Remarks delivered to Wichita City Council, May 6, 2008. Listen here.

Smoking ban supporters claim that they have the right to go to bowling alleys, bars, and other such places without having to breath secondhand smoke. That's false. No one has the right to be on someone else's property on their own terms. The property owner controls those terms. If the bar owner lets the band play too loud (or maybe not loud enough), or the restaurant is too dimly lit, or the floor of the steakhouse covered with discarded peanut shells, do we want to regulate these things too?

Some have compared a smoking section in a restaurant to a urinating section in a swimming pool. This comparison is ridiculous. You can't tell upon entering a swimming pool if someone peed in it. You can tell, however, upon entering a bar or restaurant if there is smoking going on.

Some make the argument that since we regulate businesses for health reasons already, why not regulate smoking? Without agreeing with the need for these regulations, the answer is this: First, these government regulations don't necessarily accomplish their goal. People still become ill from food, for example. But there is some merit here. Just by entering a restaurant and inspecting the dining room and the menu, you can't tell if the food is being stored at the proper temperature in the restaurant's refrigerators. But you can easily tell if there's smoking going on.

A system of absolute respect for private property rights is the best way to handle smoking. The owners of bars and restaurants have, and should continue to have, the absolute right to permit or deny smoking on their property. Markets -– that is, people freely making decision for themselves -– will let property owners know whether they want smoking or clean air.

The problem with a smoking ban written into law rather than reliance on markets is that everyone has to live by the same rules. Living by the same rules is good when the purpose is to keep people and their property safe from harm. That's why we have laws against theft and murder. But it's different when we pass laws intended to keep people safe from harms that they themselves can easily avoid, just by staying out of those places where people are smoking. For the people who value being in the smoky place more than they dislike the negative effects of the smoke, they can make that decision.

This is not a middle-ground position, as there really isn't a middle ground here. Instead, this is a position that respects the individual. It lets each person have what they individually prefer, rather than having a majority -- no matter how lop-sided -- make the same decision for everyone. Especially when that decision, as someone said, will "tick off everybody." Who benefits from a law that does that?

Part of the Wichita Eagle opinion watch series.

A writer in the April 2, 2008 Wichita Eagle presses the case for passenger train service in Wichita. But there are several problems with the writer's argument.

The writer makes this claim: "With Kansas' vast wind resource, we could power our trains with no fossil fuels." Yes, there is a lot of wind in Kansas. But it doesn't blow continuously. What does the writer suggest we power the trains with at those times? Until there is an economically feasible method of storing the electricity generated by wind, we will be reliant on traditional methods of power generation. Wind can only be a supplement.

The writer admits that high-speed passenger train service will require a lot of public money. That's okay, he says, as we presently spend a lot on our roads and traffic systems. The government-built and owned roads are frequently criticized, however. The fact that we've spent a lot on them -- with often unsatisfactory results -- is not an argument in favor of more government involvement in transportation systems. There is, in fact, a small movement towards more private highways, and there are persuasive arguments that all roads and highways should be privately owned.

If there is in fact a demand for high-speed rail travel in Kansas and the United States, let private entrepreneurs, rather than government, lead its development. That's the best way to have a system that meets the needs of customers, rather than the needs of politicians and government bureaucrats.

I wonder if the writer remembers that the government does have a track record of owning and operating a railroad. That's Amtrak, and having mentioned that, I believe no more needs to be said.

Part of the Wichita Eagle Opinion Watch series. Audio is available here.

The school bond issue in Wichita and those occurring in surrounding districts overlook one crucial necessity: a fair wage for teachers. They are critically underpaid for all levels of education, service and abilities. (From The Wichita Eagle Opinion Line, April 27, 2008)

This writer is misinformed on several levels.

First, bond issues such as the one proposed by USD 259, the Wichita, Kansas public school district, are usually reserved for capital expenditures, such as constructing buildings. Ongoing expenses such as salaries are not considered as part of a bond issue. The writer might also remember that in August 2007, the Wichita school district raised property tax rates to pay for an increase in teacher salaries.

Then, who can determine what constitutes a "fair" wage? I know of no teachers who were forced to accept the jobs they filled. We can only presume that both the teacher and the school voluntarily entered into an agreement, with the wage to be paid as part of that agreement.

But the issue might be a little more complex. For one thing, most public school teachers work under a collective bargaining agreement which specifies the wages to be paid for teachers, based on their length of experience and educational credentials. There is little or nothing that most teachers can do to escape that pay scale. It works both ways: there are excellent teachers who are underpaid compared to the value they generate through their efforts and skill. At the same time there are poor teachers who are overpaid when compared to good or average teachers.

Related is the fact that public school teacher wages are not set in a free market by willing participants on both sides. Whenever teachers get a raise, it is inevitable that letter writers and opinion line callers will express outrage at having to pay for a raise in teacher pay. That's characteristic of coerced transactions: many taxpayers don't like to see their taxes go up. But that's usually the only way that public school teacher pay can be raised.

The public schools, also, have the same problem as does any public agency: they are not able to perform economic calculation to properly evaluate their use of resources. They are not able to calculate profit or loss, so we really don't know if they use inputs -- such as the taxpayer funds used for teacher salaries -- wisely.

Besides, the myth that teachers are underpaid relative to other jobs has been exposed for just that. Jay Greene, in the book Education Myths, reports that based on U.S. Department of Labor data for 2002, accounting for the number of hours worked, school teachers earned about $31 per hour. That is more than architects, economists, biologists, civil engineers, mechanical engineers, and chemists.

Paul Jacob, in a Common Sense commentary writes about David Boaz's article in the Wall Street Journal (available at the Cato Institute) which describes the effort to obtain a customized Starbucks card with the phrase "laissez-faire" printed on it.

The request was rejected. But the socialist slogan "people not profits" was accepted by Starbucks, as was the United Farm Workers slogan "Si Se Puede." ("Yes we can," adopted by Barack Obama's presidential campaign.)

Here's what you find if you read Starbuck's mission statement: "Embrace diversity as an essential component in the way we do business."

It seems that some political ideas are more "diverse" than others.

Remarks delivered at a public hearing for the Sedgwick County solid waste management plan, April 24, 2008. Sedgwick County, Kansas, home to the City of Wichita, is considering a mandatory household recycling program. Or, perhaps people won't be forced to recycle, but they will be required to pay for the cost burden that recycling places on communities.

You may listen to this article in audio form by clicking here.

The economist Frederich Hayek tells us that the price system communicates all the information we need to know about the relative value of things. The price system allows people who don't know each other to coordinate their activities in the most effective and efficient way possible. The price system is truly a miracle.

If you want to see what happens when the price system is not allowed to work, usually because a government attempts to manage prices, just look at the former Soviet Union and other planned economies. The economist Thomas Sowell relates this story:

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.

The price system can do its work only when free people trade with each other freely under a system where property rights are respected. Any attempt by governments to manage prices leads to inefficiencies that manifest themselves as shortages, waiting lines, surpluses, and black markets. The emergence of these problems lead to calls for even more government interventionism to fix the very problem the government caused by interfering with the price system. It can be a never-ending cycle.

How does this apply to recycling in Sedgwick County?

In some cases the price system tells us that recycling is a beneficial use of resources. About 75% of automobiles are recycled, and used cardboard is often recycled in commercial settings. That's because the price paid for these recycled items is high enough that, in these contexts, recycling can be profitable. That's the price system at work. It tells us that the best use of an old car is to recycle it, and the same goes for cardboard boxes at the grocery store.

A household setting is different. Households usually have to pay to engage in recycling. The prices that recyclers can get for these recycled goods doesn't cover the cost of collecting them from households, as evidenced by the fact that in Wichita households must pay someone to pick up recyclables. That's the price system at work again. Its sober assessment is that in the context of households, recycling is a waste of resources. That waste can be tremendous. Orange County, Florida, for example, spends roughly $3 million per year to collect recyclable goods from households, but sells them for only $56,000.

What about running out of landfill space? If landfill space were truly scarce, the price system would tell us so, because landfill operators -- if there is a free market for landfills -- could charge high prices for accepting trash. But evidently, they can't.

So the price system tells us sometimes recycling is a good use of resources, and sometimes it isn't.

