Friday, May 29, 2009

Apartment Inspections are Coming

It appears that the legislature will pass a bill requiring Houston to draft an ordinance governing the inspection of multi-family housing. The city sought the bill to clarify its authority. The Chronicle reports:
The bill requires the city to craft an ordinance by December 2010 that details standards for habitability and health and safety at multifamily properties. A key provision, already passed by the House, would also require a proactive inspections program by the city’s building, fire and health officials, rather than the current system that largely is driven by resident complaints.

And who will pay for these inspections? Undoubtedly, the owners of multi-family housing properties, who will then pass these costs on to their residents. Since the majority of the properties at issue are for low-income citizens, the poor are going to be negatively impacted by this bill.

Co-author of the bill, Rep. Dwayne Bohac, R-Houston, said:
Regular inspections are important because owners of these properties will now know that an inspection is coming and will not be able to shirk their responsibilities by simply relying on a complaint from a resident.

If the property owners are truly "shirking their responsibilities" then this is a civil matter, that is, a breach of their agreement with residents. This is not an issue in which the city or the state should be involved, except to resolve any disputes that arise.

And what about the responsibilities of the residents? Shouldn't they exercise some discretion when selecting a home? Don't they have a responsibility for their actions? Apparently the legislature doesn't think so.

This paternalism is precisely one reason why individuals refuse to take any responsibility for their own actions. They can engage is careless behavior and then rush to government to bail them out. They expect government to take care of them, and unfortunately, there seems to be no shortage of legislators willing to do so.

Thursday, May 28, 2009

Zoning is Zoning

neoHouston reports on a recent forum on form-based codes presented by Houston Tomorrow. Unlike conventional "Euclidian" zoning, which dictates what types of activities may occur on a parcel of land, form-based codes focus more on building "typology"--that is, the form of the building.

Daniel Parolek, one of the presenters, outlined the five essential components of a form-based code:
  1. The Regulating Plan
  2. Building Form Standards
  3. Public / Civic Space Standards
  4. Thoroughfare Standards
  5. Administration Standards
Of these, the regulating plan is the most important, as it establishes the overall development plan for the community:

In developed areas it classifies neighborhoods based on the level of infrastructure and prevailing building type, and in undeveloped areas it proposes future infrastructure investments and appropriate building types based on that infrastructure pattern, (in other words, bigger buildings go where the bigger roads are).

On administration standards, neoHouston writes:

In recognition of one of the biggest failures of conventional zoning, form-based zoning is built with a strong focus on simple, fast administrative processes. People whose plans comply with the ordinance should experience very fast, automatic approval.

While the presenters, and neoHouston, think that there is a significant difference between conventional zoning and form-based codes, they are simply wrong.

No matter what adjectives you put before "zoning", the essence remains the same--control of property is removed from the rightful owner and vested in government officials. The property owner cannot use his property as a matter of right, but only with the permission of politicians and bureaucrats. No matter how they try to dress it up or what they call it, zoning is zoning. And zoning is a violation of property rights--the right to property is the right of use and disposal. Under zoning, no matter its variation, control of property use is removed from the owner.

Consider what happens to those who plans do not comply with the ordinance. They are prohibited from using their property as they choose. Their plans are destroyed, and they are forced to abide by the dictates of the central planners. If they refuse to do so, they become criminals.

The false alternative between conventional zoning and form-based zoning is no different than the alternative between arsenic and cyanide. To the property owner, the end result is the same--he may only use his property as others mandate.

Advocates of form-based zoning are trying to put lipstick on a pig. The fact that they frequently drop the word "zoning" and use "code" instead is one clue to their motivation. Like the advocates of "Houston-style zoning" in the 1990s, they believe that changing the name of their proposal changes its essence and its meaning. But verbal gymnastics do not change the principles that underlie their proposal.

Wednesday, May 27, 2009

Being Taken for a Ride

The Mighty Wizard takes Metro to task on its 2010 report to Congress (HT: blogHouston). The Wizard reports that the Federal Transit Administration states that:
spending $897 million on the North Corridor rail alignment is going to result in a mere 7,500 new riders being attracted to using transit (see page 221 of the report). The Southeast Corridor rail alignment is projected to cost $911 million and is expected to attract a mere 4,500 new riders to transit (see page 227 of the FTA report). Yes gentle readers, you read that correctly. The FTA is telling Congress that it is recommending helping Metro spend $1.8 billion to attract 12,000 new riders to rail transit, a figure that works out to spending $150,000 to attract a new rider to transit.

This is the type of asinine policy that results from public planning and government intervention. If a private business attempted such a thing, it would quickly go bankrupt, if it could even raise the funds to launch such a program. And the only individuals harmed would be those who invested in such a folly. However, since Metro is supported with tax dollars, we all get to participate in this enormous waste of money.

Metro's alleged purpose, as best I can tell (I couldn't find an explicit statement on their web site), is to improve transportation in Houston and the surrounding communities. Whether it is tearing up existing roads for construction, or clogging roads with buses, or crashing trains into automobiles, Metro has failed horribly. Further, despite the constant urging of government officials for commuters to "go green" and use more public transportation, The Wizard reports that Metro's ridership has declined by 10 percent to 20 percent in the past year.

This means that taxpayers are paying more and more to subsidize the transportation of fewer and fewer.

The Wizard notes that Ray Chong, who was Deputy of Traffic and Transportation in the City public works department, recently predicted that in the year 2035 the average commute in Houston will be 3 hours. Calling Chong's claim "garbage", The Wizard correctly points out one important fact:

It overlooks [Chong's claim] that people, that real estate developers and landlords, as well as employers and employees, all make decisions as to where to locate. Very few people will tolerate making a 3 hour daily commute, much less a 2 hour commute, and they will adapt accordingly, often by deciding to leave a little earlier or later to get to their jobs.

In other words, when individuals are free they make decisions based on their values. Those who find a 3 hour commute unacceptable will move closer to work, find a new job, or take some other action. The popularity of town homes inside The Loop and downtown lofts attest to the fact that the market--that is, individuals--can address these issues without government meddling.

Government should not be in the transportation business. Like every other improper government activity, public transportation is inefficient, expensive, and fails to deliver on its stated goals. It requires taking money from some individuals to pay for the transportation of others. It requires seizing private property to build roads and rail lines. In short, it violates the rights of individuals.

If a market exists for mass transit, private companies will meet that demand--they have done so in regard to increasing the density of housing inside The Loop and downtown. And if there is no market--which appears to be the case--then nothing Metro does will change that fact.

Tuesday, May 26, 2009

Metro and Eminent Domain

According to the Chronicle, Metro's light rail expansion plans are being threatened by a bill under consideration in Austin. The bill would limit Metro's ability to use eminent domain to obtain land needed for proposed routes. George Smalley, Metro’s vice president for communications and marketing, said:
It effectively kills the light rail program.

If you lose a line like the University Line because you lost the power of condemnation, then the whole thing is at grave risk.

Several legislators, including John Whitmire, D-Houston, vowed to fight any attempt to limit Metro's powers. Whitmire claimed that such limits “would prevent the common good.” Whitmire does not define "common good". Apparently, he assumes that we all know and agree to the meaning of that undefinable term. The controversy surrounding Metro's plans demonstrate otherwise.

Whitmire's position rests on the premise that some individuals must put aside their own selfish interests for the alleged betterment of the community. Those who refuse to do so voluntarily will be forced to comply.

Something is very wrong when an alleged good can only be achieved through the use of government force. The proponents of eminent domain (in any context) argue that the "common good" justifies the means. But noble ends cannot be achieved through ignoble means. When government must resort to the initiation of force against innocent citizens, neither its ends nor its means are justifiable, proper, or moral.

Government should not be in the transportation business. Having expanded beyond its legitimate function--the protection of individual rights, including property rights--government must invariably resort to force. Government must compel individuals to act as it decrees, regardless of their values, judgment, or rights.

