 daily (with 40 on weekdays) nonstop or one-stop flights by commercial air carriers, providing access to 4,989 U.S. and international destinations.”

This statement simply addresses the current situation. But the goal is more flight options. Which is better evidence of meeting the statutory goal: A simple recitation of what’s available today, or looking at the trend, especially comparing Wichita to the nation? REAP’s statement provides very little information as to whether the program is meeting its stated goals, or whether the program is desirable. We should ask that REAP recognize the data and its implications.

This trend is an example of unintended consequences of government intervention and regulation. The Affordable Airfares program imposes a rough form of price control on airfares in Wichita. If the program didn’t do that — and it appears it succeeds at this goal — then there would be no point in having the program.

The inevitable effect of price controls is that less is supplied, compared to what would have been supplied. This economic phenomenon is reliable and predictable.

While travelers prefer low air fares to high, this is not the only consideration. For those who need to travel on short notice, the availability of flights is very important, and on this measure, Wichita is doing much worse than the nation.

Data is through March 2013, from Bureau of Transportation Statistics. Since this data is highly seasonal, I present a 12-month moving average, so that each point plotted is the average of the previous 12 months data. Also, I index January 2000 to 100.

Monthly flights, Wichita Airport and nationally.

ObamaCare employer mandate delayed, start of train wreck?

aspirin-bottleScheduled to take effect on January 1, the employer mandate portion of the Affordable Care Act (ObamaCare) has been delayed for one year.

Curiously, this announcement was made on an obscure Treasury Department blog, along with articles titled “Meeting, and Exceeding, Our Small Business Procurement Goals in FY 2012″ and “In Case You Missed It: Top Executives Say U.S. Is #1 for Foreign Direct Investment.”

The employer mandate requires those who employ more than 50 full time-equivalent employees to provide insurance or pay a penalty. Cato Institute’s Michael D. Tanner notes the general problem, and a specific problem based on the decision to delay the employer mandate:

In postponing the implementation of the Affordable Care Act’s employer mandate until after the 2014 mid-term elections, the Obama administration has tacitly admitted what critics of the law have long contended: that Obamacare is unworkable and would be a significant burden for American business and the economy at large. Stay tuned for further dominoes falling.

Actually, the Administration’s decision to postpone the employer mandate may make a bad situation worse. Because the individual mandate remains in place, workers may now face a situation where they must purchase their own insurance or pay a penalty because their employers don’t provide coverage. In effect, the administration’s decision shifts the cost from employers to workers. This hardly seems fair, and may force the administration to rethink the individual mandate as well. (And So the Obamacare Train Wreck Begins … )

Will the implementation of other parts of ObamaCare be delayed? I think it seems likely. But: Section 1513 AVC states, regarding the employer mandate: “The amendments made by this section shall apply to months beginning after December 31, 2013.” So does the administration have the legal authority to make changes like this?

uninsured-estimates-2013-05

Also: For all the wrenching debate and changes, there will still be many uninsured people. Here’s a chart based on the Congressional Budget Office May 2013 estimate of the effects of the Affordable Care Act on health insurance coverage.

This is just the start of discovery of pathologies built into ObamaCare. Here’s Avik Roy explaining an incentive contained within the employer mandate:

The strong penalty vs. the weak penalty

The employer mandate actually consists of two different penalties, based on two different categories of employer behavior. These originate from Section 4980H of the Affordable Care Act. Subsection (a) requires steep penalties for employers who offer no coverage at all. Subection (b) requires modest penalties for employers who offer “minimum essential coverage under an eligible employer-sponsored plan.” This difference — between the strong penalty in 4980H(a) and the weak penalty in 4980H(b) — is crucial to understanding how things will play out in the future.

Under the strong penalty, in which an employer “fails to offer to its full-time employees…the opportunity to enroll in minimum essential coverage,” and “at least one full-time employee” enrolls in an exchange, the employer has to pay a fine of $2,000 times the total number of full-time-equivalent employees at the firm, minus 30. (The employer mandate only applies to firms with 50 or more full-time-equivalent workers.) So if you employ 50 workers, that’s a fine of 20 * $2,000 = $40,000. And the fine isn’t tax-deductible, adding to the pain.

Under the weak penalty, in which an employer does offer “the opportunity to enroll in minimum essential coverage,” but that coverage doesn’t meet Obamacare’s requirements for affordability or actuarial value, and at least one worker enrolls on an exchange instead, the fine is $3,000 times the number of workers who enroll on the exchanges. So, if you employ 50 workers, and three of them get coverage on the exchange instead, the fine is a much lower 3 * $3,000, or $9,000. (Technically, in subsection (b), employers pay the lesser of the weak penalty or the strong penalty, but this in most cases should be the weak penalty.)

So: Employers avoid the strong penalty and gain eligibility for the weak penalty by offering “minimum essential coverage.”

Roy goes on to explain that “minimum essential coverage” means coverage my any insurance plan that can legally be sod in a state, including plans that provide limited coverage or services. Roy writes that companies may offer these bare-bones plans to their employees and escape the penalties.

This behavior, which federal officials have confirmed is allowed, evidently wasn’t considered by officials, writes Roy: “Nonetheless, Obamacare’s designers expressed surprise that employers would do such a thing. ‘Our expectation was that employers would offer high quality insurance,’ said Robert Kocher, a former Obama health care adviser. It wouldn’t be the first time that the law’s authors didn’t recognize how economic incentives actually work.”

Economic incentives are what makes the world work. They’re based on human behavior, and that isn’t easily changed, even to suit Barack Obama’s desires.

Westar rate increase contains business welfare

electric-meters

The rate increase that Westar Energy has applied for contains a large dose of discretionary business welfare spending. Westar, in conjunction with out current economic development machinery, will be allowed to grant discounts on electricity to new businesses. A current program exists, but Westar says it doesn’t offer the flexibility Westar needs.

Following is an excerpt from testimony Westar submitted to the Kansas Corporation Commission. I’ve added emphasis:

Q. HOW WILL THE FIRST COMPONENT OF PROMOTE KANSAS WORK?
A. The economic development portion of the proposal would permit Westar, at its option, to provide economic development assistance in the form of discounted electric service to new customers and existing customers with planned expansions if three conditions are met: (1) the customer adds new jobs to its work force, (2) the customer brings new capital equipment and plant to a new or expanded facility and (3) the economic development effort is supported and backed by a state organization such as the Kansas Department of Commerce or a local economic development organization.

Q. HOW WILL PROMOTE KANSAS PROVIDE WESTAR WITH FLEXIBILITY TO ADDRESS ECONOMIC DEVELOPMENT NEEDS ON A CASE-BY-CASE BASIS?
A. If approved, Promote Kansas will allow Westar to adjust the economic incentive — in the form of reduced electric rates — provided to a customer based on the circumstances involved. This is a change from Westar’s existing EDR, which provides for a fixed percentage discount of 25 percent to the customer’s electric bill in the first year. The incentive credit declines by five percent per year over a mandatory five year period. After the fifth year of service, the customer pays the full cost of their electric service. Westar has no flexibility to adjust the amount of the incentive credit level or duration under the current EDA.

We believe that the fixed percentage under the existing EDA is too rigid. In some situations, the customer may not require the entire 25 percent reduction in its electric bill, or a full five years of reduced electric rates, in order to move forward with an expansion or relocation to Kansas. In these cases, the rigidity of the existing EDA tariff results in either contributing more than needed to attract the new customer or encourage the expansion, or not offering the incentive at all. The current EDA tariff was developed over a quarter century ago, tailored to specific circumstances that no longer exist. It was based on past exigencies, and it is time to revise it to meet today’s priorities and business environment.