A mandatory recycling program or one where people have to pay fees even if they don't actually recycle their household goods amounts to the government attempting to override the price system. It is attempting to manage the price system through government interventionism. These policies, should Sedgwick County implement them, will cause citizens to suffer the same inefficiencies that all planned economies have demonstrated, if on a smaller scale.

Following are remarks I delivered to the Wichita City Council, asking them to not approve tax increment financing (TIF) for a project in Wichita. The council approved the financing by a vote of six to one. Thank you to council member Paul Gray for his dissenting vote.

Mr. Mayor and members of the Wichita City Council, I ask you to not approve this TIF financing request, and to cease this practice in the future.

We need to allow markets to channel capital and investment to where people value it greatest. The profit and loss system provides that guidance.

By asking for the TIF financing, developers are sending us a signal that without the special tax favor, their project would not be economically feasible. They evidently have judged that it would not be profitable. They must feel that they will not be able to sell or rent at prices that will cover their costs of developing this project.

This means that proceeding with the project is investing capital somewhere other than its most-valued use. We know that because developers build other things in Wichita without receiving a subsidy, and they are able to earn a profit.

Now this project may satisfy the political goals of some people who believe that not enough development is happening in their politically-desired part of town. But these people are not spending their own money to accomplish this goal.

If these developers want to build something in this area, they need to figure out what will appeal to people, what will fill enough of a need, that the project is profitable on its own. That's how we will know that this investment is wise. They won't have to appear before governmental bodies seeking approval for their plans. They can just do it.

That's market entrepreneurship. It is the way that wealth is created. These developers, instead, are practicing political entrepreneurship, where they seek to please various governmental bodies, rather than satisfying consumers who express their desires through the mechanism of markets.

This leads to a corrosive environment where nearly every week someone appears before this council requesting special treatment, that favor paid for by the rest of the the community. This is harmful.

Supporters of TIF explain them in a way that makes it seem as though there is no cost involved in granting the subsidy. But there is. Why would these developers want them, and why would this council not grant them to everyone if there were no cost?

I propose a pledge that this council could take that will help our community become aware of the cost of these subsidies, and will also alleviate some of the inequity. When the City of Wichita grants special tax treatment, it must reduce its spending by the same amount. By following this simple rule, the City can be reminded of the cost of granting special tax favors, and the rest of us won't have to pay for them.

USD 259 (the Wichita public school district) outgoing superintendent Winston Brooks has been receiving a supplemental salary paid for by private interests. This salary supplement, supporters say, was necessary to prevent Mr. Brooks from leaving Wichita for somewhere else where he would be paid more.

One way to look at this salary supplement is that USD 259 received the services of someone whose salary they couldn't afford. And since the salary supplement was funded by the voluntary action of citizens, how can we object? But there are problems with this type of arrangement.

If a superintendent of schools depends on the owner of, say, a car dealership to lead a group that pays a significant share of his salary, and then it comes time for the school district to purchase cars, how can we be sure there is no conflict of interest?

When it comes time for the school district to purchase cars or anything else, do we check to make sure that the selected vendor isn't a member of, or have a friend on, the committee that provides the superintendent's supplemental salary? And if so, is the district getting a good deal? Or would too many restrictions prevent the district from getting the best deal on their purchases?

Another problem is that it may be the case that the superintendent of schools is worthy of a large salary, perhaps much larger than the current salary and supplement. Someone who can effectively manage an organization with thousands of employees and an annual budget of over half a billion dollars is worth a great deal. Someone who can make a positive difference in how well Wichita's schoolchildren are educated is invaluable.

This illustrates a problem with government institutions. They do not have the flexibility to respond to events and circumstances in the way private enterprise can. If it was the case that the new incoming superintendent could save tens of millions of dollars while greatly improving student outcomes, that person would be worth a salary of, say, one million dollars or more. But as a practical matter, USD 259 could not pay anyone a salary that large. There would be too much resentment.

The main problem is that USD 259, like all government school districts, is funded not through voluntary transactions, but through taxation backed up by coercion. When taxpayers are forced to pay for things they don't agree with, resentment builds.

Further, because the Wichita public schools raise funds through taxation instead of voluntary transactions taking place in markets, we do not know, and the board of USD 259 certainly does not know, if their expenditures are wise and efficient. This applies to a superintendent's salary and every other expenditure the school district makes. Absent the test of profitability, or even the test of having to attract customers and revenue through voluntary decisions on the part of consumers, we do not know how efficiently USD 259 manages the resources they have.

In this article, Karl Peterjohn states that the professional staff at the Kansas Department of Health and Environment approved the permit for a new coal-burning electricity plant in Kansas, but the agency's Secretary, Rod Bremby, overruled that staff. It seems as though he and Governor Kathleen Sebelius were trying to stake new political ground in America. Why they would want to do this is not clear to me and many other Kansans. China builds a new plant like the one proposed for Kansas every seven to ten days. India builds many, and so do some other countries. Since it's not called global warming for nothing, it doesn't matter where these plants are built. They all affect the global atmosphere, as far as carbon dioxide is concerned, in precisely the same way. So two Kansas politicians, cheered on by a few newspaper editorial writers, place the Kansas economy at great risk for what benefit? Perhaps in a few years, on a hot summer day when little wind is blowing, the chillers at the Wichita Eagle building on East Douglas will slow to a crawl, the editorialists' computers switch to battery back up power with only a few minutes left to finish the day's work, and no electricity is available to run the printing presses or the servers hosting the Eagle's web site. But at least we in Kansas spewed only 0.01% as much carbon into the atmosphere as did the new Chinese coal plants.

Regulatory Uncertainty Weakens Kansas’ Economy
By Karl Peterjohn, Kansas Taxpayers Network, www.kansastaxpayers.com

The regulatory uncertainty created by Kansas Department of Health and Environment (KDHE) Secretary Ron Bremby’s decision to deny a permit to Sunflower Electric’s proposed power plant places the Kansas economy at risk and should be obvious to everyone. Sadly, this everyone does not include the Wichita Eagle’s editorial board’s February 27th editorial.

Electric utilities are already highly regulated by the state as well as federal rules and edicts. Sunflower Electric’s proposed coal fired electrical power plant expansion had been through numerous permits and regulatory requirements. The professional staff at KDHE had recommended approval based upon the criteria elected officials had placed in Kansas law.

Secretary Bremby decided that he would add new criteria that no federal or state elected officials had approved. Kansas became the first state to declare that carbon dioxide emissions are pollutants. That became his basis for denying a construction permit.

In a column in the February 27, 2008 Wichita Eagle ("Smoking ban issue not one to negotiate"), columnist Mark McCormick quotes Charlie Claycomb, co-chair of Tobacco Free Wichita, as equating a smoking section in a restaurant with "a urinating section in a swimming pool."

This is a ridiculous comparison. A person can't tell upon entering a swimming pool if someone has urinated in it. But people can easily tell upon entering a restaurant or bar if people are smoking.

Besides this, Mr. McCormick's article seeks to explain how markets aren't able to solve the smoking problem, and that there is no negotiating room, no middle ground. There must be a smoking ban, he concludes.

As way of argument, McCormick claims, I think, that restaurants prepare food in sanitary kitchens only because of government regulation, not because of markets. We see, however, that food is still being prepared in unsanitary kitchens, and food recalls, even in meat processing plants where government inspectors are present every day, still manage to happen. So government regulation itself is not a failsafe measure.

Markets -- that is, consumers -- do exert powerful forces on businesses. If a restaurant like McDonald's serves food that makes people ill, which do you think the restaurant management fears most: a government fine, or the negative publicity? Even small local restaurants live and die by word of mouth. Those that serve poor quality food or food that makes people ill will suffer losses, not as much from government regulation as from the workings of markets.

But I will grant that Mr. McCormick does have a small point here. Just by looking at food, you probably can't tell if it's going to make you ill to eat it. Someone's probably going to need to get sick before the word gets out. But you easily can tell if someone's smoking in the bar or restaurant you just entered. Or, if people are smoking but you can't detect it, I would image that the danger to health from breathing secondhand smoke is either nonexistent or very small.

The problem with a smoking ban written into law rather than reliance on markets, is that everyone has to live by the same rules. Living by the same rules is good when the purpose is to keep people and their property safe from harm, as is the case with laws against theft and murder. But it's different when we pass laws intended to keep people safe from harms that they themselves can easily avoid, just by staying out of those places where people are smoking. For the people who value being in the smoky place more than they dislike the negative effects of the smoke, they can make that decision.

