Flood protection: If it’s not your business, it’s none of your business

August 29th, 2010 by Brian

From the Daily Camera:

The idea [from City of Boulder officials] is that a new set of codes would apply to new construction and substantial remodels of buildings that are designated as “critical facilities.” Under the city’s definition, those buildings include hospitals, sewage treatment plants, gas stations, nursing homes, police and fire stations, emergency shelters, urgent care centers, schools, day care centers, communications facilities and businesses that store or use hazardous waste.

The Daily Camera solicited its editorial advisory board to submit their views on this.  Mine was printed on August 28:

If it’s not your business, then it’s none of your business. Government has no right to mandate how private property owners protect against floods — let alone commandeer their buildings during emergencies. The proper response to a busybody in your life is “This is private and none of your business.”  The same goes for private properties that the city considers “critical facilities.” These include gas stations, nursing homes, day care and urgent care centers, and private schools and hospitals.

Property owners have the right and responsibility to insure against risk according to their own best judgment. In a free-market, short-sighted owners would pay for lax precautions through repairs, lost revenue, higher insurance premiums, and possibly lawsuits if hazardous materials are involved.

But government sabotages responsible ownership with tax-funded disaster assistance and the monopolistic National Flood Insurance Program. As a Competitive Enterprise Institute analysis discusses, the NFIP has little incentive to accurately asses flood risks. Over several years the NFIP “paid out $806,591 for repeated storm damage to a suburban Houston home that was valued at $114,480,” reported the Houston Chronicle.

Private flood insurers have beneficially balanced incentives. Selling policies that require excessive safety measures risks losing customers to competitors. But lax measures result in paying many costly claims.

Government mandates cannot achieve this balance. Boulder officials should consider the risks of mandates that significantly increase construction and remodeling costs. These can obstruct renovations and new construction, which can result in lost jobs, tax revenue, or continued use of already flood-prone buildings.

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Further reading:

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Tax breaks are not tax subsidies

August 14th, 2010 by Brian

Too often I’ve heard people refer to tax breaks or tax exemptions as “subsidies.” Freeman Editor  Sheldon Richman does a great job explaining the difference.  Some excerpts:

A subsidy is a cash grant from the government. … government intervention enables people to obtain money they were not entitled to; the flip side is that someone else is deprived of money he is entitled to, or that he would have had legitimate access to.

In contrast, when someone is given any kind of “tax break,” he keeps money he is entitled to. … if a person retains some of his own money because of a government action, we should not condemn this as a subsidy.

Subsidies should be opposed. Opportunities to keep one’s own money should not.

Needless to say, government can create great mischief by determining who can and cannot keep his own money. If mortgage interest is tax-deductible but rent is not, government encourages home buying. It is not the government’s function to decide the best way to live and then to use the tax system to manipulate people into living that way. …

No one should be begrudged the opportunity to keep his own money. In the face of a discriminatory tax cut, we should point out that it ought to apply to everyone (who pays taxes), and not just a narrow group of taxpayers. Efforts to widen exceptions may not succeed, since that would defeat the politicians’ purpose, which after all is to manipulate private behavior. But at least we can pound home the point that it’s better for people to spend their own money for their own objectives.

Read the whole article: Tax “Breaks” Aren’t Subsidies in The Freeman, published by  The Foundation for Economic Education

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Flawed voting system creates Maes & Tancredo conflict

August 14th, 2010 by Brian

Colorado’s 2010 gubernatorial race reveals a major flaw in our plurality-based elections: vote splitting. It’s well-known that Dan Maes and Tom Tancredo will split the Republican vote. This makes it much easier for Democrat John Hickenlooper to win compared to if one candidate withdrew. In an August 11 Rasmussen poll, the combined Maes/Tancredo votes exceeded Hickenlooper votes by 6 percentage points. Maes and Tancredo are similar enough candidates that if either withdraws, the other may gain enough votes to win.

Election rules should not create such conflict, or the related “spoiler effect” where voting for your favorite candidate helps your least favorite candidate win. Elections need not bind voters this way.

For example, a few U.S. cities use instant runoff voting, where to vote is to rank candidates according to your preference. Say the only candidates are Maes, Tancredo, and Hickenlooper, and you rank them in that order. If Dan Maes gets the least total first-choice votes, then he’s eliminated, and your vote is transferred to your next choice, Tancredo. In the runoff only Tancredo and Hickenlooper remain, and whoever has the most votes wins.

Critics of instant runoff voting point to possibly unfair results for popular second-choice candidates, or counter-intuitive results of Burlington Vermont’s recent mayoral election. But even with these potential drawbacks, instant runoff voting is preferable to today’s plurality voting. It remedies vote splitting, spoiler effects, and “wasted vote” concerns. More nuanced voting systems may improve upon instant runoff voting, but added complexity could limit their appeal.

This view on Colorado politics was originally printed in the Daily Camera (Boulder) on August 14 2010.