Promote Kansas would contain a variable incentive credit. If Westar decides to provide the incentive credit to a customer, it would range from five percent to 25 percent the first year and would then decline over no more than a five-year period. This will allow Westar flexibility to determine how much incentive is necessary to attract the new customer or the expansion. Westar will be able to actively participate in negotiations with potential new businesses along with other economic development organizations in order to develop the best package of benefits for the customer’s specific situation.

We need to be concerned with this part of Westar’s application. This language — at its option … based on the circumstances involved … variable incentive credit … this will allow Westar flexibility — gives huge discretion to Westar to decide how much customers will pay for electricity.

Westar is not a government agency, but as a tightly regulated entity, it’s almost like government. It exercises the type of monopoly power that few outside of government do: It holds a near-monopoly on the delivery of a product that almost everyone wants and needs. With few exceptions, households and business firms can’t negotiate with Westar on their electric rates.

Therefore, when Westar offers — at its discretion — lower electric rates to some customers, others must necessarily pay more. Testimony to this effect was offered by Westar.

If we could be certain that the goals of this program would be realized, that would be one thing. But as a quasi-governmental entity, Westar suffers from the same knowledge problem as does government, especially regarding targeted investment programs like that proposed in this new rate structure. These actors believe that they have the ability to select which companies are worthy of public investment, and which are not. Really, it’s even a larger decision, as all other Westar customers have to pay for the investment decisions that will be made.

This rate plan implements a form of centralized planning by the state that shapes the future direction of the Kansas economy. We have to decide who is in the best position to make these decisions: Regulators and utility company executives, or the diverse market where thousands of business firms freely compete for voluntary investments to be made.

Arnold Kling has written about the ability of government experts to decide what investments should be made with public funds. There’s a problem with knowledge and power:

As Hayek pointed out, knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.

When knowledge is dispersed but power is concentrated, I call this the knowledge-power discrepancy. Such discrepancies can arise in large firms, where CEOs can fail to appreciate the significance of what is known by some of their subordinates. … With government experts, the knowledge-power discrepancy is particularly acute.

Despite this knowledge problem, the Kansas Corporation Commission is considering giving Westar the very type of power that ought to be left to markets. For this reason, KCC should reject Westar’s rate increase application until this program, and the program it is intended to replace, are eliminated.

The full rate application is available at Docket 13-WSEE-629-RTS: Application of Westar Energy and Kansas Gas and Electric Company Charges for Electric Service. A public hearing is scheduled tonight in Wichita; see Westar electricity rate hikes.

For our own good: No rain, please

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.
– C.S. Lewis

There are those who are so sure of the righteousness of their prescriptions for others’ behavior, they will torment themselves when good things happen.

Normally, we rejoice when it rains during dry conditions, even if it slows down the wheat harvest a bit. But if good fortune for others means it’s less likely your regulatory dream regime will pass — well, which is more important?

wichita-wanting-weather-sensorsTo a frequent comment writer on the Wichita Eagle online site, the choice is this: His regulatory urge, his conviction that he is absolutely certain he knows what others should do, is more important than our collective sigh of relief: “I have become so committed, to wanting weather sensors to be required on new lawn irrigation systems, that I’m upset when it rains. Because I know it means it’s less likely to get passed by the Council.”

It’s not enough, apparently, that the city is taking very expensive measures to save very little water. I speak, of course, of rebates for low-flush toilets, which force one person to pay for someone else’s appliance.

No, for this person, others have to suffer additional expense — and brown lawns — just so he can force his regulatory wishes on the rest of us.

USA vs. You: The problem of overcriminalization

Events in recent months have justifiably caused Americans to ask whether a powerful, activist, and interventionist government and bureaucracy is good to have. Those who have been looking at overcriminalization, however, have known that government and regulatory agencies have been targeting and oppressing Americans for a long time. And it’s getting worse.

USA vs. You cover

The new website USAvsYOU.com holds useful information for Americans to know about how law has changed in recent years, compared to how it operated for centuries before. The booklet available for reading is titled USA vs. You: The flood of criminal laws threatening your liberty.

As an example, here is a troubling trend:

In many criminal laws, the “guilty mind” requirement has been removed or weakened. This means people can go to prison regardless of whether they intended to break the law or knew their actions were in violation of the law.

Traditionally, crimes had two components: (l) mens reu (guilty mind), and (2) actus reus (bad act).

Today, many criminal laws and regulations have insufficient or no mens rea (guilty mind) requirement — meaning, a person need not know that his or her conduct is illegal in order to be guilty of the crime.

An example story is the following:

THE CRIME: Rescuing a baby deer

Jeff Counceller, a police officer, and his wife Jennifer spotted an injured baby deer on their neighbor’s porch. Instead of turning a blind eye to the dying fawn, the Councellers took the deer in and nursed it back to health.

An Indiana Conservation Officer spotted the fawn (named Dani) in the Councellers’ yard — and promptly charged the couple with unlawful possession of a deer, a misdemeanor offense. Fortunately for her, the day that “Little Orphan Dani” was to be euthanized by the state, the deer escaped into the wild. Due to public outrage, the government dropped the charges.

The website and booklet is a product of Heritage Foundation and it partners such as the American Civil Liberties Union. Heritage has been covering the issue of overcriminalization here. It describes the problem as this: “Overcriminalization describes the trend to use the criminal law rather than the civil law to solve every problem, to punish every mistake, and to compel compliance with regulatory objectives. Criminal law should be used only if a person intentionally flouts the law or engages in conduct that is morally blameworthy or dangerous.”

We have problems like this in Wichita, believe it or not. An ordinance passed by the Wichita City Council in 2010 might ensnare anyone visiting city hall, if they happen to have a broad-tip marker in their purse or briefcase:

Animated marker

“Possession of Graffiti Implements Prohibited in Public Places. It is unlawful for any person to have in his/her possession any graffiti implement while in, upon or within one hundred (100) feet of any public facility, park, playground, swimming pool, skate park, recreational facility, or other public building owned or operated by the city, county, state, or federal government, or while in, under or within one hundred (100) feet of an underpass, bridge, abutment, storm drain, spillway or similar types of infrastructure unless otherwise authorized.”

“Graffiti implements” are defined broadly earlier in the ordinance.

If you’re thinking about a career in taxicab driving, be advised that the city has ordinances punishing you if you’re found to have violated these standards: “Fail to maintain their personal appearance by being neat and clean in dress and person” and “Fail to keep clothing in good repair, free of rips, tears and stains.”

REAP: We’ll plan for you, like it or not

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
– H.L. Mencken

We’ve learned that the government planners will plan for you, whether or not you want it. Despite having voted against participation, two Kansas counties are still included in a regional planning consortium.

South Central Kansas Prosperity

The new website thinktomorrowtoday.org promotes and supports the sustainable communities government planning process in South-Central Kansas. The planning effort has been rebranded as “South Central Kansas Prosperity.”

In the logo, on a map, and in narrative, Butler and Sumner counties are listed as participants. But these newspaper headlines say something else about what the elected officials in these counties thought about joining the plan:

Sumner County isn’t on board with fed’s sustainable communities planning grant

Sumner County isn’t on board with fed’s sustainable communities planning grant (Wichita Eagle, July 30, 2012): “One of the counties served by a sustainable communities planning grant recently declined to be a partner in the effort, expressing concerns about federal intrusion in local government.”

