Voice For Liberty

Tag: Role of government

  • Government Art in Wichita

    Do we really want government art in Wichita?

    David Boaz, in his recent book The Politics of Freedom: Taking on The Left, The Right and Threats to Our Liberties writes this in a chapter titled “The Separation of Art and State”:

    It is precisely because art has power, because it deals with basic human truths, that it must be kept separate from government. Government, as I noted earlier, involves the organization of coercion. In a free society coercion should be reserved only for such essential functions of government as protecting rights and punishing criminals. People should not be forced to contribute money to artistic endeavors that they may not approve, nor should artists be forced to trim their sails to meet government standards.

    Government funding of anything involves government control. That insight, of course, is part of our folk wisdom: “He who pays the piper calls the tune.” “Who takes the king’s shilling sings the king’s song.”

    When I read Rhonda Holman’s editorial City can be proud of its arts work in the July 15, 2008 Wichita Eagle, which starts with the stirring reminder that “The arts fire the mind and feed the heart” I thought that perhaps she was going to call for less government involvement in the arts. Anything so important to man’s nature surely, I thought she would agree, should not be placed in the hands of government.

    But my hopes were not realized, because soon she described the City of Wichita’s commitment to permanent spending on arts as “a bold and even brave investment in quality of life.” It appears that even the yearnings of our hearts and minds are subject to government management and investment.

    “Government art.” Is this not a sterling example of an oxymoron? Must government weasel its way into every aspect of our lives?

    And what about the “investment” in art, which Ms. Holman claims helps “drive the economy” through its economic impact and job creation? She, and Wichita City Council member Sharon Fearey rely on a study from 2007, which I discuss in Economic Fallacy Supports Arts in Wichita. This study tells of the fabulous returns on investment by governments when they invest in the arts. Like most studies of its type, however, it focuses only on the benefits without considering secondary consequences or how these benefits are paid for. Henry Hazlitt, in his masterful book Economics in One Lesson explains:

    While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

    It is, as Hazlitt terms it, “the special pleading of selfish interests” that drive much of the desire for government spending on the arts. Either that or elitism. Do newspaper editorialists and city council members believe that the people of Wichita can choose for themselves the art they want to enjoy, and then acquire it themselves? Evidently not, as the City of Wichita government has its Division of Arts & Cultural Services.

    (The material by David Boaz is from a speech which may be read here: The Separation of Art and State.)

  • Happy Cost of Government Day

    According to Americans for Tax Reform today, July 16, 2008, marks national Cost of Government Day:

    On July 16, Americans mark the national Cost of Government Day (COGD), the date on the calendar year when the average American finishes paying off his or her share of federal, state and local spending, and the regulatory burden. Cost of Government Day falling on July 16 means that you had to work 197 days out of the year just to meet all the costs imposed by government. In other words, the total cost of government – far more than taxation alone – consumes 53.9 percent of national income.

    Americans for Tax Reform also calculates Cost of Government Day by State. For each state, the number of days worked for the government is shown, ranging from 172 days for Alaska to 212 days for Connecticut. Kansas is state number 25 in these rankings, right in the middle. We work 192 days for government, meaning our freedom day was July 11, a few days ago.

  • Where’s Leadership on Oil Speculation?

    In the July 12, 2008 Wichita Eagle, Kenneth James Crist of Wichita blames oil speculators for ruining the U.S. Economy, writing that politicians should “do something positive to halt the rampant speculation in the stock market and oil futures that is really driving these runaway prices. All it really amounts to is tremendous greed on the part of a few, at the expense of the many.”

    I wish that Mr. Crist had read Futures Markets by the economist Walter E. Williams before writing this letter. In this article we learn this:

    The futures market, which takes into account both the present and the future availability of goods, is a vital part of a smoothly functioning economy. Unfortunately, that fact provides little comfort to people frustrated over the high prices of food and fuel. As such, it provides fodder for political demagogues, charlatans and quacks who rush in with blame and prepare “solutions” for the problems they themselves have created — the high prices for food and fuel are directly linked to the policies of the White House and Congress.

    That’s right. Futures markets — that’s where speculators buy and sell — provide a valuable service by assuming risk that others are not willing to take on, and by smoothing the price of commodities over time. Speculators assume risk. That is their essence. They may make huge profits in their leveraged trades, but they also bear the risk of, and the actual realization of, equally huge losses when their guesses are wrong.