State legislators should revoke Metro's eminent domain powers, just as they should revoke the similar powers of the Texas Medical Center. Indeed, they should revoke the eminent domain powers of every entity in the state, private or public. More importantly, they should question the ends that they are pursuing.

There is only one context in which the "common good" or the "public welfare" has any meaning--the recognition and protection of individual rights. This is the only "good" which all individuals share. The "common good" is individual liberty--the right of each individual to act according to his own judgment, so long as he respects the mutual rights of others. Until legislators recognize this fact, and act accordingly, they will continue destroy the lives of some Texans for the alleged benefit of others.

Monday, May 25, 2009

Creating the Perfect City

You probably have a vision of the "perfect" city. In a "perfect" city everything would be just the way you like it. You would never have to walk into a business in which someone was doing something you didn't like--such as smoking. You would never have to look at an ugly tree. You would never have to witness a favorite building torn down. You could get around town cheaply and easily. You wouldn't have to tolerate a muffler shop next to your house.

Of course, a "perfect" city probably wouldn't be so perfect. You wouldn't be able to run your business as you choose--Houston's smoking ordinance (and many others) might prohibit that. You wouldn't be able to plant the trees that you enjoy--Houston's landscaping ordinance might prohibit that. You wouldn't be able to use your land as you desire--Houston's preservation ordinance (and many others) might prohibit that.

You see, your vision of the perfect city is not shared by every Houstonian, just as you do not share their vision. Some of us like smoked filled bars. Some of us like different kinds of trees. Some of us like to use our property for things others might not like. The things that you like are not embraced by all of your fellow Houstonians. While you are busy trying to create your perfect city, other citizens will be doing the same. While you are trying to control actions you dislike, others will be trying to control your actions.

You will likely find politicians who share your vision, and they will seek to pass laws to bring that vision to reality. And others will be doing the same. Indeed, this is modern politics--competing groups seek to gain political influence to implement whatever they deem necessary to create their "perfect" city.

This battle for "perfection" is the logical outcome of the morality that dominates Houston. Most Houstonians believe that the individual must put aside his own selfish interests for the "public good" or the "general welfare". The individual must abide by the dictates of "the people", no matter his own judgment, desires, or values. The individual must serve the "greater good", and those who refuse to do so voluntarily may properly be forced to do so.

Forget about planting a Chinese Tallow--your fellow citizens have decreed that to be a "trash tree". Don't even consider allowing employees or customers to smoke in your business--that has been declared to be detrimental to the "public health". Don't think about erecting a billboard on your property, or tearing down an "historical" building, or using "attention-getting devices"--you will incur the wrath of those with a different vision of the perfect city. No matter your view of perfection, there will be those who disagree. And if they have political power, or political connections, they will be able to impose their views upon you.

In truth, the perfect city is one of individual freedom. In the perfect city, each individual is free to act according to his own judgment, so long as he respects the mutual rights of others. He is free to use his property as he desires. He is free to operate his business as he chooses. He can plant the trees of his choice, or tear down the house that he owns, or allow smoking in his business. Those who find his choices distasteful are free to shun him, find a job elsewhere, and spend their money with businesses more to their liking.

Houston can be the perfect city. All we must is reject the belief that the individual exists only for the sake of serving others. All we must do is recognize and protect the right of each individual to his own life, liberty, property, and pursuit of happiness.

Saturday, May 23, 2009

Don't Sweat the Small Stuff 27

"The Donald" has "Feelings"
I have never been a big fan of Donald Trump. I did enjoy the first few seasons of The Apprentice, and he gained a little respect for his decisiveness. But the show, and apparently "The Donald", have turned into a worse joke than I previously thought he was. Loren Steffy provides this little tidbit from testimony offered by Trump when he sued a writer for understating Trump's wealth:
"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," he told lawyers in the December 2007 deposition.
That Trump would even sue someone over such a trivial matter speaks volumes about his character. That he uses his feelings to determine his net worth must have government agents giddy with delight. If Trumps uses his feelings to assess complex financial issues, I am certain that someone at the IRS will be more than happy to use his feelings to determine that Trump has underpaid his taxes.

A Score for O-Bloggers
This week the Chronicle's editorial page linked to a post on this blog (twice), as well as Gus Van Horn. This was a first for both blogs, and each is now listed in the permanent link menu. Yay for me, and congratulations to Gus.

Pitching for Peter Brown
Peter Brown's web site offers us further evidence of his credentials to run the nation's fourth largest city:

On Saturday morning over 30 supporters and volunteers gathered at the campaign headquarters to walk in the Cinco de Mayo parade with Peter Brown. After a quick breakfast and tips on parade walking (throw candy underhand, not overhand) the group carpooled to the parade start. There they met the 20 other supporters who were already there.

I am not an expert on candy throwing, but I do know fast-pitch softball involves an underhand delivery. So, throwing the candy underhand will not necessarily reduce the velocity of the flying sweets. But what I really want to know is whether the supporters were taught to throw curve balls and change-ups. After all, politicians are very good at those pitches.

This is a Dangerous Idea
The Attorney General for South Carolina has threatened to sue Craigslist executives for aiding and abetting prostitution. According to the blog of Craiglist CEO Jim Buckmaster, South Carolina AG Henry McMaster ordered the company

to remove the portions of the Internet site dedicated to South Carolina and its municipal regions which contain categories for and functions allowing for the solicitation of prostitution and the dissemination and posting of graphic pornographic material within ten (10) days.

Buckmaster responded with a lawsuit of his own, seeking a restraining order to prevent prosecution.

First, prostitution should be legal. If someone wishes to offer sex for money, they should be free to do so. And if someone wishes to pay for sex, they should also be free to do so. So long as all parties are participating voluntarily, it is nobody's business but those involved.

Second, if Craigslist will be held accountable for what others post on its site, a very dangerous precedent is set. For example, Google could be held liable for the contents of this blog. The result will be the suppression of anything potentially controversial.

Third, nobody is forced to go to Craigslist, respond to any ad, or anything of the sort. Individuals who don't like porn can simply avoid sites that have it. It really is that easy.

Friday, May 22, 2009

Another Post on Eminent Domain in the Medical Center

Yesterday the Chronicle editorial supported limiting the Texas Medical Center's eminent domain powers. But as is often the case, the editorial conceded the moral premise underlying eminent domain. Noting that TMC has condemned at least one house and forced the sale of 15 others, the Chronicle asks:
For the sake of argument, let’s say that the public need for TMC’s cash-generating parking garage should have overridden Central City’s interest in remaining residential. But if so, shouldn’t that decision have been made in the open? By elected representatives? Or by people who answer to elected representatives? Or at least not behind closed doors?

In other words, there is nothing wrong with some entity seizing private property--it just needs to be done in a democratic fashion. So long as "the people" have a voice in the matter, property rights can be violated. This is a complete abrogation of property rights. Property rights, like all rights, are not subject to a vote. They cannot be overridden by "public need", no matter who is making the decision.

The editorial concludes:
We support Rep. Garnet Coleman’s effort to remove TMC’s eminent-domain power over residential neighborhoods. (Coleman’s original bill, H.B. 3709, has been rewritten as an amendment to a larger eminent-domain bill, S.B. 18, now under consideration in the Texas Legislature.) TMC would retain its ability to condemn commercial properties — which is still an extraordinary power for a corporation to possess.

With that in mind, we hope that in a future session the Legislature will consider changing the organization’s charter, and require TMC to open its meetings and its records to the public. If a nonprofit is going to wield a governmental power, it ought to behave more like a government.

Again, the editorial does not question the use of force. It just wants that force wielded more democratically. But the number of people supporting the violation of property rights does not change the fact that such violations are immoral. Government's monopoly on force should be used to protect our rights. There never has been, nor will there ever be, a valid justification for using government power to violate the rights of individuals.