This is not a middle-ground position. It is a position that respects the individual. It lets each person have what they individually prefer, rather than having a majority -- no matter how lop-sided -- make the same decision for everyone. Especially when that decision, as Mr. Claycomb stated in another Wichita Eagle article, will "tick off everybody." Who benefits from a law that does that?

Other articles on this topic:

Property Rights Should Control Kansas Smoking Decisions
http://wichitaliberty.org/node/619

Testimony Opposing Kansas Smoking Ban
http://wichitaliberty.org/node/618

A system of absolute respect for private property rights is the best way to handle smoking. The owners of bars and restaurants have, and should continue to have, the absolute right to permit or deny smoking on their property.

Not everyone agrees with this simple truth. Some ask why is there no right to clean air when there is the right to smoke. The answer is that both breathing clean air and smoking are rights that people may enjoy, as they wish, on their own property. When on the property of others, you may enjoy the rights that the property owner has decided on.

It's not like the supposed right to breathe clean air while dining or drinking on someone else's property is being violated surreptitiously. Most people can quickly sense upon entering a bar or restaurant whether people are smoking. If people are smoking, and patrons decide to stay, we can only conclude that they made the choice to stay. The owners of bars and restaurants do not have the power to force people to stay and breathe smoke.

Employees may make the same decision. There are plenty of smoke-free places for people to work if they don't want to be around smoke.

Some think that if they leave a restaurant or bar because it is smoky, then they have lost their "right" to be in that establishment. But no one has an absolute right to be on someone else's private property, much less to be on that property under conditions that they -- instead of the property owner -- dictate.

Property rights, then, are the way to solve disputes over smoking vs. clean air in a way that respects freedom and liberty. Under property rights, bar and restaurant owners will decide to allow or prohibit smoking as they best see fit, to meet the needs of their current customers, or the customers they want to attract.

A property rights-based system is greatly preferable to government mandate. Without property rights, decision are made for spurious reasons. For example, debate often includes statements such as "I'm a non-smoker and I think that …" or "I'm a smoker and …" These statements presuppose that the personal habits or preferences of the speaker make their argument persuasive.

Decision-making based on personal characteristics, preferences, or group-membership happens often in politics. Lack of respect for property rights allows decisions to be made by people other than the owners of the property. In the case of a smoking ban, the decision can severely harm the value of property like bars or restaurants that caters to smokers. This matters little to smoking ban supporters, but as we have seen, they have little respect for private property.

By respecting property rights, we can have both smoking and non-smoking establishments. Property owners will decide what is in their own and their customers' interests. Both groups, smokers and nonsmokers, can have what they want. With a government mandate or majority rule, one group wins at the expense of the rights of many others.

Submitted by John Todd.

February 13, 2008

Senate Judiciary Committee
Kansas Legislature
State Capitol
Topeka, Kansas 66612

Subject: My testimony presented in OPPOSITION to Senate Bill No. 493 concerning crimes and punishments relating to smoking.

Mr. Chairman and members of the Senate Judiciary Committee, thank you for allowing me this opportunity to speak to you in Opposition to passage of Senate Bill No. 493 concerning crimes and punishments relating to smoking, aka the Kansas smoking prohibition act.

My name is John Todd. I am a self-employed real estate broker and land developer from Wichita. I currently serve on the Governmental Affairs Committee and the Board of Directors of Wichita Independent Business Association. I am the Wichita Area Volunteer Coordinator for Americans For Prosperity—Kansas. I have been working with the Wichita Business and Consumer Rights Coalition in an effort to stop a smoking ban ordinance currently being debated by the Wichita City Council. I appear before you today as a private citizen, speaking only for myself and not for any other group.

I do not smoke, but does that give me, or even the majority of non-smokers in our state the right to use state law to restrict the rights and freedoms of those people who choose to smoke? A Democracy is like two wolves and a sheep deciding where to go for lunch. The lone sheep would have to agree with De Toquiville who described that situation as the "tyranny of the majority." The pledge of allegiance describes our country as a "republic." Our founders established a republican form of government in order to protect the individual’s rights from the tyranny of the majority.

In the past few weeks a handful of companies in Wichita have asked to be exempted from paying property taxes on investments they have made. This week Wichita may decide to grant special tax treatment to a large development in downtown Wichita.

Is it wise for the City of Wichita to grant these special tax favors?

Because capital for investment is in short supply, it is important that our economy allocate it where it does the most good, where it is valued most. Markets do a very good job of this when they operate free of government meddling. When government intervenes, however, decisions about how to allocate investment capital will be made for all sorts of non-economic reasons.

Here in Wichita, for example, there are some who believe that downtown Wichita suffers from underinvestment when compared to some of the city's outlying areas. These people -- many of them holding political office or a quasi-governmental position -- seek to use government and its ability to tax (or not to tax) to achieve their goals. They have passed measures like the sales tax to fund the downtown Wichita arena. Downtown developers and businesses are given tax breaks, tax abatements, and they may obtain low-interest loans backed by the credit of the City of Wichita. A special tax district overlays downtown, with the proceeds being used to promote downtown's interest in receiving more governmental largesse. Downtown is also filled with special tax increment financing or TIF districts, where property tax revenues that would normally be used to fund the general operations of government are instead diverted to enhance the profitability of the developer's project.

All this favorable treatment means that projects that would not be feasible on their own merits are undertaken because they satisfy a political agenda. This results in misallocation of scare capital. It's also not fair to those who risk their own capital without receiving special government favor, meaning that we may have less investment overall in Wichita because of reluctance to compete with tax-favored investors.

This interventionism is also harmful in that it creates a special class of firms: those firms who have asked for and received government favor. They gain a competitive advantage over their direct competitors. As Karl Peterjohn of the Kansas Taxpayers Network has taught me, these firms also have a competitive advantage over other firms of all types in Wichita. That's because firms of all types that don't receive special tax favors have higher overhead, and therefore may not be able to compete with the tax-favored firms in paying attractive wages to obtain employees.

This interventionism is harmful again because it creates a class of political entrepreneurs rather than market entrepreneurs. Instead of seeking to create products and services that please customers, they seek to please politicians and bureaucrats. This behavior, called rent-seeking, produces nothing of value to the economy as a whole.

Furthermore, if what those who seek special tax treatment say is true, that is, that the projects they propose would not be feasible if they had to pay their taxes, we have a serious problem: we have taxes that are so high that they inhibit private investment.

Finally, when government reduces someone's tax and doesn't reduce its own spending, the rest of the taxpayers have to make up the difference.

I propose a partial solution to this problem that will help our leaders become aware of the cost of this problem, and will also alleviate some of the inequity. When the City of Wichita (or any other taxing authority) grants special tax treatment, it must reduce its spending by the same amount. By following this simple rule, the City can be reminded of the cost of granting special tax favors, and the rest of us won't have to pay for them.

Listen to this article in audio by clicking here.

As Wichita considers the need for a new public library, a more central and fundamental question goes unconsidered: what is the role of the public library today, and do we really want one?

Consider the difference between public and private institutions. The public institution has to satisfy only a small group of people, namely the politicians that fund it. Yes, once in a while voters get to select the politicians, but issues such as a library are usually far down the list of important topics, notwithstanding a recent Wichita Eagle editorial promoting a public library as “one of the most important cultural institutions in a community. It's an investment in our future, a symbol of our values and aspirations.”

Private institutions, or businesses, on the other hand, are voted on every day by customers, who choose one over the other for their own personal reasons. This is the idea of “consumer sovereignty.”

Public institutions, open to all, appeal to few in the end. The problem caused by unwanted “customers” at the central library is well known, and must serve to decrease its usage by some large amount.

Reading the 2006 annual report of the library, it appears that 34% of the loans made at the central branch were art, music, and video. (Due to the way the library presented the figures, I couldn't determine this number for the branches.) Disregarding the presumably small number of artworks loaned (in comparison to the number of DVDs), the library is competing with services provided by the free market, namely video rental stores.