    That illustrates an often overlooked property of futures markets. For one person — the “evil” speculator — to bet on the price of oil going up, someone has to take the opposite position, betting that the price will fall. Both can’t be right. One wins and the other loses. Is there sympathy for these speculators that lose in these trades?

    The action of a speculator taking a “long” position in markets is to buy low and sell high. This benefits consumers in the long run. By buying when prices are low, the speculator does cause prices to rise and be higher that they would be without the speculator’s buying. Then, selling when the price is higher, the speculator causes the prices to be lower than it would be if not for his selling. This is how the speculator smooths prices and assumes risk.

    Speculators can’t wait too long, either. From Greedy Speculators? published at the Cato Institute:

    The current political charge is, “the speculators are driving up the price of oil.” But think about it for a moment. If the price of oil is being driven above the market clearing price where supply equals demand, demand will fall and the speculators will be stuck holding huge, unintended stocks of oil. Holding oil in tanks and ships is costly, and speculators will not incur these costs for long, so the price will drop.

    We need to recognize the valuable role that speculators play in our economy. By focusing on an easy target, we fail to look elsewhere to find the true causes of our problems.

    For more information on the valuable role that speculators play in the economy, see chapter 22 of Walter Block’s book Defending the Undefendable.

  • Wichita Eagle Voter Guide Responses

    I am running for Republican precinct committeeman. The Wichita Eagle sent me a request to answer some questions to appear in a voter’s guide. These are the questions asked (to the best of my recollection; I didn’t record the text of the questions and now I can no longer log in to the system to see them) and my responses.

    1. What do you believe should be in the party’s platform?

    I believe the Republican party has strayed from its commitment to individual liberty, limited government, and free markets. The party should commit itself to nurturing economic prosperity by reducing government control of the economy. We should allow people to decide how to best spend and invest their time, money, and talents. By reducing the intrusiveness of government, we can create a laboratory of economic freedom in Wichita that would restore Wichita’s tradition of entrepreneurship.

    2. What is your position on social issues?

    Government should relinquish its monopoly on the financing of education by allowing school choice through tax credits. Parents would then have more control over the education of their children. Government’s ability to take private property through eminent domain should be severely restricted. All elected officials should be subject to term limits. Governments should respond to citizen requests for records in a reasonable way.

    3. What is your position on fiscal issues?

    Voter approval should be required for all tax increases. Governments should pledge to limit their increases in spending to the inflation rate plus population growth. The use of tax increment financing (TIF) districts and tax abatements should be eliminated. Giveaways such as the interest-free loan to the Old Town Warren Theater must be stopped. We should be careful that trading a higher sales tax rate for property tax relief doesn’t lead to more taxes overall.

  • The Threat of Social Progressives

    In the July 5, 2008 Wichita Eagle, a Mr. Chet Syres of Hutchinson contributes a letter promoting the virtues of liberalism, proponents of which he now wants us to call social progressives.

    I remind Mr. Syres that leftists stole the terms “liberal” and “progressive” from the classical liberals. From For A New Liberty by Murray N. Rothbard:

    One of the ways that the new statist intellectuals did their work was to change the meaning of old labels, and therefore to manipulate in the minds of the public the emotional connotations attached to such labels. For example, the laissez-faire libertarians had long been known as “liberals,” and the purest and most militant of them as “radicals”; they had also been known as “progressives” because they were the ones in tune with industrial progress, the spread of liberty, and the rise in living standards of consumers. The new breed of statist academics and intellectuals appropriated to themselves the words “liberal” and “progressive,” and successfully managed to tar their laissez-faire opponents with the charge of being old-fashioned, “Neanderthal,” and “reactionary.” Even the name “conservative” was pinned on the classical liberals. And, as we have seen, the new statists were able to appropriate the concept of “reason” as well.

    In recent years, it is liberals themselves that have given their mis-appropriated term a bad name by advocating the policies that Mr. Syres now sells under a new name: social progressivism. Who could be against progress? Only Neanderthals, of course.

    But look under the covers. Does raising the minimum wage help those who its proponents want to help? For those lucky enough to retain their jobs after an increase in the minimum wages, yes. For those who lose their jobs, no. For those who have made their way through the public schools (the grand achievement of social progressives) without graining much in the way of skills, and therefore can’t find a job at the new higher wages, no. See Problem of Low Wages Not Easily Solved.