Underlying the editorial's position is the implicit advocacy of mob rule. So long as "the people", or their elected representatives, have a voice in the matter, private property can be seized if it serves a "public need" or the "common good". But any atrocity can be justified if this serves as the standard. If "the people" are the sole judge of what is proper and acceptable, the rights of every individual are under continual assault. "The people"--that is, the majority--can do as it pleases simply because it is the majority.

In principle, this is a rejection of principles. A principled position would declare eminent domain immoral, no matter who wields that power or the purpose of its use. A principled position would reject the initiation of force and declare the rights of individuals inviolate.

Thursday, May 21, 2009

The Tyrant Next Door

I have noted, and others have as well, that state and local governments are often the worse violators of individual rights.

One of the primary sources for violations of individual rights on the local level is zoning. Where implemented, which is almost everywhere, zoning is used to control virtually every detail of land-use, from architectural styles to landscaping, from parking spaces to height.

I have had some experience fighting zoning in two different cities, and more than 15 years apart. In both instances I was somewhat amazed at how many people believed that zoning would be beneficial for them. And defined in a very narrow and out of context perspective, they were probably right.

Zoning would have allowed them to remedy some evil that they thought existed in their neighborhood--in both instances the primary supporters of zoning were those who thought neighborhoods needed "protection". They had a very myopic view. They looked at a perceived problem in a specific location and proposed a "solution" that would touch every property owner in the city. And they found a cadre of noisy companions in other neighborhoods, and together they could create an almanac of alleged horror stories.

This localized control and the ability for average citizens to have a voice in policy decisions is, in my opinion, much of the reason for the egregious attacks on individual rights that occur on the state and local level. Citizens feel like they have a voice in matters.

On the local level, democracy comes alive. We can attend city council hearings, we can visit or call our council members, and we can even reach the mayor's office with relative ease. We can write letters to the editor and call the local talk radio program. We can instigate petitions and be active in civic groups. We can make a difference.

Of course, there is much more to the story than this. Simply because individuals have a voice in matters does not mean that they will choose to violate the rights of others. That choice is ultimately the consequence of basic philosophical premises, and the resulting belief that government coercion is legitimate and proper.

The desire to use coercion, combined with the ease of getting involved, is why local governments are often so tyrannical. Local officials often develop little fiefdoms, where they can dispense favors, punish their opponents, and rule with an iron fist. They can micromanage in a way that federal officials cannot.

The Founding Fathers believed that the states would be the best protectors of liberty. They believed that the states would be most reflective of the opinions and values of the citizens. The latter may be true; the former certainly isn't.

Until Americans understand the sanctity of individual rights, their complaints about Washington and Austin will do little good. Until Americans demand that the rights of all individuals be protected, they will continue to be victimized by the tyrant next door.

Wednesday, May 20, 2009

Private Parks: Practical and Moral

I have previously argued that the city of Houston should begin selling off assets, such as parks and libraries, in an effort to reduce spending, cut taxes, and return to its proper function of protecting individual rights. An editorial in the Chronicle last week provides some evidence regarding the practicality of such a plan.

Citing Hermann Park, Discovery Green, and the Lee and Joe Jamail Skatepark, the editorial explains how these amenities are are funded:
In large part, it’s Houston’s private donors. Most obviously, a check from the Jamail family launched the skate park. But just as admirable are the many members of the two conservancies that support Hermann Park and Discovery Green; they provide money for the endless extra love and care that top-notch parks require.

While urging Houstonians to lobby city council to spend more on neighborhood parks, the editorial acknowledges that police salaries and fire trucks take priority. With the city "tightening its belt", the Chronicle advocates "direct action": "Give money. Raise money. Volunteer your time."

This is all well and good, but it doesn't address the fundamental issue--the city should not be in the park business. The city should sell its parks, beginning with the neighborhood parks.

Economically, taxpayers benefit from the elimination of the costs associated with park maintenance. Those who value parks would be free to provide financial support, and those who do not will be equally free to spend their money as they choose. The editorial makes it clear that there are individuals and groups who value the parks and are willing to pay for them.

Some may fear that the parks would disappear as developers buy up the land and build town homes. There is some justification in this. But considered in its full context, and by implementing appropriate measures, such concerns can be easily addressed.

I have previously advocated selling the neighborhood parks to the home owners of the neighborhood. The "cleanest" arrangement would be for the home owners association to own and operate the park. This is currently done in many subdivisions. As a part of the sale, deed restrictions could be attached to the property so that it cannot be used for other purposes while the deed restrictions are active. When the deed restrictions lapse, the owners could then decide to renew them and retain the park, or use the property for other uses.

Such a plan provides short term protection for property owners who purchased their home because of its proximity to a park, yet allows the owners to control the use of their property without intervention from government.

Morally, individuals should not be forced to provide financial support for parks (or anything else) against their own judgment. If Jane Doe wants to have a park down the street with clean restrooms and freshly painted equipment, she should be willing to pay for it. She should not--nor does she have a right to--force taxpayers to provide her children with a place to play.

Privatizing the city's parks is both practical and moral.

Tuesday, May 19, 2009

CAPCO and Jobs

The fallacy that government can create jobs is alive and well in Texas and other states. Through the state's Certified Capital Company program (CAPCO) the state provides venture capital to small businesses. According to an OpEd article in Sunday's Chronicle:

The easiest way to understand what is wrong with the CAPCO program is to compare it to real venture capital. Real venture capital fund managers make their money from the profits they earn for their investors. If the fund managers make smart investments, they keep 20 percent of the profits. But they must return all of the original investment capital and most of the profits to their investors.

In contrast, CAPCO fund managers get to keep the state’s millions of dollars and any profits generated. Unlike investors in real venture capital, Texas taxpayers receive back nothing: Not the profits from their investment or the original capital that they provided.

In other words, tax dollars are given to a private business and the state gets nothing in return. Proponents of the program argue that CAPCO creates jobs, and the resulting tax revenue benefits the state. However, a study of Lousiana's CAPCO program found that:

CAPCOs are “expensive and inefficient to the state” and that “the greatest and most immediate beneficiaries of the CAPCO program are the CAPCO companies and their owners.”

As Henry Hazlitt points out in Economics in One Lesson, these schemes have visible beneficiaries and hidden victims. The money used for CAPCO was taken from taxpayers, who can no longer use their money in the pursuit of their values. They cannot use that money to save, invest, or consume. In other words, the economic activity that would have occurred is simply wiped out. Taxpayers, and those who would benefit from their economic activity, are the hidden victims.

Texas has already spent $400 million on CAPCO since its inception, and legislators are considering spending another $200 million on this wealth redistribution--money is taken from taxpayers and given to those who have the right political connections or are in favored industries.

These interventions in the market will have predictable results: a net job loss. But government officials will point to the new jobs created and pat themselves on the back, while ignoring the jobs that they have destroyed. They will continue to pretend that their acts of theft and coercion are productive endeavors, and when problem invariably arise, they will respond with calls for more intervention.

It has been widely reported that Texas has one of the strongest economies in the nation. Our legislators seem determined to change that fact, and if they continue to emulate the statist policies of the two coasts, we will experience the very same economic consequences as those regions.

Monday, May 18, 2009

The Invasion of the Property Tax Appraisers

Property taxes play a significant role in funding government operations in the state of Texas. I pay property taxes to the city of Houston, the Houston Independent School District, Houston Community College, the Harris County Flood District, and numerous other entities. While the tax rate is set by the individual taxing authorities, the value of my property is determined by the Harris County Appraisal District (HCAD).

The appraised value of properties has steadily increased for decades. My own home has nearly doubled in value in the past decade, partly due to market conditions and partly because of the many improvements I have made. The result has been a substantial increase in my property tax bill. And I am hardly alone.

For many home owners--particularly those on a fixed income--such increases can be devastating. The increase in property values has added nearly $100 per month to my tax bill. For someone on a fixed income, such an increase could literally tax him out of his home.

