Monday, September 29, 2008

Look What Else Ike Blew In

As another example of how government meddling in the economy creates widespread problems for consumers and taxpayers, the Texas Public Policy Foundation (hat tip to Houston Conservative) writes on Texas insurance rates:

Consider the current funding crisis of the Texas Windstorm Insurance Association (TWIA), the state’s provider of windstorm insurance. Because of below-market rates and a corresponding failure to enforce TWIA’s status as the state’s provider of last resort for windstorm insurance, TWIA has seen an explosion in the number of policies in force and in its overall exposure. As of August 31, 2008, there were 224,468 TWIA policies in force – up from 68,756 in 2001– and TWIA’s total exposure was $66.6 billion.

However, prior to Hurricane Ike, TWIA could cover less than $2.1 billion in losses. As claims from Ike will eclipse TWIA’s reserves, Texas taxpayers will be forced to bail out the state for losses that should have been covered by TWIA were reasonable policies in place.

As with flood insurance, the government stepped in to provide below market insurance for property owners. When disaster strikes, those below market rates force the government to use taxpayer money to make up the difference.

Such government government programs are wrong on several levels.

First, the government should not be in the insurance business. Government's proper purpose is the protection of individual rights, not providing insurance, education, mail delivery, or most of the other things government currently attempts to do.

Second, economically such programs make absolutely no sense. If the government is providing insurance at below market levels, that clearly tells us that this is a money losing venture. Of course, the government cannot lose money because it has the seemingly endless supply of tax dollars at its disposal.

Third, robbing Peter to pay Paul is always immoral, no matter what justification one attempts. (More fundamentally, all robbery is wrong.) Forcing taxpayers to subsidize insurance means that some benefit at the expense of others. You may think this is fine if you are one of the beneficiaries, but you should remember that countless other groups are trying to benefit at your expense.

The answer isn't a better process for choosing the winners and losers. The answer is to allow each individual to make the choices that affect his life and allow him to act accordingly. The answer is to prohibit one individual from compelling another to provide for his well-being. The answer is to hold individuals accountable, and allow them to prosper or fail based on the merits of their decisions and actions.

This of course, means abolishing every form of welfare and entitlement program, including government insurance programs and Wall Street "rescue plans". But that won't occur until individuals refuse to accept the unearned. That won't occur until individuals refuse to demand that some must sacrifice for the benefit of others.

Saturday, September 27, 2008

Philosophical Lessons from Ike

The following essay was written by Warren S. Ross.

There are some extraordinary philosophical lessons to learn from hurricane Ike, for those attentive and philosophically astute to learn them. In this dire emergency, caused by the direct hit of a near category 3 hurricane on the fourth largest city in the country, more than two million people were without power, an entire nearby resort island (Galveston) was demolished by flood waters, and food, water and power were in short supply for several days to a few weeks. Some observations about the aftermath of Ike are worth cataloging as a preliminary:

· Even the most basic necessity – water – depends on the continuous use of machinery – pumps – to keep the positive pressure to ensure no bacterial intrusion. Clean water also depends on chemistry – chemicals such as chlorine to kill bacteria, plastics to bottle the clean water people must drink when tap water is nonpotable; the science of chemistry to identify, test for and understand the medical implications of ingesting a whole host of naturally occurring microorganisms. When for four days Houston had low water pressure and had not completed the myriad of testing required to be rationally certain of purity, Houstonians had to boil water or drink bottled water.

· A lengthy causal sequence is required to supply the potable water and basic food needs of a city. The pumps that keep positive water pressure are driven by electricity, which in turn is generated by the burning of hydrocarbons, and the transmission of the generated electricity to the plant that houses the pumps and cleans the water. Without the transmission means (high tension power lines, connected by a complex network of switches and directed by computers, cumulatively called “the grid”), or without the hydrocarbons, the water cannot be produced for human consumption. The food needs of a city are delivered by those who use the hydrocarbons (fuel for the trucks) to bring the food from the point of original production to the warehouses and ultimately grocery stores that supply them to ultimate consumers. Part of what is needed to complete this process of production is electricity to drive the pumps that pump fuel at fuel stations into trucks, as well as electricity to light and most importantly refrigerate the warehouses and grocery stores. Additionally what is needed is a network of interconnecting roadways from farms to points of distribution.

· The causal sequence is not only lengthy but complexly organized in mutually enhancing circles. For example, electricity is produced from hydrocarbons but electricity is needed to dispense hydrocarbons.

· The mayor of Houston, Mayor White, as well as his counterparts at the county
level, have an unusually good grasp of these issues, at least at the economic level. Mayor White admonished the media, who were accusingly asking why the government “points of distribution” – PODs – were not up and running faster, that it makes no sense to deliver food to a location without a means of access by either trucks or the public. He also had to remind the media that a service station may have fuel but it is useless if the service station has no electricity (this in response to accusing questions as to why fuel trucks weren’t bringing gasoline to all service stations). Like ignorant third graders, the media were petulantly demanding everything “now,” and the mayor reviewed for them these basic facts about the logical hierarchy of production.

· Mayor White is an unusual man, a democrat but originally a businessman rather than a career politician. He understands not only these economic issues but some fundamental moral and political issues as well. He praised Houstonians for acting responsibly to assess and remediate their own situation, not waiting for government to do it but doing it on their own (clearing streets, removing trees, checking on neighbors and helping them through the emergency). He used the word “individual” repeatedly, stating that individual responsibility and effort were what set Houstonians apart from others (an oblique but generally well understood reference to the angry mobs of lethargic welfare recipients crying for government aid and egged on by politicians in the New Orleans Katrina debacle). White told one reporter that no one needs government permission to help a neighbor or friend. He told another that the private sector was the ultimate “point of distribution” in the form of grocery stores and fuel stations, not the small number of government PODs. Mayor White also repeatedly stated that the primary agent of restoring power is not the government but a private company – Centerpoint Energy. Although the Mayor was understandably frustrated with the slow pace ofrestoring power, he never once harangued Centerpoint Energy or tried to threaten or bully it. He never hinted at a “takeover” or accused it of greed or incompetence (nor did he menacingly assert that its management was being overpaid). He let Centerpoint, and encouraged citizens to let it, do its job. I do not agree with a lot of what Mayor White has done in his administration – increased taxes, attacked private property in the form of “land use” restrictions and attacks on sexually oriented businesses – but I am convinced from his actions during this crisis that at some level he is pro-reason, pro-individual, and pro-free market.