Butler County decides not to support REAP planning grant

Butler County decides not to support REAP planning grant (El Dorado Times, August 23, 2012): “The issue at the center of the Butler County Commission’s discussion about a sustainable communities planning grant was local control.”

I can understand why these counties decided to opt out of the planning process and why two Sedgwick County Commissioners voted against participation.

Cato Institute Senior Fellow Randal O’Toole, in his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, explains the danger and harm of government plans. I remember two passages in particular:

Somewhere in the United States today, government officials are writing a plan that will profoundly affect other people’s lives, incomes, and property. Though it may be written with the best intentions, the plan will go horribly wrong. The costs will be far higher than anticipated, the benefits will prove far smaller, and various unintended consequences will turn out to be worse than even the plan’s critics predicted.

And this:

The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan.

We see the vision of moral absolutism on display: Despite two counties voting against participation, their overseers will, nonetheless, create a plan for them.

It’s for their own good, after all.

Wichita begins rebates and regulation

Instead of relying on market forces, Wichita imposes a new tax and prepares a new regulatory regime.

Equus BedsAt today’s meeting of the Wichita City Council, the city decided to spend up to $1 million this year on rebates to encourage people to buy water-efficient appliances. This will save a vanishingly small amount of water at tremendous cost.

The worst realization from today’s city council meeting is how readily citizens, politicians, and bureaucrats will toss aside economic thinking. The antimarket bias that Bryan Caplan explains in The Myth of the Rational Voter: Why Democracies Choose Bad Policies was in full display — even by the conservative members of the council.

It’s also clear that some council members want to go down the road of austerity rather than abundance.

What did we learn today? Many speakers used the terms “conservation” and “judicious.” Conservation is good. Judicious use is good. But each person applies different meanings to these concepts. A great thing about living in a (relatively) free economy is that each person gets to choose to spend their time and money on the things that are important to them, and in the amounts they want. We make these choices many times each day. Sometimes we’re aware of making them, and sometimes we’re not.

For example: If you’re watching television alone in your home, and you go to the kitchen to get a snack, do you turn off the television for the moment that you’re not watching it? No? Well, isn’t it wasting electricity and contributing to global warming to have a switched-on television that no one is watching, even for just a moment?

Some people may turn off the television in this scenario. But most people probably decide that the effort required to save a minute’s worth of electricity consumption by a television isn’t worth the effort required.

(By the way, the type of television programs you watch each evening: Is it worth burning dirty coal (or running precious water through dams, or splitting our finite supply of uranium atoms, or spoiling landscapes and killing birds with wind turbines) just so you can watch Bill O’Reilly or Rachel Maddow rant? Or prison documentaries? Or celebrity gossip? Reruns of shows you’re already seen? And I’ve seen you fall asleep while watching television! What a monumental waste. We should require sleep sensors on all new televisions and rebates to retrofit old sets.)

But when people leave their homes empty to go to work, almost everyone turns off the television, lights, and other appliances. Many may adjust their thermostats to save energy. People make the choice to do this based on the costs of leaving the lights on all day versus the cost of turning them on and off. No one needs to tell them to do this. The relative prices of things do this.

(You may be noting that children have to be told to turn off televisions and lights. That’s true. It’s true because they generally aren’t aware of the prices of things, as they don’t pay utility bills. But adults do.)

In most areas of life, people use the relative prices of things to make decisions about how to allocate their efforts and consume scarce resources. Wichita could be doing that with water, but it isn’t.

The conservation measures recommended by speakers today all have a cost. Sometimes the cost is money. In some cases the cost is time and convenience. In others the cost is a less attractive city without green lawns and working fountains. In many cases, the cost is shifted to someone else who is unwilling to voluntarily bear the cost, as in the rebate program.

At least we’ll be able to measure the cost of the rebate program. For most of the other costs, we’re pretending they don’t exist.

Instead of relying on economics and markets, Wichita is turning to a regulatory regime. Instead of pricing water rationally and letting each person and family decide how much water to use, politicians and bureaucrats will decide for us.

All city council members and the mayor approved this expansion of regulation and taxation.

(Yes, it’s true that the rebates will be funded from the water department, but that’s a distinction without meaningful difference.)

The motion made by Mayor Carl Brewer contained some provisions that are probably good ideas. But it also contained the appliance rebate measure. Someone on the council could have made a substitute motion that omitted the rebates, and there could have been a vote.

But not a single council member would do this.

It’s strange that we turn over such important functions as our water supply to politicians and bureaucrats, isn’t it?

The future of Obamacare, now he tells us

This is a sad commentary on the state of politics and governance in the U.S., from the Boston Globe:

Unencumbered by the political pressures of a reelection campaign, Baucus is in a position to call out both the failure of federal officials to prepare for implementing Obamacare as well as the unintended consequences of its complex regulations.

A short while ago, before U.S. Senator Max Baucus announced his retirement, U.S. Representative Mike Pompeo of Wichita noticed the incongruity of Baucus complaining about a law he passed, tweeting the following:

Following are excerpts from a letter Pompeo sent to Baucus, followed by the entire letter.

My shock wasn’t because I disagreed: You’re right to say this legislation has led to great uncertainty for hard-working Americans, small business owners, and families. No, I was shocked because you wrote this bill. I was saddened because your acknowledgment of the harm caused by PPACA has come so late.

No one in the country bears more responsibility for the complexity of this law than you. When your supermajority couldn’t pass the bill using normal procedures, you and your Senate colleagues rammed through the final legislation by using parliamentary gimmickry. Then, in the House, Speaker Pelosi cheerfully urged members to pass the legislation “in order to find out what’s in it.” This was not good policy-making, and now we’re seeing the consequences.

Secretary Sebelius’s implementation of the law is certainly flawed, but the policy process produced a law that could not possibly be implemented successfully. As legislators, it is our responsibility to write bills that clearly explain our meaning and have achievable goals. By your own admission, this law is a disaster.

You drafted it, you twisted arms to get it passed, and, until now, you have lauded it as a model for all the world. Your attempts to pass the buck to President Obama’s team will not work, nor will they absolve you of responsibility for the harm that you have brought via this law.

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The heavy hand of Kansas regulation

Martini glass, half full, with a single olive

Regulation run amok in Wichita, from Anne Meyer of KWCH 12 Eyewitness News:

(Wichita, KS)— “Two for one” drinks or “half price”. Customers may not know the difference between the two on their bill, but those words matter when it comes to Kansas liquor laws. One phrase is legal, the other is not.

One Wichita bar owner is trying to fight that.

Shooters on South Hydraulic is known for attracting pool players. Now Owner Paul Weigand is getting attention from the state for violating Kansas’ liquor law.

“I’m just not ready to pay that fine yet, I want a judge to tell me the difference between two for one and half price,” Weigand said.

Continue reading and view the video at Words matter when it comes to Kansas liquor law.

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.

In Kansas, arguing about the wrong school issues

School blackboard

Sunday’s Wichita Eagle makes a state-wide issue (literally) out of something that could self-regulate, if only we would let it.

The issue is what proportion of Kansas school spending finds its way “into the classroom” — whatever that means — and Kansas Governor Sam Brownback’s use of this statistic.