For example, consider Dave Nolder (HT: Houston Property Rights Association). In 2008 the appraised value of his home increased from $177,100 to $463,254, a jump of 271%. The Banner reported:
The first step was an informal hearing, which he [Nolder] says was "totally worthless, they would not change anything; it was a total waste of my time." He was given copies of the records that were used to appraise his property, and discovered the appraiser had determined the value based on sales of commercial properties instead of single family residences, some of the properties not even in the same part of town.

"They also compared the property," he says, "to properties on the other side of my land, even though these properties have no 'for sale' sign on them. The Appraisal District saw the need to raise their appraisals even though no land around this area has sold recently. Of course, these properties had the appraised value go up from 2007 to 2008, so the Appraisal District was comparing my land to land in which they had raised the value themselves."

In other words, HCAD arbitrarily raised the value of nearby properties, and then used those inflated numbers to increase the value of Mr. Nolder's property. Nolder says that his appeal hearing was a "dance and pony show", and the appeal board allowed him only 15 minutes to present his case "because they had a lot of protests".

As further evidence of the arbitrary nature of HCAD's appraisals, the appeal board lowered his property value to $275,000. They simply picked a number that they "felt" was right, with little concern for the facts or Mr. Nolder. The tax must be paid, or Nolder will lose his home.

Nolder--like many citizens--says that he doesn't mind paying taxes, he just wants them to be "fair". But what is fair about arbitrary assessments imposed at the point of a gun? No matter what value HCAD assigns, the fact remains that one party in this transaction is coerced. There is nothing fair about theft, nor can there ever be.

While it is impractical to abolish property taxes at this time, steps can be taken to provide some measure of justice to property owners. The most important step would be to return government to its proper function--the protection of individual rights. This would necessitate abolishing the Houston Independent School District, the community college system, the hospital district, and numerous other taxing authorities. Such measures would require gradual implementation to wean citizens from the elixir that oozes from the public teat.

In the short term, these entities should begin reducing their spending and cutting their tax rates. HCAD should freeze or reduce all property values.

Nobody--not even the government--has a right to forcibly take property that rightfully belongs to someone else.

Sunday, May 17, 2009

Eminent Domain Reform in Texas

I received the following email this morning regarding eminent domain in Texas. I have not had time to review HJR 14, so I cannot comment on it at this time.


What NOW?
Call to ACTION & Tools to ACT
Important FACTS for you on the Eminent Domain Constitutional Amendment & the Eminent Domain Bill.
The Senate will vote soon on HJR 14 (the Amendment). Make the CONTACT as soon as possible.
1. CALL (Fax or Email) your State Senators and tell them you support HJR 14. (House Joint Resolution 14)
2. Forward this message to your friends and family to encourage them to do the same.
The Contact TOOLS you need are at the very bottom.

FACTS: the Constitutional Amendment (to take action on)
This message is from the Institute for Justice, the public interest law firm that represented Suzette KELO in her fight to keep her home which resulted in the U.S. Supreme Court KELO decision in favor of taking private property from individuals and giving it to others for economic development purposes.

HJR 14 is the constitutional amendment to put better protection against Eminent Domain abuse into the Texas Constitution. It has passed the House unanimously. If the Senate passes HJR 14 with a two-thirds majority, it will appear on the November ballot so that we can vote FOR more protection of private property.

Thousands of Texans, from Houston to San Antonio to El Paso, are currently on the chopping block. They need your help. Now, more than ever, it is critical that you make your voice heard and support HJR 14. This is it. It's been four years since the Kelo decision. The future of property rights in Texas rests in the hands of the Texas Senate. We have to let them know how important stopping eminent domain for private gain is to Texans.

Thank you for continuing to stand on the frontlines of the battle against eminent domain abuse.
Christina Walsh
Institute for Justice

FACTS: the Bill (This underscores why we need BOTH to protect us.)
May 14, 2009
My San Antonio Editorial
by Bill Peacock Bill Peacock works for the Texas Public Policy Foundation, an Austin-based nonprofit, free-market research institute. "Land-owners need rights in a development-driven world."

Texas needs real property rights protection
Four years have passed since the U.S. Supreme Court's infamous Kelo decision, which essentially changed private property ownership from a fundamental civil right to a privilege granted by the state at its sole discretion.

Texas has failed to adequately respond to this decision. The first attempt in 2005 missed the mark. In 2007, the Legislature passed strong property rights protections in HB 2006, but the bill was vetoed over concerns about compensation.

Senate Bill 18 is this legislative session's Eminent Domain Reform Bill. However, it was recently stripped in the Senate State Affairs Committee of two key reforms. Today, there is a good chance that after the Legislature adjourns, Texas property owners will still be subject to the same takings that outraged the nation in the Kelo case.

The cities that exercise the power of eminent domain — and have consistently opposed reform — are generally of the same opinion.

One analysis of SB 18 concluded:
SB 18 attempts to strike a reasonable balance between the needs of condemners and the property rights of landowners and appears to make more subtle changes in an effort to promote fairness for property owners.

The provisions of SB 18, in its current form, might make the use of eminent domain more complicated, and nominally more expensive. But the bill is not nearly as bad as virtually every other alternative.

In other words, SB 18 allows cities to carry on their eminent domain business as usual.

One of the major protections stripped from SB 18 was a definition of public use. The justification offered in support of this was that “public use is already defined in case law.” While it is true that the courts have determined over the years what constitutes a public use, this is a cause for action — not inaction — by the Texas Legislature.

Kelo exposed years of jurisprudence that has undermined the Texas Constitution's standard that property may be taken only for a public use. As the Texas Supreme Court has noted, our courts have “adopted a rather liberal view as to what is or is not a public use.”

This liberal view allows property to be taken from one property owner and given to another in order to increase tax revenues for local governments. SB 18 defers to the judicial blessing on these takings and does nothing to stop them.

Fixing Texas' KELO problem involves three things:
1. eliminating the ability of governments to transfer taken property from one private owner to another,
2. eliminating the ability of governments to use blight designations as an end run around the ban on takings for economic development purposes, and
3. ending government land speculation by requiring that property not put to the public use for which it was taken within five years, be offered for sale back to the original owner at the price the government paid for it.

The Texas Legislature needs to pass, and Gov. Rick Perry needs to sign, legislation containing these reforms. To date, SB 18 contains none of them. Only with these reforms will Texans be assured that cities like El Paso, with its downtown redevelopment plan already in place, won't use eminent domain to achieve the dreams of the well-connected at the expense of the rest of us.

