Wednesday, December 31, 2008

The 2008 Live Oaks Awards

It is relatively easy to find fault with many things within our culture. But it is also important to identify and recognize the many individuals, events, and experiences that provide inspiration, make our lives better, and bring enjoyment. These are men and women who bring joy to our lives and improve our standard of living. These are experiences that make us laugh, or show us beauty, or express the sublime. Below are some of my Live Oaks for 2008.

I started this blog in late April, with the express purpose of defending property rights in Houston. While that remains a primary interest and purpose, after several months I began to realize that there are many other topics of interest to me. In addition, writing on property rights issues in Houston can get rather repetitive, and that could seriously quell my enthusiasm. Writing a blog post six days a week can be a burden at times--I'm not always in the mood. But forcing (I use "force" in the sense of will power) myself to write has become easier, and the overall experience has been one of the absolute delights of the year. I owe a special thanks to Gus Van Horn for his support and suggestions in developing this blog. And his gumbo is pretty good too--I had the pleasure of sampling it at the Houston Objectivism Society Christmas party this year.

Yaron Brook
Yaron seemed to be everywhere this year, in print, on the air, and in person. While many Objectivist intellectuals had successful years, Yaron was a dynamo. His efforts served as my greatest inspiration in 2008. His articulate, insightful, and positive leadership gives me more hope for the future than I have experienced in many years.

Fantasy Football
I played in my first fantasy football league this fall. (I know I say below that I'm not a big football fan, but it sounded like it might be fun.) I invested 20 to 30 minutes per week on the league, and it gave me a much greater appreciation of the decisions that coaches must make. Identifying the skills and weaknesses of each player, the opponent he would be facing, and other factors was an interesting and enjoyable experience.

The Houston Astros
I have long been a fan of the 'Stros. They have had good teams and bad teams, but for more than a decade they have always been a classy team. The owner--Drayton McLane--does not tolerate aberant behavior, and he sets the tone for the entire organization. As an added bonus, this season I had the pleasure of attending the retirement of Craig Biggio's jersey.

Mamma Mia! The Movie
I was never a fan of ABBA, but a friend insisted that I see the movie. Within two minutes I was smiling; within five minutes I wanted to sing along (but I didn't know the words); within ten minutes I wanted to get up and dance. This is not a movie with an intricate plot. But it is a movie that is unadulterated joy. The best way to summarize the movie is from "Dancing Queen":

You can dance, You can jive, Having the time of your life.

I had the time of my life watching Mamma Mia, twice.

Aaron Neville
If I could choose a singing voice, I would choose Aaron Neville's. He is scary to look at, but his voice defies his physical appearance. I attended his Christmas show in Houston, and for nearly two hours I was delighted to experience the pure joy of a beautiful voice.

Mario Williams
I am not a particularly avid football fan. I enjoy watching an occasional game and follow certain teams in the paper, but I do not live and breath for Sunday afternoon.

Several years ago the Houston Texans drafted Mario Williams with the first pick in the NFL draft. This selection was widely criticized in the local press and by fans, who thought local football hero Vince Young should have been picked. Texans Coach Gary Kubiak and Williams were mocked and derided before Williams played his first game.

Now in his third season, Williams has been named an All-Pro. Despite the merciless criticism he received, Williams has remained a class act. He has never lashed out or spoken ill of his detractors. Williams remained confident of his ability, and chose to allow his play on the field to speak for itself. Here are a few comments Williams made after being named All-Pro:

That’s life, he [Williams] said. But you can’t satisfy everybody. If you’re going to go through the world saying, you know, ‘I hope they don’t boo me,’ or worry about what people are going to say, you’re not going to make it too far.

I hold grudges, but I don’t hold too many grudges, Williams said, laughing. It’s a great honor (being the No. 1 pick), but then it’s a lot of responsibility just for the fact that you were the first pick.

I told you so.
Yes you did Mario. Congratulations for a well-deserved honor.

There are many others who have brought me joy and improved my life during 2008. My failure to mention them in no way diminishes my appreciation of their efforts.

Monday, December 29, 2008

Integrity and Eminent Domain

On Sunday, December 28 a front-page story in the Chronicle details the city's use of eminent domain to seize a tiny parcel of land on San Felipe. The city seized the land under the guise of widening the street, though only a small part of the land was necessary for that purpose. The city plans to use the remainder of the land as a pocket park.

While such seizures of private property can never be morally justified, this particular story involves much more than just the city's violation of property rights. It hints at political favoritism, back room deals, and conflicts of interest.

At the heart of the controversy are developers Ed Wulfe and the Hanover Company, Mayor White, and Councilman Peter Brown. Both Wulfe and Hanover executives have made significant contributions to both White and Brown. In addition, Councilwoman Pam Holm, whom the Chronicle says "was intimately involved in the decision to seize the land" has also received substantial contributions from both Wulfe and Hanover employees.

Brown's wife is an investor in the project Hanover plans to build adjacent to the seized land. Questions are now being raised about a conflict of interest regarding Brown, who voted for the seizure. Only time will tell whether White, Brown, or Holm did anything illegal and/ or are paying off donors.

The Chronicle reports that the contract between Wulfe and Hanover stated "that either Wulfe 'and/ or a governmental entity or agency'" acquire title to the property. Within two months of the seizure Wulfe and Hanover closed their deal.

White has defended seizing the entire property, rather than the small amount needed to widen the road. Often the city must pay for the entire value of a property, he argued, even if only a portion is seized. It only made sense to get the best "deal" possible for the city.Of course, seizing private property and paying less than fair market value is always a good "deal" for the city. It was only after the fact that White decided to use the remaining land for a park. The city's parks director--Joe Turner-- has testified that

the park idea was pushed by the Uptown Houston District, a local development board on which Ed Wulfe has a seat. Also on the board is John Nash, president of the Hanover company.

John Breeding, president of the Uptown Houston District, said that although Wulfe and Nash sit on the board, they were not involved with the decision to acquire the land.

It was the Uptown Development Authority, a related but separate quasi-governmental entity with a separate board, that sought to buy the land and use a portion for a park, he said.

This entire deal has a very strong odor of impropriety. The fact is, government officials used their power to seize land and that seizure benefited political supporters and one official's spouse. The fact is, Wulfe needed that property to close his $12.5 million deal with Hanover, and when the owners refused to sell that land for $1.4 million, the city seized the land. The fact is, the city offered to pay only $433,800 for the land--though Wulfe offered $1.4 million. The owners are now in litigation.

But this would not be any sweeter smelling if the details were different--if Wulfe and Hanover were not campaign donors. The city would have still seized private property, and that is always wrong, whether the seizure occurs to widen a road, build a park, or pay off political cronies.

What is ironic about this is that the project planned by Hanover is a high-density, mixed-use development similar to another project that the Mayor and many on city Council have opposed--the Ashby High Rise. Much of the Mayor's political support comes from the neighborhoods opposing Ashby, which certainly make questions about his motives understandable.

All involved claim that nothing illegal or improper occurred. The Chronicle states that Brown consulted the City Attorney about recusing himself from the vote to seize the property--after the vote. But whether explicit communications occurred to discuss this issue, all involved knew who and what was involved. And if they claim otherwise, we must question their competency to be city officials.

While the Mayor and Brown defend their integrity, the truth is, men in their position cannot act with integrity--they cannot be loyal to rational convictions and principles. Their jobs consist of making decisions that are implemented by force. Their decisions impose the values of some upon others. Their decisions compel some individuals to act contrary to their own convictions and principles.

If White and Brown really have a concern about their integrity, then they will begin by rejecting the premise that they--or anyone--has a right to compel others to act in a particular manner. They will reject the premise that might makes right. They will reject the premise that the alleged "public welfare" justifies seizing property and destroying lives. And they will embrace the moral right of each individual to his own life, liberty, and happiness. Of course, Buffalo Bayou is likely to freeze over before this occurs.

