Monday, August 31, 2009

Another Way to Waste Tax Dollars

Apparently it isn't enough that Metro and the city take our money to build boondoggle projects like light rail. They also need to steal from citizens to finance studies to determine the feasibility of moving the facade of an "historic" building that stands in the way of a proposed light rail line.

The Sterling Laundry & Cleaning Company building in the East End was slated for demolition last week. When residents of the area learned of Metro's plans, they raised a stink. According to a Chronicle editorial, ever-meddling council member and nanny Sue Lovell called a meeting to "hash things out".

Because a city park is across the street--and city law prohibits taking park space--Metro can't move the proposed line. One of the residents asked about moving the building's facade to the park, and Metro officials agreed to consider that idea. Tax payers now get to finance the requisite study, and if it goes through, they get to pay to move the facade so that East Enders can stare at a pile of old bricks.

It wasn't enough that Metro took money from tax payers to buy the building. It isn't enough that Metro will build a rail line that few will use, forcing tax payers to subsidize the transportation costs of some Houstonians. Now, Metro will waste more of our money to see if it can appease some vocal area residents and a buttinski politician. And the Chronicle thinks that this is a good thing:

The concerned parties will meet again next week. Usually we'd be appalled by a plan to save only the front skin of a historic building. As consultant Donovan Rypkema once wrote, “Maintaining a four-inch depth of a brick facade is not preservation ... We ought not to settle for this Halloween preservation — saving the mask and throwing away the building.”

But in Houston, where we preserve so little of our past, it's at least something. And that's better than what the neighborhood almost had last week, when the lovely building nearly disappeared completely.

We salute all those working to see that at least a scrap of the East End's history survives.

The Chronicle--like all of the "preservationists"--thinks that old buildings have some kind of inherent value simply because they are old. Sure, they make noises about "historical value" and our "heritage" and similar nonsense while simultaneously ignoring something much older and more significant to our heritage--the Constitution of the United States.

If the age of something is its sole claim to value, the Constitution trumps the Sterling Laundry & Cleaning Company building by about 140 years. So why doesn't the Chronicle propose preserving that document? Why doesn't the Chronicle propose protecting property rights, instead of advocating for land-use controls, sign regulations, and similar violations of our rights?

The truth is, the age of something does not endow it with inherent value. Value is not some mystical quality granted to an item merely because it has existed for a long time.

If the East Enders value the empty building, they are welcome to spend their money to buy it and move it anywhere they wish. But to force tax payers to finance their "hobby" is a gross injustice. The public coffers are not a trough for every pressure group to satisfy their desires.

Anyone truly interested in protecting our heritage would do well to first identify its true nature. Our heritage does not consist of old lumber and bricks, but of freedom--the right of individuals to live their lives without interference from others, so long as they recognize the mutual rights of others. That is something truly worth preserving and protecting.

Friday, August 28, 2009

Mayoral Tidbits

Huntley and Morales
Houston mayoral candidate TJ Huntley has "joined forces" with another mayoral candidate--Roy Morales. The two are the only conservatives in the race, and as Huntley explained (via the KTRK political blog):
We all know that this race isn't about me nor any one particular person. To many of us, it is about restoring the morals back into Houston and about having a Godly leadership that promotes Godly morals and principles. Houston is a city that has an abundance of liberal morals and liberal spending. Having two conservatives running in the same race gets very crowded and often when this happens, the two will split the vote when it's time for the elections. ... With this strategic merging of Republican forces, we have a strong army of voters that can take this city back. All the conservatives and Republicans are now combined onto one ticket along with the Christian and the young voters...
Other than Morales' call for the recently enacted sign ordinance to be repealed, neither has offered many specifics on any issue. Overtly injecting religion into the campaign isn't going to play well with voters, but Republicans seem to have a difficult time learning that lesson. I had considered supporting Morales (I was even invited to the opening of his campaign headquarters last weekend) but I am going to have an extremely difficult time doing so not that he has "joined forces" with the crusading Christian.

Gene Locke
The Houston Association of Realtors (HAR) has joined the Houston Apartment Association Better Government Fund PAC and the Greater Houston Builders Association in endorsing Gene Locke for mayor. HAR's announcement stated (via the KTRK political blog):
Gene had the best vision for where the City of Houston is headed and fully recognized the importance that real estate and homeownership play in the overall economic health of the City.
And what is Locke's vision for real estate? His web site states:
Gene... will also protect neighborhoods from unwanted development and work to ensure that any new development is in harmony with current residents’ desires.
Locke is no different from his two main competitors--Brown and Parker. All want to "protect" neighborhoods and appease noisy neighborhood civic groups. And HAR thinks that this will somehow be good for real estate.

Peter Brown
The "Funk Meister" is now claiming that:
Citizens are investors in Houston and we can make government invest taxpayer money wisely by:
  • Exercising fiscal restraint
  • Establishing a Department of Neighborhoods
  • Making city services and government more accessible online
  • Reforming METRO
The last time that I checked, an investor has a choice as to where he invests his money. The city of Houston does not give me an option--I am forced to "invest" my money in whatever boondoggle the city government can concoct. The only honest context in which Brown can call my tax money an investment is if he is running a Ponzi scheme.

Annise Parker
Parker has unveiled her plan to improve the Bureau of Animal Regulation and Care (cleverly known as BARC):
If elected mayor, I will do everything within my power to make sure BARC becomes a humane and adequately funded no-kill shelter.
BARC is hardly the most pressing issue facing the city. Nor is it even a proper function of the government. Since Parker also wants to spend our money more efficiently (I've yet to hear a candidate want to waste more taxpayer money), she could begin by closing down BARC. That would save taxpayers money--which I would consider quite humane--and give her more time to actually run the city instead of worrying about abandoned pets.

As the mayoral election approaches, I get more and more disgusted with the candidates. We are less than three months away from the election, and they continue to offer us little more than vague generalities about "protecting" neighborhoods, increasing government efficiencies, and similar butt kissing. It's too bad that there isn't a viable candidate who actually supports individual liberty.

Thursday, August 27, 2009

The Mob versus Ashby

In its seemingly endless quest to bring more government control over our lives, on Wednesday the Chronicle chimed in on the city's approval of the latest plans for the Ashby High Rise. In a ploy typical of statists, they cloud the issue with an absurd claim:
The Ashby Street high-rise has become the latest test case in a town without
zoning pitting the rights of single-family homeowners and their civic groups
against condominium developers.

The paper fails to tell us what "rights" are in conflict, though the editorial does state that the high rise is "an out-of-scale project that will significantly impact the residential neighborhoods around it." We can only conclude that, since the homeowners in the surrounding neighborhoods don't like the project, their "rights" are somehow being violated.

This equates rights with desires, and destroys the entire concept of rights. The frustration of the homeowners desires, we are to believe, is a violation of their rights.

In truth, a right is a sanction to freedom of action in a social setting. A right places boundaries on the actions of others--they may not use force to interfere with your actions, just as you may not use force to interfere with their actions. Rights apply only to individuals, and they apply to all individual equally.

Absent a proper definition of rights, the political process is thrown open to pressure groups, each competing to influence the decisions of politicians and bureaucrats. Not surprisingly, the Chronicle does not question this:
For a while it seemed a potent alliance of civic groups representing affluent
and influential residents of Southhampton and other tony Rice University area
neighborhoods might be able to thwart the planned construction of the
residential tower and associated commercial complex. Indeed, if this powerful
interest group could not effectively combat what it perceived as inappropriate
redevelopment on the border of its neighborhoods, what chance would poorer and
less politically connected residents in other parts of the city have?

In other words, if the rich and powerful could not throw their weight around, what hope is there for the "common man"? If those with political influence aren't able to use government coercion, then who can? The Chronicle provides the answer--"financial, real estate and developer interests". In other words, a group with even more political clout. Having tossed individual rights under the bus, the paper can only whine about which group is more effective in influencing politicians.