TOOLS: LINK to ALL Senators & ALL their Contact INFO.:
TX SENATE Members - 81st Legislative Session
Averitt, Kip (512) 463-0122 & Fax: (512) 475-3729 Kip.Averitt@Senate.State.Tx.US
Carona, John (512) 463-0116 & Fax: (512) 463-3135 John.Carona@Senate.State.Tx.US
Davis, Wendy (512) 463-0110 & Fax: (512) 475-3745 Wendy.Davis@Senate.State.Tx.US
Deuell, Bob (512) 463-0102 & Fax: (512) 463-7202 Bob.Deuell@Senate.State.Tx.US
Duncan, Robert (512) 463-0128 & Fax: (512) 463-2424 Robert.Duncan@Senate.State.Tx.US
Ellis, Rodney (512) 463-0113 & Fax: (512) 463-0006 Rodney.Ellis@Senate.State.Tx.US
Eltife, Kevin (512) 463-0101 & Fax: (512) 475-3751 Kevin.Eltife@Senate.State.Tx.US
Estes, Craig (512) 463-0130 & Fax: (512) 463-8874 Craig.Estes@Senate.State.Tx.US
Fraser, Troy (512) 463-0124 & Fax: (325) 676-8060 Troy.Fraser@Senate.State.Tx.US
Gallegos, Mario, Jr. (512) 463-0106 & Fax: (512) 463-0346 Mario.Gallegos@Senate.State.Tx.US
Harris, Chris (512) 463-0109 & Fax: (512) 463-7003 Chris.Harris@Senate.State.Tx.US
Hegar, Glenn (512) 463-0118 & Fax: (512) 475-3736 Glenn.Hegar@Senate.State.Tx.US
Hinojosa, Juan "Chuy" (512) 463-0120 & Fax: (512) 463-0229 Juan.Hinojosa@Senate.State.Tx.US
Huffman, Joan (512) 463-0117 & Fax: (512) 463-0639 Joan.Huffman@Senate.State.Tx.US
Jackson, Mike (512) 463-0111 & Fax: (512) 475-3727 Mike.Jackson@Senate.State.Tx.US
Lucio, Eddie, Jr. (956) 968-9927 & Fax: (956) 447-0583 Eddie.Lucio@Senate.State.Tx.US
Nelson, Jane (512) 463-0112 & Fax: (512) 463-0923 Jane.Nelson@Senate.State.Tx.US
Nichols, Robert (512) 463-0103 & Fax: (903) 589-0203 Robert.Nichols@Senate.State.Tx.US
Ogden, Steve (512) 463-0105 & Fax: (512) 463-5713 Steve.Ogden@Senate.State.Tx.US
Patrick, Dan (512) 463-0107 & Fax: (512) 463-8810 Dan.Patrick@Senate.State.Tx.US
Seliger, Kel (512) 463-0131 & Fax: (512) 475-3733 Kel.Seliger@Senate.State.Tx.US
Shapiro, Florence (512) 463-0108 & Fax: (512) 463-7579 Florence.Shapiro@Senate.State.Tx.US
Shapleigh, Eliot (512) 463-0129 & Fax: (915) 544-1998 Eliot.Shapleigh@Senate.State.Tx.US
Uresti, Carlos (512) 463-0119 & Fax: (512) 463-1017 Carlos.Uresti@Senate.State.Tx.US
Van de Putte, Leticia (512) 463-0126 & Fax: (512) 463-2114 Leticia.VandePutte@Senate.State.Tx.US
Watson, Kirk (512) 463-0114 & Fax: (512) 463-5949 Kirk.Watson@Senate.State.Tx.US
Wentworth, Jeff (512) 463-0125 & Fax: (512) 463-7794 Jeff.Wentworth@Senate.State.Tx.US
West, Royce (512) 463-0123 & Fax: (512) 463-0299 Royce.West@Senate.State.Tx.US
Whitmire, John (512) 463-0115 & Fax: (713) 864-5287 John.Whitmire@Senate.State.Tx.US
Williams, Tommy (512) 463-0104 & Fax: (512) 463-6373 Tommy.Williams@Senate.State.Tx.US
Zaffirini, Judith (512) 463-0121 & Fax: (956) 722-8586 Judith.Zaffirini@Senate.State.Tx.US

Saturday, May 16, 2009

Don't Sweat the Small Stuff 26

Sex with Chinese Prostitutes reports that "[t]he National Institute of Alcohol Abuse and Alcoholism (NIAA), a part of the National Institutes of Health (NIH), will pay $2.6 million in U.S. tax dollars to train Chinese prostitutes to drink responsibly on the job." Ralph Hingson, director of epidemiology and prevention research at NIAA, tried to justify the program:

There are many Americans who travel to China each year and they should be made aware of the HIV problem.

This may be true, but so what? The government should not be spending money to alert Americans that having sex with prostitutes poses a danger. Anyone who doesn't realize this gets exactly what they deserve.

I am not sure which is worse: That the government is spending money on such nonsense, or that someone can justify it with a straight face.

If Cutting Taxes Helps Businesses...
This week Washington Gov. Chris Gregoire reduced the state's main business tax on newspapers by 40 percent to help them address declining revenues. By implication the governor is admitting that taxation is harmful to business. Why then, doesn't she cut taxes for all businesses? Or better yet, do away with all taxes?

This is nothing more than trying to keep the goose that lays the golden eggs alive long enough to lay some more eggs.

The Selflessness of John Edwards
In a column for the Chicago Tribune, Matt Mackowiak repeats a typical shallow explanation for the downfall of John Edwards:

Rarely in the history of American politics has a politician risen so far, so fast only to fall purely as a result of his own selfishness, ego, dishonesty and vanity.

Dishonesty and selfishness are mutually exclusive. Dishonesty--faking reality--is never in one's best interest, and Edwards' fall from grace demonstrates that fact. His political career is probably over, and his marriage is on the rocks. Edwards believed that he could deceive those closest to him and get away with it. He couldn't (for very long) and he didn't.

True selfishness is a huge achievement. It requires a devotion to rationality and the identification of one's values and goals. Edwards was apparently moved by his short-term desires, placing his immediate gratification above his professed values. In doing so he acted contrary to his self-interest.

Ayn Rand was writing about her character Peter Keating, but she could have been speaking of John Edwards:

What was his aim in life? Greatness—in other people’s eyes. Fame, admiration, envy—all that which comes from others. Others dictated his convictions, which he did not hold, but he was satisfied that others believed he held them. Others were his motive power and his prime concern. He didn’t want to be great, but to be thought great. He didn’t want to build, but to be admired as a builder. He borrowed from others in order to make an impression on others. There’s your actual selflessness. It’s his ego that he’s betrayed and given up. But everybody calls him selfish . . .

The Politics of Road Closures
In April the city turn Rivercrest Drive in west Houston into a one-way street to eliminate traffic that was cutting through the neighborhood. The closure allegedly increased the traffic in nearby Briargrove Park, and now residents of the two neighborhoods are battling with City Hall to address the issue.

Such political skirmishes could not and would not occur if the streets were privately owned. The owner would have the right, and the ability, to determine the conditions of use. But when streets are owned by the government, the use of those streets become a political football.

An Interesting Book Review
What happens when you assemble an abundance of data and mix it with bad premises? According to the Wall Street Journal, you get Fool's Gold (HT: JM McCulloch). While the author of the book--Gillian Tett--concludes that greed caused the financial crisis, the Journal sees it differently:

Ironically, Ms. Tett's reporting describes not an out-of-control free market but one tragically distorted by government regulation. If she struggles to reach a logical conclusion, then, she still does an excellent job of assembling the facts necessary to form one.

I haven't read the book, but apparently Ms. Tett ignored the very data that she assembled. So even if the author wants to turn a blind eye to reality, the facts speak for themselves.

Friday, May 15, 2009

One Park Place

Under the Freedom of Information Act, Texas Watchdog recently received nearly 100 pages of correspondence between Mayor White and Finger Properties relating to One Park Place, a downtown high rise apartment building.

I have only briefly looked through the documents--I actually have better things to do. But others however, have done some digging, and what they have found illustrates a point I have made several times.

One Park Place is located near Discovery Green, the downtown monument to environmentalism. Mayor White, in his never ending quest to leave a legacy, offered to help the Finger Companies market their project, and ultimately wrote a letter on city stationary. This is the cause of the interest in the project.

According to Swamplot:

[T]he mayor had apparently rejected a tax abatement request from Finger Properties — and... the letter he sent out promoting the Downtown residential development was offered in part as consolation for that refusal.

The mayor has been using tax rebates to entice developers to proceed with projects he favors. While the mayor obviously supports One Park Place, apparently Finger Properties doesn't have enough political pull to "qualify" for such financial support. White could however, throw some pretty hefty crumbs to the developer in the form of a promotional letter.

That a sitting mayor would promote a specific private project on city stationary is an abuse of power. The mayor is supposed to be protecting our rights, not playing spokesman for political favorites. And while he is busy blessing One Park Place, Regency Square, and other projects, he continues to condemn the Ashby High Rise.

Some may consider this "business as usual". Many critics cynically dismiss such political pandering as an application of the Golden Rule--those with the gold rule. And then they call for greater government oversight, new ethics rules, further regulations, and more government controls. They accept government intervention in the market as a metaphysical fact, and the only issue to be debated is how that power will be wielded.

Without clearly defined principles, politicians can only deal with issues on a case-by-case basis. Each particular situation is regarded as isolated and unrelated to any other situation. The resulting policies are often contradictory as the politicians act on political expediency and appease the noisiest gang, those with political pull, or both.