The front page Sunday article (Governor’s numbers come under question) spent over 1,000 words on the topic. It covers where Brownback got the number he uses, the controversy over how to classify spending as “classroom” or other, and troubles surrounding an advocacy group that pushed for more spending going to the classroom.

Why is this issue important? In Kansas, most children attend government schools that are funded and regulated by government. This means that how schools spend money is a political issue. There will be arguments.

In the private sector, however, we don’t see these types of arguments. Do we argue in public about how much the grocery store spends on administrative overhead compared to other spending? Of course not. The managers and owners of the grocery store are intensely interested in this issue. The public is too, but only in how the management of the grocery store affects their shopping experience.

If shoppers don’t like the way a store is managed, they shop somewhere else. Management may notice this and make changes that customers appreciate. If management doesn’t adapt, the store will likely close and be replaced by other stores that do a better job delivering what customers want.

Or, some shoppers may like a high level of management in a grocery store — one with more personal service. Some like a bare-bones store where you sack the groceries yourself. This variation in customer tastes and needs leads to what we observe: diversity in the types of grocery stores shoppers can choose from.

The point is that in the private sector, people get to choose what they like. They choose what’s best for them. But with our system of public schools funded and regulated by government, there is no choice. (Yes, you can escape the public schools and use others, but you still must pay for the government schools.)

There’s a factor that leads to this diversity of grocery stores and self-regulation focused on meeting consumers’ needs. It’s market competition.

But Kansas has no market competition in schools, unless you want to escape the system entirely and still pay for it. We have a very weak charter school law, meaning there are very few charter schools in Kansas. We have no vouchers or tax credit scholarships.

If we had these instruments of school choice in Kansas, government schools would face market competition. They would have to start being responsive to customers. We could allow schools to decide for themselves how much to spend on management and things other than the classroom. Market competition would guide schools in structuring their management and budgets to best meet the needs of schoolchildren and parents.

If we had school choice in Kansas, we would have a more diverse slate of schools for parents to select from. We could rely on the nature of markets to self-regulate schools like we rely on markets to regulate grocery stores.

We could quit arguing about things like how much is spent in the classroom, and we could actually focus on teaching children.

But the Kansas school education establishment doesn’t want that. That establishment fights every attempt to introduce even small elements of choice into Kansas. We’ll see this soon as several bills facilitating school choice are introduced in the Kansas Legislature.

Saving farms from people

Wheat combine on farm

Last week at a meeting of the Sedgwick County Commission, Commissioner Tim Norton spoke in favor of the need for comprehensive government planning. In support, he cited the commonly-held belief that humans — especially with their desire for large suburban home lots — are depleting the stock of farmland to the point of being detrimental to agribusiness.

Here’s part of what Norton said (video below):

Now I know people don’t like the idea of sprawl and growth rings and all that, but the truth is there is a balance between where people live and preserving our good agricultural lands and how do you make that work. And that’s being able to sustain part of our economy. Agribusiness is the third largest economic driver in our community, in our region, and to say that we’re okay with every five acre tract being taken up by somebody’s rural residence sounds really good if you’re talking only property rights. But if you’re talking about preserving and sustaining agribusiness you gotta have the land and it’s got to be set aside for that enterprise.

Farms and ranches being driven out of existence by homeowners — that sounds like a problem that might threaten our food supply. But what are the facts?

First, there is an overabundance of farmland in America. There is so much farmland that we pay farmers billions each year to refrain from planting crops. We pay corn farmers billions in subsidies each year and then use their crops for motor fuel, instead of for making fine Kentucky bourbon and taco shells, as God intended.

Considering Sedgwick County, as that is what Norton represents: Despite being the second-most populous county in Kansas and home to its largest city and surrounding suburban communities, Sedgwick County ranks fourth among Kansas counties in the number of farms, thirty-fourth in farmland acres, seventh in total harvested cropland acres, thirty-third in market value of harvested crops, sixty-sixth in market value of livestock, and eighty-seventh in pasture acres. (Data from Kansas Farm Facts 2011, reporting on 2007 farm statistics.)

There’s something else that might ease Commissioner Norton’s concern, if he would only believe in the power of markets over government: That is the price system. If we were truly running short of farmland, crop prices would rise and farmland would become more valuable. Fewer people would be willing to pay the price necessary to have a five-acre home lot.

In fact, if crop prices were high enough, farmers would be buying back the five-acre lots, or perhaps paying homeowners to rent their yards for planting crops or grazing livestock.

In either case, markets — through the price system — provide a solution that doesn’t require politicians and bureaucrats. There are many other areas in which this is true, but government nonetheless insists on regulation and control.

The power of prices, as told by Thomas Sowell: “The last premiere of the Soviet Union, Mikhail Gorbachev, is said to have asked British Prime Minister Margaret Thatcher: How do you see to it that people get food? The answer was that she didn’t. Prices did that. And the British people were better fed than those in the Soviet Union, even though the British have never grown enough food to feed themselves in more than a century. Prices bring them food from other countries.”

Flight options from Wichita decline, compared to nation

A program designed to bring low air fares to Wichita appears to meet that goal, but the unintended and inevitable consequences of the program are not being recognized.

The legislative agendas for Wichita and Sedgwick County call for supporting the retention and funding of the Affordable Airfares program. This program provides taxpayer money to subsidize low-cost air carriers in Kansas. Most of the program’s funds have been spent in Wichita, in particular on AirTran Airways.

According to Regional Economic Area Partnership, the managing organization, the goal of the program is “to provide more air flight options, more competition for air travel, and affordable airfares for Kansas.”

Is the Affordable Airfares program meeting its goals? If we look at “air flight options,” and if we consider the number of monthly departing flights as a measurement, Wichita isn’t doing well compared to the nation. The chart at the end of this article illustrates.

(Since this data is highly seasonal, I present a 12-month moving average, so that each point plotted is the average of the previous 12 months data. Also, I index January 2000 to 100.)

Of particular note is that over the past two or three years, the trend of flights nationally is level, while the trend of flights available in Wichita is declining.

In its Kansas Affordable Airfares Program Fiscal Year 2011 Report, REAP addresses the goal of “more air flight options” and reports:

“Air service through Wichita Mid-Continent Airport addresses the statutory objective of more flight options, as follows: A total of 11 airlines provide service from Wichita to seven nonstop destinations with connecting service and four nonstop destinations with no connecting service. Overall, there are on average 38 daily (with 40 on weekdays) nonstop or one-stop flights by commercial air carriers, providing access to 4,989 U.S. and international destinations.”

This statement simply addresses the current situation. But the goal is more flight options. Which is better evidence of meeting the statutory goal: A simple recitation of what’s available today, or looking at the trend, especially comparing Wichita to the nation? REAP’s statement provides very little information as to whether the program is meeting its stated goals, or whether the program is desirable. We should ask that REAP recognize the data and its implications.

This trend is an example of unintended consequences of government intervention and regulation. The Affordable Airfares program imposes a rough form of price control on airfares in Wichita. If the program didn’t do that — and it appears it succeeds at this goal — then there would be no point in having the program.

The inevitable effect of price controls is that less is supplied, compared to what would have been supplied. This economic phenomenon is reliable and predictable.

While travelers prefer low air fares to high, this is not the only consideration. For those who need to travel on short notice, the availability of flights is very important.

For more about flights in Wichita, see In Wichita, confusion over air traffic statistics.

Monthly flights, Wichita Airport and nationally.