· Centerpoint Energy did and is doing an extraordinary job of restoring power, reconnecting half a million customers within two days, then incrementally expanding coverage by about 100,000 per day. This company, with its expertise at maintaining the infrastructure of a complex power grid, has organized skilled workers and machinery in a truly remarkable effort analogous to a military campaign. Bringing in linemen from across the state, the country and even from Canada, staging them in 24-hour-per-day shifts, fueling their trucks, feeding and housing them, organizing their effort in a rationally hierarchy of restoration (attack that part of the problem which affects the most customers first, then the next most customers, etc.), is a truly gargantuan effort of productive achievement.

Here are some of the deeper philosophical lessons to be drawn from the above:

· Man’s life depends on modern industrial civilization, with its complex chain of production, its reliance on machinery and chemicals and oil drilling and roads – all the disruptions to raw “nature” that the environmentalists are continuously complaining

· Man’s mind, used rationally to solve the problems of life, is the fundamental means of survival, not welfare handouts. An extraordinary amount can be achieved by individual effort with or without government aid. In fact, comparing Houston to New Orleans (where government at the city, state and national levels was predominantly in the position of responsibility) is a textbook experiment in the differences between the two types of aid, and their consequences. As one concrete illustration, consider that three years after Katrina New Orleans is still not rebuilt and that the media report that 2300 homes that have been rebuilt are built below the physically necessary elevation to survive another flood. Only a welfare-type mentality, confident that government will once again bail him out of the risk taken by rebuilding irrationally, would act in such a way.

· Government aid is quite possibly dispensable, even the short duration emergency type aid everyone has come to expect, if industry with its motive of profit and its knowledge and capability in this complex causal sequence is permitted to act
without restrictions.

· The truly gargantuan achievements referred to above with respect to Centerpoint Energy, but equally applicable to the fuel suppliers, the grocery chains, the tree-clearing companies, the roofers, the home-supply stores, the trucking industry, is unusually visible in an emergency like this (although even there, as the media interactions with Mayor White suggest, such visibility requires a conceptual approach, not staring blankly at brute facts without integration). What most people don’t realize is that this is the achievement industry engages in each and every day. This entire complex causal chain is something that is enacted on a daily basis and keeps the food on our tables, the water flowing from the tap, and the cars moving. And it is enacted on a daily basis in every other industry, such as communications,
construction, entertainment and finance, to the extent that these industries are left free to operate without government controls.

Were these the lessons grasped by the intellectuals and media spokesmen? Initially, it was difficult to know what the rest of the country was saying about Houston because we were under a storm-imposed blackout in which only the three local stations were broadcasting. However, even comparing these three stations and their broadcasts shows important differences in interpretation and philosophical perspective.

By far the best station is KHOU channel 11. This station repeatedly emphasized the issues of production and the causal sequence, admiringly broadcasting stories about the complex organizational chain to bring necessities to Houstonians, and the men and women who were engaged in this process. The other two stations were starkly different. At the bottom of the list is KTRK channel 13, which broadcast stories in “investigative reporter” mode, attempting to uncover conspiracies in what government and others were doing that caused them to not get Houston on its feet fast enough according to the station’s timetable. Its main investigative reporter, Wayne Dolcefino, asked “what don’t they want us to know” when officials understandably blocked reporters (along with everyone else) from going to the Bolivar Peninsula, a hard-hit area of Galveston Island that needed to be kept clear while search and rescue crews combed the area for survivors.

In the middle of the heap but not particularly higher than channel 13 was KPRC channel 2, which didn’t stoop as low as channel 13 but spent a good bit of its air coverage emphasizing a few glitches (which did exist) in the setting up of the PODs, calling them “huge disconnects.” Neither of these other two stations came close to the level of understanding of the production chain as did channel 11.

At the national level, the interpretations could be seen once the blackout was lifted by the return of power and internet connectivity. At first it was a shock to see that Houston was not at the very top of every national report, in fact it had a very small place. We had been immersed in the emergency so fully for so many days that it took a little reorientation to realize that it isn’t the only thing going on in the world. In fact, this is perfectly appropriate approach to reporting.

Emergencies aren’t the essence of life. They are temporary life-threatening situations that at worst threaten a small segment of any country’s population. After the initial shock, it was refreshing to read about what was going on in sports, financial markets, the election and foreign affairs (not that the news in any of these areas was particularly good, with the possible exception of sports, depending on which teams you support). The reports, from the New York Times, Reuters, and others, were factual and sometimes alluded to the points identified above, in a limited way. On the other hand, after the first few days when the emergency was acute, the national media coverage faded to an almost insignificant amount considering that the fourth largest city in the country was still struggling to get back on its feet. The normal recovery of a city of rational individuals and industrial workers, laboring to restore their lives, loses its luster to those in the media who want the drama of chanting crowds, with scenes of homeless people asleep on cots in large stadiums.

One cannot but speculate that at least part of the reason the national media coverage is so limited and matter of fact (especially compared to their unending, monotonous coverage of the New Orleans Katrina aftermath) is that Houston is just not helpless enough for their world view. Certainly, the plentiful material for philosophical implications was barely reported in the national media. Nor were any such implications drawn. An emergency, which highlighted the fundamental issues in human survival, and which afforded a richly outfitted laboratory for philosophical insight, became just another 2nd page story, and hence a missed opportunity.~

Thursday, September 25, 2008

Flooded with Money

Government intervention in the economy invariably leads to unintended consequences. Many times such interventions force individuals to act contrary to their own judgment, and they invariably seek ways around the intervention. At other times, such interventions encourage behavior that ultimately creates results not foreseen.The National Flood Insurance Program (NFIP) is one such intervention.