More resources on how the Democrats and Republicans shut out competition from third-party candidates:

Free markets have few barriers to entry. Individuals and firms can offer new products or services to consumers, thereby fostering competition and choice. American elections, in contrast, are dominated by two parties. Not Invited to the Party synthesizes political science, economics, and history to demonstrate how the two-party system is the artificial creation of a network of laws, restrictions, and subsidies that favor the Democrats and Republicans and cripple potential challengers, depriving voters of truly vigorous political debate. Consequently, Americans are deprived of choices on election day and arguably, deprived of effective and accurate representation in Congress and the presidency.

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“Campus gun ban at CU Boulder ignores reality”

August 2nd, 2010 by Brian

That’s the headline the Denver Post used for my article about the University of Colorado’s gun ban, which prohibits concealed-carry permit holders from being armed on campus. It begins:

Imagine this news headline: “School shooter apologizes — not for killing — but for violating CU campus gun ban.”

Preposterous, right? Not to some members of the University of Colorado Boulder faculty.

A recent motion from the Boulder Faculty Assembly (BFA) supports a campus gun ban — as if someone intent on killing would comply with a campus gun ban, let alone regret breaking one.

One argument I’m particularly fond of is:

Here’s a challenge for the CU Regents and Boulder Faculty Assembly. They’re OK with armed campus police, but not armed citizens with the training and qualifications to have earned a concealed-carry permit. Then why not issue special campus gun permits to those who, at their own expense, undergo the same firearms training as the CU Police?

If this is not acceptable, how about more rigorous training, or limiting permits to faculty and staff? If a regent or CU faculty member opposes this, you should wonder about his actual motives for opposing concealed carry on campus.

Read the whole article: Campus gun ban at CU Boulder ignores reality.

(Graphic courtesy of Oleg Volk and A-Human-Right.com.)

Update: This was the most-viewed opinion article at the denverpost.com for the week of August 1-August 7 2010.  See the “OnLineNumbers” part of the Aug. 8 print edition here (pdf).

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City of Boulder should consider outsourcing, privatizing services

August 1st, 2010 by Brian

Background from the Daily Camera:

Boulder City Manager Jane Brautigam has been working this year to move to a “priority-based” budget, in which the things most important to the community are first in line for funding.

My response, published in the Camera:

The Boulder City Council should consider saving money the way private organizations often do: by outsourcing some of its operations to private firms. For-profit and non-profit firms that compete for government contracts have incentive to provide low-cost quality services. A firm won’t get a contract if its bid is too high, and its contract won’t be renewed if it does a lousy job. Typical savings from privatization are between five and twenty percent, reports the Reason Foundation.

The towns of Roswell and Sandy Springs, Georgia each have around 90,000 residents. But Sandy Springs’ annual budget is around $300 less per person. Why? Sandy Springs has outsourced many of its services to private-sector firms. Unlike surrounding cities with budget deficits, Sandy Springs has a surplus.

Outsourcing some Public Works services could be worthwhile. Consider Centennial, CO. In 2008 Centennial signed a five-year agreement with a private firm to “manage all public works functions for the city.” This includes “traffic engineering and operations, permit processing, inspections, administrative services, and street and roadside maintenance, including snow removal.”

Also examine Parks and Recreation. Consider outsourcing their operation to private firms.  Such privatization efforts have yielded 20% cost-savings. Or better yet, could the City raise money by leasing its facilities – rec centers, fields, pools, and golf course – to private organizations to manage them?

Or how about increasing user fees for Parks and Recreation programs? Don’t some programs compete with private firms, and make taxpayers subsidize other people’s leisure activities? This is both costly and unfair.

This was originally printed in the Daily Camera on July 31.

A couple of Daily Camera articles about this:

And the Priority Based Budget Memo dated July 27 by the City Manager and others. This includes one method by which they would prioritize city services.

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End Boulder’s unnatural monopoly in electricity & natural gas service

July 17th, 2010 by Brian

Governments should not grant monopolies, but the Boulder City Council would by renewing Xcel’s franchise. Xcel would remain “the community’s sole provider for electrical and natural gas service,” says the City’s website. Xcel should do business without government protection from competition.  Competitors should be free to contract with land owners to run wire and gas lines, and sell their products to interested customers.

Some advocate another form of unnatural monopoly -  municipalization -  where government owns the electric utility. Supporters claim that “munis” have lower prices than franchised investor-owned utilities like Xcel. But this presents a false alternative between two types of government-created monopolies. Government should stick to its proper role: enforcing laws that protect individual rights. Here, this means repealing political controls that inhibit free-markets in electrical and natural gas service.

Others advocate “community choice aggregation.” This sounds like mandatory open access, which Texas has — Google “Texas  electricity shopping.” Mandatory open access involves forced competition that violates grid owners’ property rights: grid owners must sell grid access to competing power producers at contrived prices.

Maybe government-enforced competition is preferable to a government-enforced monopoly. But why settle for this?  Electricity is more a government-created monopoly than a “natural” one. Though state and federal controls inhibit competition, utilities compete for customers in about 10 U.S. towns. Such competition was more common before governments imposed regulations on them, as documented in “Electric Avenues,” published by the Cato Institute. Since the electric utilities themselves lobbied for these regulations, ask yourself who has benefited.

This was originally printed in the Boulder Daily Camera on July 17 2010.

More references on free-markets in electricity generation and distribution:

Image via OpenClipArt.