Urban Legends: Myths About Houston

In a recent posting titled "Is Houston really Unplanned?" on Market Urbanism, Stephen Smith attempts to debunk alleged myths about Houston and planning. In the process, he actually engages in a much more widespread error--the failure to essentialize. (Here is a good explanation of essentializing.)

Smith cites several examples of land use regulations in Houston, such as minimum lot size mandates and regulations dictating parking requirements for new development. He argues that these regulations, along with the city's enforcement of deed restrictions, refute claims that Houston has developed primarily on the basis of free market principles.

Smith's position is common. Zoning advocates actually used similar arguments in the early 1990's. Zoning advocates were wrong then, and Smith is now.

Admittedly, Houston is not devoid of land use regulations. But the nature, number, and scope of those regulations is significantly different from other cities. There is an essential difference between the regulations in Houston and those in other cities. The permitting process in Houston is relatively fast compared to other cities, and the expenses incurred in that process are also significantly lower in Houston. In other words, developers in Houston can respond much more quickly to changes in the market and do not incur exorbitant costs that must be passed on to consumers.

This is not a justification for the regulations that Houston does have. They are wrong and immoral, as are all land use regulations. But the fact is, Houston has far fewer and much less egregious restrictions on freedom than other cities.

Smith, and many others, attempt to paint a picture of Houston land use policies with a very wide, and indiscriminate, brush.
Boosters of Houston’s land use policy – those who believe that Houston’s land use patterns are the free market, revealed – never mention the restrictive minimum lot size and minimum parking requirements. They mention deed restrictions as free market innovations but fail to see how the city’s prosecutors turn private concerns into public budget drains.

If someone defends Houston's relatively free land use policies, pundits such as Smith seem to assume that those advocates defend all of Houston's land use policies. This is akin to believing that if someone likes one of Clint Eastwood's movies, he likes all of Clint Eastwood's movies (and everything else Clint Eastwood does). This is patently absurd.

As an example, Smith cites opposition to a proposed project at 1717 Bissonnet (the Ashby High Rise) as evidence that Houston does not have a laissez-faire policy towards land use. Smith implies that one particular violation of property rights is evidence that Houston is no different from other cities. He evades the fact that the vast majority of development projects proceed with little or no obstruction from the city.

I have defended the Ashby High Rise many times on this blog and at a panel discussion at Rice University. I have defended the project as a matter of principle--land use regulations are wrong and immoral. I have also addressed numerous other violations of property rights on this blog and elsewhere for nearly twenty years. To claim that "[b]oosters of Houston’s land use policy" have ignored the city's violations of property rights is simply untrue. It may be true of some, but not of all. Smith chose to put all of us in the same boat with a broad generalization that flies in the face of the facts.

The fact is, Houston has fewer land use restrictions than other cities. Those that do exist are less restrictive (in general) than the restrictions in other cities. Those that do exist are less destructive than the restrictions in other cities. Again, the restrictions that do exist are indefensible.

Smith's argument amounts to: Either Houston is completely laissez-faire or it is just like every other city. This ignores the degree of the transgression. This equates a pickpocket with a murderer. Both have violated the rights of another. Both have engaged in evil, but on a much different scale. To equate the two is to diminish the murderer's evil. To equate Houston with cities that erect mountainous obstacles to development is to diminish Houston's greatness.

But painting with a wide brush is not the only error that Smith makes. He questions the validity of contracts:

Another form of planning that Houston has, which is celebrated by the self-titled Antiplanner, is the institution of supposedly voluntary deed restrictions, or private land use covenants agreed upon by the owners of the property under restriction. I’m personally torn over the “libertarianness” of such schemes – are they truly voluntary? Can an individual owner of a property opt out of them once they’ve been signed? What’s the statute of limitations? One thing that makes me suspect that they perhaps aren’t as “free market” as they seem is that though the contracts are between individuals, Houston’s city code allows the city attorney to prosecute these lawsuits at no cost to the supposed victims – fellow property-owners.

Consider Smith's own question-- "Can an individual owner of a property opt out of them once they’ve been signed?" In other words, after a contract has been signed, can one party unilaterally breach that contract? This is nothing more than a desire to invalidate the very concept of contracts. If one party can unilaterally breach a contract, contracts--all contracts--are rendered meaningless.

A contract is an agreement to engage in certain actions over a period of time. If one party can unilaterally breach that contract--that is, declare the agreement void--the contract isn't even worth the paper it is written on.

I agree that the city should not be enforcing deed restrictions--that is the responsibility of those who are party to the contract. But this error on the part of the city does not invalidate the fact that Houston remains freer than other cities. Smith fails to distinguish between minor transgressions and major.

A right is a sanction to act according to one's own judgment without seeking permission from others. In this regard, Houston recognizes individual rights more consistently than other cities. This does not mean that Houston is perfect--it means that Houston recognizes individual rights more consistently than other cities. Where Houston does not recognize individual rights, it is wrong.

But Smith--and those who share his position--uses isolated facts to argue his case and then fails to identify the essence of those facts. He implies that all "[b]oosters of Houston’s land use policy" are the same. He implies that the voluntary and contractual planning that accompanies deed restrictions is no different from zoning or other coercive land use regulations. Both of these implications are false.

When one does not think in essentials, disparate facts can seem very similar. On the surface, deed restrictions and zoning might seem the same--both restrict land use. But the former is voluntary and consensual, while the latter is coercive and mandatory. There is an essential difference between the voluntary and the coercive. There is an essential difference between allowing individuals to act on their own judgment and forcing them to act contrary to their judgment. There is an essential difference between Houston and every other major city in the nation.

Saturday, December 27, 2008

Don't Sweat the Small Stuff 7

For the past several years the Powers family in Anchorage has built a giant snowman in their front yard. In 2005 "Snowzilla" stood sixteen foot tall, and he grew larger in succeeding years. Camera crews from Russia and Japan loved to photograph the frozen giant. Earlier this week city officials declared the snowman a public nuisance because of the traffic he created and issued a cease and desist order.

This illustrates one of the almost insolvable problems that results when government extends beyond its proper functions. If the street were privately owned, this would be a complete non-issue--the owner of the street and his contractual agreement with home owners would settle the matter.
The right to property allows one to use his property as he chooses, so long as that use does not violate the rights of others. A use that attracts excessive traffic to a residential area can certainly pose a risk to the residents and/ or interfere with their enjoyment of their property, and as such, can be a violation of their rights. (I say "can" because objective criteria would need to be established.)

It is government's responsibility to objectively define actions that constitute a nuisance. As an example--and this is purely an example--the government might define an activity that doubles (or triples) traffic on a particular street to be a nuisance.

Wikipedia describes a nuisance:

Under the common law, persons in possession of real property (either land owners
or tenants) are entitled to the quiet enjoyment of their lands. If a neighbour
interferes with that quiet enjoyment, either by creating smells, sounds,
pollution or any other hazard that extends past the boundaries of the property,
the affected party may make a claim in nuisance.
As it is, it is difficult to pick a side on this particular issue. I empathize with the Powers family--Snowzilla must be fun to build and adore. I also empathize with the neighbors, who must tolerate a significant increase in traffic and all that that brings. I do not know enough details to say who is right and who is wrong, but this is not a clear cut case of excessive government intervention.

Suggestions for Obama
Thomas Cooley offers some suggestions to Obama on creative ways to stimulate the economy at Among his ideas are:
Preach for America. Unemployed bankers will be hired at minimum wage to preach in churches and temples about the virtues of unfettered capitalism and take up the collections.

Parades for Progress. Modeled after the Doo Dah Parade this will be a permanent parade corps of military bands, precision lawnmower marching teams (unemployed real estate agents), precision pin-striped briefcase marching teams (bankers) and so on.

Bailout Bake sales. This program will train former auto executives and autoworkers to bake cookies and pastries and sell them door to door. Profits will go to fund the bailout.
I have to assume that Mr. Cooley has his tongue firmly planted in his cheek. But some of his ideas are no sillier than those coming from Washington.

Let's Just Try Something
New Jersey Jon Corzine thinks that the new administration should emulate FDR's "bold, persistent experimentation". In essence, this comes down to throwing massive amounts of money at anyone and everyone, and particularly state and local governments:

First, the states, local governments and the federal government must be full partners in the recovery process...

Second, the package should be large. Some estimates put the cost of the economic crisis next year at $700 billion, or about 4 percent of gross domestic product. To offset this, the cumulative value of the stimulus plan should be $1 trillion over two years. This is a large sum, but if the spending is executed effectively, it should be a significant investment in our country's physical and human resources that will pay long-term dividends while also creating and saving jobs. [emphasis added]
I assume that Corzine is serious, in which case his argument is extremely specious. Can we really expect the money to be spent effectively? How often has the government actually done this?
More importantly, any money the government spends is consumptive spending, and that money must necessarily come from the private sector--by its very nature this is not effective spending. But Corzine and his fellow Democrats (with a lot of Republican support) will continue to try to convince us that robbing the private sector will somehow return us to prosperity.

Becoming Numb to the Bailouts
The recent reports in the news about the bailout of the auto industry left me surprisingly numb. The intense anger and incredulity I experienced with the bailout of the financial industry has given way to passive acceptance. Perhaps more interestingly, when I heard that the auto makers wanted $15 billion (or whatever the number was), I thought, "That's all? That's not very much."

I am quite cognizant of the fact that $15 billion is a lot of money, and I quickly banished that thought from my mind. But it is interesting that it ever occurred to me at all. The massive sums being spent, and being pondered, do make $15 billion seem almost paltry in comparison.

Friday, December 26, 2008

Observations on Houston's Housing Market

I have owned a paint contracting company for more than twenty years. Over the years I have looked at more than 10,000 jobs, most of which have been for residential work. As a result, I have seen a lot of homes. Indeed, other than Realtors, contractors easily see more homes than virtually any other profession.

This has provided me with a unique vantage point for observing Houston's housing market. During the past decade an interesting trend has developed, and it illustrates the benefits of Houston's relative freedom in land use.

The most significant trend is a move towards greater housing density in many areas of the city, particularly inside The Loop. As land values and demand for housing have increased inside The Loop, increased density makes economic sense for both builders and home buyers. This is readily evident in areas such as The Heights, Rice Military, Midtown, and many other parts of the city.

A common trend is for a developer to purchase several single family homes, tear them down, and build a number of three-story town homes on the lots. The economics make perfect sense--if a lot costs $400,000, even a modest home is unaffordable to most Houstonians. However, if four town homes are built on that lot, the price of the land is distributed among four home owners, rather than one. The home becomes significantly more affordable. Larger developments encompassing half of a block are not uncommon, with similar economies.

This has certainly been interesting to observe. As market conditions changed--that is, the demand for Inner Loop housing increased--land values rose. If the housing market retained the one house per lot status quo, demand would ultimately subside because of affordability. One result would be that Houstonians would be driven from the Inner Loop, resulting in longer commutes. Another would be that the population inside The Loop would remain relatively stable because there would be no expansion of the available housing, and demand for that housing would send prices skyrocketing.

A similar trend has unfolded downtown. I lived downtown in the mid-1980's, and at the time there were essentially only two places to live-- the Houston House and 2016 Main. After business hours downtown was dead. However, developers such as Randall Davis transformed abandoned buildings such as the Rice Hotel into condominiums, lofts, and other housing. Restaurants and entertainment soon followed, and now downtown Houston is a destination spot.

I must admit that while much of this was occurring I was not as observant as perhaps I should have been. But my recollection of the time line is that these trends are a demonstration of Say's Law-- supply creates demand. When the housing was limited in downtown, or Midtown, or Rice Military the demand was also limited. When the supply increased, the demand did as well, which in turn led developers to create additional supply.

A typical town house has a foot print measuring approximately 30' by 40'. (I've literally measured hundreds of them, and these measurements are remarkably consistent, though there are certainly differences.) The first floor generally consists of a two-car garage, a bedroom/ study, and a bathroom. The second floor has the main living area--the kitchen, living room, a powder room, and dining room--with few if any dividing walls. The third floor has the master bedroom. This is the typical layout, but many options are offered.

I have seen first floor bedrooms measuring approximately 12' by 12', I have also seen first floor "bedrooms" measuring 30' by 12'. I have seen relatively small kitchens and large kitchens. I have seen minuscule dining rooms and spacious dining rooms. I have seen lofted ceilings in the living room, rising two-stories high, and ceilings spaced at 10' high. I have seen third floors with a second bedroom, and third floors with only the master suite. In other words, while the basic floor plan for these homes is similar, a lot of variety is still offered to the consumer.

These homes generally have 2,400 to 3,000 square feet of living space, depending on the particular floor plan and layout. They are appraised at approximately $250,000 to $350,000, depending on location and the actual size of the unit. In Houston, a home owner gets a much larger home for much less money than most major cities. In Seattle for example, town homes of 1,200 square feet often sell for $600,000 or more.

The changes in the housing market have largely occurred because builders and developers do not have a long and expensive permitting process. They can respond to market demands, or anticipate those demands, without a lengthy process to secure government approval. And perhaps more significantly, they do not incur the excessive costs associated with the approval process in other cities, which allows them to keep housing at affordable levels.

Of course, there are those who do not like these changes. They argue that demolishing quaint bungalows and cottages to make way for town homes destroys the character of the neighborhood, that the town homes are too similar and plain, etc. Many have argued for less density in developments. Invariably, virtually all of these critics call for more government intervention and control. They don't like the way certain neighborhoods are changing and they want to use the power of government to put an end to it.

While these squeaky wheels often get the grease, they (and the politicians who cater to their demands) ignore the fact that many Houstonians do like these town homes. These homes would not be selling if this weren't the case. As is usually the case, the current residents of a neighborhood launch their protests, while many who will be impacted--potential future buyers--are oblivious to the controversy. They ultimately become the voiceless and unknown victims.

At the same time these neighborhood groups are fighting to impose their values on others, competing groups argue for greater density in development as a means of reducing commutes. The solution is not to battle over political power, but retain (and increase) freedom in land use. Allow individuals to choose their values and vote with their wallets. Not only has this served Houstonians well, it is also the moral thing to do.

Wednesday, December 24, 2008

A Christmas Fantasy

Americans awoke today to startling news-- the federal government declared itself morally bankrupt and closed the doors on virtually all of its operations. "We have realized the error of our ways," President Bush announced on the steps of the White House. "I actually read the Constitution over the Thanksgiving holiday, and realized that we were doing a lot of things that just aren't Constitutional."

Reaction to the President's announcement was swift and predictable. "This is a typical Republican ploy to benefit the rich off the backs of the disabled, unskilled drug addicts, and flowering house plants," House Speaker Nancy Pelosi said from the window of her limo.

Harry Reid expressed similar thoughts from Hawaii, where he was vacationing. "This is going to kill that real estate deal I've been working on," the Senate Majority Leader said over what sounded like ukulele music.

The President announced a series of sweeping changes, including a return to the gold standard, the suspension of all federal regulations, and a federal tax holiday of six months. "We can't undo one hundred years of bad legislation in just four weeks," the President said, "but we are going to give it hell trying." When asked how he thought Congress might respond, the President laughed, "Let them sue me. I've read the Constitution. We are going to return the federal government to its legitimate functions, which are the courts and the military."

Wall Street responded with the largest one-day gain in history. One trader said, "The uncertainty over what edict would next come from Washington had all of us on edge. And the massive amounts of money they've been throwing around with irrational exuberance was just insane." Auto dealers and retailers reported record sales. And across the nation, people of every color, ethnicity, and religion joined hands in the streets to sing the words of that old Negro spiritual, "Free at last, free at last, thank God Almighty we are free at last."