Wichita licenses the striping of parking lots

Next week the Wichita City Council will consider licensing and regulating the painting of stripes in parking lots. How, may I ask, has civilization advanced without the benefit of such regulation?

The agenda report narrative states “The proposed ordinance does not set up permit or inspection processes; it would be complaint-driven enforcement through the ADA Coordinator.”

But earlier, the same report reads: “The proposed ordinance establishes a licensing and enforcement system applicable to persons and businesses catering to the public when they modify the construction or layout of parking spaces they make available to the public.”

The licensure requirement in the ordinance states: “Any person or entity, whether as principal, agent, or employee, engaged in the business of striping a parking lot in the City of Wichita shall be required to obtain a striping contractor’s license from the City Engineer’s Office. When striping is performed by or under the direct supervision of a property owner or renter, or such owner’s or renter’s agent, such individual shall be deemed to be a licensed striping contractor for the purposes of striping such property.”

Before receiving such a license, applicants must post a surety bond of $5,000, approved by the city attorney. Then the contractor must pass a comprehensive exam on ADA standards for accessible parking. There’s an application fee of $100, which appears to be payable annually.

And, this ordinance is open-ended: “The City Engineer’s Office shall develop any additional rules and regulations necessary for the issuance or annual renewal of striping contractors’ licenses.”

Before painting stripes on a parking lot, notice must be given, according to the proposed ordinance: “When striping begins, the striping contractor shall post a conspicuous notice at the location to be striped, to remain conspicuous for no less than seven days after striping is completed. The notice shall be in a form prescribed by the ADA Coordinator and shall contain, at a minimum, the striping contractor’s name and license number or, if the striping contractor is the property owner or renter, the notice shall contain that entity’s contact information.”

Violators, believe it or not, can face imprisonment: “Any person violating any of the provisions of this chapter shall, upon conviction, be punished by a fine of not more than one thousand dollars or by imprisonment for not more than thirty days or by both such fine and imprisonment.”

I wonder: Is it a problem in Wichita that there aren’t enough parking spots for disabled people, or that the parking spots are too narrow? (The ordinance specifies the width of the parking stalls, and also the width of adjacent access isles.)

Can’t businesses decide for themselves how many parking spots they want to reserve for their handicapped customers? Or must government decide for us, independently of the type of business? Isn’t it possible that a hospital and a ballet studio might have different needs for handicapped parking, and that each is best equipped to determine that number?

To top it off: It appears that these regulations are part of a settlement agreed to by the City of Wichita in response to a lawsuit filed against the city. For the city’s sins, we all suffer with these needless and overbearing regulations.

Wichita parking lot striping standards and enforcement

Obama’s regulatory extremism

In the introduction to his book Democracy Denied, Phil Kerpen gives us a history lesson on the grab for executive power by presidents through the use of “signing statements.”

Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

Kerpen explains how the view from the oval office can make one forget campaign promises:

Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

Not that Obama alone takes criticism for exercising presidential power contrary to the actions of Congress, as he describes the auto industry bailout in the last days of the presidency of George W. Bush. A bill didn’t make it through Congress, but Bush “repurposed” TARP funds — intended for banks — and used them for an auto bailout in the amount of $17.4 billion.

It is this use of executive power and agencies to bypass the will of people — as expressed through Congress — that is detailed in a book authored by Phil Kerpen and published at this time last year: Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him.

Kerpen’s website is philkerpen.com, and it features excerpts from the book along with a theatrical trailer.

Kerpen explains the problem by describing a solution: The Regulations from the Executive in Need of Scrutiny Act, or REINS Act. This proposed law would require any major regulatory action to be approved by Congress and receive the president’s signature. Kerpen writes: “We have regulators who are effectively writing and executing their own laws. The major policy decisions that affect every aspect of our economic lives are moving forward without consent of the people’s legitimately elected legislative branch.”

The problem is that often Congress passes generic laws and leaves it to regulatory agencies to write the rules that implement the law. By requiring Congressional and Presidential approval of major regulations, agencies will be accountable to the current Congress, and lawmakers will have a chance to ensure that actual regulations are consistent with the intent of enabling legislation.

Cap-and-trade energy legislation provides an example of Kerpen’s thesis, which is “how the Obama administration was disregarding Congress and the American people to accomplish its objectives through regulatory backdoors.” The legislation passed the House, but couldn’t pass the Senate. So what happened next? Kerpen explains Obama’s detour around Congress:

Just to show you how unfazed the Obama administration was by the political defeat of cap-and-trade, consider what’s on page 146 of Obama’s 2012 budget: “The administration continues to support greenhouse gas emissions reductions in the United States in the range of 17 percent below 2005 levels by 2020 and 83% percent by 2050.” Those just happen to be the same levels required by the failed Waxman-Markey cap-and-trade bill. Obama is telling the EPA to just pretend that the bill passed and regulate away.

In fact Obama’s EPA was already moving full steam ahead to implement a global warming regulatory scheme that could even be more costly than cap and trade — without the approval of the American people and without so much as a vote in Congress.

The remainder of the chapter details some of the ways EPA is accomplishing this backdoor regulation.

The Patient Protection and Affordable Care Act, otherwise known as ObamaCare, is another topic Kerpen covers where regulation is replacing lawmaking by Congress:

Nancy Pelosi was right in more ways then she realized when she infamously said “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.” Not only was the more than 2,000-page bill negotiated in secret and so densely complex that few humans could understand it, it also deferred most of the really difficult and important decisions to the regulators, including dozens of brand-new boards, committees, councils, and working groups. So even after ObamaCare had been passed there was no way to know what was really in it until the bureaucracy was assembled and began issuing regulations.

Kerpen describes the bill that passed as not “finished legislation,” and is now being interpreted by bureaucrats, the most powerful being HHS Secretary Kathleen Sebelius. Her office is now, according to Kerpen, “issuing a whole string of official guidelines and regulations that attempt to ‘correct’ the draft law, often by asserting things that the law doesn’t actually say.”

Other chapters describe regulation of the internet (net neutrality), card check, the Dodd-Frank financial regulations, and energy regulation. All of these represent the Obama administration either ignoring Congress or creating vast new powers for itself. The chart Kerpen created shows the plays being made.

Obama regulatory extremismKerpen’s chart of Obama regulatory extremism. Click for larger version.

What about regulatory reform? Obama’s doing that. In January he wrote in the Wall Street Journal: “We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses.”

In a chapter titled “The Back Door to the Back Door: Phony Regulation Reform” Kerpen explains that this promise or regulatory reform by the president is a sham. Kerpen describes the executive order that implements regulatory review this way: “The new executive order is the regulatory parallel to the Obama administration’s strategy on federal spending, which is to spend at astonishing, record rates and rack up trillions of dollars in deficits while paying lip service to fiscal responsibility by establishing a fiscal commission.”

And in a gesture of true public service, Kerpen introduces us to Cass Sunstein, the man who is heading the Office of Information and Regulatory Affairs (OIRA), the agency that will be conducting the purported review of regulations. A quote from Sunstein: “In what sense is the money in our pockets and bank accounts fully ‘ours’? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without the support of bank regulators? Could we spend it if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?”

Kerpen sums up Sunstein’s political philosophy of central planning:

The idea of Sunstein’s “nudge” philosophy is that the fatal conceit of central economic planning can somehow succeed if it is subtly hidden from view. Sunstein thinks that if he imposes regulations that steer our choices instead of outright forcing them, he can achieve desirable social objectives. … Given Suinstein’s views and the central role he will have in reshaping federal regulation to be “more effective,” we need to be deeply concerned that any changes that come out of the process may make regulation less apparent, but no less costly — and more effective at crushing genuine individual choice and responsibility and substituting the judgment (even if by a nudge instead of a shove) of a central planner.