Even the loaning of books competes with bookstores. The library reports tells us that the value of the books the library circulated -- that is, what it would cost if each person who borrowed a book had bought the book instead -- is $29,068,288. I am tempted to ask what the City of Wichita has against local bookstore owners. But the reality is that the library competes rather poorly with bookstores. It has been many years since I relied on the library for timely books in my field, computers and software engineering. I found the shelves filled with titles referring to software and computers long out of date.

Today, if you want to borrow a recently-released book, especially a bestseller, you are likely to find yourself waiting in line behind dozens of borrowers, each with up to two weeks to use the book. This makes buying the book an attractive alternative, which is often what I do.

If you want to read a classic, good luck to you. I wanted to read Capitalism and Freedom, one of Time Magazine's 100 most important books published since World War II. But, the library didn't own it.

Could a privately-owned library be what Wichita needs? Could it do a better job? How would such a library work?

As it turns out, I can't find an example of a city with a private library. That alone doesn't mean a private library couldn't work. It is, I believe, more a symptom of our increasing reliance on government instead of private solutions.

There are many ways a private library could work. Patrons might be charged a small admission fee. Patrons might buy monthly or annual memberships for unlimited use. There might be a fee for checking out items, perhaps based on the newness or popularity of the item and the length of the loan period. Items might carry advertising. Meeting rooms and other services could carry rental fees.

The point is that the library would be directly accountable to its customers who use the library, instead of a governing board, the city council, and the “public,” whoever that is. The library, wishing to earn a profit for its owners, would have strong motivation to provide services that people are willing to actually pay for. It would be free to act on its own to raise capital and provide these services, instead of complaining about the lack of funding, which is the case with the current library, as with nearly all other cultural institutions, too.

Plans for new libraries call for coffee shops in the mode of Starbucks. Will the refreshments served be free? Of course not. So charging for some services is okay, it seems.

What about people who can't afford even the small fees a private library might charge? We are all already paying these fees now in the form of taxes. We are already paying for a library, both those who use it and those who don't. Spreading out the costs over everyone doesn't make it more affordable for the town as a whole. As Thomas Sowell recently wrote: “This was all before politicians gave us the idea that the things we could not afford individually we could somehow afford collectively through the magic of government.”

I wish that the Wichita Eagle editorial board would consider the alternative to government provision of things like libraries, entertainment facilities, airports, arts and culture, schools, and many other aspects of life. Relying on coercive government action over individual and voluntary group initiative makes us less free as a country and city.

From Dan Mitchell, Center for Freedom & Prosperity http://www.freedomandprosperity.org

John Stossel eviscerates David Brooks, the ostensibly conservative columnist for the New York Times. Brooks has argued for big new government initiatives to boost human capital. Stossel correctly notes, though, that Brooks wants to expand failed government programs when the right approach is to move in the other direction:

David Brooks is a bright guy, so I wonder how he can blame the free market for failing in this way. He continues, "Despite all the incentives, 30 percent of kids drop out of high school and the college graduation rate has been flat for a generation." Excuse me, but why is that the market's fault? Government dominates education in America. K-12 education is a coercive, often rigidly unionized government virtual monopoly that fights every attempt to experiment with free-market competition. Brooks writes that Hamiltonians like him "think government should help people get the tools they need to compete." But when has government ever been good at that? He claims the state can "increase the quality of human capital" by, for example, providing "Quality preschool [to] help young children from ... disorganized homes. ... " Really? What is the chance that it would be "quality" preschool if government runs it? Even the acclaimed Head Start has not been shown to have any lasting effect on academic performance. ...When I asked Brooks why a government that performed as ineptly as FEMA did after Hurricane Katrina will be better at running preschools, he said, "Some lives are so screwed up, it's hard to make them worse." Government coercion almost always makes things worse. It discourages individual effort, and sucks capital away from more productive uses. ...America became an economic power despite, not because of, Hamiltonian intervention. Hong Kong and much of East Asia went from abject poverty to affluence in a few decades not because their governments gave people "tools they need to compete" -- they didn't -- but because they exercised limited powers.

http://www.townhall.com/columnists/JohnStossel/2007/06/27/big-government...

Writing from Davenport, Iowa

A column by economist Walter E. Williams (Why we're a divided nation) strongly makes the case for more decision making by free markets rather than by the government through the political process.

When decisions are made through free markets, Dr. Williams says, both parties win, because in a free market, parties voluntarily enter into only those transactions that benefit them.

When decisions are made for us by the government, however, it is almost always the case that one party's gain is someone else's loss. Therefore, there is conflict. The more decisions made through politics, the more potential for conflict. Coalitions arise in order to try to get more from the government, and the most effective coalitions "are those with a proven record of being the most divisive -- those based on race, ethnicity, religion and region."

The final paragraph of the column is this:

The best thing the president and Congress can do to heal our country is to reduce the impact of government on our lives. Doing so will not only produce a less divided country and greater economic efficiency but bear greater faith and allegiance to the vision of America held by our founders -- a country of limited government."

In an earlier post, I mentioned some columns by Dr. Williams that I thought were important. This column is certainly one of his best, as it very simply, in one short page, shows us a major fault in our current political landscape.

This is an excellent article that exposes how little some people like Michael Moore think about the systems they consider corrupt and unworkable. It appears that Mr. Moore is so consumed with an anti-market bias that he hasn't really considered the true causes of the problem with healthcare in America. He isn't the first person to have problems with an anti-market bias, nor do I suspect he'll be the last.

Michael Moore Confirms that Government Health Care is Sicko
by Diana M. Ernst, Pacific Reserach Institute

Michael Moore showed up in Sacramento last week to promote his film Sicko. Senator Sheila Kuehl hailed Moore as a prophet of truth to the American people but the filmmaker is so mired in his own health hysterics that he regularly contradicts himself .

He rails against “for-profit” health care, but 85 percent of U.S. hospitals are non-profit, and almost half of privately insured Americans have polices from non-profit health insurers.

Moore referred to the Martin Luther King Jr.-Harbor hospital in Los Angeles, where a patient died of a perforated bowel after lying on the emergency room floor for 45 minutes. Since 2004, the hospital has received more than a dozen state and federal safety citations. Hospital errors included leaving sick patients unattended which resulted in death for three of them, giving patients the wrong medications, and using Taser stun guns to restrain psychiatric patients.

This hospital is not private, however. It is owned by the County of Los Angeles. So much for reliable government care. And the private insurers Moore rails against are currently selling health policies laden with government mandates and regulations.

The Council for Affordable Health Insurance (CAHI) has reported that mandated benefits have increased to the more than 1,800 today. In some states, mandated benefits have raised the cost of individual health insurance by 45 percent. Government solutions that create more government amount to nothing but expensive salt in the wound. Such is Governor Schwarzenegger’s plan to tax hospitals and physicians for mandated health coverage, and such is Senator Kuehl’s government monopoly plan, promoted as a "single payer" system.

We need to help insurers to be more competitive, not scrap them for big-government bureaucracy. Mr. Moore’s foolish preference of abolishing private insurance in favor of government-run, single-payer health care will not create universal care, only a government monopoly. In other words, Moore thinks the government should provide “free” health care that isn’t required to meet any standards.

Mr. Moore also thinks Canada is a good role model, but two years ago the Canadian Supreme Court found that government monopoly health care violates basic human rights. The winning plaintiff in this case, Mr. Zeliotis, needed hip surgery. When he tried to pay privately for his operation rather than wait in the public line (which takes two to four years) the Canadian government stopped him. Mr. Zeliotis argued against government interference with his freedom to choose private medical care. The denial of such a choice prolonged his pain and threatened his safety.

Mr. Moore also likes the single-payer system in Cuba, a one-party communist state. Some 11 million Cubans attend run-down facilities, receive dated prescription drugs, and are even required to bring their own sheets, food and soap to the hospital. Communist Party bosses get better treatment but when it came time for the great dictator Fidel Castro to go under the knife, he flew in a specialist from Spain. To adopt the health-care system of a totalitarian dictatorship like Cuba would be kind of, well, sicko. But government-run health care also presents problems right here at home.

Medicaid was instituted in the 1960s under President Johnson for the poor, but it has grown far beyond its capacity, putting its financial capabilities under great strain. In order to keep costs down, Medicaid underpays physicians, who have increasingly stopped accepting Medicaid beneficiaries as a result. Government restrictions on physicians also make it challenging to get prescription drugs for Medicaid patients.