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CU campus concealed-carry & right to self-defense

July 3rd, 2010 by Brian

Banning seat belts in cars would be immoral. Banning guns deserves equal condemnation.  Self-defense is a fundamental human right – not granted by governments, but recognized by just law. Gun bans deny peaceful people an effective means of self-defense against violent criminals, who ignore gun bans. Just as someone who disables seat belts shares responsibility for the resulting traffic fatalities, gun ban supporters are partially responsible for victims of violent crimes.

The issue at CU is whether people with concealed-carry handgun permits can be armed on campus.  Armed with baseless prejudice against permit holders, supporters of campus gun bans imagine hypothetical horrors that might result from allowing it. But none of these have occurred on campuses, like CSU, that have allowed concealed-carry. Actual horrors — mass school shootings — have occurred only on so-called “gun-free” campuses.

Violent criminals seek unarmed victims, as Dave Kopel documents in his law review article, “Pretend ‘Gun-free’ School Zones: A Deadly Legal Fiction.” A “gun free” campus invites rapists and murderers: “Commit your crimes here – your victims won’t shoot you!”

“Dial 911 and die,” warns Jews for the Preservation of Firearms Ownership. Police typically cannot respond in time to stop shootings, and have no legal obligation to protect us. Students owe their lives to heroic civilians such as Joel Myrick, Mikael Gross, and Tracey Bridges, who stopped school shootings with guns they retrieved from their cars.

Gun bans disarm such potential heroes and invite rapists, gay-bashers, and murderers to prey on defenseless victims.

The above was printed in the July 3 Daily Camera (Boulder, CO).

Other gun control resources:

(Graphic courtesy of Oleg Volk and A-Human-Right.com.)

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Minimum wage destroys jobs, harms poor and minorities

June 17th, 2010 by Brian

From the Center for Freedom and Prosperity:

Also check out the chapter on minimum wage laws in Henry Hazlitt’s Economics in One Lesson.

(via Reason.tv)

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Governments are poor stewards of forests

June 13th, 2010 by Brian

From New Scientist:

In the first study of its kind, Chhatre and Arun Agrawal of the University of Michigan in Ann Arbor compared forest ownership with data on carbon sequestration, which is estimated from the size and number of trees in a forest. Hectare-for-hectare, they found that tropical forest under local management stored more carbon than government-owned forests. There are exceptions, says Chhatre, “but our findings show that we can increase carbon sequestration simply by transferring ownership of forests from governments to communities”.

The New Scientist article is gated, and I got the above quote from Tyler Cowen at Marginal Revolution. For more, see his post: The economics of local forest management (or another lesson in Elinor Ostrom).

In Reason magazine, Ronald Bailey writes:

Authors Ashwini Chhatre, a geographer at the University of Illinois at Urbana-Champaign, and Arun Agrawal, a political scientist specializing in environmental policy at the University of Michigan, offer evidence that governments have a habit of licensing destructive logging and that they often fail to prevent resource rustling. In contrast, Chhatre and Agrawal found, forests owned by local communities are managed for the long term and store lots of carbon dioxide.

As Chhatre told New Scientist, “Our findings show that we can increase carbon sequestration simply by transferring ownership of forests from governments to communities.” Chhatre and Agrawal further suggest that locals are better at managing common pastures, coastal fisheries, and water supplies.

Read the whole article: Who owns the forests?.

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To lower college costs, eliminate tax-funded tuition subsidies

June 12th, 2010 by Brian

Last week Governor Ritter signed a bill that allows Colorado’s tax-funded universities to raise their tuition.  In response, “some Colorado students will see increased financial aid to offset the higher tuition, ” InDenverTimes reports.

Surely some parents are rightly concerned with fast-rising tuition costs.  But Capping college tuition would either degrade a school’s quality or reduce scholarships students receive. For lower tuition prices, eliminate tax-funded tuition subsidies and financial aid. Employers and prospective students would benefit.

Government-subsidized student loans and grants increase tuition prices. When government subsidizes the cost of education, students pay less, so more people want to buy what colleges sell. Colleges respond by increasing tuition and fees. This isn’t just theory.  Economist Gary Wolfram’s research documents empirical evidence that backs it up.

College subsidies hurt both students and employers. College isn’t for everyone, but tuition subsidies create the illusion that it is. As career counselor Marty Nemko summarizes, “College students with weak high school records usually drop out, having learned little, and with devastated self-esteem, a mountain of debt, and a job they could have obtained without college.” Employers hurt because these students could have spent their college years gaining valuable skills through, for example, an apprenticeship program or on-the-job training.

Absent harmful tax-funded college subsidies, private alternatives would replace them. These would include the familiar student loans and scholarships. An intriguing alternative would be “human capital contracts,” where in exchange for investors’ paying their college expenses, students repay them a percentage of their future earnings over a specified time.

Whatever the alternatives, it’s immoral for politicians to confiscate our earnings to distort the labor market and meddle in people’s lives. Young adults have the right to pursue their dreams and careers according to their own judgment, rather than the schemes of politicians.

A version of this article was published on-line in the Daily Camera on June 12, 2010.

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