From the NFIP web site:
Before 1968, the federal government’s flood initiatives consisted of disaster relief to victims in the event of a flood, or flood control projects such as dams, levees and seawalls.

While well-intentioned, this approach did little to ease the financial burden of most flood victims. Worse, the public couldn’t buy flood coverage from most insurance companies, which regarded floods as too costly to insure.

Congress established the National Flood Insurance Program (NFIP) to address both the need for flood insurance and the need to lessen the devastating consequences of flooding. The goals of the program are twofold: to protect communities from potential flood damage through floodplain management, and to provide people with flood insurance.

What this means is that private insurers regard flood insurance as too risky, i.e., a bad investment. The lack of available flood insurance provided a disincentive to build in flood prone areas.

However, with NFIP that disincentive was removed. With taxpayer subsidized insurance available, it became less risky to build in flood plains. And with the risk removed, development boomed.

In other words, taxpayers are forced to support a program that encourages building in flood plains. And to make matters worse, taxpayers are then forced to pay for rebuilding and recovery efforts through FEMA and similar programs.

This is a classic example of the government intervening and providing a service below its market value. As always happens in such situations, demand increased. And that demand resulted in more beach front properties and the resulting expenses when devastating storms strike.

The solution is not more interventions. The solution is not prohibitions on building on beaches or other infringements of property rights. The solution is to get the government out of the insurance business.

If individuals wish to build on their beach property, they have a moral right to do so. They do not have a moral right to force others to subsidize their insurance or rebuild their home. If they can obtain insurance, or self-insure, the financial risk is entirely theirs (or their insurer's).

The reasonableness of building on the beach is open to debate. But that is a decision that should be left to the property owner based on his judgment. However, when the government provides subsidized insurance, the property owner is no longer required to act with the same level of responsibility. Taxpayers across the nation will shoulder a little of his responsibility, and thus encourage behavior than he might otherwise shun.

The government flooded the insurance market with taxpayer money and as a result a lot more homes get flooded.

Wednesday, September 24, 2008

Selective Enforcement

Buckhead Investments, the developers of the Ashby High Rise, have applied for a variance from the city in regard to the loading dock for the proposed project. A story in the West University Examiner News states:

The controversial development at 1717 Bissonnet St. has cleared six of seven departmental reviews, but still lacks clearance from Public Works and Engineering’s traffic section, which last rejected plans June 24.

In the comments section of the most recent denial, Public Works representatives asked for supporting documentation concerning “peak-hour turning movements” and suggested a pull-through loading area, rather than having trucks back onto Bissonnet.

The developers have cited another project not far from their location that uses a configuration similar to theirs. According to the developers, the Fairmont Museum District at 4310 Dunlavy St. does not have a pull-through loading dock.

Whether this is true or not is really an irrelevant issue. The City of Houston has made it clear that it will do everything it can to stop the Ashby High Rise.

The city recently said it will rely heavily on guidelines from an ordinance concerning the connection of driveways into public streets as the method of controlling traffic congestion, rather than continuing work on an ordinance to limit the size of high-density developments.

Those guidelines date back to 1947, and — according to city records — have never been cited in either approving or denying any building permit.

In other words, the city is going to rely on a 61-year-old law that has apparently never been enforced. Why are they starting now?

But a more fundamental issue is the fact that such a law even exists. What purpose is served by having a law that has never been enforced? Apparently the issues addressed by the law have never arisen, in which case we must question why the law was written. That City Hall has chosen to selectively enforce it now, when its attempts to draft new legislation specifically aimed at Buckhead failed, raises some serious questions about motives.

This is the very nature of non-objective laws-- they are subject to a wide variety of interpretations, and those interpretations ultimately determine their application. Combine that with political pressure from constituents and you get the type of selective enforcement we are witnessing in regard to the Ashby High Rise.

The treatment of Buckhead Investments should be insulting to anyone who values the rule of law. City Hall is blatantly and openly resorting to strong arm tactics to kill the project. If Houstonians allow such an atrocity to continue, the ultimate devastation will be much worse than that wrought by Hurricane Ike. Ike destroyed our property; granting such powers to City Hall will destroy our property rights.

Monday, September 22, 2008

Texas Open Beaches Act, Part 2

Sunday's Chronicle addresses the Texas Open Beaches Act and its possible application to areas devastated by Hurricane Ike. The debate has already begun as to what will and will not be allowed, though it may be a year before a final decision is made.

In the Chronicle article, Jim Blackburn, an environmental attorney and coastal expert based in Houston is quoted:

"We have to protect people from themselves and certainly from developers."

According to Mr. Blackburn, development should be restricted or prohibited because people might make bad decisions. The same could be said about consuming alcohol, eating red meat, driving, using the Internet, or come to think of it, any human activity. If protecting people from themselves is justification for prohibiting them from building on their property, then there is no limit as to which activities could be regulated.

Freedom means the right to act without coercion, so long as you respect the mutual rights of others. Freedom means the right to make bad, or even stupid, decisions.

Some argue that such restrictions are justified because these bad decisions impact others. But this is also true of virtually every decision we make. Again, those who posit such an argument are endorsing unrestricted government regulation of individual activities.

Jerry Patterson, the state's land commissioner
said his intent is not to trample on property rights, but to confront what he considers a crucial problem. In addition to the eroding shoreline, he is concerned that the high cost of rebuilding highways and pipelines and restoring beaches on barrier lands will become a perpetual burden on state taxpayers.

This entire issue would go away if the government got out of the infrastructure business. Simply privatize the land and the entire issue goes away. Those who own the land should pay for the infrastructure needed to support those areas.