Mr. Moore's remedies fail as heath-care reform and do not even amount to effective propaganda. He needs less rhetoric and more direct experience. He should get on a Canadian waiting list for treatment, try the “second” system that serves most Cubans, or follow a Medicaid patient’s struggle to get health care from the government.

Meanwhile, union nurses and hospital employees were among 1,000 people who must have taken sick time to cheer Michael Moore Tuesday. Perhaps Speaker Nuñez and Senator Kuehl will investigate how patient care suffered while their caregivers took to the streets.

Our economy is so intertwined and interdependent that it is impossible for the government to guide it in any direction without setting off a long chain of consequences. This is another example of the folly of centralized economic planning.

As I've written in the past, to determine the true value of ethanol, remove all subsidies for producing it and the corn used to make it, and end the tariff on imported ethanol. Very rapidly the market will tell us just how much a gallon of ethanol is worth.

Dan Mitchell summarizes The Wall Street Journal:

The shine is off corn ethanol, and oh, what a comedown it has been. It was only in January that President Bush was calling for a yet a bijillion more gallons of the wonder-stuff in his State of the Union address, and Iowa's Chuck Grassley was practically doing the Macarena in his seat. And why shouldn't Mr. Grassley and fellow ethanol handmaidens have boogied? They'd forced their first mandate through Congress, corn farmers were rolling in dough, billions in taxpayer dollars were spurring dozens of new ethanol plants--and here was the commander-in-chief calling for yet more yellow dollars. All in the name of national security, too! Corn ethanol seemed unstoppable, but a remarkable thing happened on the road from Des Moines. Just as the smart people warned, the government's decision to play energy market God and forcibly divert huge amounts of corn stocks into ethanol has played havoc with key sectors of the economy. Corn prices have nearly doubled, which means livestock owners can't afford to feed their animals, and food and drink manufacturers are struggling to buy corn and corn syrup. Environmentalists are sour over new stresses on farmland; international aid groups are moaning that the U.S. is cutting back its charitable food giving, and many of these folks are taking out their anger on Congress. ...The hugely influential National Cattlemen's Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade--a first. ...The National Turkey Federation estimates its feed costs have gone up nearly $600 million annually and is surely letting loose on members from turkey states such as Minnesota and Missouri. The National Chicken Council, which represents companies that produce, process and market chickens, has been hitting the southern political caucus, putting pressure on senators from big poultry states such as Georgia, Arkansas and Alabama. Chicken giant Tyson's, the second largest employer in Arkansas (after Wal-Mart), even felt the need to warn about the effect of rising corn prices on its business in its first quarter earnings statement. Food and drink manufacturers, which rely heavily on corn and corn syrup for their products, are also making the Washington rounds. The Grocery Manufacturers Association this week called for Congress to undertake a study before it imposed a bigger ethanol mandate. Soft-drink companies such as Coca-Cola (of Mr. Chambliss's Georgia) are also up in arms.
http://www.opinionjournal.com/columnists/kstrasselpw/?id=110010094

And summarizing John Stossel:

When everyone in politics jumps on a bandwagon like ethanol, I start to wonder if there's something wrong with it. And there is. Except for that fact that ethanol comes from corn, nothing you're told about it is true. ...If ethanol's so good, why does it need government subsidies? Shouldn't producers be eager to make it, knowing that thrilled consumers will reward them with profits? But consumers won't reward them, because without subsidies, ethanol would cost much more than gasoline. The claim that using ethanol will save energy is another myth. Studies show that the amount of energy ethanol produces and the amount needed to make it are roughly the same. ...even turning all of America's corn into ethanol would meet only 12 percent of our gasoline demand. ...the standard mixture of 90 percent ethanol and 10 percent gasoline pollutes worse than gasoline. ...Surely, ethanol must be good for something. And here we finally have a fact. It is good for something -- or at least someone: corn farmers and processors of ethanol, such as Archer Daniels Midland, the big food processor known for its savvy at getting subsidies out of the taxpayers. And it's good for vote-hungry presidential hopefuls. Iowa is a key state in the presidential-nomination sweepstakes.
http://www.townhall.com/columnists/JohnStossel/2007/05/23/the_many_myths...

I, Pencil is one of the most important and influential writings that explain the necessity for limited government. A simple object that we may not give much throught to, the story of the pencil illustrates the importance of markets, and the impossibility of centralized economic planning.

From the afterword to I, Pencil by Milton Friedman:

Leonard E. Read’s delightful story, “I, Pencil,” has become a classic, and deservedly so. I know of no other piece of literature that so succinctly, persuasively, and effectively illustrates the meaning of both Adam Smith’s invisible hand -- the possibility of cooperation without coercion -- and Friedrich Hayek’s emphasis on the importance of dispersed knowledge and the role of the price system in communicating information that “will make the individuals do the desirable things without anyone having to tell them what to do.”

Link to a pdf of I, Pencil: http://www.fee.org/pdf/books/I,%20Pencil%202006.pdf

Link to Leonard E. Read reading I, Pencil: http://www.fee.org/events/detail.asp?id=6239

From an article by Kenneth P. Green on energy policy. It explains why subsidy in any form is bad policy.

First, subsidies breed corruption. They don't create incentives for honest people that already have a market-worthy product -- such people can already sell their goods into the market easily. Rather, subsidies create a fertile garden for rentseekers who are unable to sell their goods competitively in a free-market, and prefer to tap the coercive and redistributionist force of government to lever their uncompetitive good into the market at the public's expense. Rather than contribute to overall social welfare by giving consumers the best goods at the least cost, or even maximizing the efficient use of people's taxes, rent-seekers undermine social welfare by foisting inferior or over-priced goods onto the market while taking money from people that could be used for other important purposes. This is a particular problem in countries with relatively weak property rights regimes, and countries with legal institutions insufficient to prevent it.

Full article at http://www.aei.org/publications/filter.all,pubID.26353/pub_detail.asp.

Thank you to Karl Peterjohn for this excellent, well-researched article.

Urban Renewal: A Flawed Idea That Failed 50 Years Ago
By Karl Peterjohn, Executive Director Kansas Taxpayers Network

EXECUTIVE SUMMARY

1) Urban renewal failed across the United States in the 20th century. The urban renewal efforts from the 20th century that are the foundation for the newly proposed redevelopment agency in Wichita rely upon these old Kansas laws that require an increase in local government’s powers. There are no clearly defined steps that will avoid repeating these past mistakes in the public hearing discussions so far.

2) The financing mechanism for this new redevelopment agency is not clear. Other communities might have agencies with this label and operate their Community Development Block Grants (CDBG) money through them, but integrating the current CDBG programs into this new agency have not been made clear. The revenue need to fund this agency is unspecified. The city has property, sales, and fee revenues that can be raised to provide the substantial funding needed for this proposed new agency.

3) No efforts have been clearly defined to avoid repeating the mistakes that occurred in the 20th century urban renewal redevelopment process. If the city is going to make mistakes, let’s not repeat the errors of the past.

4) Current city activities will be impacted by this redevelopment agency. This includes and is not limited to central inspection, zoning, and planning.

5) The city will need to restore the eminent domain powers that the 2006 legislature removed from state law for many of the proposed redevelopment efforts to work. While the eminent domain reform enacted in 2006 does not take effect until July 1, 2007, the city needs a plan that will fit within the boundaries of state law.

6) A disproportionate amount of the burden created by urban renewal fell upon low income and largely minority groups. Urban renewal programs provided disproportionate benefits to high income, developers, and citizens with close ties to these programs at city hall.

INTRODUCTION ON WICHITA

The Wichita City Manager is promoting a new city redevelopment agency and using the existing urban renewal statutes that exist in Kansas law for this community. Sedgwick County officials have joined both appointed and elected city officials in discussing this concept.

Urban renewal was an important post World War II program that tried to rehabilitate and improve cities all over the United States. Unfortunately, urban renewal and the government dominated and controlled redevelopment process that was the essence of urban renewal in the 20th century failed. It was also a very expensive failure.

Wichita has gone through two rounds of urban renewal. The first effort was in parallel with the national efforts that ran from 1949 to 1974.(1) Downtown Wichita changed significantly when urban renewal programs used their eminent domain powers to acquire large chunks of property in Wichita. The City of Wichita has been one of the largest property owners in this community since this program began. Century II was one of the major redevelopment projects in downtown Wichita during this period of time.

