Voice For Liberty

Tag: Regulation

  • Nothing works

    By Alan Cobb, Americans For Prosperity — Kansas. From The Topeka Capital-Journal, Saturday, November 01, 2008

    On Oct. 1, Congress did nothing. And we at Americans for Prosperity — Kansas applaud it. By not acting to renew it, lawmakers allowed the ban on offshore drilling and oil shale recovery to expire.

    This first step, albeit a baby step, toward reducing our nation’s reliance on foreign oil by permitting U.S. companies to explore and drill for oil along our coastlines and in our western states will help reduce energy costs and increase energy security.

    Congress doing nothing about offshore oil drilling Oct. 1 may just be the biggest something lawmakers have done to date in crafting the comprehensive energy policy so badly needed by our nation. When Congress continues its work on energy it is critical it again does nothing to raise energy taxes or create new ones.

    Let me borrow from the medical community for a cautionary message to Congress: First, do no harm. Although Congress must take action if we are to get the energy reforms our nation so badly needs, it must act with care to first do no harm, either by reinstating drilling bans or by repeating the energy tax faux pas of the 1980s.

  • Untruths about carbon and its regulation at the Wichita Eagle

    The Wichita Eagle’s recent editorial by Rhonda Holman takes a few Kansas legislators to task for statements regarding regulatory uncertainly in Kansas (No ‘regulatory uncertainty’ in Kansas, October 28, 2008 Wichita Eagle). She claims their statements “don’t reflect reality” and that their untruths are harming Kansas’ ability to bring in business.

    I want to remind Ms. Holman of reporting in the Topeka Capital-Journal from earlier this year which investigated some of the issues surrounding the denial of the permit for the expansion of Holcomb Station. As reported in my post Rod Bremby’s Action Drove Away the Refinery, the Secretary of the Kansas Department of Health and Environment absolutely created a very confusing situation. He denied a plant solely for its level of carbon emissions, and then said that a proposed plant that emits even more carbon would not be a problem.

    Who would trust a public official who speaks like that?

    Besides this, Ms. Holman says the Holcomb plant is bad for Kansas, as it exports power “while leaving Kansas with 100 percent of the carbon dioxide.” I know of no authority — not even Al Gore — that believes that carbon dioxide pollution is a problem in the local vicinity of a power plant. To the extent that carbon emissions are a problem — and that’s a mighty big “if” — it’s a problem on a global scale. Why else would climate change alarmists be concerned about carbon emissions from power plants in China?

  • Kansas can’t afford a cigarette tax hike

    Research & Commentary: Kansas Can’t Afford A Cigarette Tax Hike
    By John Nothdurft, Legislative Specialist at The Heartland Institute

    The Kansas Health Policy Authority’s recommendation to use a 75-cent cigarette tax increase to pay for health costs should be worrisome — not only to smokers, but also to non-smokers and fiscally responsible legislators as well.

    The approach may seem appealing at first, but such tax increases are notoriously unpredictable and regressive. Funding a high-profile need such as health care with a cigarette tax increase is particularly hazardous because it ties an inherently unstable tax to an increase in government spending.

    A big question mark hovers over how much revenue the proposed cigarette tax hike would actually bring into the state’s coffers. According to the Center for Policy Research of New Jersey, since that state’s cigarette tax was raised 17.5 cents two years ago, the state has actually lost $46 million in tax revenue.

    Many other states have seen lower-than-projected revenue returns after cigarette tax hikes were put in place. This is a result of the general decline in tobacco use nationwide, cross-border shopping, Internet sales, smuggling, and other factors that are causing cigarette tax revenue streams to flatten.

    If Kansas legislators were to hike cigarette taxes to fund health care programs, they soon would be stuck having to choose between rolling back the funding for health care or raising other taxes. A recent National Taxpayers Union study found legislators usually do the latter. “Taxpayers face a seven out of 10 chance of seeing another net annual tax hike within two years of a tobacco tax hike,” the group reported.

    Cigarette tax increases also unduly burden low-income taxpayers and punish local businesses.

    The following articles offer additional information on cigarette tax hikes.

    Cigarette Tax Hikes Burn Hole in State Coffers
    Gregg M. Edwards, president of the Center for Policy Research of New Jersey, an independent nonprofit organization that addresses public policy issues facing New Jersey, reports how his organization found that New Jersey brought in less revenue after its cigarette tax hike than was coming in before it was implemented.