Despite the Chronicle's claims, there is no conflict between the rights of the developers and the rights of the homeowners. Each has a moral right to use his property as he chooses, so long as he does not use force against others. But the Chronicle and the homeowners do not like the choices being made by the developers. They cannot tolerate the idea that someone might make a decision that they dislike. And they are more than willing to use the power of government to impose their views on others. Like school-yard bullies, they believe that might makes right.

The size of the gang does not determine the propriety of its actions. Civil society is not a contest to see who can amass the largest arsenal of political capital and influence.

Wednesday, August 26, 2009

A Pyrrhic Victory

On Friday the city of Houston gave the developers of the Ashby High Rise permission to proceed. The necessary permits were approved after more than two years and eleven attempts by the developers to meet the city's demands. The developers aren't entirely pleased with this development, telling the Chronicle:

We're still not necessarily pleased with that result because we did have to eliminate uses that we felt made the project more appropriate for the location and enhanced its overall appeal. What the city has approved is not the best project we can build.
The entire story is a travesty. The fact that the developers even had to seek permission to use their property is a gross injustice. Now they will be forced to build a project that isn't what they desire--they must eliminate the retail and office space they had planned, as well as reduce the number of apartments in the building. What was originally proposed to be a mixed-use facility will now be an apartment building.

It is interesting that the city didn't even have the courtesy to inform the developers directly. The city issued a press release and allowed reporters to give the developers the "good" news.

At a time when many Houstonians, including a large number of government officials, are clamoring for denser development and more mixed-use projects, city officials have arbitrarily eliminated one such project.

The neighborhood associations who had fought Ashby aren't willing to give up. They have threatened a lawsuit to stop the project, which will force the developers to incur even further costs. Leslie Miller, who lives in a townhouse next to the site, said:
It's out of place for the neighborhood. It's very disappointing that the city doesn't have the tools at hand to prevent this from happening, not only in our neighborhood but in others throughout the city.
What Ms. Miller ignores is that government is an agency of force, and the only "tool" it has at hand is a gun. And it is a gun that the home owners in the area--with the help of city hall--have wielded in fighting the project. I suspect that the home owners would be extremely reticent to arm themselves and directly attack the developers. But they see nothing wrong with using government as their proxy.

The project approved by the city will likely be less financially appealing to the developers. The loss of retail and office space, along with the reduction in apartments, will certainly reduce their revenues. Their choice will be to absorb this loss, or raise the rents on the remaining spaces. If the former, the city has effectively stolen money from them. If the latter, the housing will be less affordable. In either case, the result will be economically harmful.

We can hardly call this a victory, for the rights of the developers have been under assault from the beginning. They were forced to grovel at the feet of city bureaucrats. They were required to spend their time completing paperwork to satisfy the city's arbitrary demands. They were compelled to act as the city dictated, rather than on the basis of their own judgment.

The Ashby High Rise is hardly the only example of the city placing arbitrary barriers in the way of businessmen. We have seen it with Spec's Liquor. We have seen it with the sign ordinance. We have seen it with tags for taco trucks. In each instance--and numerous others--the government has declared actions that violate the rights of nobody to be illegal.

Mayoral candidates Annise Parker and Peter Brown criticized the city's decision and if elected would combat a repeat of the Ashby controversy by enacting new land-use regulations. Both would continue, and perhaps accelerate, the city's growing anti-business attitude.

Tuesday, August 25, 2009

Two Birds with One Stone

As opponents of ObamaCare point to the socialized health care systems of Great Britain and Canada to illustrate what awaits Americans if they travel the same path, many citizens of those two nations have rushed to defend their systems. A British libertarian--Sean Gabb--recently jumped into the debate, and his article shows what is wrong with both socialized medicine and libertarianism. (HT: Barry Klein)

Gabb readily acknowledges that the British National Health Service (NHS) is founded on compulsion and is unjust:
It is as much an act of theft as if I were to be robbed in the street. The whole present system, therefore, is illegitimate. If it were, as we are continually assured, the “envy of the world”, my opinion would not alter. It is in itself unjust. I resent its existence in my country. I join with Mr. Hannan [a British politician touring America to oppose ObamaCare] in warning the Americans not to accept it for themselves.

But the fact that the NHS is unjust and illegitimate is only a part of the issue according to Gabb. He finds it necessary to point out that America's health care system is heavily regulated and forty million Americans do not have health insurance. Americans, he implies, have no place to demean the NHS:
This should not be taken as a defence of the NHS. I am simply pointing out that it is no worse on balance than the American system. They are differently organised and differently funded. Each has specific advantages and disadvantages.

To Gabb, there is no difference between nationalized health care and a system with some elements of freedom--they are just "differently organized". There are, he tells us, advantages to a socialized system:
If I contrast what I am told about the American system with what I know from personal experience about the British, the NHS is not really that bad. In December 2007, my wife needed an emergency caesarean. This was performed by the NHS. At all times, we were kept informed of our options and our legal rights. I was allowed to stand beside my wife in the operating theatre. I was then allowed to sit with my wife and daughter until gone midnight... While there were visiting hours, I was allowed to come and go as I pleased. The quality of treatment was first class. Apart from the flowers and chocolates and bottles of wine that I chose to lavish on the medical staff when we left, there was no final bill for any of this. About ten years ago, the father of my best friend died of cancer. There may be more effective cancer treatments than the medical establishment prefers to see provided. But within the terms set by the medical establishment, he had excellent treatment. When all else had failed, he was allowed to die in peace under a broad umbrella of opiates. Another of my friends was diagnosed with prostate cancer about seven years ago... He remains well and has no complaints about the NHS.
According to Gabb, some people do receive decent health care in Britain for "free". So? That doesn't change the nature of the NHS or the fact that British doctors are slaves of the state. That some individuals receive good health care is completely irrelevant. And it certainly isn't free--the cost is the freedom and lives of doctors and patients. Gabb is a typical libertarian--despite his calls for a free market, he is essentially a statist. He believes that government control of health care has "advantages".

It is no surprise then, when Gabb attacks property rights:
I believe that all drug patent laws should be repealed. These do nothing to encourage innovation, but are simply a means by which well-connected drug companies extract huge rents from the rest of us.

This is both morally evil and economically illiterate. A drug company has a moral right to any products it develops. If it has no protection from competitors stealing its products, what possible motivation would it have for investing millions of dollars in the research and development of new drugs? Patent laws, by protecting property rights, are precisely what do encourage innovation. But Gabb--like libertarians in general--wants to be "free" to engage in any whim. He wants no restrictions, no standards, and no principles to stand in his way.

Gabb believes that any restriction on one's actions is an act of force. If patent laws prohibit a company from making a product that it did not invent, that is an act of force. The rights of drug companies--who invest millions of dollars and years of research to develop and test their products--should be discarded, according to Gabb.

If the rights of drug makers can be discarded so easily, the rights of all citizens will not be far behind. Anyone who can find any type of "advantage" in a system that enslaves doctors is not a friend of liberty. Any claims to the contrary are just empty words.

Monday, August 24, 2009

Altruism and the Health Care Police

Altruism--the dominant morality of our culture--holds that we are our brother's keeper, that the individual must place the welfare of others before his own, that we must sacrifice for the benefit of others. We see this manifested in the political arena in a multitude of ways--welfare, social security, public education, and public health care programs are but a few examples. Each of these is justified on the basis of need, and some individuals are forced to provide for the needs and welfare of others.

A less obvious consequence of altruism often lurks just below the surface of these, and other issues. Take the growing concern with obesity for example.

The obvious connection between altruism and obesity is publicly supported health care. If the taxpayer is forced to pay for the health care of others, and our desire is to reduce health care costs, then it is proper to take measures to reduce obesity. But altruism demands meddling in the dietary and lifestyle choices of individuals for other reasons.

If concern for the welfare of others is a moral duty, then we must do more than simply pay for the health care of the needy. We must also take steps to improve their overall health. In other words, we should not only take care of their illness, but we should also try to prevent that illness. Since obesity is one of the primary health risks that is relatively easy to correct, we--meaning government--have a moral responsibility to combat obesity. After all, it is for the good of the obese, whether they know it or not. We--meaning government--must look out for them, and even more so when they lack the willpower or desire to act responsibly. We--meaning government--are their keeper, and they obviously have a need for more control over their actions. We--meaning government--must exercise that control.

The demands of altruism go deeper than just our actions. Our actions are determined by our ideas and conclusions. We act on the basis of what we believe to be true. But if we must place the welfare and interests of others before our own, our own ideas and conclusions are irrelevant. Altruism demands that we act, not on the basis of the contents of our own mind, but on the basis of what others declare to be a need. In the physical realm we must place the interests and values of others before our own; in the intellectual realm we must also place the thoughts and ideas of others before our own.

In every aspect of our lives, altruism demands that we cast aside our own desires and our own judgment. Altruism demands that we deny our self, that we become selfless.

The growing calls for controls and restrictions on trans fats, sodas, and other "bad" foods are a logical consequence of altruism. And since virtually every action we take has some impact on our health, it doesn't stop with what we put in our mouth. It is no coincidence that health care "reform" also includes calls for more emphasis on exercise. It will not be long before mandatory exercise programs will be discussed, and a sedentary lifestyle will possibly become a crime.

So long as altruism is accepted as the standard of morality, this is the direction we are going. So long as the needs and interests of others supersede your own, logic demands that government expand its control over your life. If you want to sit on the couch watching Oprah and eating potato chips all day long, you must put aside your own "selfish" desires and go to the gym--or jail.

You are not your brother's keeper. You are responsible for nobody but yourself (and those you voluntarily choose to help and support). Until you accept that, and everything it implies, you should not be surprised when government dictates what you eat. You should not be surprised that government demands that you practice what you preach.

Friday, August 21, 2009

"Perfect" Competition

Economists and pundits like to defend certain government interventions--such as the regulation of utilities and the provision of roads--on the grounds that "perfect" competition cannot exist for certain services. The argument is similar to that used to defend "natural" monopolies--in the absence of government intervention, the "public interest" cannot be served.

According to Wikipedia, "perfect" competition consists of:
  • Many buyers/Many Sellers – Many consumers with the willingness and ability to buy the product at a certain price, many producers with the willingness and ability to supply the product at a certain price.
  • Low-Entry/Exit Barriers – It is relatively easy to enter or exit as a business in a perfectly competitive market.
  • Perfect Information - Prices are assumed to be known to all consumers and producers.
  • Transactions are Costless - Buyers and sellers incur no costs in making an exchange.
  • Firms Aim to Maximize Profits - Firms aim to sell where marginal costs meet marginal revenue, where they generate the most profit.
  • Homogeneous Products – The characteristics of any given market good or service do not vary across suppliers.
When these conditions do not exist, it is often argued that government must intervene to protect consumers. But even a cursory review of this criteria would reveal that no product or service does, or can, meet this standard. For example, virtually no two products are exactly the same (except perhaps for items like paper clips and thumb tacks). Or, professional athletics certainly have high entry barriers, yet they are very competitive.

The truth is, the demand for "perfect" competition is an example of the fallacy of rewriting reality:
Unable to determine what they can or cannot change, some men attempt to “rewrite reality,” i.e., to alter the nature of the metaphysically given. Some dream of a universe in which man experiences nothing but happiness—no pain, no frustration, no illness—and wonder why they lose the desire to improve their life on earth. Some feel that they would be brave, honest, ambitious in a world where everyone automatically shared these virtues—but not in the world as it is. Some dread the thought of eventual death—and never undertake the task of living.
Those who clamor for "perfect" competition dream of a world that is much different from what actually exists. They demand omniscience on the part of consumers and producers (perfect information). They demand an absence of standards (low entry barriers). They demand many sellers, which automatically eliminates innovation and new products (homogeneous products). And when they do not find the world of their dreams, they demand that the government create that world. Their demands and dreams however, will not alter reality--not individually and not collectively.

The desire for "perfect" competition is the desire for a Garden of Eden, a panacea in which individuals do not need to exert effort or thought. It is a fantasy. And the attempts to make it real will ultimately result in a nightmare.

Thursday, August 20, 2009

Lies, Misrepresentations, and Scare Tactics

During the debate over zoning in Houston in the early 1990s I sponsored a booth at a convention on Houston development. Among the literature we distributed was a pamphlet that described how zoning operates in other cities. One of the leading proponents of zoning picked up one of our pamphlets and began reading it as he walked away. He quickly returned, accusing my organization of spreading lies.

The pamphlet had stated that under zoning all land-use in the city would fall under the control and dictates of the zoning board. This zoning advocate was irate--the proposed zoning ordinance did not call for a zoning board. Instead, land-use decisions would be decided by city council. Because we had mislabeled the political entity that would have dictatorial powers over land use in Houston, our entire argument was regarded as a lie.

In the aftermath of the referendum on that zoning proposal, its advocates cried foul. Opponents, they argued, resorted to lies, misrepresentations, and scare tactics because, among other things, we pointed to examples of corruption, racism, and economic decline associated with zoning in other cities. That would not happen in Houston, they insisted, because our fair city would have "Houston-style" zoning, and therefore, my arguments were invalid.

This same attitude is now being exhibited by proponents of ObamaCare. Claims that the proposed health care reform will result in "death panels", drive private insurers out of business, and lead to rationing are dismissed with angry cries of lies, misrepresentations, and scare tactics.

When I heard these claims in regard to zoning, I concluded that zoning proponents were simply sore losers who were blinded by their power lust. And while I still think that there is some truth in this, the real cause is much deeper and more profound. The real cause is pragmatism, which holds that
there is no such thing as an objective reality, men’s metaphysical choice is whether the selfish, dictatorial whims of an individual or the democratic whims of a collective are to shape that plastic goo which the ignorant call “reality,” therefore this school decided that objectivity consists of collective subjectivism—that knowledge is to be gained by means of public polls among special elites of “competent investigators” who can “predict and control” reality—that whatever people wish to be true, is true, whatever people wish to exist, does exist, and anyone who holds any firm convictions of his own is an arbitrary, mystic dogmatist, since reality is indeterminate and people determine its actual nature. [emphasis added]
This is the cause and source of the anger directed at anyone who asserts his own independent judgment. How dare anyone be so naive and arrogant as to believe that his own judgment is superior to the mob. How dare anyone have the audacity to reach a conclusion without consulting the latest opinion polls. How dare anyone think for himself.

On every level, an independent thinker is a slap in the face of the pragmatist. The independent thinker asserts that reality is objective, not a creation of the "collective consciousness". The independent thinker asserts that he can learn the facts of reality, and need not consult the mob to do so. The independent thinker asserts his moral right to live for his own sake, rather than sacrifice his life to the demands of the group. Both physically and intellectually, the independent thinker asserts his sovereignty. Such an assertion denies everything the pragmatist believes about the world and himself. Having surrendered his own mind to the collective, he loathes anyone who has not done likewise.

Zoning proponents conducted hearing after hearing, soliciting the input of the public in order to build a consensus. They posed as saviors of the city, promising a glorious future of economic growth, "protected" neighborhoods, and an improved "quality of life". But a recalcitrant few disputed the consensus, denied their claims, and stood on principle. We were attacked as liars and fear mongers, just as the opponents of ObamaCare are attacked today.

Pragmatism blinds the statist to the consequences of his actions. (Not that he really cares, because intentions are all that really matter.) We cannot discuss how zoning operates in Detroit, or Miami, or New York City, because they aren't Houston. We cannot predict how zoning will play out in Houston--nobody can predict the future. We cannot state with certainty that Houston will experience the horrors that plague other cities with zoning. These are all based on theory, and to the pragmatist, all that matters is the specific, concrete issue of the moment.

To the pragmatic proponents of zoning, a claim that the zoning board would control land-use is a lie. A claim that zoning is used as a political tool is a misrepresentation. A claim that zoning increases the cost of housing is a scare tactic. They could not, and cannot, refute the factual evidence that damns zoning (and ObamaCare), and so they resort to the tactics of child. That anyone takes them seriously is what is truly scary.

Wednesday, August 19, 2009

"General Welfare" and Health Care

I seldom read liberal blogs because I have better things to do with my time. And they generally make my head hurt, which is an experience I try to avoid. On occasion, I will read one, usually to find an example of some point I want to make. Thus it was that I went to Half Empty to read why health care is a constitutional right.

The post's title was my first clue regarding what I would read. The blog's tag line was my second clue:
Expect the worse. That way you can be pleasantly surprised when the worst fails to occur.
This is the type of cynical attitude that we have come to expect from the Left. Life is a tortuous struggle filled with suffering, and then you die. Any success you somehow manage to achieve will only be temporary, because soon the rich and powerful will take it all away. But this isn't the point of my post.

Half Empty cites an article on Politico, in which a self-described “dumb southern Iowa redneck” asks Sen. Chuck Grassley to identify the section of the Constitution that states that health care is a right. Citing the Preamble of the Constitution, Half Empty writes:
So what, I ask, is the argument against having, as a constitutional right, the right to health care when it is right there in the Preamble that one of the purposes of the constitution is to “promote the general welfare” of the people.
This, along with quoting one paragraph from another web site, is the entirety of his argument. He closes by asking:
So, dumb Iowa redneck, is the question answered?
Actually, it isn't. Apparently, Half Empty is completely empty of knowledge regarding the Constitution, and has never read anything by James Madison on the subject. Madison, the Father of the Constitution, knows a thing or two about that document and the "general welfare" clause:
If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, every thing, from the highest object of state legislation down to the most minute object of police, would be thrown under the power of Congress.... Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America."
Madison correctly understood that the "general welfare" clause could be interpreted to mean anything and everything; it could be used to justify any government program. To give that clause such broad and undefined meaning would be to render the Constitution itself irrelevant, which is precisely what Half Empty proposes.

Anyone who wishes to comment on the "general welfare" clause would do well to read the Federalist Papers, as well as Madison's notes on the Constitutional Convention. Both make abundantly clear the meaning and intent of that clause. For example, in Federalist #41 Madison explained the inclusion of the "general welfare" clause in the Preamble:
For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural or more common than first to use a general phrase, and then to explain and qualify by an enumeration of the particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity ... what would have been thought of that assembly, if, attaching themselves to these general expressions and disregarding the specifications which limit their import, they had exercised an unlimited power of providing for the general welfare?
There are many, many more instances in which Madison and other Founders explained the meaning and intent of the "general welfare" clause. But the meaning and intent of the Founders is of no concern to the Left--they regard the Constitution as a living, breathing document that should be interpreted according the the whims of the moment. They don't want to be "confined" by such things as principles. They believe that what was true yesterday, let alone more than 200 years ago, could not possibly be true today.

The fact is, the purpose of the Constitution was to protect individuals from arbitrary government dictates. It was not a grant of unlimited powers, subject to the changing tastes of the time, or the interpretation of power lusters. It was a limitation on the powers of government, and it enumerated those powers, reserving all others to the states and individuals.

Liberals, as well as many conservatives, do not want to be constrained by such limitations. They want unbridled power to dictate and control. If they have to misrepresent the words of America's founding heroes, so be it. If they have to invent "rights", no problem. To them, it's just a game, and individuals are dispensable tokens.

Tuesday, August 18, 2009

A Dog and Pony Show

In June I mentioned that my neighborhood had applied for the designation of "Prohibited Yard Parking Requirement Area". The designation will prohibit parking vehicles in one's yard, and violators will be subject to a fine of $150 per offense. I protested the application, and the protest hearing was held last week. It was a farce, albeit an educational farce. So I suppose that I gained some value from the escapade.

The hearing was opened with a declaration that if the requirements established in the enabling ordinance had been met, then the application would be approved. The requirements include proper notification to property owners, a neighborhood of at least five contiguous blocks, and a few other items. I immediately realized that my protest on moral grounds would have no impact.
The president of the civic association spoke first. He made a number of claims, including the negative environmental impact of parking in the yard. Since we had previously been told that we couldn't react to any speaker's comments, I contained my laughter.

I was called next and stated my opposition to the entire ordinance. I was allowed only three minutes to speak, which required me to modify my comments--I had prepared to speak for five minutes. However, I could have spoken for five hours and it wouldn't have mattered. The hearing officer was there for the sole purpose of determining if the requirements had been met. Regardless, the officer, her smug minions, and the audience got to hear an abbreviated defense of property rights.

After I spoke, two members of the audience thanked me for my comments and asked for contact information. So, at a minimum I provided them with some intellectual ammunition.

Two other property owners spoke after me, both in opposition to the designation. They asserted that the civic association had not met the requirements and provided documentation to support their claim. I hold some hope that their testimony might carry the day.

I stayed for a while to listen to the testimony regarding another neighborhood. The president of the Westbury civic association declared that only 17 residents out of 5,000 had protested the application for their neighborhood. She concluded that the residents were clearly in favor of the designation.

I do not know the president, but it is clear that logic is not her strong suit. One cannot validly determine the position of those who did not protest. They may be apathetic on the issue. Or, they may be opposed, but did not file a protest. The only valid conclusion one can reach regarding their silence is that they remained silent. And that certainly does not imply support for the designation.

But that was not the most interesting part of the hearing. One resident claimed that the civic association had failed to meet the requirements--their signs had been up only two days rather than the specified time frame (they were to remain up until the hearing). The hearing officer replied that the department was aware that opponents of the ordinance might remove the signs to create a challengable offense. The department head had "the discretion to change the rules, or create new rules" as she determined appropriate. Since replacing the signs would be expensive, the department waived that requirement.

There was no evidence presented or implied that opponents had removed the signs. But the mere fact that opponents could do so was deemed sufficient to simply waive the law. What in the hell is the purpose of the law then, if the department head can arbitrarily waive it? What is the purpose of any law if the person charged with its enforcement can change it at her sole discretion? This is not the rule of law--it is the rule of whim.

Numerous members of the Westbury civic association were in attendance to voice their support, and their testimony revealed the power lusting, busybody attitude underlying this ordinance. One of the members testified that their civic association had pushed city council to pass the ordinance. I do not know how many other civic clubs did the same, but the stories in the Chronicle at the time indicated the number was relatively small

What this means is that a small number of people successfully lobbied for an ordinance that enabled them and their ilk to become tyrants within their neighborhood. In passing the ordinance, city council granted them the power to impose their values upon their neighbors with the force of government at their back.

One Westbury resident captured their spirit perfectly. She proclaimed that she could not imagine anyone not realizing that parking in their yard is simply wrong, but obviously some people are devoid of that elementary knowledge. The designation is needed, she implied, to put these uncouth delinquents in their place.

As I noted in my testimony, I abhor neighbors parking in their yard. There are many other activities that I also abhor, like not maintaining one's property or poor taste in landscaping. But such activities do not violate my rights, nor does parking in one's own yard. Those who wish to use government force to ban that practice--or anything else that does not violate anyone's rights--are guilty of a far worse sin than those who park in the yard.

The entire hearing was a meaningless exercise. Short of some technical violation of the ordinance's requirements, acceptance of the application was a foregone conclusion and another law that violates our rights will be jammed down our throats. City officials can correctly claim that they sought public input, even though they had little interest in considering anything we had to say. They followed the prescribed process.

This is democracy in action. A noisy mob lobbied city council for the power to force their views and values on others. Proclaiming themselves spokesmen for the "public interest", they sought and received, government approval to use brute force against their neighbors. They wouldn't think of marching up to their neighbor and making demands at the point of a gun, but if government acts as their proxy they are filled with pride at their "success". But the fact that government is doing their dirty work doesn't change the nature or the immorality of their thuggery.

Monday, August 17, 2009

The "Public Option" and Education

Proponents of ObamaCare argue that offering a "public option" will not prevent individuals or businesses from obtaining private insurance. Let the "market" decide, they chortle, while ignoring that any service that is subsidized by the government is not really competing in the marketplace. A recent article in the Chronicle illustrates this fact:
Several Houston-area public school leaders said they are picking up dozens of new students from families who can no longer afford private school tuition, which can approach $20,000 a year for high school students.

While many parents prefer private education, financial difficulties are making the "public option" more attractive. Faced with the choice between paying tuition or receiving "free" education, many parents choosing the less expensive, though inferior option.

This is precisely what will occur with health care. Businesses who continue to offer private insurance to their employees will find their costs higher than competitors who don't. Financial pressures will drive more and more businesses to the "public option". Insurance companies, who reportedly will be prohibited from writing new policies, will find their customer base steadily decreasing. They will die a slow death.

Consider a few of the restrictions that will be imposed on private insurance companies:
  • Their policies must be approved by government
  • Changes in a policy will render it unacceptable
  • Companies cannot write new policies
If such restrictions were imposed on private schools, they too would be condemned to a slow death. Their curriculum would require government approval, and any changes would render the school illegal. The schools could not attract new students, so as students graduate the schools will have fewer and fewer customers--and ultimately none.

But to recognize this, one must think in principles. Only by thinking in principles can one connect seemingly disparate concrete issues--such as health care and education. Only by thinking in principles can one project the long-term consequences of a particular policy. Proponents of ObamaCare reject principles.

They think that they can correctly say that health care "reform" will not eliminate private insurance, for the proposed legislation does not do so explicitly. Any claim based on principles is rejected as a lie. Any claim that extends beyond the immediate, concrete wording of the proposed legislation is called disinformation.

To claim that the "public option" will compete with private insurers is equally unprincipled. It is in fact a "stolen concept":
The “stolen concept” fallacy, first identified by Ayn Rand, is the fallacy of using a concept while denying the validity of its genetic roots, i.e., of an earlier concept(s) on which it logically depends.

While offering the "public option" the government will shackle private insurers with a growing list of regulations and controls. Private companies will be at the complete mercy of government bureaucrats, whose edicts will be unchallengeable in court. And this, we are to believe, is a competition. Most would recognize the absurdity of a "competition" in which chains were placed around the feet of Michael Phelps, but when applied to a business the implications are completely evaded.

We can learn valuable lessons from the "public option" in education. To do so, we must look beyond the stated intentions and vague promises. We must use the distinctively human form of cognition--thinking in principles.

Public education is a well-documented failure. Certainly there are exceptions, but they are exceptions. The same will occur with health care, because the underlying principles are the same. The same cause will lead to the same effect, or in computer lingo, garbage in, garbage out.

Friday, August 14, 2009

Tax Holidays

I am simultaneously amused and disgusted with politicians who do verbal gymnastics to support a particular position while ignoring its implications. Tax holidays are one example.

Fifteen states and the District of Columbia now offer tax holidays in the weeks leading up to the start of the school year. The tax break applies to most clothing and school supplies. According to one tax analyst:
Although states are facing serious budget issues, they seem to be reluctant to cancel their tax holidays as a way to increase revenue. In fact, ‘hard times’ may be seen as a justification for these holidays, both as ‘relief’ for hard-pressed consumers and ‘stimulus’ for hard-pressed retailers.
This is a common justification for tax holidays--they give a break to consumers and stimulate economic activity. If these claims are true, and I have no reason to doubt that they are, why are they limited to a few days of the year, and only to specific items? If tax holidays are good for businesses and consumers, then why not create more good by expanding the tax holidays?

Part of the reason is that some people don't think that tax holidays are good.

During the Presidential primaries in 2008 John McCain and Hillary Clinton proposed a gas tax holiday. CNN quoted Tom Kloza, chief oil analyst at the research firm Oil Price Information Service:
It's a quick fix for people who believe cheap gas is their birthright. It's not a prudent thing to do.

Kloza said the amount of money motorists would save would do little to stimulate economic growth. The revenue from the gas tax is much needed for road repairs, he added.

This response is typical of critics of tax holidays, and ironically, it is based on the same premise embraced by many advocates of tax holidays.

Tax holidays, whether it is for school supplies, or gasoline, or guns (South Carolina has such a tax holiday), the purpose is the same--to encourage consumers to spend money on certain items. It is a state mandated sale of sorts, albeit a rather marginal sale (in Houston the sales tax is 8.125%).

Tax holidays are used to manipulate consumers; they are an incentive--or more accurately, the removal of a penalty--to engage in activities the government desires. They advocates of tax holidays want to control the behavior of individuals, and they use the carrot of tax holidays--rather than the stick of regulations and prohibitions--to achieve that control.

Critics of tax holidays, such as Tom Kloza, also want to control individual behavior, but to different ends. He prefers to take money from taxpayers to use for specific purposes, like building roads. Rather than dangle carrots, he prefers to use the stick of taxation.

I am certainly in favor of virtually any plan that allows individuals to keep more of their money, and tax holidays are no exception. But I would much prefer to see a general reduction in taxation--and indeed its eventual elimination--rather than the manipulation inherent in tax holidays.

Thursday, August 13, 2009

The City We Deserve

A recent piece on the KHOU web site asks if zoning is in Houston's future. While the article does not come to a definitive conclusion, it implies that more restrictive land-use controls will be necessary. Or, as urban planner David Crossley says:

I mean, everybody gets the general concept—you can either create the future you want or you’ll get the future you deserve.

By "create", Crossley means government planning to control development. Though he shuns the "z-word", Crossley makes it clear that government should be more involved in land-use:

It isn’t zoning that’s the issue. It’s that there is no plan, no comprehensive plan for the future.

Let us assume that Crossley is right, and Houston needs a comprehensive plan. Whose plan will be used? There is no shortage of pundits sharing their vision of what Houston should look like in the future. These plans often conflict, so we will be left with the crucial decision on choosing one plan to the exclusion of all other plans. Equally important is the issue of implementation--a plan that isn't implemented is merely a pipe dream.

City officials will have two basic options for developing and implementing a plan. The first is to hire experts--such as Crossley--to develop a plan and then shove it down our throats. Or, they could hold an endless series of hearings, meetings, and other gatherings to solicit public input. Then, after more meetings and compromises, they could shove that plan down our throats. No matter which route city officials take to develop a plan, its implementation must necessarily require its forced imposition upon all Houstonians.

Crossley, who has been briefing mayoral candidates on the issue, argues that Houston must encourage denser development and offer better public transportation. This is a plan shared by many. Others--such as the Southampton and Boulevard Oaks civic clubs--are not so keen on denser development. And the home owners and businesses along Richmond Avenue aren't happy about light rail rumbling past their property. In short, there never has been and never will be a city-wide consensus on which plan to adopt.

Advocates of zoning (or planning, as they now call it) warn Houstonians that without government control over land-use the city will plunge into debauchery and decline. They have been shouting this refrain for nearly ninety years, and it is no truer today than it was when zoning was first proposed in the 1920s. If their claims are true, why has Houston's population steadily grown? Why did Houston lead the nation in job growth in 2008? If their claims are true, why has Houston prospered more than any other city in America?

The fact is, Houston has shown a greater respect for property rights than any other city--Houstonians have rejected zoning three times. Our economic growth, low cost of living, and affordable housing are the practical benefits of our relative freedom in land use. Because Houstonians have rejected government control over all land use, today we do enjoy the city we deserve.

Wednesday, August 12, 2009

Evasion in the Health Care Debate

Sunday's Chronicle carried an OpEd article that demonstrates the equivocation, gross evasion, and emotionalism dominating the appeals to nationalize health care. In the article, Dr. John C. Baldwin writes:

In the continuing absence of universal access to health care in the U.S., terror abounds. The terror of being uninsured if you become ill, the terror of personal bankruptcy due to health care costs, the terror of pre-existing conditions that prevent obtaining health insurance — all have led to a state of fear in this country. Having reconsidered the previous administration's “war on terror” that led to so much abuse of power and loss of domestic freedoms and so little success in the Middle East, we should now commence a national effort to combat this real form of terror in our own country.
Extending his argument, Dr. Baldwin claims that "health care security" is as important as national security. We cannot field an army without a healthy populace. We cannot support that army without a healthy work force. Dropping context further, he argues that we would not agree to have our defense services provided by private companies, and therefore, it makes no sense to allow health care to be provided by private companies. To Dr. Baldwin, fear is fear. Its source, nature, and legitimacy are irrelevant. Protecting Americans from calculating mass murderers--which he implies is not a real threat--is the same as protecting them from disease.

National defense is a proper function of government, as it is the means by which government protects individual rights from foreign threats. But to argue that "health care security" is equivalent to national defense is to ignore the source and meaning of those rights.

Rights pertain to action--they are a sanction to act without interference from others, so long as one respects the mutual rights of others. Rights protect one's freedom to act as one chooses, to select one's values and act to attain them. Rights place boundaries on others; they may not interfere with your actions, just as their rights prohibit you from interfering with theirs.

Rights do not guarantee success. They do not guarantee that we will attain the objects of our desires, only that we will be free to take the necessary actions. There is no such thing as a right to haircuts, television sets, Internet connections, or health care. There is only the right to take the actions to acquire these values through voluntary trade with those who produce such values.

Claims that health care is a right obliterates the entire concept of rights. As Dr. Leonard Peikoff writes in Health Care is Not a Right:
You are entitled to something, the politicians say, simply because it exists and you want or need it--period. You are entitled to be given it by the government. Where does the government get it from? What does the government have to do to private citizens--to their individual rights--to their real rights--in order to carry out the promise of showering free services on the people?

Both theory and practice provide the answers: The government must take from some to give to others. The government must force doctors to provide their services to those who have not earned them. Doctors must become servants of the state.

Decrying the high cost of health care in America, Dr. Baldwin argues that we must reform the system to reward "better decisions" rather than the number of procedures performed. He doesn't tell us who will make these decisions or by what standard, but he makes it clear that it won't be patients and their doctors. Doctors, he tells us, are motivated by "perverse economic incentives". Removing these incentives will drive down health care costs and improve quality.

This argument evades basic economic truths. Nationalized health care will increase the demand for health care--when a product or service is provided for "free" demand always increases. Indeed, increasing access to health care--which means increasing demand--is a common refrain among universal coverage advocates.

At the same time, these advocates want to reduce costs and remove decision making from doctors. The results will be predictable. Cost reductions in the face of soaring demand can only be achieved by dramatically reducing the procedures performed--that is, rationing.

While these economic arguments against nationalized health care are important, they are not the fundamental reason to oppose a government take over. The fundamental reason is moral--the moral right of doctors and patients to act according to their own judgment. And this is precisely what Dr. Baldwin and "reform" advocates are explicitly attacking. They seek to "free" patients and doctors from economically based decisions, and drive both into the strangling hands of government bureaucrats.

Tuesday, August 11, 2009

A Plan for Crime

Sunday's Chronicle carries a story on the four major candidates for mayor, and their positions on crime. Not surprisingly, all are opposed to crime and pledge to take actions to reduce it. Aside from that not so startling revelation, the only aspect of the article that is informative is the absolute lack of plans on the part of any of the candidates.

Sure, they all spout off vague generalities, like hiring more officers and reducing inefficiencies to pay for them, but this hardly qualifies as a plan. As a public service--which is motivated by my selfish desire to be free--I will once again put forth a specific plan to reduce violent crime in Houston.

I would agree that reducing inefficiencies is a proper step, but in a much different fashion than the candidates endorse. Perhaps the most effective way to reduce inefficiencies is within the police department itself. Houston's police are charged with enforcing myriad laws that involve voluntary, peaceful activities between consenting adults. If the measure of efficiency is the most effective use of resources, arresting individuals for actions that do not violate the rights of anyone is horribly inefficient.

I do not have solid numbers to indicate how much police effort is involved in apprehending individuals for drug offenses, prostitution, and similar "crimes", but I think it is safe to say that it is substantial. My own limited exposure to the criminal justice system indicates that more than half of all the cases involve drugs. Rather than spend valuable resources protecting individuals from their own self-destructive actions, the police should be spending their time fighting real crime.

Further savings can be achieved by de-criminalizing other activities currently regulated by the city, such as building codes, restrictions on signs, tags on taco trucks, and a myriad other ordinances that violate the rights of individuals. In each instance, significant cost savings can be achieved and the city will take important steps towards recognizing individual liberty.

Of course, such measures will not be considered by any of the mayoral candidates. They embrace the idea that government should regulate individual behavior, and only differ in the extent and specific details of that regulation.

While improving government efficiency certainly has merit, it is really a non-essential issue. If one endorses policies that violate individual rights--as all regulations do--greater efficiency simply means more effective methods for violating rights. This is hardly a goal to aspire to.

Houston's city budget is bloated, not because of inefficiencies, but because the city government is engaged in activities far beyond its proper functions. Seeking minor cost savings is no different from having a diet soda with a double-meat burger and supersized order of fries. It is a mere pretense. The few calories saved by drinking a diet soda pale in comparison to the gluttony of the food. The obese must change their behavior if they desire to lose weight and regain their health. City government must do likewise if it is to truly fight crime--it must restrict itself to protecting our rights.

As it is now, most Houstonians probably violate one law or another on a routine basis without even knowing about it. For example, even our esteemed mayor was guilty of having an unregistered bicycle. If the mayor is unaware of the law, how is the average citizen to know? And why are our police charged with enforcing such absurdities?

If the mayoral candidates truly wish to do something constructive about crime, they would do well to begin by defining it. Until they do, they will be unable to control crime and average citizens will find their most mundane activities criminalized. And that is a crime that our next mayor should address.

Monday, August 10, 2009

Taking Us for a Ride

What happens if you develop a unique business idea and successfully implement it? If you are Erik Ibarra you get a stream of tickets from the city of Houston.

Ibarra owns Rev Houston, a downtown shuttle service that uses electric carts to ferry passengers around the central business district. The service is entirely free, and the company depends on tips for revenue. But the city calls Rev Houston a taxi service, and has repeatedly cited the company for numerous violations of taxi regulations.

Tina Paez, the city's deputy director of administration and regulatory affairs, told the Chronicle:

If they charge a fare or accept a gratuity, they are a vehicle for hire. Even though they don't technically charge, they come under the ordinance.
So, if I take an elderly neighbor to the store each week and she gives me some money for gas and my time, I would be considered a taxi by the city. A voluntary transaction between two individuals should not be the concern of the city.

Among the offenses cited by the city is the absence of a fire extinguisher on the electric vehicles, which carry no combustible liquids. Another offense is the absence of a taxi meter, which is unnecessary because the company doesn't charge a fee. Paez justifies these absurdities in typical fashion:
She said city officials are concerned with the shuttles meeting minimum safety standards, tourists being taken advantage of, and making sure drivers have criminal background checks.
Paez fails to cite a single instance in which a tourist, or anyone for that matter, has been taken advantage of by the company. Rather than address actual instances of fraud or coercion, the city treats Rev Houston as a criminal enterprise for the mere fact of existing. This is simply a perverse twist on the equally perverse concept of original sin.

The city's true motives have come under question, since Ibarra and his brother won a lawsuit against the county in 2008. But whether the city is exacting revenge or not, it is resorting to strong-arm tactics to harass Ibarra for activities that do not violate the rights of anyone.

The city is not alone in its desire to put Ibarra out of business:

Houston Yellow Cab President Raymond Turner has complained to Paez's office, as well as City Council members. It is a matter of fairness, not cost, he said.

“The taxicab industry is highly regulated by cities,” he said. “If they allow these vehicles for hire, it's basically ignoring city ordinance. It's allowing someone to operate a vehicle outside the law.”

Rather than question the entire premise of city regulation, Turner seeks to use those regulations to his advantage. Rather than demand the freedom to operate his business as he deems appropriate, Turner demands that chains be put around the neck of others. The city's taxi regulations are a barrier to entry, and existing companies like Yellow Cab can use those barriers to stifle competition.

Paez argues that Ibarra can simply get a jitney permit and the issue will go away. Ibarra disagrees, pointing out that jitneys operate a set route--set by the city--and his service goes where passengers desire, not to some arbitrary point selected by bureaucrats. Further, the city has never issued a jitney permit.

While taxi regulations are hardly the most important issue facing Houston, the principle underlying them is. Individuals have a moral right to take the actions necessary to sustain and enjoy their lives, so long as they respect the mutual rights of others. Government's sole purpose is the protection of this right.

Government regulations, by their very nature, violate the rights of individuals by mandating their actions. Regulations are pre-emptive, treating certain actions as criminal despite the judgment of the individuals involved. The truth is, if one individual chooses to offer transportation services and another chooses to purchase those services, it is no business of the city.

We don't need city hall telling us who can transport us and who can't. We do need city hall to protect our right to make that decision. And until we can, city hall will continue to take us for a ride down the road to statism.

Friday, August 7, 2009

My Brother's Children's Keeper

Barack Obama has repeatedly told us that we are our brother's keeper. Now the state of Texas is telling us that we are also our brother's children's keeper. According to the Chronicle, Texas taxpayers will soon be on the hook for $2.1 billion to pay for the college education of Texas children:
This is not a free education for them. Their parents and grandparents bought state-guaranteed prepaid college education plans between 1996 and 2003 known as the Texas Tomorrow Fund, later renamed the Texas Guaranteed Tuition Plan.

Now the fund is nearly broke, a victim of tuition deregulation at state universities and busts in the financial markets that were supposed to provide the investment returns to keep the fund solvent.

Comptroller Susan Combs, whose office administers the fund, said the plans are guaranteed by the full faith and credit of the state. So, no parent whose child has a college plan has to worry about it being honored.
This means that taxpayers will be asked forced to make up the difference. The fund was created in 1995 at the urging of then-Comptroller John Sharp, who is now a Democratic candidate for the U.S. Senate. While some lawmakers warned that the plan was a train wreck waiting to happen in 1995, Sharp blames Combs for the shortfall, even though her predecessor had cut off new enrollment in the plan in 2003. Combs formally closed the program when she took office in 2007.
Sharp said the original prepaid tuition program has financial problems because Combs closed it to new enrollment. Sharp said pensions and Social Security need new members to remain solvent over long periods.

Combs has correctly responded that this is nothing more than a Ponzi scheme. And as is generally the case in government sponsored Ponzi schemes, the masterminds are off to bigger and better things by the time the scheme falls apart. Putting Texas taxpayers on the hook for billions apparently isn't enough for Sharp, who is now seeking the power to do the same to taxpayers across the country.

But just to demonstrate that Washington doesn't hold a monopoly on repeating its mistakes, lawmakers started a new plan--the Texas Tuition Promise Fund--in 2007. Of course, when that plan goes belly up, and it will, its advocates will also point the finger at someone else. Lawmakers love to throw crumbs to voters in exchange for votes, and both ignore the fact that those crumbs will ultimately be supplied by taking a loaf of bread from taxpayers. To the credit of lawmakers the Texas Tuition Promise Fund is not backed by the state's credit--for now. But what will happen when this boondoggle goes broke?

The entire idea that we are our brother's keeper is founded on the idea that need supersedes rights, that the need of one person is a claim on the property and life of others. So when the Texas Tuition Promise Fund goes broke, the need of the subscribers will be the prevailing concern. And taxpayers will again be asked forced to make up the difference.

Lawmakers continue to make the same foolish mistakes because they believe that the failures result from poor implementation. They didn't charge enough, or the money was invested poorly, or some other nonsense is always offered as an excuse for failure. They never stop to consider whether their proposals are wrong in principle. And the Texas Tuition Promise Fund is wrong in principle.

The proper purpose of government is to protect our rights, not create investment programs for parents. Anyone who wants a "tuition promise fund" can set one up without the state being involved. It's called a savings account, and as far as I know every damn bank in Texas offers them. And if that isn't good enough there are other investment vehicles, such as mutual funds.

Someday we might have lawmakers who don't kiss the butt of every voter they can simply to get elected. But until that occurs, we will continue to witness that gross spectacle. And taxpayers will continue to be subjected to a different kind of probing in the same area of the body.

Thursday, August 6, 2009

Freedom and Bad Hair Cuts

Last Saturday I got a hair cut, which was not the highlight of my weekend. However, while sitting in the chair, voluntarily allowing a strange woman to fondle my hair, I noticed her prominently displayed cosmetology license. I was tempted to laugh at the absurdity, but since she had several sharp objects at her disposal, I thought better of it.

Normally, when I am in a sedentary position I prefer to read, or sleep. But because of the previously mentioned sharp objects, sleeping was not really an option. So I read her cosmetology license. Three times.

I expected to see some information on the license that would assure me that I was receiving the best hair cut allowable by law, or something of the sort. I thought maybe I would see some name that I recognized that would convince me that this stylist had passed muster. Someone like Bush 41 (who spends the winter in Houston). But alas, no such information or names could be spotted.

And then I wondered, what is the worst thing that could happen here? Well, she did have sharp objects, and all kinds of nasty things could result from that. But since I did not see any Texas Rangers standing guard, that license wasn't much protection if she decided to emulate Jack the Ripper. Besides, she seemed to be the type who understood that that wouldn't be a good career move.

So then I thought, the typical justification for occupational licensing is to protect the public welfare and safety. How is the fact that the state has given this woman permission to cut my hair protecting my welfare or safety? I suppose that if I got a really, really, incredibly bad hair cut that I might be a little upset. But my health would not be threatened. I've had a few bad hair cuts in my life, and never once did I get ill.

I want to be perfectly clear. I am not endorsing bad hair cuts. In fact, I generally don't endorse bad anything. But a bad hair cut is not going to ruin my day, let alone my life. I've learned many things, and one of them is: My hair will grow out. Another one is: It is really, really hard to give a bad hair cut. Believe me, I have tried. On myself.

What really ticks me off about this occupational licensing is that the state is treating me like a little child. I can recognize when someone doesn't cut my hair well. After all, it is my hair. I see it every day of my life. I have yet to have anyone from the state come to my home or business to inspect my hair. They don't even do that when I renew my driver's license (and don't get me started on that). Yet, they have the audacity to believe that they can make better decisions about my hair than I can.

To this point I have been rather flip about this issue, but it is indeed serious. If someone wants to cut my hair, and I want to pay them to do it, what freaking business is it of the state? Just because Juanita passed some test 2 years ago doesn't mean she is going to do a good job today. If she doesn't, I will express my displeasure and wear a hat.

Juanita, her colleagues, and indeed all individuals, have a moral right to earn a living as they choose, so long as they respect the rights of other individuals. And I have a moral right to purchase their services if I choose. Neither of us needs the state interfering with that transaction and our freedom. I certainly don't need the state acting as my mommy to make sure that Juanita will do a good job. I expect her employer to do that, and if he doesn't, I will take my business, and my hair, elsewhere.

Wednesday, August 5, 2009

Natural Monopolies: Principles and Application

Last week I wrote about a dispute between the city of Houston and CenterPoint Energy. One of the comments to that post defended the concept of regulated monopolies, arguing that the infrastructure costs would prevent competitors from entering the market. In addition, a new entrant into the industry would have to run power lines to each customer. What if property owners did not permit the new company to do this? What, it was wondered, would be my plan for addressing this issue.

There are several premises packed into this question, all of which are mistaken.

First, the assumption is that a new power company would attempt to service the entire city. This may or may not be true. There are many examples of companies entering a market in stages. As infrastructure is developed the company expands the area it services. As an example, Comcast has done this with service to businesses.

Second, the question implies that if one advocates a particular principle, one must also provide details of its practical implementation. The failure to do so, it is further implied, invalidates the principle.

This is a common error founded on the false alternative of skepticism or omniscience. If we do not know everything, then we cannot know anything. If I cannot provide specific, concrete details as to how a free market in electricity would operate then the entire principle of freedom is discarded.

The implementation of any principle can be highly complex. Many factors must be considered. In the case of electricity, factors such as the cost to generate power, the cost of running wires, projected market capture, and much more would need to be considered by a new power company. The new company would need to consider these factors in the context of its goals to determine how to act. Which brings me to my fourth point.

It is impossible to predict exactly what actions men will take when they are free. Unrestricted by arbitrary government regulations, innovation increases and previously unknown solutions are developed. In a regulated environment, electric providers are shielded from competition, and those who develop innovative solutions are prohibited from entering the market.

As one example, it has been suggested on HBL that small nuclear plants could be used to provide power for a neighborhood or community. By placing power generation close to the end user, many costs would be reduced. Such innovations are impossible in our current environment.

Finally, the question drops the context. Existing utilities have easements in which they can erect poles and run power lines. This fact would have to be considered in any transition to a free market in electricity. The rights of existing companies, property owners, and new companies would have to be identified, recognized, and protected.

The transition from regulation to freedom will not be as easy as throwing a switch. The process would likely need to be gradual, with some less than ideal steps along the way. As one example, and this is only an example, it might be necessary to require existing companies to share their poles with new companies, with compensation paid to the existing company.

The fact that I cannot provide specific details regarding a free market in electricity does not invalidate the principle that each individual has a moral right to his own life. Freedom allows individuals to act according to their own judgment, and I would not be so presumptuous as to claim that I know how others will act. But it sure would be fun to find out.

Tuesday, August 4, 2009

Natural Monopolies, Part 2

Yesterday I addressed some of the economic fallacies underlying the “natural monopoly” argument. Today I will address the moral premises that “justify” this egregious violation of rights.

The "natural monopoly" argument holds that certain services—such as electricity or water—are best provided by one entity. In such instances, the government grants a monopoly in a particular area and then regulates the industry in the "public interest". In granting the monopoly, the government prohibits competition.

No matter the judgment of entrepreneurs and businessmen, they cannot enter the industry. If they develop new technology or believe that they can operate more efficiently, they are prevented from offering their innovations. If they can raise the necessary capital and secure the voluntary agreement of all parties (such as property owners), government decree prohibits individuals from using their property as they choose.

At one time the "natural monopoly" argument was used to justify restrictions on telephone service and to award monopolies in cable service. Today, consumers have multiple options in both industries. New technology allowed the provision of these services in a manner that was not and could not be anticipated by government officials. Because men were left free to act on their own judgment, they were able to offer alternatives despite the claims of "natural monopoly" proponents.

One of the claims in defense of the regulation of “natural monopolies” is that a sole service provider could raise prices to an outrageous level, that is, become a “coercive monopolies”. Ayn Rand addressed such phenomenon:

A “coercive monopoly” is a business concern that can set its prices and production policies independent of the market, with immunity from competition, from the law of supply and demand. An economy dominated by such monopolies would be rigid and stagnant.

The necessary precondition of a coercive monopoly is closed entry—the barring of all competing producers from a given field. This can be accomplished only by an act of government intervention, in the form of special regulations, subsidies, or franchises. Without government assistance, it is impossible for a would-be monopolist to set and maintain his prices and production policies independent of the rest of the economy. For if he attempted to set his prices and production at a level that would yield profits to new entrants significantly above those available in other fields, competitors would be sure to invade his industry.

Even if a business were able to gain 100% of a market, it would still be subject to the threat of competition. It could not force consumers to purchase its goods and services. Ignoring this fact, government has responded to these fictitious coercive monopolies by establishing actual coercive monopolies.

In the process, the government violates the rights of consumers and businessmen. Consumers have no choice in their service provider—they are not free to contract with whom they choose. Businessmen are not free to act on their independent judgment. Both are strangled by regulations enacted in the “public interest”.

Since there is no such entity as “the public”--“the public” consists of all individuals—any appeal to the “public interest” ultimately means that the interests of some individuals are to supersede the interests of other individuals. Such appeals declare that some men must sacrifice their interests for the benefit of others, and that sacrifice will be enforced at the point of a gun. It is a gross perversion to believe that one man’s welfare can or should be achieved through coercion.

In the end, “natural monopolies” are anything but natural. They defy economic facts. More fundamentally, they defy man’s nature and his moral right to live according to his own rational judgment.

Monday, August 3, 2009

Natural Monopolies, Part 1

It is frequently argued that certain services--particularly utilities--are "natural monopolies", which Wikipedia explains as:

In economics, a natural monopoly occurs when, due to the economies of scale of a particular industry, the maximum efficiency of production and distribution is realized through a single supplier.

Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors. This tends to be the case in industries where capital costs predominate, creating economies of scale which are large in relation to the size of the market, and hence high barriers to entry; examples include water services and electricity. [links removed]

This argument has plausibility, until one actually looks at reality. It is founded on economic fallacies and moral perversions.

Certainly it is true that many of the services considered "natural monopolies" require substantial investment in infrastructure. But so do many industries, such as Internet service providers, television, and retail chains. Yet, despite the investment required to launch a new business or expand one's market, each of these industries has an abundance of competition.

The fact is, the investment required is seldom an impediment to providing a service or starting a new business that has the potential to make investors a lot of money. The capital markets--whose purpose is to identify promising business ideas--will gladly direct the necessary financing to any business that is judged to offer profits. A cursory examination of the Wall Street Journal demonstrates this fact almost daily.

There may be instances in which only one business provides a particular service in a specific geographic area--a small town that can only support one drug store is a common example. However, the threat of future competition acts as a regulator on what that business will charge. If it attempts to raise prices to an outrageous level, it will attract competitors. The same holds true of any product or service.

Economically, the “natural monopoly” argument amounts to: Since it costs a lot to build the necessary infrastructure in an industry, government will do everyone a favor and prohibit anyone from even trying. In short, government knows what is best. Rather than allow anyone to be innovative and act on his own judgment, government will declare the issue resolved once and for all.

If this is true of “natural monopolies”, why isn’t it true of other industries? If government can decree that some services are best provided by one entity, then what is to stop government from making a similar decree regarding all industries? The principle of economies of scale is not limited to power lines or water mains.

The enormous material prosperity enjoyed by Americans is the result of freedom—of men acting without interference from others. Thirty years ago, innovations like satellite television and cellular phones were unknown. Had the government decreed the infrastructure requirements for these industries to be too expensive, we would not enjoy the choices we have today.

The economic fallacies underlying the “natural monopoly” argument are not the most important reason for opposing government intervention. Tomorrow I will look at the moral premises that serve as the foundation for these violations of rights.