Fortunately, the troubled history of urban renewal is one that is readily available. This is particularly critical for a city like Wichita that went through a second stage that it has been following with a city directed special redevelopment program since the late 1980’s.

Developer Jack DeBoer issued his “DeBoer Plan” for downtown redevelopment in Wichita almost 20 years ago. DeBoer’s vision was for the construction and development of a large number of new and enhanced existing facilities in downtown Wichita. The focus would be in turning the downtown area into an entertainment/tourist destination with a variety of primarily enhanced public facilities. The DeBoer plan was largely implemented in stages with the “crown jewel” being the recently approved downtown arena. This private-public partnership was expected to transform and revitalize downtown Wichita. A large amount of public and private funds were expected to be spent to turn this vision into a reality.

The centerpiece for this revitalization proposal was three major projects downtown: a 500 foot keeper of the Plains that would be for Wichita what the space needle is for Seattle; a new downtown hotel; a new downtown arena. In addition a variety of other attractions would be built to attract people, particularly tourists, to downtown Wichita. The Wichita ice arena and Childrens Museum were two of the other significant attractions that were built.

The irony of the DeBoer proposal, was the fact that almost 20 years later, DeBoer is most prominently attached to the East Bank/Waterwalk development proposal and was NOT specifically part of his 1980’s era proposal. This redevelopment project, which included a large amount of city owned parcels, included land that had originally become city property back in the urban renewal era.

The DeBoer redevelopment proposal went well beyond the arena and a 500 foot Keeper of the Plains statue. Downtown Wichita was supposed to become an urban tourist destination location with a variety of attractions to get both residents and out-of-town tourists to flock to see. Naturally, accommodations like a new hotel would be needed to go with the recent expansion of the Bob Brown convention center complex attached to Century II.

The expansion of museums on and by the river, a new ice rink, remodeled Lawrence-Dumont stadium (roughly 20 years ago) and other improvements were all supposed to stimulate a new form of local development that went beyond the traditional businesses and industries existing in Wichita. The City of Wichita and Sedgwick County spent huge sums to build, expand, or remodel facilities in and around downtown. Meanwhile, the private sector that was already downtown quietly continued to shrink and diminish.

A new local bus station was built downtown in the 1990’s. Macy’s retail store disappeared to be replaced by the Finney State Office Building that the city helped arrange by providing a nearby parking facility.

The initial reaction to the DeBoer revitalization plan was mixed. The family of the late Black Bear Bosin quickly sank the idea of inflating his statue into a 500 foot city landmark. That was the only idea that was not substantially implemented, and by raising the base, a good argument can be made that the intent of the DeBoer plan to increase the height of the keeper has been partially met.

The city has just finished spending a large amount of tax funds raising the pedestal for the Keeper of the Plains statue so that the original statue is more visible to the public. However, it is not clear to what degree this statue is attracting either local or outside the Wichita area visitors into downtown. The city supported Indian Museum that is adjacent to the Keeper of the Plains statue has continued to struggle and this facility continues to have a variety of operational problems that continue to appear in the news from time-to-time.

Both the city’s ice arena as well as the Children’s Museum have struggled over financial operating costs and budget problems at several points since these facilities were opened. Downtown Wichita’s Old Towne area has seen an influx of restaurants and nightclubs. Many of the private projects have required a variety of taxpayer funded support that included but is not limited to parking. The high amount of turnover in the ownership and operation of many of these private facilities raised performance questions. Similar firms outside of the downtown area did not receive the same benefits that many of the downtown firms received. This situation raised equity issues for similar businesses. Is local government capable to step in? The sizable financial losses from the operations of the now city owned Hyatt Hotel during its first few years of operation raises questions about the effectiveness of the public-private redevelopment efforts that occurred in the last few years of the 20th century in Wichita.

Wichita has struggled both with the explicit urban renewal along with the rest of the country in the middle of the 20th century. Follow up redevelopment programs during the last 20 years have created a number of changes downtown but the growth in this community had largely eluded the downtown area. This Wichita history is important for city council and other local officials to keep in mind when examining the redevelopment agency proposal and resurrecting urban renewal.

I. NATIONAL URBAN RENEWAL: A BRIEF HISTORY

Urban renewal failed. Even before the federal urban renewal efforts ended in the 1970’s the academic critics were pointing out major problems. The goals were not being met and costs far exceeded initial projections.

In my September 6, 2006 letter to city leaders discussing urban renewal I pointed out the wide range of literature discussing urban renewal and redevelopment that dated back over 40 years ago. This history was wide ranging and featured prominent scholars from that era who included several who went on to national prominence in other public realms like the late Senator Patrick Moynihan who was also a White House staffer for several presidents, and White House staffer to former President Reagan, Martin Anderson. In addition, major urban scholars like Jane Jacobs, Harvard professors Edward Banfield, and Nathan Glazer who focused upon city improvements and trying to reduce and ameliorate the urban poverty problem had a major impact at looking at city issues.

Now a case can be made that urban renewal has never totally ended. That is a certainly a reasonable position in light of the existence in some states of the urban renewal statutes in state law that were enacted roughly 50 years ago. The late Ronald Reagan jokingly commented that there was nothing as eternal as a government program. The echoes of urban renewal and similar redevelopment efforts continue like a governmental version of the scientists “Big Bang” echoes detected by the Bell Laboratory scientists who won Nobel Prize in Physics for their effort.

As far back as 1963 then professors Glazer and Moynihan wrote in their classic “Beyond the Melting Pot” described urban renewal and its ethnic and sociological impact this way, “There have been difficult (sociological) problems, but not different from those in other great American cities. The major attempt to deal with these problems has been through urban renewal—the rebuilding of the area so as to reduce the low-income and increase the middle- and high-income population. This movement has been supported by all the middle-class groups and institutions in the area, who of course would like to see less crime and disorder and crowding and dirt around them.” (2)

Urban renewal had impacted the natural evolution of the neighborhoods that were in transition in New York City in the 1950’s as the Irish, Jews, and Germans moved out to be replaced back then what Glazer and Moynihan referred to as “Negroes” and Puerto Ricans. Glazer and Moynihan comment on the paucity of Puerto Rican community organizations and attribute this in part to the impact of urban renewal, “Aside from the storefront churches, organizational life is not strong among the Puerto Ricans….but Puerto Rico, just as the rest of Latin America, has always been weak in spontaneous grass-roots organization. Probably the rise of organization has been inhibited too by the factors that have dispersed the population and prevented the development of a great center for the Puerto Rican population—housing shortage, slum clearance, and the availability of public housing….The demolition of the houses that affront the neighborhood means precisely the demolition of those that house vast numbers of Puerto Ricans—families living in single rooms, families taking in migrant relatives, displaced children, and temporarily homeless friends. Ironically, ‘improving a neighborhood’ means moving out those who are most crowded, have the least room, and whose resettlement offers the most difficult problem for themselves and city agencies.”(3)

Slum clearance is just a synonym for urban renewal. Slum clearance is the argument being put forth by the advocates for new city redevelopment agency. Glazer and Moynihan identified over 40 years ago simply bulldozing buildings does not address the underlying problems. These are problems of crime that result in the dilapidation that is being used to justify a new city agency.

What will be done differently in 2006 than what was done in 1956? If local officials are going to make build a new city bureaucracy and expand the city’s role in controlling property within the city limits, Wichitans need to know why the local officials should repeat the same mistakes that were exposed over 40 years ago?