The challenge, Kerpen writes in his conclusion to the book, “is to change the political calculus to elevate regulatory fights to the appropriate level in the public consciousness. We must make sure the American people understand that a disastrously bad idea becomes even worse when it’s implemented by backdoor, unaccountable, illegitimate means.”

Kerpen recommends passage of the REINS Act as a way to restore accountability over regulatory agencies to Congress. The two messages Congress needs, he writes, are: “You can delegate authority, but you can never delegate responsibility,” and “If you fail to stop out-of-control regulators, voters will hold you accountable.”

Koch articles draw critics, but few factual

Two large articles in the Wichita Eagle regarding Charles and David Koch of Wichita-based Koch Industries have attracted many comments, and many are not based on facts.

The two articles are The Kochs’ quest to save America and Charles Koch relentless in pursuing his goals.

A curious irony is the claim by many comment writers that Charles and David Koch want to buy America, while at the same time they are running it into the ground: “The koch bros. are funding the conversion of OUR COUNTRY into another third world country.”

Even if it was possible to buy America — whatever that means — why would someone destroy it first?

Another common thread in the comments is that Charles and David Koch didn’t complain about government spending, subsidy, regulation, etc. before President Barack Obama was elected. In fact, they have been working to promote free markets and economic freedom for many decades. Charles Koch and two others founded what became the Cato Institute in 1974, nearly four decades ago. Even earlier: A recent issue of Koch Industries Discovery newsletter contains a story titled “Don’t subsidize me.” Here’s an excerpt:

When Charles Koch was in his 20s, he attended a business function hosted by his father. At that event, Fred Koch introduced Charles to a local oilman.

When the independent oilman politely asked about the young man’s interests, Charles began talking about all he was doing to promote economic freedom.

“Wow!” said the oilman, who was so impressed he wanted to introduce the young bachelor to his eligible daughter.

But when Charles mentioned he was in favor of eliminating the government’s oil import quota, which subsidized domestic producers, the oilman exploded in rage.

“Your father ought to lock you in a cell!” he yelled, jabbing his finger into Charles’ chest. “You’re worse than a Communist!”

It seems the oilman was all for the concept of free markets — unless it meant he had to compete on equal terms.

Under oath

For more than 50 years, Charles Koch has consistently promoted economic freedom, even when it was not in the company’s immediate financial interest.

In the 1960s, Koch was willing to testify before a powerful Congressional committee that he was against the oil import quota — a very popular political measure at the time.

“I think it’s fair to say my audience was less than receptive,” recalls Koch.

Years later, Koch warned an independent energy association about the dangers of subsidies and mandates.

“We avoid the short-run temptation to impose regulatory burdens on competitors. We don’t lobby for subsidies that penalize taxpayers for our benefit.

“This is our philosophy because we believe this will produce the most favorable conditions in the long run,” Koch said.

Many comments take the company to task for accepting oil and ethanol subsidies. Koch Industries, as a refiner of oil, blends ethanol with the gasoline it produces in order to meet federal mandates that require ethanol usage. Even though Koch opposed subsidies for ethanol — as it opposes all subsidies — Koch accepted the subsidies. A company newsletter explained “Once a law is enacted, we are not going to place our company and our employees at a competitive disadvantage by not participating in programs that are available to our competitors.” (The tax credit subsidy program for ethanol has ended, but there is still the mandate for its use in gasoline.)

Regarding oil subsidies, the programs that are most commonly cited (percentage depletion and expensing of intangible drilling costs) apply to producers of oil — the companies that drill holes and pump up oil. Koch Industries doesn’t do that. The company doesn’t benefit from these programs.

Other comments charge that Koch Industries wants to end regulation so that it can pollute as much as it wants. This is another ridiculous charge not based on facts.

A statement on the KochFacts website states “recent critics have also claimed that Koch is one of the nation’s top 10 polluters. This study confuses pollution with permitted emissions, which are carefully regulated by the U.S. EPA and other agencies. The index labels as ‘polluters’ Ford Motor, General Motors, GE, Pfizer, Eastman Kodak, Sony, Honeywell, Berkshire Hathaway, Kimberly Clark, Anheuser Busch and Goodyear — corporations, like Koch companies, with significant manufacturing in the U.S. Emissions, a necessary by-product of manufacturing, are strictly monitored and legally permitted by federal, state and local governments.”

Say: Didn’t the U.S. government take over General Motors, and continues to hold a large stake in the company? And GE and Berkshire Hathaway: Aren’t those run by personal friends of Barack Obama?

The reality is that manufacturing has become much more efficient with regards to emissions, and Koch Industries companies have lead the way. One report from the company illustrates such progress: “Over the last three years, Koch Carbon has spent $10 million to enhance environmental performance, including $5 million for dust abatement at one of its petroleum coke handling facilities. These investments have paid off. In 2008, Koch Carbon’s reportable emissions were 6.5 percent less than in 2000, while throughput increased 10.4 percent.”

Even when Koch Industries does not agree with the need for specific regulations, the company, nonetheless, complies. Writing about an increase in regulation in the 2007 book The Science of Success: How Market-Based Management Built the World’s Largest Private Company, Charles Koch explained the importance of regulatory compliance: “This reality required is to make a cultural change. We needed to be uncompromising, to expect 100 percent of our employees to comply 100 percent of the time with complex and ever-changing government mandates. Striving to comply with every law does not mean agreeing with every law. But, even when faced with laws we think are counter-productive, we must first comply. Only then, from a credible position, can we enter into a dialogue with regulatory agencies to determine alternatives that are more beneficial. If these efforts fail, we can then join with others in using education and/or political efforts to change the law.”

Koch companies have taken leadership roles in environmental compliance, explains another KochFacts page: “In 2000, EPA recognized Koch Petroleum Group for being ‘the first petroleum company to step forward’ to reach a comprehensive Clean Air Act agreement involving EPA and state regulatory agencies in Minnesota and Texas. Despite fundamental policy disagreements, then-EPA Administrator Carol Browner acknowledged Koch’s cooperation. She characterized the agreement as ‘innovative and comprehensive’ and praised the ‘unprecedented cooperation’ of Koch in stepping forward ahead of its industry peers.” Browner was no friend of industry, and had a “record as a strict enforcer of environmental laws during the Clinton years,” according to the New York Times.

What may really gall liberals and Koch critics is this: They believe that a powerful and expansive government is good for the country. But what we have is a complicated machine that a company like General Electric can exploit for huge profits, all without creating things that consumers value. Charles Koch calls for an end to this, as he wrote last year in the Wall Street Journal: “Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay. Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”

The political Left just can’t believe that anyone would write that and really mean it.

New tracking frontier: Your license plates

As Wichita considers implementing police surveillance cameras in Old Town to combat crime, an article appears in the Wall Street Journal to warn us of the implications of this action.

Wichita has no police surveillance cameras except those protecting the Keeper of the Plains statue environs. But it seems many Wichita leaders are enthusiastic about their installation elsewhere.

The Journal article New Tracking Frontier: Your License Plates focuses on the ability of surveillance cameras being able to recognize automobile license plates: “Until recently it was far too expensive for police to track the locations of innocent people such as Mr. Katz-Lacabe. But as surveillance technologies decline in cost and grow in sophistication, police are rapidly adopting them.”