    Debunking the “Tax Thee, But Not Me” Myth: Five Reasons Why Non-Smokers Should Oppose High Tobacco Taxes
    According to the National Taxpayers Union, “the per-capita state and local tax burden in high-tobacco tax states is 8 percent above the national average, while the general tax bill for residents of low-tobacco tax states is 15 percent below the national average.”

    Poor Smokers, Poor Quitters, and Cigarette Tax Regressivity
    Dr. Dahlia Remler, with the Department of Health Policy and Management at Columbia University, rebuts the argument that cigarette taxes are not regressive.

    Tax Hikes Often Fail to Generate Expected Revenues
    Economists warn tobacco taxes are an unpredictable source of revenue.

    Six Reasons Not to Raise Tobacco Taxes
    Economist Dr. William Anderson of the Oklahoma Council of Public Affairs outlines six pitfalls of higher cigarette taxes.

    Tobacco: Regulation and Taxation through Litigation
    Professor Kip Viscusi breaks down the social costs of smoking, taking into consideration a wide array of factors including health costs, sick leave, and the lower pension and nursing home care costs incurred by smokers.

    Cigarette Tax Burns the Poor
    David Tuerck, professor of economics and executive director of the Beacon Hill Institute at Suffolk University, outlines how cigarette taxes unfairly burden low-income earners.

    Cigarette Taxes Are Fueling Organized Crime
    Patrick Fleenor, chief economist for the Tax Foundation, shows high cigarette taxes have fueled organized crime and a profitable black market in New York.

    Cigarette Tax Burnout
    Last year Maryland increased its cigarette tax to $2 a pack in order to fund health care … but now the state’s budget is facing a billion-dollar shortfall. This article outlines the budget mess that always results when states rely on cigarette tax revenues even as smoking rates decline.

  • Laissez faire in Washington? On what planet?

    Sheldon Richman of the Foundation for Economic Education contributes analysis of the current economic situation in the article Government Failure. A few quotes:

    Laissez faire in Washington? On what planet? Governments at all levels have regulated the financial industry from the time of the founding. …

    At the Division of Labour blog, economist Lawrence H. White asks: “What deregulation have we had in the last decade? Please tell me.” …

    What about greed? Here White also has something important to say: “If an unusually large number of airplanes crash during a given week, do you blame gravity? No. Greed, like gravity, is a constant. It can’t explain why the number of crashes is higher than usual.” Likewise, greed (however you define this essentially useless concept) can’t explain the current economic troubles. Why didn’t these troubles occur earlier? Were people less greedy then? …

    What about irresponsibility? Now we are getting to the crux of the matter. There was irresponsibility — but only because the government for decades has pursued a policy of relieving big companies of the responsibility that otherwise would have been imposed by market discipline and competition. …

    Good intentions count for nothing in this context. The laws of human action (praxeology) can’t be repealed or got around.

    Praxeology. Ludwig von Mises has an explanation for everything, it seems.

  • A Free Market for Electricity in Kansas?

    A letter in today’s Wichita Eagle makes the case for a free market in electricity. An excerpt:

    I am among a growing number of Americans who are skeptical about the human impact on climate change. I do not believe there is sufficient evidence that our behavior is causing the changes many environmentalists tend to blame on humanity. So it seems wrong to force me to pay higher electric rates because of unproven theories about our impact on the environment.

    I think those people who support such theories should pay the higher rates for electricity, since their beliefs are driving costs higher. Instead of charging all customers higher rates, only charge those customers who want to use alternative energy sources. This policy could easily be implemented by sending all ratepayers a ballot so they can decide which energy source they prefer to use.

    A market-based solution to part of this rate increase makes perfect sense. People who believe humans are responsible for climate change can pay for it, and those of us who are skeptical can continue to enjoy lower energy bills.

    Deregulation of electricity markets has been tried — sort of — recently, and it didn’t work out as well as it could have. The problem was that it was only partial deregulation, as explained in Short-Circuited, an article at the Cato Institute. California’s Troubles Not Caused by Deregulation explains the situation in California.

  • The Problem of Environmental Calculation

    One of the things about radical environmentalists is that they seem to learn a lesson, only to fail to learn from it. What do I mean?

    Recently, New York Times writer David Pogue rehashed in a column titled The Bottom Line of the Eco Balance Sheet the “calculus of green” as it relates to the age-old eco-awareness question, “Paper or plastic?”

    He runs through the pros and cons of each type of bag, finally concluding: “The real answer to that question, of course, is ‘neither—bring your own reusable bags.’”

    Having complained of the complexity of the “calculus of green” and having run through both sides of the paper-plastic argument, he suddenly proclaims the answer. Without any supporting evidence.