Aesthetically, urban renewal was a failure creating a monotonous diversity that the leading urban scholar of her day Jane Jacobs described, “Anything looks ugly if it is done badly. But this belief implies something else. It implies that city diversity of uses is inherently messy in appearance; and it also implies that places stamped with homogeneity of uses look better, or at any rate are more amenable to pleasant or orderly esthetic treatment. But homogeneity or close similarity among uses, in real life poses very puzzling esthetic problems. If the sameness of use is shown candidly for what it is—sameness—it looks monotonous.”(4)

In fact, the converse according to Jacob is true for cities, “Intricate minglings of different uses in cities are not a form of chaos. On the contrary, they represent a complex and highly developed form of order…Nevertheless, even though intricate mixtures of buildings, uses and scenes are necessary for successful city districts, does diversity carry, too, the disadvantages of ugliness, warring uses and congestion that are conventionally attributed to it by planning lore and literature? These supposed disadvantages are based on images of unsuccessful districts which have not too much, but too little diversity. They call up visions of garish, sprawling, unremitting commerce. None of these conditions, however, represent flourishing city diversity. On the contrary, these represent precisely the senility that befalls city neighborhoods in which exuberant diversity has either failed to grow or has died off with time…. Flourishing city diversity, of the kind that is catalyzed by the combination of mixed primary uses, frequent streets, mixture of building ages and overheads, and dense concentration of users does not carry with it the disadvantages of diversity conventionally assumed by planning pseudoscience.(5) Jacob then proceeds to criticize the urban planners and urban renewal advocates of her day for their failures to understand the intricacies or the spontaneous order created by the marketplace operating under a rule of law.

The problems outlined in a practical sense by Jacob are examined in much greater detail that extends well beyond urban renewal and municipal revitalization and into a broader discussion of the role of urban experts, government planners, city residents trying to live their lives and how this exists in an America where the role of the government has been expanding during the 20th century and the first decade of the 21st century.(6)(7)

The most recent national explosion of this issue is the eminent domain battles that lead up to the U.S. Supreme Court’s recent and highly controversial, Kelo decision ratifying forced land acquisition powers for private developers at the expense of current landowners when exercised by local units of government. That has led some Wichita city leaders to put this city behind an effort to have broad based powers to condemn private land using eminent domain and then be able to turn that property over to other private hands. This led the 2006 Kansas legislature to pass legislation that will limit municipal eminent domain powers for redevelopment beginning July 1, 2007.

These failures go far beyond the sociological analysis offered by Glazer, Jacob, Anderson, and Moynihan. Hoover Institute scholar Martin Anderson identified a number of problems with urban renewal.

In addition, liberty and control over property by citizens was diminished for all and in some cases eradicated for the people living in the targeted “redevelopment” areas. “Who wants urban renewal? Certainly not the lower income groups—they get displaced from their homes to make way for the modern apartments they cannot afford to rent. It is hard to know whether the middle class is much concerned with the changes that have occurred in the cities…Then who is behind the tremendous push for urban renewal? Raymond Vernon, former Director of the New York Metropolitan Region Study, has speculated that the main stimulus for urban renewal comes from two elite groups—the wealthy elite and the intellectual elite. Both groups have strong economic and social attachments to the central city.”(8)

In a book examining eminent domain abuse and its ties to urban renewal, Steven Greenhut looked at Anderson’s analysis and warned: “Nothing much has changed today.”(9)

Greenhut also pointed out, “Without eminent domain, very little of the destruction could have taken place. But once the government had the right to take whatever it pleased in the name of the ‘higher good’ then the sky was the limit.”(10)

Urban renewal did do massive amounts of damage. Let’s look at one well examined and very costly case: Pruitt-Igoe in St. Louis that was described: “Few people could have missed the demolition of St. Lous’ Pruitt-Igoe and other hideous housing projects that came to epitomize wht the urban-renewal program was all about: creating high-rise, crime-ridden slums that eventually had to be dynamited before any real urban progress could be made.”(11)(12)

Von Hoffman’s Harvard University study went on to describe this redevelopment tragedy this way, “St. Louis’s Pruitt-Igoe housing project is arguable the most infamous public-housing project ever built in the U.S. A product of the postwar federal public-housing program, this mammoth high-rise development was completed in 1956…Only a few years later, disrepair, vandalism, and crime plagued Pruitt-Igoe. The project’s recreational galleries and skip-stop elevators, once heralded as architectural innovations, had become nuisances and danger zones. Large number of vacancies indicated that even poor people preferred to live anywhere but Pruitt-Igoe. In 1972, after spending more than $5 million in vain to cure the problems at Pruitt-Igoe, the St. Louis Housing Authority, in a highly publicized event, demolished three of the high-rise buildings. A year later, in concert with the U.S. Dept. of Housing and Urban Development, it declared Pruitt-Igoe unsalvageable and razed the remaining buildings.”(13)

If the city of Wichita is going to resurrect the urban renewal that led in it worst cases to problems like the one listed above, a specific program is needed to make sure that these past mistakes are not repeated. In addition, it must be clear where the public funding sources will come from to provide for this redevelopment.

Avoiding the government redevelopment/urban renewal model is needed. This problem remains a national challenge for communities across the country. In Abuse of Power, Steven Greenhut describes the 21st century challenge this way: “For as bad as the old urban renewal was—and almost everyone from every political perspective has criticized the outcome of this massive federal program—at least it was done to remedy what its proponents saw a genuine urban problems of substandard housing and rundown neighborhoods. Since at least the early 1980s, urban renewal has morphed into something known mainly as redevelopment. Advocates of modern redevelopment projects often use the same language of blight to justify their efforts, but the purpose has changed dramatically.”

“Whereas the old urban renewal was designed largely to wipe away areas that unquestionably were down on their heels, the new urban renewal is basically about filling city coffers with money. It’s about building tax bases. It’s about luring new commercial retailers into older areas to bring in additional property and sales taxes. Just because these financial motives are sometimes (but not always) dressed up in the language of the New Urbanism or downtown revitalization or blight removal should not fool one into thinking that the new urban renewal is about anything more than money.”(14)

For local government to proceed, it must have eminent domain powers to remove the wrong people from the targeted property. This has led to condemnations of property across the country and destroyed the property rights for homeowners in many cases. Lakewood, Ohio is one example but books have been written outlining a large number of cases that cross the country.

“As there were no structural problems with the houses, the City (Lakewood, OH) relied upon terms like ‘economic and functional obsolescence’ to find blight. Translation: The houses lack two-car attached garages and second bathtubs and their yards are too small. No modern family could possibly want a historic, well maintained house without a two-car attached garage.”(15)

The author of this study “Public Power, Private Gain,” issued by the Institute for Justice in 2003 provided numerous abuses similar to Lakewood’s that are occurring throughout the country. Dana Berliner’s book is filled with outrages to individuals, a variety of businesses, churches, farmers, and others in the name of eradicating “blight” or “neglect” or “distressed” properties.

Many of these outrages occurred in Kansas. “Unfortunately, for the citizens of Kansas, their state is one of the worst abusers of eminent domain, especially in comparison to other states with similar population size.”(16) Problems with redevelopment in the context of eminent domain abuses were specifically cited in Kansas City, the infamous Gross case out of Merriam, and Topeka. Kansas was ranked second worst out of the 50 states behind only California in this national study.

In the Gross case a small businessman operating a used car lot lost his property because the city of Merriam condemned it so a neighboring BMW dealership could acquire the property.(17)

These abuses were part of the foundation for the effort to reform Kansas eminent domain laws in the wake of the Kelo decision on eminent domain by the U.S. Supreme Court. In addition, there is also a similar and even more anti-property owner case coming out of the Kansas Supreme Court recently. Unlike Kelo that has been extensively covered in the news media, the Kansas case has received almost no local news coverage.

“A good example is the Kansas Supreme Court’s 2003 decision in the case of General Building Contractors and Robert Tolberg v. Board of Shawnee County Commissioners. The justices not only affirm the county’s right to take virtually any property they chose in the name of economic development, but they also show open disdain for the property owners who are challenging the taking of their properties. Throughout the ruling, one sees an emphasis on process rather than on rights. As long as the government followed the letter of the law and the proper redevelopment process, then the court couldn’t see what the controversy was about. Yet, courts are supposed to serve as a check on the government’s edicts, holding them up to timeless constitutional principles rather than the planning ideologies of the day.”(18)

This was the perspective of a California eminent domain author in looking at the problems in Kansas recently. The Kansas events where eminent domain was used to favor private parties helped set the stage in 2006 for the legislature’s efforts to limit eminent domain takings for non public purposes. This is primarily for economic development efforts but in some other states even the traditional eminent domain powers for public purposes are now being questioned or even limited. In other states, the voters have been specifically asked to decide the proper role for eminent domain powers in the case of redevelopment.