As it happens, Wichita is actually behind the curve relative to the rest of the country. In 2010 it was estimated that 37 percent of large U.S. police agencies use license plate recognition cameras. Private agencies are joining in, mostly in an attempt to find cars subject to repossession.

Curiously, the data in the police databases may be subject to public records requests. The Journal obtained California records that way, although the location data was removed. The cameras in Wichita may be paid for by a public-private partnership, which leads to questions as to who owns the collected data, and who may use it for what purposes. But given the weak public records law in Kansas and the hostility of Wichita officials to fulfilling citizen records requests, this may not be a concern. (Or maybe not.)

Once police have cameras installed and have created computer systems and databases, they don’t want to give up their access to this data, writes the Journal:

This year California State Sen. Joe Simitian introduced legislation to limit retention of automatic plate-recognition records by private contractors to 60 days and require officers to have a warrant to access the data.

Sen. Simitian argued the police should have probable cause to get information about the location of people’s cars. “Should a cop who thinks you’re cute have access to your daily movements for the past 10 years without your knowledge or consent?” he says. “I think the answer to that question should be ‘no.’”

Private companies and law-enforcement agencies vehemently opposed the bill, saying it would create an “overwhelming burden” on police departments and would cut into revenue from unpaid parking tickets. Mr. Simitian eventually abandoned his legislation.

There may be those who will be assured that their privacy is not at risk because the data is in police hands and can’t be accessed by private citizens. But government agencies are the cause of many personal data breaches, with negligence by employees the leading cause.

While Wichita may have no current plans to implement the license plate reading system described here, once started the increasing surveillance state in Wichita will be difficult to control. Especially if it seems the cameras can control crime in Old Town.

New Tracking Frontier: Your License Plates

By Julia Angwin and Jennifer Valentino-Devries

For more than two years, the police in San Leandro, Calif., photographed Mike Katz-Lacabe’s Toyota Tercel almost weekly. They have shots of it cruising along Estudillo Avenue near the library, parked at his friend’s house and near a coffee shop he likes. In one case, they snapped a photo of him and his two daughters getting out of a car in his driveway.

Mr. Katz-Lacabe isn’t charged with, or suspected of, any crime. Local police are tracking his vehicle automatically, using cameras mounted on a patrol car that record every nearby vehicle — license plate, time and location.

“Why are they keeping all this data?” says Mr. Katz-Lacabe, who obtained the photos of his car through a public-records request. “I’ve done nothing wrong.”

Continue reading at The Wall Street Journal (subscription required).

Dangers of texting while driving: Are laws the solution?

There’s no doubt that texting while driving is dangerous, as illustrated in this KAKE Television news story. But the government solution — passing laws against texting while driving — haven’t worked, and some states have experienced an increase in crashes after implementing texting bans.

A news release from the Highway Loss Data Institute summarizes the finding of a study: “It’s illegal to text while driving in most US states. Yet a new study by researchers at the Highway Loss Data Institute (HLDI) finds no reductions in crashes after laws take effect that ban texting by all drivers. In fact, such bans are associated with a slight increase in the frequency of insurance claims filed under collision coverage for damage to vehicles in crashes. This finding is based on comparisons of claims in 4 states before and after texting ban, compared with patterns of claims in nearby states.”

The study does not claim that texting while driving is not dangerous. Rather, the realization by drivers that texting is illegal may be altering their behavior in a way that becomes even more dangerous than legal texting. Explains Adrian Lund, president of both HLDI and the Insurance Institute for Highway Safety: “If drivers were disregarding the bans, then the crash patterns should have remained steady. So clearly drivers did respond to the bans somehow, and what they might have been doing was moving their phones down and out of sight when they texted, in recognition that what they were doing was illegal. This could exacerbate the risk of texting by taking drivers’ eyes further from the road and for a longer time.”

When Kansas passed its texting ban in 2010, newspapers editors praised the legislature and Governor Mark Parkinson for passing the law. In an editorial, the Wichita Eagle’s Rhonda Holman wrote “But it’s nice to know the state finally has a law against this brainless and dangerous practice.” In his written statement, Parkinson said “I am pleased to sign this legislation that will encourage more aware drivers and save Kansas lives.”

While Kansas was not included in the HLDI study, there’s no reason to think that Kansas will experience anything different from the states that were studied: Kansas drivers may be under greater risk of being in a crash after the passage of this law.

Paradoxically, higher fines and stricter enforcement of this law will encourage the dangerous law-evading texting behavior.

Texting while driving will be a subject on the KAKE Television public affairs program This Week in Kansas to be aired Sunday at 9:00 am. Dr. Alex Chaparro of Wichita State University will appear to present his findings on the dangers of texting while driving and what can be done to improve safety.

Surveillance state arrives in Wichita

In an effort to control crime in Old Town, Wichita is importing the police surveillance state. Right now the targeted area is a small part of the city during certain periods of time. But once camera use has started, it is likely to spread across town, especially given the enthusiasm of police and elected officials like Wichita city council member Lavonta Williams (district 1, northeast Wichita), according to Wichita Eagle reporting.

Many people may not be aware of the gross invasion of privacy that government cameras represent. Have you used the facial recognition technology in Google’s Picasa software? It’s uncanny how accurate it is. In the hands of government, it’s a concern.

Some surveillance cameras can read car license plates two blocks away. With facial recognition technology and optical character recognition, police don’t have to actually watch the live or recorded video to learn who has been in a location. Computers can create databases, updated in real time with who is where at what time. Alerts can be programmed, so that if a person or car is seen, police can be notified.

Then, we have to wonder whether the cameras work as advertised. The website You Are Being Watched, a project of the American Civil Liberties Union, comes to this conclusion: “An increasing number of American cities and towns are investing millions of taxpayer dollars in surveillance camera systems. But few are closely examining the costs and benefits of those investments, or creating mechanisms for measuring those costs and benefits over time. There is extensive academic literature on the subject — studies carried out over many years — and that research demonstrates that video surveillance has no statistically significant effect on crime rates. Several studies on video surveillance have been conducted in the UK, where surveillance cameras are pervasive. The two main meta-analyses conducted for the British Home Office (equivalent to the US departments of Justice and Homeland Security) show that video surveillance has no impact on crime whatsoever. If it did, then there would be little crime in London, a city estimated to have about 500,000 cameras.”

An irony is that law enforcement likes recording citizens, but not the other way around. As John Stossel has noted, police don’t like to be recorded. In some states its a crime to tape a police officer making an arrest. A video excerpt from Stossel’s television shows the attitudes of police towards being recorded. At Reason Radley Balko details the problem, writing “As citizens increase their scrutiny of law enforcement officials through technologies such as cell phones, miniature cameras, and devices that wirelessly connect to video-sharing sites such as YouTube and LiveLeak, the cops are increasingly fighting back with force and even jail time—and not just in Illinois. Police across the country are using decades-old wiretapping statutes that did not anticipate iPhones or Droids, combined with broadly written laws against obstructing or interfering with law enforcement, to arrest people who point microphones or video cameras at them. Even in the wake of gross injustices, state legislatures have largely neglected the issue.”

Further irony is found in the parties promoting the cameras. Council member Williams was instrumental in crafting Wichita’s smoking ban. So too was Charlie Claycomb, president of the Old Town Association. One of their arguments was that everyone should have the right to enter any business and not be subjected to secondhand smoke. It was an argument based on civil liberties.

I’d like to be able to enjoy a cocktail in Old Town without my presence monitored and noted by the police. Is that a civil liberty worth preserving?

Wichita should reconsider this decision. It seems like an easy solution to a problem. But it’s another journey down the road of the ever-growing regulatory regime in Wichita.

At Kansas Board of Education, some questions aren’t allowed

At a meeting of the Kansas State Board of Education, it became clear that there are certain topics and questions that aren’t to be discussed in public.

At September’s meeting (video here), BOE chair David Dennis interrupted questioning by board member Walt Chappell and proceeded to the next member’s questions. Chappell was asking whether “cut scores” had declined and whether definitions of “meets standard” and “proficiency” had changed. Dennis would not allow these questions to be answered.

It’s clear that Dennis — and the entire Kansas public school bureaucracy — doesn’t want to talk about these questions. Here’s why.

Until this year, scores on Kansas-administered and controlled assessments have been rising — “jumping,” in the recent words of Kansas Education Commissioner Diane DeBacker. But scores on the National Assessment of Educational Progress (NAEP) for Kansas students don’t reflect the same trend. Scores on this test, which is given every two years, haven’t been rising as they have on the Kansas-controlled test scores. Sometimes they decline.

We now know why the Kansas-controlled test scores have risen: The Kansas State Department of Education has lowered standards. Kansas Policy Institute has done the research.

In Removing Barriers to Better Public Education, updated in June with new data, KPI concludes: “In 2000 and 2001 a student needed at least 87% correct answers in Reading to be Proficient (the second-highest performance level), but from 2002 through 2005 they only needed 80% correct answers to be Proficient (the third highest level) on the same test; Proficiency in Math required only 48% correct answers, down from 60%.”

It’s not only KPI that has noticed that Kansas schools have low standards. Data from U.S. Department of Education’s National Center for Education Statistics (NCES) reveals that Kansas has low standards for its schools, compared to other states.

These are the types of things the Kansas school public school establishment doesn’t want Kansans to know. Board of Education chair David Dennis uses his authority to silence those who might mention these facts.

While Dennis squelches those who ask inconvenient questions about Kansas public schools, he floated a proposal to increase regulation of homeschooling in Kansas. It’s simply incredible that someone presiding over a failing system — and proud to be part of that system — would want to extend his influence and control over people who have taken great effort to escape the public schools.

Related: Test scores decline; educators quick to blame funding cuts

Special interests will capture south-central Kansas planning

Special interest groups are likely to co-opt the government planning process started in south-central Kansas as these groups see ways to benefit from the plan. The public choice school of economics and political science has taught us how special interest groups seek favors from government at enormous costs to society, and we will see this at play over the next few years.

Sedgwick County has voted to participate in a HUD Sustainable Communities Regional Planning Grant. While some justified their votes in favor of the plan because “it’s only a plan,” once the planning process begins, special interests plot to benefit themselves at the expense of the general public. Once the plan is formed, it’s nearly impossible to revise it, no matter how evident the need.

An example of how much reverence is given to government plans comes right from the U.S. Supreme Court in the decision Kelo v. New London, in which the Court decided that government could use the power of eminent domain to take one person’s property and transfer it to someone else for the purposes of economic development. In his opinion for the Court, Justice Stevens cited the plan: “The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community.” Here we see the importance of the plan and due reverence given to it.

Stevens followed up, giving even more weight to the plan: “To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.”

To Stevens, the fact that the plan was comprehensive was a factor in favor of its upholding. The sustainable communities plan, likewise, is nothing but comprehensive, as described by county manager Bill Buchanan in a letter to commissioners: “[the plan will] consist of multi-jurisdictional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure investments in a manner that empowers jurisdictions to consider the interdependent challenges of economic prosperity, social equity, energy use and climate change, and public health and environmental impact.”

That pretty much covers it all. When you’re charged with promoting economic prosperity, defending earth against climate change, and promoting public health, there is no limit to the types of laws you might consider.

Who will plan?

The American Planning Association praised the Court’s notice of the importance of a plan, writing “This decision underscores the importance for a community to have a comprehensive development plan formulated through a democratic planning process with meaningful public participation by everyone.”

But these plans are rarely by and for the public. Almost always the government planning process is taken over and captured by special interests. We see this in public schools, where the planning and campaigning for new facilities is taken over by architectural and construction firms that see school building as a way to profit. It does not matter to them whether the schools are needed.

Our highway planning is hijacked by construction firms that stand to benefit, whether or not new roads are actually needed.

Our planning process for downtown Wichita is run by special interest groups that believe that downtown has a special moral imperative, and another group that sees downtown as just another way to profit at taxpayer expense. Both believe that taxpayers across Wichita, Kansas, and even the entire country must pay to implement their vision. As shown in Kansas and Wichita need pay-to-play laws the special interests that benefit from public spending on downtown make heavy political campaign contributions to nearly all members of the Wichita City Council. They don’t have a political ideology. They contribute only because they know council members will be voting to give them money.

In Wichita’s last school bond election, 72 percent of the contributions, both in-kind and cash, was given by contractors, architects, engineering firms and others who directly stand to benefit from new school construction, no matter whether schools are actually needed. The firm of Schaefer Johnson Cox Frey Architecture led the way in making these contributions. It’s not surprising that this firm was awarded a no-bid contract for plan management services for the bond issue valued at $3.7 million. This firm will undoubtedly earn millions more for those projects on which it serves as architect.

The special interest groups that benefit from highway construction: They formed a group called Economic Lifelines. It says it was formed to “provide the grassroots support for Comprehensive Transportation Programs in Kansas.” Its motto is “Stimulating economic vitality through leadership in infrastructure development.”

A look at the membership role, however, lets us know whose economic roots are being stimulated. Membership is stocked with names like AFL-CIO, Foley Equipment Company, Heavy Constructors Association of Greater Kansas City, Kansas Aggregate & Concrete Associations, Kansas Asphalt Pavement Association, Kansas Contractors Association, Kansas Society of Professional Engineers, and PCA South Central Cement Promotion Association. Groups and companies like these have an economic interest in building more roads and highways, whether or not the state actually needs them.

The planners themselves are a special interest group, too. They need jobs. Like most government bureaucrats, they “profit” from increasing their power and sphere of influence, and by expansion of their budgets and staffs. So when Sedgwick County Commissioner Jim Skelton asks a professional planner questions about the desirability of planning, what answer does he think he will get? It’s not that the planners are not honest people. But they have a vested economic and professional interest in seeing that we have more government planning, not less.

And we have evidence that planners watch out for themselves. It is not disputed that this planning grant benefits Regional Economic Area Partnership (REAP). Sedgwick County Commissioner Richard Ranzau says that John Schlegel, Wichita’s Director of Planning, told him that “acceptance of this grant will take REAP to another level, because right now they are struggling, and this will help plot the course for REAP.” He said that REAP, which is housed at the Hugo Wall School of Public Affairs at Wichita State University, needs to expand its role and authority in order to give it “something to do.”

We see that REAP is another special interest group seeking to benefit itself. In this case, our best hope is that REAP engages in merely make-work, that the plan it produces is put on a shelf and ignored, and that the only harm to us is the $1.5 million cost of the plan.

By the way, did you know that Sedgwick County Commissioner Dave Unruh, who voted in favor of the plan that benefits REAP, is now chairman of REAP? Special interest groups know how to play the political game.