This is the type of problem that arises when government acts beyond its legitimate functions. Each illegitimate action creates unforeseen problems, which lead to the need for further interventions.

The real issue is not whether anyone should build in areas impacted by hurricanes. The issue is the legitimate function of government. Government's proper function is the protection of individual rights, including property rights.

A right is a sanction to act without restriction. A right sanctions you to act according to your judgment, so long as you respect the mutual rights of others to act according to their judgment. You cannot force others to act in accordance with your judgment, just as they cannot force you to act in accordance with theirs. Government's sole function is the protection of this right.

When government moves beyond this function, it invariably imposes the judgments of some upon others. Such actions require some individuals to act contrary to their judgment, or as Mr. Blackburn puts it, "to protect people from themselves". Not only is this arrogant, it is immoral.

Mr. Blackburn, and others who support the Texas Open Beaches Act may not like the decisions many people make. He has every right to disagree, but he has no right to impose his views on others. That is the meaning of freedom.

Sunday, September 21, 2008

Hoarding and Gouging

In the first two days after Hurricane Ike hit the Houston area, I could not find a store open within 3 miles of my home. It wasn't that I was in need of anything, but I wanted to know what was available. On Monday a few stores opened, all of which I believe were powered by generators. The first gas was not available until Tuesday.

During this period government officials were regularly warning businesses to refrain from gouging customers. When stores opened or gas was available, long lines quickly formed. I heard reports of people waiting up to 4 hours for gas.

Much of the demand for gas was created by people topping off their tank. Under normal circumstances, I doubt that many people do this. They know that they can purchase gas easily and do not care to spend the time and effort to put a few gallons in their tank. However, after Ike individuals wanted to be certain that they had as much gas as they could get. In other words, they were hoarding gas.

This hoarding was not limited to fuel. Brian Shelley at Freedom is the Solution relates an experience he witnessed in a grocery store:
As I picked up a few items at a recently opened store near my home, I witnessed food hoarding going on as well. A woman added nearly a dozen packages of hot dogs to her cart already half-full with bags of frozen chicken breasts, and other packaged meats. She then turned to advise the other two women she was with to grab some. Each added half a dozen packages to their carts. I don’t know their situation back home, but since the shelves were mostly bare already, it probably meant that other people arriving later would have to go without. If the store had hiked the prices of certain items even a few dollars, food types in short supply could have been enjoyed by more people not just the lucky few who discovered that the store had recently restocked.

In the aftermath of Ike, demand for many items spiked. Many people lost food when their electricity went out and they were seeking to restock. Those with generators needed additional gas. Those who had neither electricity or a generator needed ice. All of these items were in short supply. Because those who had these items had been warned about gouging, they could not raise their prices to curb demand.

All resources exist in a limited supply, even under normal conditions. There is never enough of any product or service. Prices moderate demand and ration products and services to those who most value them. When demand spikes, but prices do not rise, consumers will hoard.

Economically, anti-gouging laws make no sense. Morally, they are unjustifiable. Every economic transaction is a voluntary exchange. Each party benefits, or else he will not take part in the transaction. If he finds the price too high for the value he will receive, he can simply decline the transaction.

This was true the day before Ike hit, and it remains true in the days after. No matter what the product, those who own it have a moral right to establish the price for which they will sell it, even if that price seems outrageous. So long as the business does not force anyone to buy its products, and I have heard no reports of this ever happening, the consumer is free to look elsewhere.

In normal times, most consumers recognize their freedom of choice. They recognize that they have the right to take their business to someone else. But in emergencies many believe that it is proper and just to compel businesses to act as if an emergency did not exist.

The right to property means the right of use and disposal. It means that the property owner can determine the conditions and price for which he will sell his property. On the flip side, consumers who highly value a particular product can bid up the price. If a seller can find a willing buyer, and a buyer can find a willing seller, nobody has been harmed.

The rationale behind anti-gouging laws is that businesses will take advantage of consumers during desperate times. This implies that consumers cannot make wise decisions during emergencies. It implies that consumers have a right to purchase food, water, ice, and plywood at a particular price. No such right exists. In this context, there is only the right to choose.

At root, anti-gouging laws infringe on the rights of every individual. Because anti-gouging laws interfere with the voluntary exchange of property they harm both the producer and the consumer.

Imagine the uproar if the government imposed restrictions on the quantity of gas, ice, water, food, plywood, or any other product that could be purchased after a hurricane. The outrage would be justified because it would interfere with the voluntary exchange between two willing parties. The same outrage should be expressed anytime government interferes in a voluntary exchange, whether it is aimed at consumers or businesses.

Saturday, September 20, 2008

The Pen is Mightier than the Storm Surge

If you have seen photos of the Texas coast after Hurricane Ike, you are aware of the the destruction caused by the storm. Thousands of homes were seriously damaged or destroyed, and many will be prohibited from rebuilding. And the owners of many of the homes that survived Ike may be prohibited from occupying their property.

The Dallas Morning News reports that the State of Texas may seize hundreds of properties, including homes that survived the storm, under the Texas Open Beaches Act (TOBA):
Hundreds of people whose beachfront homes were wrecked by Hurricane Ike may be barred from rebuilding under a little-noticed Texas law. And even those whose houses were spared could end up seeing them condemned by the state.

Now here's the saltwater in the wound: It could be a year before the state tells these homeowners what they may or may not do.

Worse, if these homeowners do lose their beachfront property, they may get nothing in compensation from the state.

What this means is that what Hurricane Ike could not accomplish will be done with a stroke of the lawmaker's pen. The 1959 law proclaims that the beach between the normal high tide and the normal low tide is public property and it is illegal to build private homes on public property.

The law is typically enforced after a large storm moves the shoreline, but it can also be invoked after gradual erosion does the same thing. Regardless, the owner loses his property and receives no compensation.

The author of the law expressed no sympathy for the victims of this land grab.

"We're talking about damn fools that have built houses on the edge of the sea for as long as man could remember and against every advice anyone has given," A.R. "Babe" Schwartz said.
According to "Babe", since these property owners did something foolish (which is debatable) then the state has every right to seize their property. But who determines what is foolish? And why do foolish actions give the state the right to seize the property? "Babe" offered no explanation. Foolishness is not illegal, nor should it be so.

"Babe" attempts to justify his law:
Every one of them was warned of that in their earnest money contract, in the deed they received, in the title policy they bought," he said. "And whether you like it or not, neither the Constitution of the United States nor the state of Texas nor any law permits you to have a structure on state-owned property that's subject to the flow of the tide.

That may be true, but it does not justify condemning private property and seizing it for the state. More significantly, "Babe" uses the law to justify itself-- private structures cannot be built on public land, and since the beach is public land, the law is proper. This is nothing more than a circular argument.

The proper purpose of government is the protection of individual rights, including property rights. As a part of that function, government must define how property rights are established-- as it properly did in the Homesteading Act. TOBA defines property rights out of existence.

The premise behind TOBA is that the public has a right to beach access. To secure this "right" a certain portion of the beach was declared public property and accessible to all.

The web site for Texas Open Beach Advocates defends the law because it protects a "basic and traditional right to some of the best of God's creation". No explanation is offered as to the source of this "right". Apparently we are supposed to just know.

The truth is, there is no such right. A right pertains to action. A right is the freedom to take action in the pursuit of one's values. A right is not a guarantee that one's actions will be successful, or that one will attain the object of one's desires. The mutual rights of others prohibits us from pursuing or attaining our values through the use of force.

The TOBA crowd believes that their desires constitute a right. They believe that if they desire something-- such as open beaches-- then others must provide that something. And all they need is some politician eager to win votes to accomplish their goal. All they need is someone willing to use a pen to accomplish what the storm surge couldn't.

Friday, September 19, 2008

Ike and Property Rights

Prior to Ike's landfall, everyone in the region was bombarded with tips and information on how to prepare for a hurricane. Since Houstonians often go through such a routine multiple times a year, the information is widely known (or should be). Among the suggestions: have 3 days of water and non-perishable food, have candles and batteries, fill your bathtub, and fill your gas tank. None of these are particularly difficult or expensive tasks.

In the aftermath of the storm, it became painfully obvious that the advice and information provided by authorities was ignored by many citizens. On Sunday citizens (and some local government officials) were complaining about the lack of food, water, and ice. In short, less than 24 hours after the storm, many citizens were already out of food and water. Clearly, they did not heed the advice to stock a 3 day supply.

While it was apparently too much of an imposition to fill up a few jugs of water and buy a few cans of tuna, these people had plenty of energy to hunt down the nearest reporter and air their complaints. They had no interest in taking the responsibility to provide for their own sustenance, but quickly damned the "system" when those items did not miraculously appear.

These people demonstrated little regard for their own lives. They could not, or would not, take simple steps to provide for themselves. They chose to wantonly and irresponsibly ignore both the advice of authorities and common sense. Instead, they chose to demand that others provide for them.

Unfortunately, there are many who ignore the self-imposed nature of this misery, and rush to provide aid and comfort. There are many who regard need as a claim on the property of others, and demand that tax dollars be used to provide for those who refused to provide for themselves.
The victims of Ike are not limited to the path of his winds and rain. The victims of Ike are spread across the nation as taxpayers from every state are forced to provide relief for the area.

Houstonians did not choose to be ravaged by a hurricane. But neither did the residents of Iowa, or Georgia, or Alaska, or any other state. Yet their property will be taken for the benefit of those in the Houston area. Our need is not a claim on their property.

In the days since Ike’s landfall there have been countless stories of private individuals and businesses donating water, ice, and other supplies to help others. There are undoubtedly many more such stories that will never be heard. This is the proper response to any disaster—relief provided through the voluntary actions of individuals and businesses.

Each individual has a moral right to pursue the actions required for his sustenance and enjoyment, so long as he respects the mutual rights of others. An individual’s need, no matter how dire or how tragic its cause, does not give him a right to demand that others provide for him. Those who claim otherwise are declaring that has no individual has a right to live for himself, that the individual can be forced to sacrifice for others.

Houston has become a great city because it has largely rejected that premise. Houston has largely respected the property rights of its citizens. If Houstonians wish to retain our greatness, we must continue to respect property rights, including those of non-Houstonians.

Saturday, September 13, 2008

The Market

Tory Gattis, at Houston Strategies, directed me to another article singing the praises of Houston. Sam Staley, writing for, says
Underappreciated in the city’s success may be its uniquely flexible and adaptable approach to land-use regulation. Unlike every other major city in the US, Houston has shunned zoning regulation, preferring to leave choices about land uses up to the real estate market.
The real estate market that he refers to consists of all Houstonians who care to participate in it. The real estate market consists of the independent choices of thousands of Houstonians, each making decisions based on his own values and acting accordingly. The lack of land use regulations in Houston makes this possible.

In cities with restrictive land use controls, developers and builders must jump through hoops, appease politicians, bureaucrats, and special interest groups, and essentially beg for permission to do their job. They are prohibited from reacting to the market, and instead forced to react to the arbitrary demands of those with political power.
Redevelopment occurs at a rapid pace inside the Loop, creating a mix of land uses rare in most U.S. cities, where aggressive zoning segregates and highly regulates land uses. High-rise apartment buildings and commercial towers emerge on redeveloped property quickly, and notices of higher density and mixed-use redevelopment dot parcels of land throughout the inner-loop area.
In other words, when developers and builders see a need for greater density, they respond accordingly. And they can respond relatively quickly because they do not need to spend years seeking the approval of those who do not own the property.

The market is a dynamic place. Each participant is motivated by his own self-interest, seeking to find the best use for his abilities and assets. When the market is unfettered, individuals can act as their judgment dictates, even when others think their ideas are folly. They need not convince the ignorant, the short-sighted, or bureaucrats. They need only convince those who choose to deal with them-- their investors, their employees, and their customers. And each of these are motivated by their own self-interest.

Those who seek to impede the market, which means impede the voluntary choices of individuals, are motivated by something entirely different. For all of their rhetoric about protecting the public or promoting the common good, their real goal is control. Their real goal is control over the men and women who build and produce.

The failures of command economies are numerous and well-known. The successes of freedom are less numerous, but certainly easily found. And no city better demonstrates the success of freedom than Houston.

Houston is a slap in the face to every advocate of government intervention in the economy, land use restrictions, and violations of property rights. Houston demonstrates, day after day, year after year, that freedom leads to individual prosperity. But individual prosperity is not the goal of those who seek more controls. Their goal is control.

You may think that I am exaggerating, that those who propose greater government controls are motivated by benevolence. You may think that they go "too far" sometimes, but that they have good intentions. You may even think that some controls are necessary, or our city will run amok in anarchy.

If you think any of these things, you are wrong.

Those who are motivated by benevolence do not use coercion to impose their ideas and values upon others. They respect the judgment and the rights of each individual. They interact with those who support their values and trade with those who will provide them those values. They shun those who are antagonistic to their values, or offer them no value.

Human survival and happpiness is not automatic. It requires specific actions to transform our environment to provide for our sustenance and enjoyment. Each individual has a moral right to the freedom to take those actions, so long as he respects the mutual right of others. And each individual has a moral responsibility to provide for himself.

In other words, no individual has a right to demand that others provide for his sustenance or happiness. He cannot compel others to provide for him, just as others cannot compel him to provide for them. He cannot force others to sacrifice for him, nor can others force him to sacrifice for them. That is not anarchy, that is the rule of objective law. That is freedom.

Thursday, September 11, 2008

Planning for Disaster

Many Houstonians have been calling for increased planning of the city's development. Such planning, they argue, is necessary for the city to meet the infrastructure requirements of continued growth. If one drops context and ignores the lessons of history, such arguments are plausible.

Planning is the process of identifying goals and the means for achieving those goals. A plan without the means of implementation are simply a fantasy.

It should come as no surprise that advocates of city planning also advocate increased land use regulations. Such controls are the means of implementing the plan. And it is increased control over land use that is the real goal of planning advocates. Without such controls the plan cannot be implemented.

Stripped of its pretense, the pro-planning movement is a power grab. It is an attempt to gain control over land use under the guise of promoting more organized and efficient growth.

That centralized planning has failed time after time--the recent experiences on both coasts, as well as the failure of the Soviet Union are good examples-- will not deter the planners. That such planning has led to higher housing costs in other American cities is of little concern to the planners. That such planning inevitably harms individual citizens does not matter. The planners have a vision for our city, and they are not about to let something like historical facts or principles get in the way.

If this seems like an exaggeration, consider the means by which every type of government planning is implemented. Using a combination of proscription and prescription, government planners dictate the actions of individuals. The planners determine both the ends and the means, and then use compulsion to implement their plan.

Why, we must ask, would they resort to such methods? Why, we must ask, would they criminalize land uses that do not fit their vision of a perfect Houston? Why, we must ask, are they so eager and willing to use coercion? The answers can be found in the principles that underlie centralized planning.

The justification for imposing such plans upon the citizenry rests on the premise that individuals are to be subservient to the group, such as the community. The welfare of the group supersedes that of any individual. The group then, has a right to impose its views and values upon the individual. That some individuals will be harmed in the process is accepted as a necessity.

Planning advocates will likely argue that the process will be democratic, that input will be sought from the public, that a consensus will be developed. Such arguments imply that if enough Houstonians agree to a plan it becomes proper and moral to impose that plan by force.

Such arguments, and indeed the entire premise of centralized planning, is a complete rejection of individual rights. Such arguments imply that an individual may act, not by right, but by permission.

Each individual has a moral right to the actions necessary to sustain and enjoy his life, so long as he respects the mutual rights of others. In the context of planning, each individual has a moral right to choose his values and the means for attaining those values. But he may not use force on others, just as they may not use force upon him. The attainment of his values requires the voluntary consent of every individual with whom he chooses to interact

Planning advocates reject this. They believe that individuals should not be permitted to choose and pursue their own values, but must be compelled to pursue the values of the group. They believe that the individual must be forced to sacrifice his own values to those of the group.

Such policies always have and always will lead to misery and decline. And it will happen in Houston as well if the planners have their way. Despite the rhetoric, Houston cannot and will not escape the destructive consequences of centralized planning. If Houstonians wish to retain their freedom and prosperity, then they must not only reject planning, but the idea that the individual must be subservient to the group.

Tuesday, September 9, 2008

Keep Houston Free

Let your fellow Houstonians know that you value your property rights and your freedom. Become a rolling billboard in the cause of individual rights. Put a Keep Houston Free bumper sticker on your car and spread the message.

Make a donation to the Ad Hoc Committee for Property Rights and get a Keep Houston Free bumper sticker. You can make a donation in the upper right hand corner.

Monday, September 8, 2008

An Open Letter to Houston’s Developers and Builders

Throughout this year we have heard countless stories about the collapse of the housing market around the nation. During this same period we have also heard many stories about Houston’s relatively stable housing market.

For decades you have provided Houstonians with affordable housing. You have provided an abundance of options, from modest starter homes to luxurious custom homes. You have helped make the lives of all Houstonians better and more enjoyable.

You have been able to do this because Houston, unlike most cities, has not erected a myriad of regulations and obstacles to impede you. Houston is arguably the freest city in the nation, and that freedom has allowed you meet the demands of the marketplace. That freedom has allowed you to judge the appropriateness of a project, and then proceed on the basis of your independent judgment.

Our abundant and affordable housing and our low cost of doing business are the economic benefits of that freedom. Our glorious skyline is the monument.

There are those who would like more control over you and your business. Over the past few decades we have seen a growing number of restrictions on businesses, builders, and developers. Many potential candidates for Mayor in 2009 have expressed support for more restrictive land use controls.

While you may be the most visible and obvious victims of these restrictions, all Houstonians will suffer. The cost of housing and doing business will increase. Consumer choices will decrease. If our political leaders seek to emulate the restrictive land use policies of the northeast and California, we will also bear the same economic results those regions have recently suffered.

But it doesn’t have to be that way. It is not necessary that you allow city officials to dictate the terms and conditions under which you operate your business. It is not necessary that you helplessly watch while others decide your future. It is not necessary that you be a victim.

City officials have no power over you or your business unless you give it to them. They cannot be successful in their power grab unless you allow them.

Regardless of the particular manner in which city officials seek to enact more restrictive land use regulations, their justification rests upon a specific moral premise. And they depend on your acceptance of that premise to sanction their actions. If you withhold your sanction, you will expose the true nature of their position and they will be literally powerless.

You may think that you are bound to follow the will of the majority or their representatives in city government. You may think that in a democratic society the interests of individuals must be subjugated to the interests of society. This is the premise upon which they rely, and it is the premise that you must reject.

Our nation was not founded as a democracy, but a constitutional republic. In a democracy, the majority may do as it pleases simply because it is the majority. Thomas Jefferson stated that “a democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

The Founders created a constitutional republic, in which the rights of individuals were to be protected from violation by a tyranny of one—the King—or a tyranny of many—the majority. They restricted the powers of government precisely to protect individuals from the arbitrary edicts of government officials.

The benefits you have provided to Houstonians was not motivated by service to others, but by your desire to profit. You have provided value for value, offering your knowledge and skills to a discerning public. When you were right, you benefited. When you were wrong, you did not.

You use your judgment to determine the market and to act accordingly. You rely on the self-interest of your clients to purchase your products, while you simultaneously pursue your own self-interest.

You are not a sacrificial animal whose life can be disposed of by others, no matter their number and no matter what alleged benefit will result. You have a moral right to your own life and the freedom to take the actions required to sustain and enjoy it. Our Founding Fathers understood this, for that is the meaning of “life, liberty, and the pursuit of happiness.”

Those who seek control over you cannot justify their plans. They depend on your acquiescence. Your moral sanction is the only weapon they have. Your willingness to sacrifice your ambitions, your plans, your desires is their only power. Withdraw your sanction. Refuse to sacrifice your interests to those who seek to control you.

It is not easy to stand alone when the mob declares that your ideas are wrong. It is not easy to reject the consensus, to rock the boat, to question the status quo. But Christopher Columbus did it. Galileo did it. Henry Ford did it. Thomas Edison did it. Our Founding Fathers did it. The world is a much better place for their courage to see the truth.

These individuals, and many, many more like them, are the rocks upon which civilization has been built. Just as the homes and buildings you construct need a solid foundation, so does a free society. That foundation lies in the realm of morality, in the right of each individual to sustain and enjoy his own life.

You would not concede to City Council the power to dictate what shingles to put on your roofs or what paint to put on your walls. You and your customers are the best judges of those criteria. Do not concede to City Council the power over any aspect of your business. They are not interested in your customers. They are interested only in the next election. They will sacrifice you and your business for the necessary votes, but only if you allow them.

In place of self-sacrifice, declare your moral right to live your life for yourself. Do not apologize for asserting your rights. Do so proudly, for you have earned it.

Saturday, September 6, 2008

Avoiding the Z Word

Zoning advocates are careful to avoid using that word. After all, they have been rejected three times by Houston voters. Further, any zoning proposal would have to be submitted to voters and the pro-zoners certainly don't want to suffer another bitter defeat.

So how will they get around both the city charter and voters? They will simply call it something else, like planning. In April, Chronicle reporter Mike Snyder posted on former Houston Planning Director Patricia Knudson Joiner:

She'd like to reframe the discussion, partly by steering it away from talk of zoning, which she considers an irrelevant and polarizing distraction. Instead, Joiner would like the public to see planning the way she portrays it in her own professional life: "Planning is seeing the future before you get there and deciding if you like it."

Since zoning is "an irrelevant and polarizing distraction" we'll just call it something else. Why get distracted by labels or principles?

But Joiner does more than simply brush the issue aside, she completely drops context. Private planning requires the voluntary consent of all involved; public planning is imposed by government force. Private planning is based on the values of the individuals involved; public planning ultimately allows some to impose their values upon the entire city. Joiner admits as much:

In other words, think of planning as an agreed-upon set of values and outcomes, then use the best available tools to achieve them. Regulations, which tend to be the focus of public discussions about how to guide growth and development, are only part of the answer, she says; local governments can also use decisions about where to invest public funds for streets and utilities to steer growth in a desired direction, and can supplement the "stick" of regulations with the "carrot" of financial incentives.

What happens to those who do not consent to the "agreed-upon values and outcomes"? Joiner is clear about that-- the "stick" of regulations will be used. In other words, those who do not agree will be forced to "agree". However, "agreement" achieved with a stick is hardly an agreement. It is the imposition of one set of ideas and values through the threat of physical force. And, as a safe measure, the City can also use bribery, aka "the 'carrot' of financial incentives".

In other words, the City will develop a plan and then impose it on everyone, including those who disagree. The recalcitrant will first be prodded with financial incentives, and then with a stick.

But none of this can happen, Joiner said, until the city develops and adopts a
plan expressing its desired outcomes. The document could be known as a
comprehensive plan, a general plan or even a business plan. (The last option may
be a good choice in a city that seems to prefer a private-sector vocabulary.)

"What business -- private or publicly traded, large or small -- doesn't
operate with a business plan?" Knudson asked.
Joiner is correct that the City can't poke and prod until it identifies the goal of its coercion. But the ends-- no matter what they are-- do not justify the means.

Further, it's not enough to just avoid the "z word". Joiner proposes to cloak it in "private-sector vocabulary". This evades the fact that there is a fundamental difference between the private sector-- which is voluntary and consensual-- and the public sector-- which is coercive and mandatory. By equating the two she simply dismisses the difference as irrelevant.

But the difference is not irrelevant. Government holds a legal monopoly on the use of force. A government plan is imposed by force. A business cannot compel others to abide by its plan. It can only seek the voluntary agreement and cooperation of others.

Unable to achieve their goals through the voluntary consent of others, advocates of greater government controls seek to use coercion to impose their values on others. Fearful of the results if they engaged in an open and honest dialogue on the principles underlying their proposals, they seek to obfuscate the issue through equivocation and evasion.

If Houstonians wish to retain their property rights, then they must see through such tactics. If Houstonians wish to maintain the prosperity they enjoy, then they must reject proposals to expand government power.

Thursday, September 4, 2008

The Right to Pole Dance

It is fairly safe to say that at this very moment somewhere in Houston consenting adults are engaging in activities that others find objectionable. Those activities might include gambling, consuming alcohol, or pole dancing.

Some people find these activities so objectionable that they seek to prevent others from engaging in them. For example, most forms of gambling are illegal (unless sanctioned by the government). And in Adams Township, PA government officials have banned a studio that wants to teach pole dancing. The township alleges that the studio is a sexually oriented business.

The owner of the studio-- Stephanie Babines-- has filed a federal lawsuit against the township. She argues that her First Amendment rights have been violated.

I am not a lawyer, but I find that argument dubious and not very compelling. It is certainly not addressing the fundamental issue—the township’s attempt to impose its values upon her.

What goes on behind closed doors is nobody’s business except for those who are voluntarily involved. Whether it is gambling or pole dancing, so long as those engaging in such activities are consenting adults, the government has no business being involved.

Bans and regulations on sexually oriented businesses are typically justified as protecting the “community’s morals”. But those who advocate such bans never define those morals. They are in fact, undefinable.

The community consists of many people, with many different moral codes. Some—such as Ms. Babines and her customers—clearly do not find pole dancing objectionable. Others—such as township officials—clearly do find it objectionable. In the end, the values of township officials will be imposed upon the entire community. This is the meaning of “community morals”—some individuals may impose their values upon other individuals.

That the law sanctions such impositions does not make it right or proper. Each individual has a moral right to pursue the actions necessary to sustain and enjoy his life, so long as he respects the mutual rights of others. Imposing one’s values upon others, no matter how many endorse such actions, violates this right.

Those who find pole dancing objectionable have every right to express their objections. They do not have a right to prohibit others from engaging in that activity.

Those who advocate bans on pole dancing or any other voluntary activity believe that the welfare of the community supersedes the welfare of any individual. They believe that they can compel the individual to abide by their standards. And that is truly objectionable.

Tuesday, September 2, 2008

Opportunity City

For the better part of 2008 analysts from around the country have pointed to Houston as an example of what a lack of government controls on land use can provide for citizens. Houston has ranked near the top in list after list of the nation's best cities. Our economy is still growing and our housing market has remained stable. As I have pointed out numerous times, these economic benefits are the practical consequences of freedom.

Interestingly, the example being set by Houston isn't limited to the United States. In "Affordable Housing No Accident in Houston", Hugh Pavletich of New Zealand writes (HT to Houston Strategies):
Houston’s great strength has been its ability to stop political and commercial elites from capturing control and denying Houstonians the ability to make their own decisions about how and where they wish to live and work. It is indeed “the people’s city.”

This did not happen by accident in Houston, but has been the result of a long tradition of sound governance ­underpinned by a political culture fostering constructive discussion and debate that consistently enhances competition and opportunity. In fact, Houston is now widely recognized, internationally, as the model “opportunity city.”

Unlike most large cities, Houston remains affordable for a middle-class family. While others argue that we need greater planning, more mass transit, and increased government control of our lives, it is the absence of such government intrusions that makes Houston affordable.

Despite the evidence that continues to pile up that Houston's lack of government control is the reason for our prosperity, there are those who seek to expand regulations and controls. If individual Houstonians are better off for the lack of such controls, we must question the motives of those who seek more controls. They certainly aren't motivated by improving our lives, because if they were, they would be repealing controls rather than seeking more.

The lack of government control means that individuals are free to pursue their values without burdensome obstacles, so long as they respect the mutual rights of others. It means that if someone has an idea, he can pursue it without jumping through hoops, filing for permit after permit, and appeasing an endless parade of bureaucrats.

This lack of controls is why Houston is "the model opportunity city". What then, do those who seek to erect more obstacles, more red tape, and more bureaucracy seek to accomplish? It certainly isn't opportunity because such obstacles reduce opportunity. It certainly isn't more affordable housing because the costs of those obstacles are ultimately passed on to consumers. It certainly is more choices for consumers because those obstacles limit what is offered in the marketplace.
I was privileged to spend two weeks during May in Houston. The lasting
impression I have is the refreshing openness, tolerance, optimism and commitment
of the Houstonians I met from all walks of life, ­characteristics often
lacking in other urban markets currently suffering housing stress.

Houstonians need to understand and appreciate the reality that your
great city is indeed a global leader with respect to its political culture and
urban governance. And, importantly, that this is being increasingly recognized
both within the United States and internationally.

This may seem a little trite, but freedom breeds benevolence. When individuals are free they regard their fellow citizens as potential allies in their mutual pursuit of happiness. When they can collaborate in the pursuit of their mutual best interests they do so without the arbitrary restrictions of government. However, when citizens are shackled by government controls and regulations, individuals must compete for government favors. They must join special interest groups to influence politicians and bureaucrats.

I completely agree with Mr. Pavletich that "Houstonians need to understand and appreciate the reality that your great city is indeed a global leader with respect to its political culture and urban governance." Houston is a great city because it is a free city. We will remain great only as long as we remain free. And we will be greater when we are freer.