November 7, 2006 the voters in Florida, Georgia, Michigan, Nevada, New Hampshire, North Dakota, Oregon, and South Carolina all passed initiatives that would restrain the government’s power to seize private property. If Kansas powers would receive a similar opportunity, a similar outcome by voters speaking out to defend their property rights is likely.

Naturally, for an elite few who are at the center of local government power, this is not an outcome that they approve of in their vision to improve their communities. The genius of the founders in providing a system where power was supposed to be spread widely among the people also puts a crimp in the utopian planners. “As in all utopias, the right to have plans of any significance belonged only to the planners in charge.”(19)

In the wake of the Berman, the U.S. Supreme Court decision in the 1950’s that provided the foundation for the expanded eminent domain powers for government became the foundation for the loss of private property rights and a sizable expansion in government’s ability to modify property ownership into the hands that the state prefers.(20)

Lower court decisions had problems with this concept but their argument, “One man’s land cannot be seized by the Governmnt and sold to another man merely in order that the purchaser may buildupon it a better house or a house which better meets the Government’s idea of what is appropriate or well designed.”(21)

II. CONCLUSION

Urban renewal failed nationally over 35 years ago across this country. Wichita’s effort to redevelopment within the national urban renewal and outside it have at best a record that is incomplete and continues to require significant public support even for nominally private, albeit many are not-for-profit entities.

The city should not proceed precipitously in once again proceeding down the “urban renewal/redevelopment” path. The experiences in the last 20 years should make city leaders sanguine in proceeding down the proposal coming out of the city manager’s office.

All possible avenues should be examined. “By the end of the federal urban-renewal program in 1974, cities that refused Title I funds and let the market hold sway over downtown redevelopment projects generally had more more impressive downtown revitalizations than those that relied so heavily on federal power and that abused property rights so egregiously.”(22)

Wichita needs to avoid repeating past mistakes. Providing a strong level of property rights actually enhances development. A stable system of government that is not excessively large and expensive is a stronger incentive to growth than a new governmental body promoting “redevelopment.”

Individual states are engaging in a number of experiments: on November 7, 2006, the voters in the city of Nashville, TN approved an ordinance requiring that the city get voter approval before any and all taxes could be raised. This question arose in light of that community’s high property tax rates.

FOOTNOTES

1) Abuse of Power, Greenhut, 2004, page 107
2) Beyond the Melting Pot, Glazer & Moynihan, page 179.
3) Ibid, page 107-8.
4) The Death and Life of Great American Cities, J. Jacobs, 1961, page 223.
5) Ibid, page 223.
6) Constitution of Liberty, F.A. Hayek.
7) Vision of the Anointed, T. Sowell.
8) The Federal Bulldozer: A Critical Analysis of Urban Renewal, 1949-1962, page 218.
9) Abuse of Power, Greenhut, page 111.
10) Ibid, page 110.
11) Ibid, page 111.
12) “Why They Built Pruitt-Igoe,” A. Von Hoffman, Joint Center for Housing Studies at Harvard U., 2000, http://www.soc.iastate.edu/sapp/PruittIgoe.html.
13) Ibid.
14) Abuse of Power, page 114.
15) Public Power, Private Gain, D. Berliner, Institute for Justice, Washington, D.C., 2003, page 166
16) Ibid, page 78.
17) “Condemnation Is Used to Hand One Business Property to Another,” D. Starkman, Wall Street Journal, Dec. 2, 1998, page A1.
18) Abuse of Power, page 150.
19) The Death and Life of Great American Cities, J. Jacobs, 1961, page 17.
20) Takings Private Property and the Power of Eminent Domain, R. Epstein, 1985, page 178.
21) Ibid, page 178-9.
22) “Urban Renewal and Its Aftermath,” J.C. Teaford, page 458 cited in Greenhut.

From Dan Mitchell:

Walter Williams summarizes why the Food and Drug Administration is likely to delay the approval of drugs that benefit people. Simply stated, they adopt a risk-averse strategy to avoid being criticized for allowing a dangerous drug on the market, even though almost all drugs can be dangerous:

…if you're an FDA official, what are your incentives in terms of whether to approve or disapprove the marketing of a drug that has a tremendous benefit to some patients and poses a health threat to others? Former FDA Commissioner Alexander Schmidt hinted at the answer when he said, "In all our FDA history, we are unable to find a single instance where a Congressional committee investigated the failure of FDA to approve a new drug. But the times when hearings have been held to criticize our approval of a new drug have been so frequent that we have not been able to count them. The message to FDA staff could not be clearer." There's little or no cost to the FDA for not approving a drug that might be safe, effective and clinically superior to other drugs for some patients but pose a risk for others. My question to FDA officials is: Should a drug be disapproved whenever it poses a health risk to some people but a benefit to others? To do so would eliminate most drugs, including aspirin, because all drugs pose a health risk to some people.

http://www.townhall.com/columnists/WalterEWilliams/2007/05/30/fda_friend...

The Miracle and Morality of the Market
Richard M. Ebeling

Click here to read the article.

In this short article we learn the simple mechanism that makes our economy work so well. Interfering with that mechanism is not only harmful, it is immoral.

Prices convey the information that we need to make our economy work. Here is why:

How are the activities of an increasingly larger group of individuals successfully coordinated, so that all the multitudes of demands and supplies are brought into balance and harmony? The Austrian economist and Nobel Laureate Friedrich Hayek showed how all of the knowledge and information in society can be encapsulated in the price system of the free-market economy. In our roles as both consumers and producers we communicate to one another what we think goods, resources, capital, and labor services are worth to us in their various and competing uses through the prices we are willing to pay for them. These “price signals” serve as the means for all of us to decide and coordinate what we want and are willing to do together with other members of society.

Because of the information conveyed by prices, is not necessary for a government to rule over the economy to cause it to function properly. In fact, government intervention in the economy is harmful, because the market is so complex that it is impossible to guide effectively. Central planning of economic activity will make people poorer, not wealthier. As Thomas Sowell relates: "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."

The moral dimension of the market refers to how in a free society, people enter into transactions freely, choosing those that they believe will benefit them:

There are none who are only masters and others who are simply servants. In the market society we are all both servants and masters, but without either force or its threat. In our roles as producers — be it as men who hire out our labor for wages, resource owners who rent out or sell our property for a price, or entrepreneurs who direct production for anticipated profits — we serve our fellow men in attempting to make the products and provide the services we think they may be willing and interested in buying from us.

Yet we know there are those who wish to interfere with the working of a free market through various means. All attempts to do this reduce the amount of liberty we are able to experience.

Too many want to dictate how others may make a living, or at what price and under what terms they may peacefully and voluntarily interact with their fellow human beings for purposes of mutual material, cultural, and spiritual betterment.

Often the concept of free markets is viewed as contrary to a moral society. Those who advocate government programs to make us better off are portrayed as noble, virtuous, and smarter than the rest of us. This article shows us that they are not that at all -- they are immoral. Why? Almost all these programs forcibly take money from one person and give it to another to whom it does not belong. There is no moral right for anyone or any government to do that, no matter how noble the cause appears.

The contrast between the statist Hillary Clinton and the libertarian Milton Friedman. Gathered by Thomas D. Kuiper.

The Free Market

"The unfettered free market has been the most radically destructive force in American life in the last generation."
-- First Lady Hillary Clinton on C-Span in 1996 stating her troubles with the free market

"What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself."
-- Milton Friedman, Wall Street Journal, May 18, 1961

Social Security

"We can’t afford to have that money go to the private sector. The money has to go to the federal government because the federal government will spend that money better than the private sector will spend it."
-- First Lady Hillary Clinton in a disagreement with a Republican congressman

"I have long been a critic of Social Security, basically because I believe that it is not the business of government to tell people what fraction of their incomes they should devote to providing for their own or someone else’s old age."
-- Milton Friedman, WSJ, March 15, 1988

Health Care

"I had a few ideas about health care, and I’ve learned a few lessons since then, but I haven’t given up the goal, and that’s why we kept working step-by-step to insure millions of children through the Children’s Health Insurance Program."
-- First Lady Hillary Clinton at the 2000 Democratic Convention, still wanting socialized medicine in the United States

"It is taken for granted that workers should receive their pay partly in kind, in the form of medical care provided by the employer. How come? Why single out medical care? Surely food is no less essential to life than medical care. Why is it not a