Houston needs leaders who embrace, advocate, and consistently apply rational principles. Specifically, Houston needs leaders who recognize that government's only proper function is the protection of individual rights, including property rights. And we will not get such leaders until the citizenry demands and accepts nothing less.

Thursday, May 14, 2009

If I Were Mayor: The City Budget

Mayor White unveiled the city's budget for fiscal year 2010 on Tuesday. The mayor's introductory letter instructed city employees to "manage every single cost", which is certainly good advice. At a news conference the mayor bemoaned the fact that the $4 billion budget will not allow him to address all of his priorities:

None of us are happy that there are any unmet needs. But in a city of this size, there will always be unmet needs.

Among the items the mayor cannot address are flood control, updates to the emergency medical system, and expanding the city's recycling program. None of these are proper functions of government. Indeed, more than 75 percent of the budget is for functions that should be provided by the private sector.

The budget for the police department will increase 2.7 percent to $675 million. The police, the courts, and administrative costs are the only functions that should be on the budget. Which means, limited to its proper function of protecting individual rights, the current budget should be less than $1 billion.

Council members and the mayor made the usual noises about tightening the city's belt and making hard choices. But the fact remains that the city should not be in the business of providing parks, libraries, "cultural services", trash collection, or a myriad other things. The budget represents business as usual.

Cutting the budget really isn't that hard. I have previously pointed out how this can be achieved--privatizing services, selling assets, and repealing laws that violate individual rights are a good starting point. Paying off the city debt would save $240 million for a savings of approximately 11.4 percent of the general fund.

Mayoral candidates talk about economic growth and make vague statements about how they will encourage business. But they continue to advocate exorbitant spending, government intervention in the economy, and programs that stifle economic activity. Freedom is the true economic stimulus.

If the mayor, or any of the candidates for that position, were truly serious about job growth and tightening the belt, they would heed my suggestions. If the city government were limited to its proper functions, Houstonians would retain more than $3 billion that will be taken from them. Economically, that money would be saved, invested, or consumed by those who earned it. And all of these involve economic activity that creates jobs and leads to economic growth.

Morally, taxpayers have a right to the money that they have earned. Confiscating money to pay for parks, libraries, "cultural services", and similar programs punishes the productive and rewards the non-productive.

The truth is, city officials want to have our cake and eat it too. They want to pretend that they care about "quality of life" and economic growth, while they simultaneously take actions that destroy both. This may sound trite, but actions speak louder than words. City officials--including mayoral candidates--want more control over the economy and our lives. They may claim otherwise, but their actions are aimed at doing precisely that.

The blame does not entirely lie with politicians. Voters and taxpayers demand and tolerate such actions. They believe that need supercedes rights, that fantasies can be fulfilled by government. Until the citizenry believes differently--which requires a philosophical revolution--an actual campaign for mayor is pointless. Until the citizenry demands freedom, they (and we) won't get it.

Wednesday, May 13, 2009

Mayoral Preview: TJ Huntley

TJ Huntley, the latest entrant into Houston's mayoral race, has a "business plan" for the city:
We will create a panel of telemarketers that will be trained and employed specifically for the purpose of attracting businesses. They will possess the necessary sales skills to ensure the largest possible business growth. In addition to his Business Growth Plan, TJ Huntley is creating a plan to aid the citizens of Houston in starting their own business. These two plans will work hand in hand to achieve short and long term economic growth.

I am sure that many Houstonians will find this appealing, but I am not one of them.

I certainly agree that attracting business is important for the city's long term economic growth. However, the most practical and moral means for doing so does not consist of marketing--it consists of promoting freedom.

Practically, I can only imagine the script that these telemarketers will use:
Good morning Mr. Gates. How is the weather in Seattle? I am calling today because your company is eligible for a special program being offered by the City of Houston. Because of the reputation of your company, we are prepared to offer seven years of tax rebates if you move your headquarters to Houston. We don't make such offers to everyone, and you should feel honored that we have placed your company has such an elite status. And if you sign up today, we will also give your company exclusive use of Discovery Green for an entire day.

I may be wrong, but I seriously doubt that telemarketing is going to be an effective means for attracting businesses to Houston.

Morally, such tactics are improper. Government's purpose is to protect our rights, not use annoying marketing methods to badger business owners to move their operations. Huntley is little different from the other mayoral candidates--he believes that city government should be actively engaged in the economy.

Regarding crime, Huntley offers a superficial solution similar to Peter Brown:
TJ Huntley plans to stop crime at the root by investing in our children and future generations. Various programs are offered throughout Houston that educate children about the dangers of crime and encourage them to live an appropriate lifestyle. Through support of these organizations we can help keep children and teens off our city streets and in safe habitable conditions.

According to Huntley, crime is essentially an educational issue--our crime rate will drop if we teach children that crime is dangerous. While I would agree that education should play a role in addressing crime, the nature of that education is considerably different. Rather than running vocational programs and "crime is dangerous" classes, government should be educating by example--if you violate the rights of others you will be punished. That is the only "lesson" that the city should be teaching.

Huntley's "me-tooing" goes beyond the economy and crime. He also wants to protect the planet and expand light rail. These positions are typical among Houston's politicians, and they are unprincipled pandering. He continues this trend when he writes about zoning:
We will work with real estate developers and encourage them to invest in these poorly constructed neighborhoods, giving the residents and their neighbors a better lifestyle.

When government "encourages" certain actions, it can only mean a carrot and stick approach. It means granting unearned benefits to some, punishing others, or both. It means using tax money to bribe individuals to act as government desires, prohibiting actions government dislikes, or both.

It would be easy to conclude that TJ Huntley offers nothing new in the mayor's race. But alas, that is not the case. His web site tell us that:
He is a strong advocate for pro-life, is passionately dedicated to the rights of the unborn, and believes that marriage should only take place between a man and a woman. Like our Founding Fathers, TJ does not support a state sanctioned or required religion but believes our nation can only achieve greatness under the hand of God.

While acknowledging that the mayor can have little, if any, impact on these issues, Huntley promises to "promote honorable morals". He makes it very clear that he would use the mayor's office to promote Christianity. He may dispute my claim, but if he seeks to make Houston great--which he does--and greatness can only be achieved "under the hand of God", his meaning is beyond question.

It is bad enough that Huntley promotes the same tired ideas as the other mayoral candidates. That he also wants to promote his religious beliefs puts him at the bottom of the list.

Tuesday, May 12, 2009

Government Without Taxation: Final Thoughts

The Freeloader Issue
A common objection to voluntary support for government is that some individuals will not pay. Such individuals will still receive the benefits of the police, the courts, and the military, but will contribute nothing financially. This is the so-called “freeloader issue” or “free rider problem”.

The fact that some individuals will not voluntarily support government is hardly an argument against government without taxation. All it demonstrates is that some individuals will be freeloaders.

The number of individuals who will freeload is irrelevant. We have already seen that millions of Americans voluntarily pay to protect their rights and their property. They will continue to do so whether others contribute or not. In other words, individuals pay to protect their rights because it is in their self-interest, and this fact does not change simply because others do not recognize that their self-interest includes supporting legitimate government functions. Those with the most to lose—e.g., businesses and the wealthy—will not subject themselves to anarchy merely because a neighbor refuses to contribute to the police department.

In addition, it is in the self-interest of all citizens to protect the rights of all citizens. A threat to the rights of one individual is a threat to the rights of all.

But the fundamental answer to the freeloader issue lies in morality. Morally, each individual has a right to act according to his own judgment, so long as he respects the mutual rights of others. This precludes the use of force, even when that compulsion would be used in an individual’s “self-interest”. Each individual has a moral right to choose for himself what constitutes his self-interest, and others have no right to compel him to act otherwise. To compel an individual to act in his “self-interest” is a contradiction.