This dramatic news comes on the heals of unprecedented government intervention into the economy. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, two men who had only recently been given even greater control over the economy, appeared remorseful as they stood by the President. Bernanke said, his voice shaking with emotion, "I cannot begin to express the absolute disgust that Henry and I are currently feeling. At the President's suggestion we spent a long weekend at Camp David reading the Constitution and the writings of our Founding Fathers. It quickly became apparent that we had gone way beyond anything the Founders envisioned for the country and that our actions were a gross violation of individual liberty."

Paulson agreed with Bernanke. "I concur with what Ben said, and just want to add that I intend to spend the rest of my life fighting to correct the wrongs that I have helped perpetuate."

When pressed for details of how his plan would unfold, the President couldn't offer many details. "We are just going to let people be free. We are removing the shackles from their lives. I don't know exactly how they will act, but I suspect that they will be pretty happy to finally have the restrictive controls removed." The President then did a little jig with Bernanke and Paulson.

The President promised additional steps in the coming weeks, including a Constitutional Amendment that would establish a wall of separation between government and the economy, the annihilation of Iran, and the sale of all federally owned land.

President-elect Obama did not appear in public today, but sent the following text message to his vast army of supporters: "WTF."

Foreign governments had mixed reactions to the President's announcement. Israeli Prime Minister Ehud Olmert simply asked, "Does this mean we can start defending ourselves?" But most reactions were captured in the short statement issued by Iranian President Ahmadinejad, who said, "Uh oh."

Across the country individuals engaged in a spontaneous display of benevolence and optimism. "This is change we can believe in," said one woman in Ohio who had gathered on a street corner to sing patriotic songs with her neighbors. "I get to pursue my values without the arbitrary constraints of government."

Similar thoughts were expressed by an auto worker in Tennessee. "I am hopeful that this means others will no longer be able to impose their values on me," he said as he wiped a tear from his cheek. "I have wanted to start a business since I was 25, but the government regulations were simply too big of a hurdle."

In Texas, Houstonians launched an impromptu parade through the streets of downtown. More than a million people gathered to watch an assortment of mariachi bands, cowboys, drag queens, and low riders. Mayor Bill White, who suspended the requirement for a parade permit, proclaimed Houston the Star of the Lone Star State for its role in demonstrating the practical benefits of freedom. "Throughout the year Houston has been hailed as the economic success story of the nation," the Mayor said. "I have spoken of the moral imperative of freedom at every opportunity. I would be proud if my words had any impact on the President. This day is a tremendous victory for individual freedom."

If only the above were true. It would truly be a glorious day. We have an immense battle ahead of us, but sometimes we need to dream and envision the goal we seek. Merry Christmas.

Tuesday, December 23, 2008

We Want You to be Safe...Really

A few years ago a city inspector came by my office. He asked to see my Occupancy Permit, which I did not have. He informed me that I was required to have such a permit in order to legally use my rental space. He then scheduled an inspection of the facility so that I could obtain permission to use my office.

At the time, I had been renting this space for approximately fifteen years. The space consists of about eight hundred square feet of offices, and another four hundred square feet of warehouse. One person--my wife--is in the office all day, and I am there periodically throughout the day. Many days go by with nobody else (except perhaps the mailman) stepping foot inside our office.

The purported purpose of the Occupancy Permit is to insure that employees and customers will be in a safe environment. Customers do not visit our office, which means, I was required to obtain an Occupancy Permit for the purpose of protecting my wife's safety! I do not recall her ever making an issue of her safety at the office, but if she has (or does), I will certainly address it without needing the City of Houston involved.

When inspection day arrived, five city inspectors showed up. There was an electrical inspector, a mechanical inspector, a plumbing inspector, and a Fire Marshall (if I recall correctly). I do not remember the purpose of the fifth individual, but if experience is any indication, he was an inspector of the inspectors.

Several weeks later we received a report detailing our various violations. Most of the items were mundane--a light was out, our bathroom fan wasn't big enough, etc. However, our most egregious transgression was the lack of signage--we did not have a sign on the door stating "This door must remain open during business hours", nor did we have a sign over the door stating "Exit".

This last item illustrates just how silly city ordinances can be. As I said, I had been renting this space for about fifteen years. There is only one door. I recognized that it was the exit after using it as the entrance. For fifteen years I used that door as an exit without the benefit of a sign telling me so. But for some reason, the city thought that my safety was imperilled because I did not have a sign to remind me how to exit the office. And I could not get an Occupancy Permit without that sign.

Adding to the inanity, the city gave me eighteen months to correct these various items. Which means, even though my safety was allegedly in question because of the lack of signage, the city was willing to allow me to continue working in such an unsafe environment for a year and a half. That really made me wonder if my safety was their real concern. But since it was the government, and I know that they wouldn't have ulterior motives such as money and power, I accepted their explanation (I am being sarcastic).

After laughing at this report, I filed it away and forgot about it. But in a rare display of competency, about sixteen months later the city sent me a notice warning me that my time was running out. I concluded that perhaps they were serious and I should take some action. In the end, it cost me nearly $1,200 to bring our space into compliance (and this was with my landlord paying a portion of the bill--he had nearly fifty other tenants going through the same thing). We then had to call the inspectors out again to verify that we had met their demands. Several weeks later I was informed that I could drive downtown for the privilege of writing another check and getting my certificate.

The entire experience was annoying and inconvenient. For fifteen years nobody had been injured or become ill because of the conditions in my office. Yet, the city was willing to make me a criminal if I did not allow their goons to parade through my office and make demands. They would have revoked my right to do business because I did not have a piece of paper stating that they had granted me permission to put a phone and computer in a rental space.

In the grand scope of things, the time and money involved was insignificant. But in principle, it was very significant. Rather than allowing me to act by right, the city forced me to seek permission. Rather than allow me to determine whether my office was safe, the city usurped that decision. And this is precisely what all regulations and inappropriate laws do--they remove decision making capabilities.

Regulations dictate action, either through proscription or prescription. They dictate the actions an individual may take, regardless of his own judgment. They render an individual's judgment irrelevant.

I do not feel any safer because I have an Occupancy Permit. In fact, I feel a little less safe, because I never know when some government official will descend upon me and make further demands. But I have devised a plan that might help. Despite the sign they made me put on the door, we usually keep it locked.

Monday, December 22, 2008

The Power of Positive Thinking

With each new economic calamity, politicians and pundits stumble over one another to point fingers at "greedy" Wall Street, incompetent businessmen, and a general lack of regulation. Last week, Chronicle writer Loren Steffy tossed his latest missive on the issue.
And so the era of lax regulation that began with Enron ends with the Madoff madness looming as a monument to the SEC’s ineptitude. Already under fire for smelling the flowers while Bear Stearns — to cite one example — charged toward collapse, the SEC’s days may be numbered.
Like many commentators on the economy, Steffy presents a package deal--a mixture of truths and falsehoods. The SEC is indeed inept, which is a claim that could be made against every regulatory agency. But to claim that we have lived in an era of lax regulation is irresponsible, untrue, and intellectually dishonest. For example, Title 12 of the Code of Federal Regulations, which covers the Banking and Finance regulations, contains more than 4,500 pages of regulations. No reasonable person can honestly say that 4,500 pages of regulations is lax.

Amidst the calls for greater control of the financial industry we keep hearing that more Congressional oversight is needed and that he individuals at the top of the regulatory agencies are incompetent. Both imply that the problem does not lie in what is being done, but who is doing it. Neither addresses the fundamental problem, which is the entire concept of regulation, not the individuals charged with enforcement.

That legislators focus on the who rather than the what is not surprising. This erroneous view stems from the same erroneous view that led to regulations in the first place--reality is malleable to the whims and desires of the collective, that is, reality is negotiable.

The purpose of every regulation is to achieve some "desired" result (or prevent an undesired result). This can allegedly be achieved by compelling individuals to act in some proscribed manner, or by prohibiting certain actions. Ironically, it is a superficial recognition of cause and effect, while it simultaneously ignores cause and effect.

For example, the stated intention of many financial regulations is to prevent fraud. It is believed that if financial institutions are forced to disclose certain information (the cause) then consumers can make informed decisions and avoid being defrauded (the effect). In general, this is valid. Disclosure is the enemy of fraud; fraud depends on the ignorance of its victims.

Regulations attempt to create specific results by controlling the actions of individuals. That control is exercised by reducing or eliminating the choices available. For example, financial institutions must disclose specific information in a particular manner--regulatory agencies have eliminated any choice in the matter. At the same time, this process creates a false sense of security on the part of consumers--if the SEC is satisfied, then the investment must be safe. This false sense of security encourages consumers to neglect responsible decision making.

The justifications for regulations are based on two faulty and interrelated premises: 1. Businesses will be intentionally deceitful and manipulative without regulations; 2. Individuals are easily deceived and manipulated without regulations. (For a good discussion on the difference between regulations and legitimate laws, see Regulations vs Laws.)

Morally, these premises are founded on the false alternative of altruism and hedonism--that individuals must choose between sacrificing for others or sacrificing others for oneself. This alternative holds that life requires sacrifice, and the only issue is who the victims will be. Charlatans such as Bernard Madoff and Key Lay only serve to reinforce this point of view.

But another alternative does exist--rational self-interest. The morality of self-interest holds that life does not require sacrifice of oneself or of others. It holds that each individual has a moral right to pursue his own values without interference from others, so long as he respects their mutual rights. It holds that cannibalism is neither necessary nor proper.

More fundamentally, these premises are founded on the view that truth is a product of the collective. If enough people believe something--such as the notion that we don't have enough regulations--then it must be true. And the seemingly endless reams of federal regulations is ignored as irrelevant.

But reality is not as co-operative as the social subjectivists believe. Reality will not bend to their will and desires, no matter how loudly they shout, or how many laws they pass, or how great their numbers, or who they put in charge.

Despite the vast powers they have over financial institutions, the demands of Congress and the myriad regulatory agencies could not prevent the collapse of Wall Street. Despite assurances that Freddie Mac and Fannie Mae were financially sound, Barney Frank's wishes could not change the fact that both were essentially bankrupt. Despite endless cheer leading and pumping of billions of dollars into the economy, the Federal Reserve cannot entice consumers to return to past spending patterns.

The regulators remained convinced that our economic turmoil is the result of too much freedom. They remain adamant that with enough money, enough Norman Vincent Peale speeches, and enough regulations they can rebuild the economy. In the end, if the economy does not recover through bribes or feel good oratory, they will force it to. And when this doesn't work, they will blame the last vestiges of freedom.

Saturday, December 20, 2008

Don't Sweat the Small Stuff 6

Servants Leadership
A recent editorial in the Chronicle calls for Servant Leadership. The editorial quotes Lao Tzu, founder of Taoism:

The greatest leader forgets himself and attends to the development of others.

In a certain sense, the second part of this quote is true. A good leader must help the development of those he is leading. But he cannot do this if he "forgets himself". He can't do this if he is a selfless servant to others and places their values above his own. Indeed, the job of a leader is to identify the goals and values of the organization that he is leading, and if he does not share those values he is going to be an abyssmal leader.

American business has a serious and largely self-created credibility problem. The public's alienation from and mistrust of business leaders is deep. Left unaddressed, it could eventually turn into a broad rejection of the free market system.

A sincere return to servant leadership by those in both business and politics may be helpful in turning that precarious situation around.

This is nothing more than a call for more of the cause that has created the created the credibility problem. Having rejected an objective moral code, businessmen, politicians, and journalists must choose between dog-eat-dog hedonism and selfless servitude. These are false alternatives. What is needed is a rejection of altruism. More importantly, what is needed is the discovery of a new morality--the morality of self-interest.

Hey Fatso, Give Me Your Money
This week New York Governor David Paterson proposed a tax on sugared beverages as a means to combat childhood obesity.

If we are to succeed in reducing childhood obesity, we must reduce consumption of sugared beverages. That is the purpose of our proposed tax. We estimate that an 18 percent tax will reduce consumption by five percent.
As is typical, this proposal is nothing but a money-grab. If childhood obesity is such a travesty, why aim for a palty five percent reduction? Why not go the gusto and increase the tax to 180%? If the effect is linear, this would cut childhood obesity in half.

The government should not be concerned about childhood obesity. Government's sole purpose is the protection of individual rights. Government interference with personal decisions, even when they are harmful, amounts to imposing the values of some upon everyone. And that is always unhealthy.

A "Bailout" I Can Support
Texas Congressman Louie Gohmert has called for a two month federal tax holiday. In a press release, the Congressman says:
According to American Solutions, a conservative think tank founded by former Speaker of the House Newt Gingrich, Americans pay $101.6 billion per month in personal income tax and $65.6 billion per month in FICA tax. Under Gohmert's proposed plan, all of these taxes would not be paid during January and February of 2009, and the money would stay in the hands of American taxpayers - the ones who best know where economic stimulus should be targeted. Gohmert's two month tax holiday would stimulate the economy while costing less than the remainder of the Paulson-Pelosi bailout plan.

This is certainly a welcome idea. But if a two month tax holiday is good, then a permanent holiday would be great. Congress has been spending your money as if you have an endless supply. They want to bailout everyone but the taxpayer, that is, individual Americans. You can sign a petition supporting Gohmert's proposal here.

Eat Local, Save a Cuban
Apparently Cubans are becoming the darlings of the environmentalist movement. That alone should tell you something about environmentalism. According to Reuters (HT: Freedom is the Solution) Cuba is leading the "eat local" movement.

In Cuba, urban gardens have bloomed in vacant lots, alongside parking lots, in the suburbs and even on city rooftops.

They sprang from a military plan for Cuba to be self-sufficient in case of war. They were broadened to the general public in response to a food crisis that followed the collapse of the Soviet Union, Cuba's biggest benefactor at the time.

These urban gardens are also turning Cuba's poverty-stricken workers into poverty-stricken workers with a few more pesos. The workers at one co-op earn $42.75 per month, which is twice the national average.

The gardens are organic because they cannot afford pesticides or fertilizers, which surely makes environmentalists proud. Not to mention the fact that most Cubans barely make enough to survive, so they won't be polluting the landscape with discarded fast food containers, CDs, and other items that make life enjoyable. Other than the walking corpses, I am sure that the environment in Cuba is just delightful.

Friday, December 19, 2008

The Theater of the Absurd

According to KOCO in Oklahoma City, Houston is the city least prepared for the upcoming forced implementation of digital television. Nearly 16% of Houston's television sets would go into some kind of fuzzy unintelligible mess if the digital conversion occurred today. (To be honest, I'm not sure how that differs from much of what is already broadcast, but that is a different matter.)

Unless you have been living in a cave, you are probably aware of the government mandate that all full-power television broadcast signals convert to digital next year. According to the FCC:
Congress mandated the conversion to all-digital television broadcasting, also known as the digital television (DTV) transition, because all-digital broadcasting will free up frequencies for public safety communications (such as police, fire, and emergency rescue). Also, digital is a more efficient transmission technology that allows broadcast stations to offer improved picture and sound quality, as well as offer more programming options for consumers through multiple broadcast stream(multicasting). In addition, some of the freed up frequencies will be used for advanced commercial wireless services for consumers.

How much of the broadcast spectrum is needed for public safety communications? And why can't they use digital instead of forcing broadcasters and consumers to invest in new equipment? But these questions are really beside the point. This mandate is wrong on every level.

It forces broadcasters to use certain technology, and thereby violates their property rights. It forces consumers to own television sets capable of receiving digital signals, and thereby violates their property rights. And just so nobody is left out, the government is giving away coupons to get discounts on converter boxes, which thereby violates the property rights of the taxpayers forced to pay for these "discounts".

All of this is allegedly justified because the airwaves are "public property" and consequently the federal government can dictate the use of those airwaves in the name of "the public". I am a member of the public, and I've done nothing to contribute to the broadcaster's ability to air a program (other than watch or listen). The airwaves are simply a potential resource that has existed since the beginning of time, and it takes specific knowledge and equipment to make use of that resource. Those who own that equipment own the resource--they gave the airwaves value. (The government does have a legitimate role to play in the issue of the airwaves, but it does not involve licensing or regulating. It involves establishing the criteria for establishing property rights of the airwaves. See this article for more on privatizing the airwaves.)

As Ayn Rand put it
There is no essential difference between a broadcast and a concert: the former merely transmits sounds over a longer distance and requires more complex technical equipment. No one would venture to claim that a pianist may own his fingers and his piano, but the space inside the concert hall -- through which the sound waves he produces travel -- is "public property" and, therefore, he has no right to give a concert without a license from the government. Yet this is the absurdity foisted on our broadcasting industry.

Not only is the government now claiming that it owns the air within the concert hall, it is also claiming control of the pianist's fingers and our ears. And control is ownership. Ownership means the ability to determine the use and disposal of an object. The government has rendered analog broadcasting equipment and television sets useless. In regard to television, the federal government has seized control of both the means of production and the means of consumption.

Marxists argue that the workers should control the means of production because physical labor is the source of value. But physical labor has existed forever, and it could not harness the airwaves. Physical labor could not discover the means for turning the airwaves into a viable resource and value. It took a reasoning mind to discover the means for transmitting sound over distances.

Both Marxists and the federal government regard the reasoning mind as irrelevant. Both seek to control the mind by force. Marxists seek to do so by seizing control of the means of production. The federal government is doing so by seizing control of our eyes and ears.

Lest you think that this is some kind of paranoid conspiracy theory, consider that Great Britain has had a television set licensing mandate since 1949. It is illegal to operate a television set Great Britain without a license. (This is not a joke.) This article provides a history of the program, and starts with a quote from the British Television Licensing Authority:
Using a television without an appropriate licence is a criminal offence. Every day we catch an average of 1,200 people using a TV without a licence. There is no valid excuse for using a television and not having a TV Licence, but some people still try - sometimes with the most ridiculous stories ever heard. Our detection equipment will track down your TV. The fact that our enquiry officers are now so well equipped with the latest technology means that there is virtually no way to avoid detection.

The licensing authority uses specially equipped vans to roam the countryside searching for illegal television sets, which can be detected electronically. While fines are the most common punishment, as recently as 1999 24 people were sent to jail for failure to obtain a television license.

Those who do not own a television set face routine harassment from the licensing authority, which apparently believes that it is metaphysically impossible for a human being to exist without a television set. Duncan Bennett, for example, has received annoying and often threatening letters for nearly 15 years. You can read some of these letters on his web site.

The growing number of controls on our lives is the natural result of each generation of politicians and bureaucrats building on the precedents of their predecessors. Each generation carries the principles of altruism, collectivism, and statism steps closer to their logical conclusion. So long as those principles are embraced the controls will increase and grow more absurd.

This is the ultimate result when "the public" owns a resource. Since there is no such entity as "the public", use and disposal of that resource ultimately gravitates into the hands of politicians and bureaucrats who use it to build their own personal fiefdom. And within the realm of that resource, the individuals who comprise "the public" become pawns to the political elite.

Those who pontificate about "public property" are attacking private property. They are attacking the right of individuals to own, use, and dispose of material values. They are attacking the right of individuals to use those values according to their own rational judgment. They have embraced the premise that coercion is a proper means for dealing with others, and thereby reject the principle that all relations between individuals should be voluntary and consensual.

At its root, an attack on private property and property rights is an attack on the mind. It is an attempt to transform reality by forcing individuals to act against their own judgment. That very premise is absurd, and it is no surprise that the ensuing policies are equally so.

Thursday, December 18, 2008

Go Green, or Else

In late November the Houston City Council unanimously passed an ordinance requiring that new homes, or remodeling projects involving more than 500 square feet, meet certain energy efficiency standards. The Chronicle has since pulled its article reporting on the ordinance, but the following was found at Lose an Eye, It's a Sport:
The new code requires new residential construction up to three stories to attain a 15 percent energy savings over the existing 2006 International Residential Code.

Builders can choose from a variety of options to meet the 15 percent goal.

I doubt any sensible person would argue that energy efficiency is not a good thing. But unlike the "green crowd", which thinks that a good thing should be imposed on everyone and enforced with the power of law, a civilized person understands that anything imposed by force is not good.

Mayor White, always eager to play up his "green credentials", defended the ordinance with a typically paternalistic argument:

"The modern trend among both some of the finer small and large home builders is to build much more energy-efficient homes," said Mayor Bill White. "In fact, you're going to see people are drawn into the city because we have good building standards."

People may be drawn to Houston by these standards, but many will not be able to afford to purchase a home. The new standards are expected to add $1,000 to $2,000 to the cost of a new home. This may not seem like a lot of money, but every dollar added to the cost of a home because of government regulations also imposes other costs.

For example, the additional costs will result in a higher mortgage, which means higher payments for the interest and principal on that loan. The home owner will pay more in taxes and insurance as well. But this extra expense is actually money well spent according to a portion of the Chronicle article quoted on blogHouston:

White said homeowners will recoup the added costs on their utility bills within four or five years.

"So, that is a good investment, and it makes it so homes are more affordable in the long run," he said. "If somebody is, say, laid off or suffers a financial reverse, then they will be able to stay in their house longer, and I would encourage people to shop for energy-efficient homes."

This may or may not be true, and it is completely irrelevant. It is extremely arrogant of Mayor White to make investment decisions for Houstonians. Further, some simple math shows that the Mayor's claims are rather absurd.

I do not know the energy bill for one of these homes, but let us assume that it is $400 a month (which is higher than my home, which was built in 1957 and is not energy efficient). The Mayor's mandate would save the owner 15%, or $60 a month. (And if the energy bill is only $200, the savings is cut in half.) But this savings will be offset by higher interest and principal payments on the loan, higher taxes, and higher insurance premiums. Is a savings of $10, $30, or even $60 a month really going to make or break a family financially and allow them to stay in their home longer? If so, I would suggest that energy efficiency is not the most important concern for that family.

But the real issue is: who should make these decisions? Should it be the individuals involved, such as the home builder and his customers, or should it be politicians and bureaucrats? Or to put it a different way, do you want to make decisions regarding your life, or would you prefer to cede those decisions to Mayor White and City Council?

In practical terms, government regulations amount to a ceding of individual decision making. But that process is not even voluntary--government seizes the decision making process from individuals without their consent. Regulations allow government officials to make decisions that impact your life, and ultimately make your life more difficult. And if you don't like it, too bad. Obey the mandates, or else. Despite their claims, government officials cannot make economic decisions that benefit you. They do not know you, your particular situation, or your values.

And even if they did, by what right do government officials believe that they can impose their values upon you? By what right do they believe that they can dictate what type of home you can purchase? By what right do they decide what is best for you, and then use force to make you abide by their dictates?

Government is an agency of force. Those who disobey its edicts face the threat of having their property seized or being imprisoned. When those edicts involve a violation of individual rights--the initiation of force--the individual must obey, or else face fines and/ or jail.

A civilized person relies on reason and persuasion to convince others of his viewpoint; a brute resorts to force. A civilized person presents the facts supporting his position; a brute uses a gun to support his position. A civilized person appeals to the rationality of others; a brute appeals to fear and intimidation.

Anyone who wishes to "go green" should be free to do so. Those who choose not to "go green" should be equally free to act on their judgment. Mayor White and City Council obviously see it differently. They think that we should all "go green", or else.

Wednesday, December 17, 2008

Your Actions Affect Others

A common justification for paternalistic government mandates, such as seat belt laws, motorcycle helmet laws, and bans on trans-fats is that the actions of one individual affects others. For example, injuries sustained in car accidents increase insurance rates for everyone, and therefore the government is justified in taking actions that might reduce injuries. Here are two examples:

...we should also require insurance companies to charge higher rates to drivers who don't wear seat belts. Get one citation -- your premium goes up 5 percent, and double that for the second citation.

This makes economic sense, because those who don't wear seat belts will cost the insurance companies more in injury and death benefits. [from wired blog network]

* * *

I think that seat belts should be mandated by law, because we all (society) ends up bearing the brunt of the cost for people who fail to wear their seatbelts. [from]

This argument could be made for every human activity. If I place a advertisement for my business, it will affect the company running the ad, my employees, my potential customers, my suppliers, and many others. If I go to the grocery store it will affect the store's employees, its shareholders, its suppliers, gas stations operators, my banker, and many more people. Unless you are an absolute hermit, your actions ultimately affect many others.

If one accepts the premise that actions that affect others can be regulated by the state, then every human action is open for regulation. Advocates of regulation would deny this. They would argue that they are only trying to address one specific issue.

This myopic view is widespread. It results from the belief that one's position on a particular issue is unrelated to any other issue. It results from a rejection of principles.

Consider the arguments made in favor of seat belt laws. The principle--actions affecting others can be regulated--must apply to all actions affecting others, or the principle is not true. (A principle is a general truth upon which other truths depend.) A principle with exceptions is not a principle.

Advocates of regulations attempt to side-step this with spurious arguments:

An individual's rights end where other's begin. You cannot take a "personal liberty" or make a "personal choice" if you are putting others at danger.
This might appear to be a plausible position. After all, the rights of others do place limitations on our actions. However, our rights do not "end where other's begin".

A right pertains to freedom of action. It is a sanction to take action without seeking the permission or approval of others. It allows one to act according to his own judgment, so long as he respects the mutual right of others to do the same. The only objective manner in which rights can be violated is through force, such as robbery, kidnapping, or murder. It is only through the use of force that an individual can be compelled to act (or not act) in a certain manner and against his own judgment. Our rights place a boundary on others, just as their rights place a boundary on us. And that boundary is the use of force--we may not initiate the use of force against others.

The rights of others do not impinge upon our rights. Our freedom of action does not end where others' rights begin. Initiating force is not a right--it is a denial of rights, including one's own. To claim otherwise is to claim that rights permit us to pursue any whim or urge, including rape, robbery, and murder.

Rights are not a gift from God or a social convention. They are a result of man's nature and the facts of reality. Life requires action to produce the values necessary for its sustenance and enjoyment. Basic values life food, clothing, and shelter do not magically appear, nor does cable television, automobiles, or computers. These values require effort, and the individual who exerts that effort has a moral right to the products he creates. To deny him this right is to deny him the means to sustain and enjoy his life.

By living in society we do not need to produce all of the values that we need and desire. We can trade the products of our labor for the products produced by others, and the very act of trade affects others. Indeed, when we live in society virtually every action we take ultimately has some affect on someone.

In a free society--that is, a society in which force is prohibited from individual relationships--each relationship is based on the voluntary consent of all involved. So long as no force is involved, each individual is free to engage in whatever actions he choose, even when those actions are irrational and destructive to his well-being. But if he has not compelled others to act contrary to their judgment, only those who voluntarily join him will suffer. His actions will only affect those who voluntarily interact with him, whether directly or indirectly.

Today, rights are not viewed as the freedom to act, but rather, a claim on the consequences of action. Thus, we hear claims about the "right" to education, health care, and home mortgages. Rather than demands for the freedom to act to obtain these values, the demands are for the values themselves.

Both the claim that actions that affect others can be regulated and the claim to these fictitious "rights" reject the principles upon which rights are actually founded.

Sadly and ironically, those who claim that actions that affect others can be regulated ignore the consequences of their actions. Their advocacy paves the way for further government regulations, and ultimately, complete government control of our lives. They fail to see the affect their actions have on others.

Tuesday, December 16, 2008

Breaking a Few Eggs

I have previously written how the Texas Open Beaches Act may be used to prohibit beach front property owners from rebuilding their homes in the wake of Hurricane Ike. This is bad enough, but California officials are attempting to force George and Sharlee McNamee to remove a shower, thatched palapa, and an ornamental sign from their yard. According to the Orange County Register

In a much-publicized case, the California Coastal Commission has declared that the yard's embellishments – from shelving to rose bushes – are illegal coastal development and must be ripped out.
The Commission is claiming that the McNamees did not obtain permission to install these items. The LA Times reports:

It doesn't matter that the improvements are on the McNamees' property. Under the 1976 Coastal Act, private and public shorefront property are subject to state regulation to protect the environment and ensure public beach access.

In the McNamees' case, the state says their recreational amenities involved unpermitted grading and damage to the bluff, and gives the perception of a private beach -- intimidating beachgoers into avoiding the public sand nearby.
Interestingly, the Coastal Act allows the state to regulate private beach property, and a part of that regulation is to prohibit anyone from creating "the perception of a private beach". In other words, the state "recognizes" that it is private property and forces the property owner to pay taxes on it, but wants everyone to pretend that it is public property.

The right to property is the right of use and disposal. The right to property means that the owner has control over the property and its use. Ownership without control is meaningless. The state wants the McNamees to assume all of the responsibilities of ownership--including taxes--but denies them any control over their property. This facade of ownership is the defining characteristic of fascism.

If this weren't such a serious issue, the state's claim that a shower, grill, and flower bed intimidates beach goers would be comical. The state is concerned that someone may avoid a public beach because of a flower garden, but it cares little about the rights of the McNamees. And if it's not bad enough that they may have to remove their accoutrements, they are facing fines of $6,000 per day for violating the state's mandates.

Mark Massara, director of the Sierra Club's coastal programs, expresses no sympathy for the McNamees:

This is not about a picnic table and not entirely about the McNamees. This is about unpermitted cabinets, stoves, water lines and gas lines running up the hillside, and showers -- pervasive, unpermitted development...

The Coastal Commission has been nothing but accommodating to these people, allowing them to maintain this illegal development for years and years and years while the McNamees sue the Coastal Commission.

This type of arrogance is not surprising from an environmentalist movement that ascribes rights to trees, rivers, and animals, but not human beings. While proclaiming that they want to protect the environment for future generations, they destroy the lives of the existing generations.

Massara is surprisingly candid when he states that this is "not entirely about the McNamees." The McNamees just happen to be the latest victims. This is really about destroying man's ability to alter the environment, which means, destroying man's ability to live.

Only by altering our environment can we create the values necessary to live and enjoy life. We alter our environment when we plant crops, dig minerals, cut down trees, dam rivers, erect electrical wires, and virtually every other activity humans engage in. Property rights protect those who engage in such efforts.

The right to property is the practical implementation of individual rights. Without property rights, the right to freedom of speech cannot be implemented--one could not obtain or control the means to print or broadcast or otherwise disperse one's thoughts. Without property rights, one could not possess the means of self-defense. Without property rights, one does not have the means to sustain and enjoy his life. Every form of tyranny begins by destroying property rights, and with them, the ability of individuals to act and live independently.

The California Coastal Commission has complete control over land use within their jurisdiction:

The Coastal Act includes specific policies (see Division 20 of the Public Resources Code) that address issues such as shoreline public access and recreation, lower cost visitor accommodations, terrestrial and marine habitat protection, visual resources, landform alteration, agricultural lands, commercial fisheries, industrial uses, water quality, offshore oil and gas development, transportation, development design, power plants, ports, and public works. The policies of the Coastal Act constitute the statutory standards applied to planning and regulatory decisions made by the Commission and by local governments, pursuant to the Coastal Act.
There is no land use that could not be classified in one of the categories listed in the Coastal Act. Which means, there is no land use that does not require the permission of the Coastal Commission. Which means, property owners cannot use their land as they choose, but only as dictated by the Coastal Commission.

Supposedly, Mao Tse-tung defended his policy of murdering opponents by saying, "You have to break a few eggs to make an omelet." The Coastal Commission and environmentalists don't mind breaking a few eggs either. And those eggs just happen to be the lives of individual human beings, such as the McNamees.

Monday, December 15, 2008

Brothers, You Asked for It

The following article was written by Joe Meuth. Joe is a student of Objectivism looking to apply and to promote rational ideas in our culture. His areas of particular interest include economics, corporate governance, ethics, and politics.

The most appropriate thing that can be said about the imminent bailout of the auto industry is a line spoken by Francisco D'Anconia: "Brothers, you asked for it!" The sundry regulations that have crippled the auto industry, among others, have enjoyed widespread support over the years. Now is a good time to set the record straight concerning one of the most egregious violations of the property rights of industrial concerns: The National Labor Relations Act. [see Sec. 7. [§ 157.] and Sec. 8. [§ 158.]] To do this, the nature of the act and how it violates rights needs to be exposed, and the fallacious economic idea on which it is often supported needs to be corrected.

Consistent with the context-dropping pragmatic tendencies of our time, the events of the last 70-plus years have been practically ignored in the public discourse. The pseudo-solutions in the form of various bailout plans that have been bandied about recently will not put an end to the inability of American automakers to compete because none of them eliminates the fundamental cause of their problems: that automakers are not free to run their business as a rational person would; they are not free to determine wages paid, and they are not free to manufacture products that their customers want (thanks to CAFE and other laws).

Since the passage of the Wagner Act, industry has been forced to negotiate with Unions over wages and benefits. This is a violation of a business owner's right to hire and fire as they see fit. In a proper, free society, wage decisions are arrived at voluntarily between the employer and the employee. In a free society, employees would be free to organize unions, and business owners would be free not to negotiate with them and free to fire employees who joined a union. Neither employee nor employer would be able to initiate force against the other.

The costs that unions have imposed on the auto industry by force cannot justifiably be ignored (as they have been) when discussing solutions to their problems. The wage, benefit, and legal expenses brought about by the coercive nature of unions are the tangible costs. A less easily quantified cost is the lost time that is spent negotiating with union leaders or shutting down a factory while a strike is underway.

The idea of a union runs counter to the general American idea that wages, like anything else, must be earned. Why then do they enjoy support from people who aren't associated with them and who have no vested interest in their continued presence?

The most common economic misconception about unions that I am aware of is the false idea that unions raise the general standard of living. When the subject of unions is raised, someone usually says, "We'd be worse off without them." (Of course, whether or not society is better or worse off with unions is a secondary concern, and "society" has no right to violate the rights of individuals for the sake of its alleged or actual benefit. And in fact, no actual, long-term benefits have ever accrued to society when individual rights have been violated). To understand why the assertion that unions raise the overall standard of living is wrong, one needs to understand what brings about an increase in wages and the amount of goods produced. As Ludwig von Mises and others have proved, and an honestly applied common sense will readily see, the reason why wages in the US are higher than anywhere else is that more capital per worker has been invested in plant and equipment here than anywhere else in the world. More capital investment means better technology, more machinery, and higher productivity. Higher productivity then leads to higher wages and an increase in the supply of goods produced (this is one of the reasons why, in a free society with a currency backed by gold, prices generally tend to fall), so not only does the worker benefit from higher wages, but also from the fact that the goods he purchases with those wages will be cheaper and more plentiful because of the capital invested in production.

How does this relate to Unions? Unions extort higher wages and benefits by force, thus decreasing the amount of money available for investment in the enterprise. This in turn leads to less capital employed and fewer goods produced, which places downward pressure on wages and upward pressure on prices. The general standard of living is decreased because of the foregone production and the absence of those goods that would otherwise be on the market.

When Americans lament the fact that foreign cars are often of higher quality and cheaper than American-made vehicles, they are recognizing the near-end result of labor unions. What is the end result? It should be clear by now: bankruptcy.

The Wagner Act effectively declares that workers have a right to the product of their labor (wages) but that business owners have no right to the product of their work and investment (profits). By enabling parasites against hosts rendered defenseless against them, the auto makers cannot help but be in the situation they are in.

There are other regulations that need to be eliminated, such as CAFE, but taking away the threat of force that is currently backing unions and stifling industry would be a first step in the right direction.

Saturday, December 13, 2008

Don't Sweat the Small Stuff 5

Clandestine vs. Open Corruption
Commentary regarding the arrest of Illinois Governor Rod Blagojevich on corruption charges has almost universally failed to recognize that corruption is inherently a part of the political process.

Politicians of all stripes routinely take money from donors in exchange to supporting particular legislation. The entire purpose of lobbyists and political action committees is to influence politicians, and that influence is often gained through donations. In principle, this is no different from the actions ascribed to Blagojevich.

I am certainly not trying to minimize the seriousness of Blagojevich's actions. However, it is hypocritical to criticize clandestine corruption while casting a blind eye toward open corruption. Both are wrong, and so long as politicians possess the power to dispose of anyone's property and life, such vote peddling will continue.

Imago Dei
Writing for the Weekly Standard, Joseph Loconte laments a United Nations call for boycotts and sanctions against Israel:

How did we arrive at this dismal state of affairs? The problem is not simply that human rights have become grossly politicized. The problem is that rights have been profoundly secularized--and severed from their deepest moral foundation, the concept of man as the imago Dei, the image of God.

This argument, of course, is not new. It holds that rights are a gift from God, and therefore can be justified only through mysticism and revelation.

The truth is, rights are derived from observable facts of reality. The values required to sustain and enjoy one's life to not magically appear like manna from heaven. They require effort--human effort. Alone on an island this fact would be crystal clear--you would have the choice to work or die. This fundamental requirement does not change when we enter society. However, others can deprive us of the fruits of our labor. Others can seize the values we produce, and thus deprive us of the means to sustain and enjoy our life.

Rights protect our freedom of action. Rights allow us to take the actions necessary to sustain and enjoy our life, so long as we respect the mutual rights of others. In short, rights allow us to live as human beings. And it is reality, not God, that is the source of our rights.

Principles and "Normal" Times
Nobel Prize winner Paul Krugman provides more evidence why that once distinguished award has become little more than a symbol of intellectual corruption:
The claim that budget deficits make the economy poorer in the long run is based on the belief that government borrowing “crowds out” private investment... Under normal circumstances there’s a lot to this argument.

But circumstances right now are anything but normal.
Apparently there are economic principles that apply to "normal" times and economic principles that apply to "abnormal" times. Which really means, there are no economic principles--we must judge each situation on its own merits and then do "what is necessary". This is pure, unadulterated Pragmatism.

Principles are our means for projecting the future and identifying the consequences of our actions. When principles are abandoned, the future becomes an unpredictable, mysterious unknown. Having rejected their means for projecting the future, people then turn to palmists, shamans, and Nobel Prize winners for guidance.

Taxing Cow Farts
The EPA is considering a tax on livestock in an effort to reduce air pollution. This proposal is ripe for a wide variety of crude and tasteless comments, but I will resist the temptation. But it is clear that ranchers think this idea stinks:

The executive vice president of the Wyoming Farm Bureau Federation, Ken Hamilton, estimated the fee would cost owners of a modest-sized cattle ranch $30,000 to $40,000 a year. He said he has talked to a number of livestock owners about the proposals, and "all have said if the fees were carried out, it would bankrupt them."

Even with unemployment soaring, the stock market in the toilet, and projections for 2009 looking very gloomy, our wonderful federal guardians seem intent on destroying more jobs and driving up the cost of food. Ethanol wasn't enough apparently.

Bend Over and Grab Your Ankles
The gradual erosion of our freedom is no longer fast enough for the statists. From Gus Van Horn:
According to the American Policy Center, the United States is only two states short of obliterating what is left of our government's policy of protecting individual rights.

Obama has already stated that he believes the Constitution needs to be interpreted in light of the "modern" world. Which means, through the lens of Pragmatism, altruism, and collectivism. The principles put forth by our Founding Fathers--the supremacy of reason and the inalienable rights to life, liberty, property, and the pursuit of happiness-- no longer apply in the "modern" world.

I'm no atheist in a fox hole, but God help us all if a Constitutional Convention actually convenes. The "right" to health care, education, and hair cuts will be written into the Constitution, and we all will officially become slaves of the state.