    Then there is Mr. Syres’ desire to tax the rich at higher rates, for they are not paying their “fair share.” Trickle-down economics does not work, he says. But the problem is that government can’t create wealth. All it can do is to transfer money from one person to another. Instead, it is people who create wealth and a higher standard of living, most often by accumulating and investing capital. The less capital there is to invest — and taxes reduce that — the less economic progress can be made. With less capital, workers have to dig ditches with shovels instead of power machines. Which would you rather work with? Who earns a higher wage, the man with a shovel, or the man operating a power backhoe? But without someone accumulating wealth and capital, there can be no backhoes, only shovels, and even they require the accumulation of some capital.

    Mr. Syres says he wants to promote “social justice” through charity implemented through legislation. Is progress made when voluntary charity is replaced by government programs, fed by taxation? Is progress made when the voluntary cooperation of free people trading in free markets is replaced by the heavy hand of government coercion? Of course not, except for those who believe that they know better than everyone else how things should be, and seek to implement their ideas through expanded government. These are the social progressives, and they are a threat to liberty and prosperity.

  • In Wichita, is Economic Development Proven Public Policy?

    In a statement read by Wichita Mayor Carl Brewer and released on the city’s website at Mayor Brewer Warren Theatre [sic] Statement, the mayor states “Economic development is proven public policy.” The word “proven” was used several other times in the statement.

    (I don’t know who wrote the title to the statement, but it combines the mayor’s name with theater developer Bill Warren’s name in a way that is, I am sure, unintentionally humorous. Mayor Brewer Warren? Who is he?)

    The Warren Theater economic development project is one example of economic development that has proven not to work, despite the mayor’s claims.

    But that is only my opinion. The definition of success, I realize, could mean different things to different people. To me, I would expect that once a development is given a huge head start with millions of dollars in subsidy provided through tax increment financing, that after a few years it would at least be breaking even. Certainly, I would hope — and I think the people of Wichita agree — that the project does not become a continual drain on the resources of the people of Wichita, as the Old Town Warren Theater has become.

    But it appears that Mayor Brewer and council member Sharon Fearey have a different definition of success. To them, tax increment financing is not a subsidy to a developer. It’s an investment by the city. All it’s used for, according to Fearey, is to pay bonds: “Under a TIF, the additional property taxes generated by new development are used to repay bonds. No dollars go to private developers.” (Sharon Fearey: Warren loan is an investment in future, July 1, 2008 Wichita Eagle)

    Ms. Fearey, may I ask this question: the proceeds from the bonds that were issued: how are they spent?

    An interest-free or reduced-interest loan is not a subsidy according to the mayor, it’s “targeted economic development.” It’s a “public-private partnership.” Without it, our taxpayer dollars would not be protected.

    John Todd tells me that there is a groundswell of resentment building in Wichita over this loan. I hope that in the coming months this increased interest in the economic development activities of the Wichita city government leads to more discussion of what path we want to pursue in Wichita. Do we want more private initiative and entrepreneurship, or do we want more politicians and bureaucrats?

  • Spending other people’s money is not the best way to reflect one’s values

    From the Goldwater Institute (www.goldwaterinstitute.org):

    A recent Arizona Republic letter to the editor lamented the fact that our government funds war, but not universal health care. The writer asks what that says about our values. That letter got me thinking, what does government spending say about our values?

    In the book Who Really Cares: The Surprising Truth About Compassionate Conservatism Who Gives, Who Doesn’t, and Why It Matters, economist Arthur C. Brooks points out that Americans who believe in limited government give more to others on average than those who believe in active government. Believers in small government give more time, money, and even blood. They give more to secular causes, too. This is not to say that there are not very generous individuals of every political stripe. The issue is one of emphasis and how much values are, in fact, reflected in a government budget.

    The Wall Street Journal just published an article on the revival of the “religious left.” The religious left, mostly left-leaning clergy, agitates for increased minimum wages and social program spending.

    One must wonder, though, how virtuous a society is when traditionally charitable giving must be forced on people through taxation. Perhaps those who recommend such a policy are too unwilling to give of themselves. As Dr. Brooks’ research suggests perhaps one’s values are best reflected in one’s personal spending rather than in the spending of other people’s money.

    An excerpt from the book Who Really Cares, by Arthur C. Brooks (See www.arthurbrooks.net):

    Let us be clear: Government spending is not charity. It is not a voluntary sacrifice by individuals. No matter how beneficial or humane it might be, no matter how necessary it is for providing public services, it is still the obligatory redistribution of tax revenues. Because government spending is not charity, sanctimonious yard signs do not prove that the bearers are charitable or that their opponents are selfish.

  • Government makes things worse, not better

    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_conservatives

  • Political Decision Making Leads To Conflict

    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.