It is important to remember that the culture would be much, much different if the idea of government without taxation could be a reality. Rational self-interest would be more widely accepted and individuals would understand that their self-interest includes voluntary support for legitimate government functions.

As we have seen, the legitimate functions of government provide necessary and substantive values to individuals—that is, the protection of individual rights. And we have also seen that individuals will voluntarily pay for these values, just as they voluntarily pay for bread, gasoline, and internet service. Even in a culture in which taxation and regulations rob citizens of a significant percentage of their income, individuals and businesses continue to voluntarily pay to protect their rights.

The time is too soon to actively advocate government without taxation as a political goal. However, it is not too soon to demonstrate that, not only is government without taxation moral, it is also practical.

Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts

Monday, May 11, 2009

Government Without Taxation: Other Revenue Sources

Lotteries have long been used by governments to raise revenues. Forty-four states and the District of Columbia have lotteries. According to the North American Association of State and Provincial Lotteries, state lotteries generated revenues of nearly $18 billion (after expenses) in 2008. Lotteries are played voluntarily, and thus represent a non-coercive method for government to raise money.

Opponents of state-run lotteries argue that they are a form of regressive taxation—that the poor are more likely to play lotteries. Whether this is true or not is irrelevant—individuals should be free to act on their own judgment, even when others think that their judgment is poor. Another common argument against state-run lotteries is that they promote gambling. Again, the truth of this claim is irrelevant, as individuals should be free to act on their own judgment.

In a free society, private lotteries would be permitted (they are generally prohibited now), and consequently, governments would have competition for lottery money.

Selling Assets
In a free society, virtually all property would be privately owned. Government would not own parks, or forests, or museums, or large tracts of undeveloped land. Government would only own the few parcels needed to house the police, the courts, and the military.

The federal government is the largest property owner in the nation. Indeed, in many western states and Alaska the federal government owns more than 40% of the land. Selling this land would raise hundreds of billions of dollars, if not trillions of dollars.

Prison Factories
Pennsylvania Correctional Industries (PCI) is a program that employs inmates at fifteen state prisons while they serve their sentences. Inmates produce garments, soaps and degreasers, and forms for state government. Inmates received credits for their work, which can be spent at the prison commissary or applied towards fines and restitution. Director Tony Miller told an interviewer that “some inmates, after serving their time and being released, have written letters of thanks for the skills they learned through their PCI jobs that helped them get jobs when they left prison.” [1] For the fiscal year that ended in June 2007, PCI made $1 million in profit on $34 million in gross sales. The California Prison Industry Authority generates annual sales of more than $150 million from silk-screened clothing, fine-ground optics, and paper products.

Supreme Court Justice Warren Burger was a vocal proponent of “factories with fences”, as he called them. His efforts in the 1980’s and 1990’s led to the expansion of Federal Prison Industries, which produces furniture, textiles, electronics, and other items. [2]

Critics of prison factories argue that they have an unfair competitive advantage over private sector industries. While inmates are paid substantially less than private sector workers, prison factories are less efficient and must contend with significantly higher security costs. As Robert Q. Millan, a former member of FPI’s Board of Directors, once said:

As a former banker, I am well aware of the operations of a variety of businesses. In private sector business, it is of primary importance to eliminate all inefficiencies possible in order to maximize profit. I could not recommend to my former bank, or any bank, that it make loans to a business that was controlled by the conflicting mandates and had the inherent inefficiencies that handicap FPI. [3]
In 1995 FPI had gross sales of $459 million. Fifty-percent of the money earned by inmates was used to pay fines, restitution, and child support. Without a prison job, these payments would not be possible. During its more than sixty year history, FPI has been self-sustaining, and indeed, it has turned over more than $80 million to the federal treasury.

While the primary purpose of prison is punishment of criminals, prison factories provide opportunities for inmates to learn job skills, which does reduce recidivism. Inmates should be provided with the bare necessities, and any amenities they wish to enjoy while in prison should be purchased with money earned in prison. Those who work should enjoy a better standard of living, just as it is outside of prison. Prison factories also provide inmates with the means to make restitution to their victims.



[3] Page 6,

Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts

Friday, May 8, 2009

Government Without Taxation: The Courts

The purpose of the courts is to resolve disputes between individuals, whether criminal or civil in nature. In criminal cases, the courts determine the guilt or innocence of an accused criminal and the punishment of the guilty. In civil cases, the courts arbitrate a resolution in a dispute—for example, a breach of contract.

In any semi-free country criminals are a small percentage of the population. In a free society, the number of criminal cases would be substantially less than today. Voluntary actions—such as prostitution and drugs—would not be crimes, and the absence of these cases would greatly reduce the case load on the criminal courts.

While their conviction and punishment of actual criminals is important, resolving contractual disputes is a much larger and significant role. Long-term interactions between individuals depend upon the cooperation of those involved, and such relationships are typically codified in a contract—a written agreement identifying the responsibilities of each party. A unilateral breach of that agreement can have significant consequences on the other parties. Those consequences can be devastating to the plans and actions of those parties.

A breach of contract is a form of force—it is the intentional withholding of property or services. For example, if a contract calls for the delivery of certain materials by a specific date, the failure to do so deprives the purchaser of property that is rightfully his. His plans—the actions dependent upon those materials—cannot be taken.

Resolving such disputes—identifying the victim and the appropriate penalties—is the primary function of the courts. This is a legitimate and important value to individuals. Without the courts, each individual would be required to enforce the contract, and he would likely meet armed resistance. The result would be gang warfare.

The benefits of resolving disputes should be obvious. It allows the parties to recover damages. If a long-term relationship is involved, such as between labor and management, it allows the parties to clarify their respective responsibilities. Individuals recognize the value provided by dispute resolution, and they willingly pay for that service.

In recent decades, alternative dispute resolution (ADR) services, such as mediation and arbitration have gained popularity as efficient and inexpensive methods for resolving disputes. Many contracts now mandate ADR as the means for resolving any disputes arising from the contract.

Arbitration allows all parties to present their case in an informal setting. The arbiter—often an expert in the particular issues in question—issues a binding ruling after considering the facts of the case. Mediation involves a third-party who tries to find an acceptable compromise between the parties in dispute. Upon acceptance by all parties, that agreement becomes binding. Many courts are now requiring mediation prior to trial for cases involving lesser dollar amounts.

ADR can be utilized in many different ways. The Better Business Bureau offers ADR services to its members and consumers. The parties to a dispute can select a mutually acceptable third-party to arbitrate or mediate, such as an attorney, a retired judge, or an industry expert. The parties can agree to use an ADR service, such as those offered by the American Arbitration Association or other private companies.

While ADR is usually performed outside the auspices of the courts, the rulings of arbiters and the agreements reached through mediation are generally enforceable in court. Because of its informal nature, ADR simply offers a faster, less expensive means for resolving disputes versus litigation.

Judicial Arbitration and Mediation Services (JAMS), and the American Arbitration Association provide a high volume of services to primarily corporate clients. For example, in 1992 JAMS generated revenues of 25 million dollars and handled roughly 12,500 cases. In the same year the American Arbitration Association handled 60,000 cases.

As with the police and military, individuals recognize the need for the courts, and they will voluntarily pay for those services.

Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts

Thursday, May 7, 2009

Government Without Taxation: The Police And Military

The Police
According to the Bureau of Labor Statistics, there were approximately 1,022,000 security guards working in the United States in 2003. This is about the same as the number of police. Americans spend approximately $60 billion per year on security alarms, security guards, and other security services. Clearly, Americans are voluntarily willing to spend money in order to protect their property and persons. And this money is spent in addition to the taxes paid for the provision of police. These are private, voluntary payments for the express purpose of protecting the rights of individuals and businesses.

In addition to these direct expenditures for security, many individuals and businesses also contribute money to support police departments. For example, the 100 Club in Houston raises money to support police officers and to provide financial assistance to the families of officers killed in the line of duty. Since 1953 the 100 Club of Houston has spent more than $28 million on special equipment, financial aid, and other disbursements to police officers and their families. Other 100 Clubs in Arizona, Buffalo, San Antonio, Minnesota, California, Maryland, and more than one-hundred communities across the nation have raised millions of dollars to support police officers, firefighters, and their families during times of tragedy.