    Reading this column, I realized the source of the problem: Mr. Pogue has no respect for private property rights, and for their power to regulate behavior and stewardship of the environment.

    For example, one side of the paper-plastic argument is that plastic bags “choke the oceans and sea life.” Well, who owns the seas? If someone owned a portion of a sea, would he allow others to harm it with discarded plastic bags?

    “Creating paper bags creates 70 percent more air pollution.” The courts have decided that people don’t own the air on their property, and that others are allowed to pollute it.

    There are other examples.

    Lack of private property rights leads to the very calculation problems that Mr. Pogue describes. Instead of relying on markets — free people trading freely, taking into account all the costs their actions create — we rely on government, which has a very poor record with regard to the environment.

    You can learn more about free markets and their ability to promote environmental stewardship in Richard Stroup’s article Environmentalism, Free-Market, a good place to start. At YouTube, you can watch a lecture-interview by Walter Block about Free market environmentalism.

  • Understanding the Responsibility of Liberty

    A writer in the Wichita Eagle’s WE blog recently wrote this cautionary note about what our country would be like if libertarians were in charge: “… you can HOPE that the acid factory down the road didn’t taint your well water and the food you buy isn’t disease ridden.” This writer seems to believe that under libertarianism, one can do whatever one wants, and to heck with the consequences.

    The most important principle to libertarians is the non-aggression axiom. As Walter Block explains in the article The Non-Aggression Axiom of Libertarianism: “The non-aggression axiom is the lynchpin of the philosophy of libertarianism. It states, simply, that it shall be legal for anyone to do anything he wants, provided only that he not initiate (or threaten) violence against the person or legitimately owned property of another.”

    Isn’t ruining someone’s well water with acid a violation of that person’s property? Of course it is. And if property rights were properly respected, that person could seek damages from the polluter and force him to stop. But governments often don’t let people enforce their property rights in this way. So the government we have contributes to the problem by not holding polluters responsible for the damage they cause.

    With regard to government food inspection being the only thing stopping the spread of disease through food, which I believe is what the writer claims: in the recent article The Wichita Eagle’s Preference For Government I wrote about how government food inspection failures occur frequently. Then, what is the difference in the motivations of government inspectors and private inspectors? When government inspection or regulation fails, politicians ask for more money for the agency that has failed. When private inspectors fail, they are held liable, or perhaps are forced out of business. There’s quite a bit of difference in the motivations between the two.

  • Regulatory uncertainty weakens Kansas’ economy

    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.

    The Wichita Eagle was correct in pointing out that Bremby’s ruling was a first. Bremby’s edict was not only a first in Kansas, it was a first for the entire nation. Bremby’s decision became national news as Kansas became the only state where carbon dioxide emissions became a pollutant. Elected officials did not make this decision but a single bureaucrat, who last year filed for bankruptcy, and who ignored his professional staff in making his ruling. The rule of law has been replaced in Kansas in this important case by the rule of a bureaucrat.

    Carbon dioxide is emitted by people, our cars, our machines, and even in our fireplaces. Since Mr. Bremby decided to make carbon dioxide a pollutant by regulatory edict, any and all other firms that emit carbon dioxide are now at regulatory risk. If carbon dioxide is a “pollutant,” let’s have our elected officials be the ones who change the law.

    Will the Sunflower precedent be extended to non-utilities, like new or existing ethanol plants, that also emit CO2? Will this edict be placed on existing coal-fired power plants? Will this occur quickly or slowly? To large and small firms equally, or not? This is regulatory uncertainty. This is obvious to everyone who has run a business and met a payroll.

    This also demonstrates how far we have moved in Kansas away from a free market system to one where the state controls the economy. When Mr. Bremby’s boss, Governor Sebelius, outlined her support for a smaller expansion of Sunflower, the state control of this economic decision making process was clear. This is state control that economists have warned against.

    Nobel Laureate economist Milton Friedman warned over a quarter century ago, “Wherever the state undertakes to control in detail the economic activities of its citizens, wherever, that is, detailed central economic planning reigns, there ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny.” This type of government control is an excellent reason why the average income of Kansans lags well below the national average as well as our state’s overall economic growth.

    This is a reason why the risk, uncertainty, and the probability of a lack of profits drives business expansions and entrepreneurs away from locating in a state where the rule of law has been replaced by unpredictable and delayed edicts from arbitrary bureaucrats.

  • It’s not the same as pee in the swimming pool

    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

    Testimony Opposing Kansas Smoking Ban