Private, non-profit foundations in exist in more than two dozen American cities for the purpose of raising funds to support local police departments. The Houston Police Foundation (HPF) was founded in 2005 and raised more than $1 million in its first year. It uses donations by individuals and businesses to “fund special programs, officer safety, training, equipment, and new technology -- none of which would be feasible under the City budget.”[1] The New York City Police Foundation was established in 1971 to “to strengthen the services of the New York City Police Department and to improve public safety in New York City.”[2] The organization has invested more than $81 million in projects for the police department. The Los Angeles Police Foundation has awarded ore than $3 million in grants to that city’s police department.

In Huntington, West Virginia individuals and businesses donated almost $200,000 to the police department for the purchase of motorcycles, police dogs, and other equipment.[3] In Milwaukee private donations in one neighborhood raised $176,000 to help the police pay for overtime and street cameras, which resulted in a 4% decline in crime in that neighborhood.[4]

These examples, and many like them, demonstrate that individuals do voluntarily pay for police protection. These contributions by citizens allow the police to purchase equipment, pay for overtime, and provide greater protection to a community.

In a free society, in which crimes are properly defined as acts of force, the laws enforced by the police would be substantially reduced. Voluntary actions such as prostitution and drugs would be legal, and the police would not be spending precious resources monitoring the voluntary actions of adults. This would significantly reduce the money and time required to enforce the law.

The Military
Just as it is a value to be protected from domestic criminals, it is a value to be protected from foreign threats. If a street thug is a threat to lives and property of individuals, terrorists and other enemies of America are equal threats. And just as Americans voluntarily pay to support the police, they also voluntarily pay to support the military.

Perhaps the best known organization providing support for American troops is the United Services Organization (USO). Founded during World War II, the USO provides “care packages”, phone cards, and entertainment for American troops stationed abroad. Charities such as the Fisher House Foundation, the Intrepid Fallen Heroes Fund, and National Military Family Association raise millions of dollars to provide equipment, financial aid, education, and other assistance to soldiers and their families. Many businesses have donated equipment to troops stationed overseas. For example, efi Sports Medicine, a San Diego-based exercise equipment manufacturer, donated more than 150 of its Total Gym machines to troops stationed in Iraq and Afghanistan.

A rational foreign policy would significantly reduce the military budget. While military strategy might dictate the need for American soldiers to be stationed in other nations, our military would not shoulder the entire burden of defending other nations. Nor would it be used for “peace keeping”, food distribution, or nation building. It would be used to kill and destroy enemies of America.





Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts

Wednesday, May 6, 2009

Government Without Taxation: The Size of Government

For the first one hundred years America remained essentially true to the principles of the Founding Fathers. Government remained largely confined to its legitimate functions (though there were certainly many exceptions). In the late nineteenth century the Federal government began to abandon the founding principles and expand its reach into an ever growing portion of the economy and the lives of citizens.

The growth of government has generally been a gradual process, with occasional bursts. The most significant growth began with the New Deal in the 1930’s. This growth can be measured multiple ways—government expenditures, the volume of laws and regulations, and the number of individuals employed by government. By each measure, government has grown by a significant amount.

The growth in government is not confined to the federal level. Indeed, since World War II state and local government has grown at a more rapid rate than the federal government.

Even in a free society, some growth in government—in terms of expenditures and employees—is to be expected. A growing economy and an increasing population would increase the need for legitimate government services. However, the size of government today far exceeds what would be projected based on numbers from the nation’s first one hundred and forty years.

Government Expenditures
During the first sixty years of America’s history, federal outlays totaled $1.09 billion. This compares to an estimated $2.724 trillion (or $7.463 billion per day) for 2008. The consequences of inflation make comparing the actual outlays rather meaningless. Using constant dollars (I will use 2000) provides for a more meaningful comparison by eliminating the effects of inflation.
In constant 2000 dollars, federal outlays were $24.222 billion during the nation’s first sixty years. By 2007 outlays had increased to an estimated $2.223 billion, or $6.117 billion per day. [1]

The ratio of government spending to gross domestic product (GDP) provides a measure that includes economic expansion. That is, this ratio allows us to measure the size of government in comparison to the overall economic activity for a given period. This provides us with an objective measure of the size of government in terms of spending.

From 1789 to 1849, federal expenditures averaged 2.5% of the GDP. During the latter half of the nineteenth century, this figure averaged 3.8%, primarily due to the Civil War. Until Roosevelt’s New Deal, federal spending remained below 10% of the GDP. With the New Deal government spending, as a ratio of GDP, began to rise. Federal spending continued to rise until the 1990’s, when it subsided slightly. In 2007, federal spending was approximately 18.4% of the GDP. As a percentage of GDP the federal government’s expenditures have grown more than sevenfold since America’s founding. [2]

Government Employees
As government has grown and assumed greater control over the economy and the lives of individuals, an increasing number of bureaucrats and other government agents are needed for enforcement purposes.

In 1962 2.84 million people were employed in the military. That number had decreased to 1.478 million in 2003, which accounts for the decrease in the number employed by the federal government. Subtracting those in the military, employment by the federal government increased from 2.42 million in 1962 to 2.732 million in 2003, an increase of 12.8%.

While the number of citizens per federal employee rose from 36 to 69.1, the corresponding number for state and local employees decreased from 1 employee per 27.6 citizens to 15.5. Both spending and the number employed by state and local governments have increased substantially since 1962. By both measures, the size of state and local government has nearly doubled during a forty-one year period. [3]

The primary cause for the expansion government employees is the growing areas of the economy and our lives that are regulated, and thus require enforcement on the federal, state, and local levels. In other words, as governments control over our lives and the economy has expanded, more individuals are required to issue permits, monitor activities, check forms, and in general, insure that the citizenry is staying in line and meeting the mandates of government.

Functions and Expenditures
The increase in federal spending is the result of the government expanding its powers beyond its legitimate functions. This spending takes two primary forms—payments to state and local governments, and payments to individuals. Payments to state and local governments are generally for infrastructure, such as roads and bridges.

From 1940 to 2007 the percentage of GDP sent to state and local governments has increased by more than three times. Payments to individual have increased even more dramatically, and now account for more than 60% of the federal government’s outlays.

Federal outlays to individuals are primarily for entitlement programs, such as Medicare and other health programs, Social Security, and income security. Those functions alone accounted for an estimated $1.585 trillion in 2007. [4]

The Volume of Regulations
In 1970 the Code of Federal Regulations contained 54,834 pages. In 1998 it contained 134,723 pages. Between 1996 and 1999 15,286 new regulations were enacted. There is absolutely no shortage of federal regulations, despite the proclamations of pundits and politicians to the contrary.

In addition to restricting the freedom of individuals through proscription and prescription, these regulations enact a staggering cost on individuals and the economy. The estimated cost of these regulations is more than $1 trillion per year. State and local regulations add another $340 billion in costs. In total, the cost of meeting these various regulations costs each person more than $4,600 per year, and the total grows every year as more regulations are enacted. [5]

The “Correct” Size of Government
While it is difficult to say with absolute precision what the “correct” size of government should be, it is quite easy to say that it should be substantially smaller. We can however, use historical numbers to give some indication of what federal government expenditures “should” be.

If we use the percent of GDP spent by the federal government in 1910, federal spending in 2007 would be approximately $325 billion, or a little more than 15% of the government’s actual spending for the year.

It is within this context that we can discuss government without taxation--the money required to operate a proper government is far less than that spent today.


[1] Federal Outlays were obtained from Conversion factors (CF) were obtained from CF for 1789-1849 based on average for 1800-1849. CF for 1850-1900 is average.

[2] Data obtained from

[3] Data obtained from

[4] Data obtained from and


Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts