Voice For Liberty

Author: Bob Weeks

  • On Seatbelts and Helmets

    I believe there is little doubt that it is foolhardy to be in an automobile without wearing seatbelts, or to ride a motorcycle without wearing a helmet. Someone inevitably claims that it is better to be thrown clear of the wreckage than to be trapped inside. But ask any race car driver — they who witness crashes all the time and may have even been in several — if they would dare take to the track without making use of their extensive belting systems.

    I believe it would be nice if we had the right to drive automobiles without wearing seatbelts, and to ride motorcycles without wearing helmets. These acts, while dangerous to the actor, don’t pose any real threat to others. If the person who crashes into my car isn’t wearing their seatbelt, it doesn’t change my likelihood of injury to my body. It does, however, greatly increase the danger to my wallet, and that’s where I draw the line.

    The economist Walter E. Williams, in a column titled Click it or ticket makes this conclusion:

    “Some might argue, but falsely so, that the problem with people exercising their liberty to drive without seatbelts, ride motorcycles without helmets or eat in unhealthy ways is that if they become injured or sick, society will be burdened with higher health-care costs. That’s not a problem of liberty but one of socialism.

    There’s no liberty-based argument for forcing one person to care for the needs of another. Under socialism, one is obliged to care for another. A parent-child relationship emerges between the citizen and the government. That was not the vision of our Founders.”

    He is correct that those who are injured often receive care that they don’t pay for themselves, either out-of-pocket or through their insurance carriers. Therefore, the rest of society pays. That reduces the liberty of others because they have to pay so that a few can enjoy their rights. Dr. Williams makes the call in favor of the rights of the seatbeltless, while I argue in favor of those who pay. Not wearing seatbelts or wearing a helmet is a small gratification. Having to pay the healthcare costs — and they are huge — to support those small liberties is oppressive. Until we can limit the economic damage of not wearing seatbelts or wearing helmets to those who cause it, I support laws requiring their use.

  • The Real Scandal at City Hall

    In 2003, local Wichita news media devoted extensive news coverage to two officials in the City of Wichita’s finance department. They were accused of improperly spending between $52,000 and $73,800 on travel. While I don’t condone this waste and I’m glad that our local news media uncovered it, the amount involved is relatively small. Furthermore, the people who wasted this money are no longer in a position to repeat.

    The real scandal, however, is the ongoing lack of care exercised when spending our money. Time and time again we read in the newspaper how the mayor or city council members are surprised by facts and circumstances arising after a decision has been made.

    For example, in an article titled “Kolb goal: full facts in future city deals” (Wichita Eagle, September 26, 2004) we read this:

    “Due diligence should have been done,” Mayor Carlos Mayans said when he learned of the losses: “We expect the staff to provide us with information that helps us make sound decisions.”

    In the same article, council member Paul Gray, upon hearing of bad financial news at the city-owned ice rink, is quoted as saying “Why is it just now coming to us?”

    Continuing in the same article, council members were described as being surprised upon learning that the industrial revenue bonds and property tax abatement awarded to a local business also included a sales tax break. How could they be surprised? The City of Wichita website contains a nicely-done page titled “Industrial Revenue Bonds” (located at http://www.wichitagov.org/Business/EconomicDevelopment/IRB) (This is the first result that appears when you use the wildly popular Google search engine and search for “Wichita IRB.”) The first link on this page is titled “IRB Overview: Industrial Revenue Bond Issuance in the State of Kansas,” and you don’t have to read very far before you come to the sentence reading “Generally, property and services acquired with the proceeds of IRBs are eligible for sales tax exemption.”

    Is it asking too much that someone at City Hall read the City’s own website? Or, is it possible that they knew this, but decided to overlook inconvenient facts?

    Recently, in an article titled “Plaza falls short” (Wichita Eagle, November 14, 2004), we read this:

    The cinema plaza is the latest in a series of public and public-private projects that have underperformed compared with projections. Others include the Hyatt Regency Wichita, Ice Sports Wichita and Auburn Hills Golf Course.

    Mayans said he’s getting tired of such surprises and is working with City Manager George Kolb to make changes.

    “We need to find out why we have so many projects (from) previous years that are having financial difficulties,” he said. “From now on, we have to make sure that we are not using anyone else’s numbers and we are doing our own due diligence.”

    In fairness to Mayor Mayans, I emphasize that these decisions were made before he took office.

    Now as we undertake spending even more money on projects such as the Waterwalk and the downtown Wichita arena, how can we restore confidence in our local government officials?

    The best thing to do would be to stop spending on projects that are better handled by the private sector. It seems like the City of Wichita, when partnering with private developers, often assumes most of the risk but is not in position to received the rewards the private developers earn (and rightly deserve to earn) if the project succeeds.

    A recent editorial by Phillip Brownlee in the November 21, 2004 Wichita Eagle illustrates the risk involved in these dealings. The editorial, when recommending how to avoid future mistakes like the Old Town Square tax shortfall, states there should be “Better communication between the developers and the city, especially if the project changes.” The key idea in this sentence is change. Things always seem to change. Private developers, being close to the ground and having their own money at risk, sense the need for change earliest. If they are spending their own money, they have the perfect right to change as they see fit. But if they have agreed with the government on a course of action, and now that course needs correction, they have to go back to the government and ask permission to change. That can take a long time — maybe too long to respond adequately to the changing markets.

    The editorial also recommends “Clearer expectations (and in writing) about what the developers will build and what occupancy rates likely will be.” First, this sentence illustrates the element of risk again, what the rates likely will be. No one knows. There is risk in developing a business of any type. It seems like the City assumes the risk, however. Also, I am wondering why Mr. Brownlee seems to imply that expectations have not been given in writing. Furthermore, what recourse does the City have if expectations are not met?

    Finally, the editorial reads “Closer City Council scrutiny before projects are approved (members at the time now say they didn’t know who all the Old Town development partners were, and they seemed to accept on faith the assurances by city staff that the project would exceed revenue projections).” I first note that it seems like city staff are acting as cheerleaders for these projects, when they should provide a sober assessment. Furthermore, if the project would exceed revenue projections, why not adjust the projections so that they accurately reflect what we believe the future will hold?

    The City of Wichita can do a better job. At one time it seemed like our mayor would be better. From an article titled “Mayans takes on WaterWalk” (May 30, 2003 Wichita Business Journal):

    One area Mayans says he’s concerned about is a “leasehold mortgage” referred to in the agreement. That means the city is allowing the developer to place a first lien on the ground owned by the city and leased to the developers for the project, Mayans says. Later, the agreement specifies that the city agrees that their ownership of the ground is to be “subordinated” to a loan obtained by the developer to build the improvements.

    “If the project is unsuccessful, the lender then has the right to take not only the improvements, but also the city’s land,” Mayans says.

    This is the type of thorough analysis and due diligence needed before the City enters into agreements of any type. Why is the city staff not providing this, and why are the Mayor and City Council members not demanding it?

  • Why I don’t listen to Rush Limbaugh

    There have been periods when I listened to Rush Limbaugh, but it has been many years since I listened regularly. Now I hear his show only when I happen to be driving while it is on the air. When I do hear it, I realize that I don’t miss it.

    I think the people who criticize Mr. Limbaugh as being merely an entertainer are correct. He provides entertainment to people who enjoy his style of humor and satire. I decided that I didn’t like it anymore, and I stopped listening. As serious political commentary, though, his show falls short in several ways.

    He often makes fun of people because of their name. I remember during the California electricity crisis he referred to Governor Gray Davis as “Gray-out” Davis. There are many more examples of this type of name-calling and ridicule. These are funny the first time or two that you hear them, but using them repeatedly, whenever you refer to the person, reminds me more of schoolyard teasing than of reasoned argument.

    His hypocrisy concerning his drug use troubles me. In the past, he has been quite harsh on drugs and drug users. His admission of his addiction was hailed as a courageous act, but he admitted it only as it was about to be revealed in the news media. He has used his wealth to defend himself in ways that few others would be able to, which is his absolute right. But the way he has acted for his own benefit is very different from what he has advocated for others in the same situation.

    Limbaugh seems to value education, but he never graduated from college. It seems like he didn’t make a serious attempt at college. I think he would say that he doesn’t need a college education, that he educated himself. Many people who fail to graduate from college say this. I wonder how they know what they missed.

    His boastfulness — “talent on loan from God” — is tiresome. I realize that much of it is playful, but to me, it becomes old very quickly. I’m glad I don’t hear it much anymore.

  • Remarks to City Council, May 11, 2004, Regarding AirTran Airways Subsidy

    I delivered these remarks to the Wichita City Council as they were preparing to vote on extending AirTran Airway’s subsidy for another two years. The extension passed with only one dissenting vote.

    Mr. Mayor, Members of the Council:

    I speak today in opposition to the continuation of the subsidy the City is paying to AirTran Airways.

    There are several reasons why I believe this subsidy should not be continued. The primary reason is that the subsidy, since it is paid to one company and one company only, is not fair to the other companies. Yes, it is true that fares are lower. But is that a legitimate reason to enrich one company at the expense of others?

    If creating an environment of unfair competition is good and correct, why should we not do this in other markets?

    If we feel that gasoline prices are too high, why not select a chain of gasoline stations and pay it a subsidy so that it could lower its prices?

    If we feel that a chain of grocery stores has too much market power and their prices are too high, why not create and subsidize stores to compete with them?

    If we feel that the commissions that real estate companies charge are too high, why not pay one of Wichita’s major firms a subsidy so that they could reduce their commissions?

    Let us all hope, then, that we do not find ourselves running, or being an employee of, a business whose prices the City believes are too high.

    But the situation is even worse. Through the Fair Fares program, the City has organized the potential customers of the subsidized business to ensure that they purchase from it. For the companies that pledged to Fair Fares: How would they feel if the government started a public body for the purpose of organizing their customers, and then used its powers of persuasion to compel them to buy from a competitor at the same time the City is subsidizing the competitor?

    All of this is in direct opposition to the American principles of limited government, individual liberty, and fair markets.

    The distortion of the market that the subsidy creates has another aspect: By creating an environment of unfair competition, we make it unlikely that any airline will consider starting service to Wichita unless they too receive a subsidy.

    If the Council feels that we must subsidize an airline, consider this alternative: why not subsidize one of the other established airlines, one that that flies to many destinations? Or, why not rotate the subsidy every year to a different airline? After all, if fares can be lowered if any airline reduces their fares, it shouldn’t matter which airline does it.

  • Political decision-making increases conflict

    A recent column by economist Walter E. Williams (Why we’re a divided nation) strongly makes the case for more decision-making by free markets rather than by the government through the political process.

    When decisions are made through free markets, Dr. Williams says, both parties win, because in a free market, parties voluntarily enter into only those transactions that benefit them.

    When decisions are made for us by the government, however, it is almost always the case that one party’s gain is someone else’s loss. Therefore, there is conflict. The more decisions made through politics, the more potential for conflict. Coalitions arise in order to try to get more from the government, and the most effective coalitions “are those with a proven record of being the most divisive — those based on race, ethnicity, religion and region.”

    The final paragraph of the column is this: “The best thing the president and Congress can do to heal our country is to reduce the impact of government on our lives. Doing so will not only produce a less divided country and greater economic efficiency but bear greater faith and allegiance to the vision of America held by our founders — a country of limited government.”

    In an earlier post, I mentioned some columns by Dr. Williams that I thought were important. This column is certainly one of his best, as it very simply, in one short page, shows us a major fault in our current political landscape.

  • Columnist Confuses Government and Individual, Again

    In the November 7, 2004 Wichita Eagle, columnist Mark McCormick again confuses the proper role of government and individual.

    He starts by talking about the spirit of the people in Wichita, how they will help you push your car, how they will hold open the door for you, etc. He refers to this as “neighborliness.” He labels Karl Peterjohn, Executive Director of the Kansas Taxpayers Network, as not belonging to this group, because of his opposition to tax increases.

    Because Peterjohn opposed the arena and a school bond issue a few years ago, McCormick thinks he also opposed the wheel and fire. This type of ridicule does not advance Mr. McCormick’s argument.

    I would ask Mr. McCormick if it is neighborly to vote for something that if passed, would require that your neighbor pay to subsidize your pleasure. That’s what the downtown arena tax does. It requires everyone to pay for something that benefits only a few.

    The things that Mr. McCormick labels as being neighborly are things we do because we want to. Many people want to give of themselves to make things better for others. When we do that, either by holding open a door for someone or by giving substantially of our time and money, we are directly engaged in the noble act of charity. The givers of charity directly receive the benefits of having donated, and because it is our own resources we are giving, we make sure that our effort is not wasted.

    When the government, however, taxes us and gives the money to those it does not belong to, it is not an act of charity. It is not neighborly, as we don’t even know those who received the benefit. The givers do not receive the benefit of having donated, because the taxes were taken from them by force.

    The arguments Mr. McCormick makes, much like in his column from earlier in the week, refer to someone being “creative” and “taking a risk” and how Wichita might become “place where dreams and ideas usually die.”

    How is it being “creative” for Sedgwick County to tax its citizens and build the same type of arena that all the other cities — the cities we are supposed to compete with — have already built?

    How is it “taking a risk” for government officials to tax citizens to build an arena? If the arena fails to generate revenue sufficient to cover its costs, will the politicians be responsible? Of course they won’t. They will simply ask the citizens for more taxes, as is happening right now with Wichita’s Old Town special tax district.

    Furthermore, I contend that the more government there is, the less “dreams and ideas” there will be, whether they live or die. For example, downtown arena supporters claim that the arena will attract bars and restaurants to its vicinity. What, then, should entrepreneurs do right now, if they are interested in opening bars or restaurants? Should they wait several years to see if the arena is built, and if it does in fact attract customers? Or should they build elsewhere, and then hope that the arena doesn’t detract too much from its business? This is not the type of climate that encourages individual risk-taking.

    The same week that this column appeared Walter E. Williams wrote in a column titled “Why We’re a Divided Nation” these words: “The prime feature of political decision-making is that it’s a zero-sum game. One person or group’s gain is of necessity another person or group’s loss. As such, political allocation of resources is conflict enhancing while market allocation is conflict reducing. The greater the number of decisions made in the political arena, the greater is the potential for conflict.”

    When we say “yes” to the things Mr. McCormick advocates, we rely on politicians and government to make our decisions, thereby increasing conflict. We should say “no” more often to government and let individuals and free markets make more decisions. We will have less conflict.

  • Columnist Confuses Government and Individual

    Writing in the November 3, 2004 Wichita Eagle, columnist Mark McCormick labels the vote in favor of a taxpayer-funded, government-owned arena a “rebirth of city’s pioneering spirit.” In this column, Mr. McCormick mentions our famous entrepreneurs and aerospace industry pioneers. Although he explicitly denies comparing the building of a downtown arena to the genius of Beech and Cessna, this article claims that the downtown arena will somehow lead to a rebirth of Wichita.

    What I think Mr. McCormick has overlooked is that the people who in the past made Wichita great were people working as individuals, not as governments. Now, when we look to get something done, we look first to the government, and we seem to think that’s a good thing. The entrepreneurs and risk-takers of the past were investing their own money, their own sweat and toil. Our government leaders invest none of this.

    The effect of the downtown arena vote is that instead of trusting the individual, or on organizations that individuals freely enter in to, we invest our hope and future in politicians and government bureaucrats. Instead of letting free competitive markets work, we rely on increasing government interference in the market. Is this the pioneering spirit that made Wichita great that Mr. McCormick refers to?

  • Downtown Wichita arena as a public good

    The streets and highways, and certainly the public parks, are examples of public goods. Public goods are characterized by two things: nonexcludability, meaning that non-payers can’t be excluded from enjoying and using the good, and nonrivalrous consumption, meaning that consumption of the good by one person doesn’t reduce the availability of the good to others. Neither applies to an arena.

    Roads and highways, to a large extent, are paid for by those who use them. As far as I know, I paid for the entire cost of street in front of my house through special tax assessments. It is reasonable that I pay for that street, as I use it extensively. In the broader case, a large source of funding for roads and highways is the gasoline tax, which is an attempt to ask those who use and benefit from the resource to pay for it.

    Some roads, such as toll roads, require their users, and potentially only their users, to pay for them.

    The proposed downtown Wichita arena or Kansas Coliseum benefits only those who actually attend events. This is especially so in the case of the Coliseum, as downtown arena supporters readily point out that there has been no development surrounding it. We can easily identify those who benefit from an arena or stadium because they rent the facility or buy tickets to attend events. So it is very easy to ask them, and no one else, to pay.

  • Arenas’ Financial Statements Not Complete

    The WSU Center for Economic Development and Business Research study (reported by Fred Mann in the September 5 Wichita Eagle), showing a small loss for the proposed downtown arena, does not account for the cost of building the arena. Neither do the Qwest Center in Omaha nor the Alltel Arena in Arkansas when they report their profits. How do I know? I wrote to each of these facilities and asked. None include any expense for depreciation, debt service, lease payments, or anything that recognizes the tremendous amount of capital consumed by building these arenas. Yet, these facilities report a profit, or perhaps a negligibly small loss.

    I have found that the arenas I have looked at (Qwest, Alltel, and the proposed Wichita) don’t account for the cost of the capital consumed in building them. For example, the projected profit (actually a small loss) for the proposed Wichita downtown arena includes no expense taken for depreciation. Now it is true, that being a government entity, the downtown arena wouldn’t pay taxes, and therefore depreciation expense doesn’t help it reduce its income taxes. But an allowance for depreciation helps us to recognize that a large amount of money was spent to build this arena, and that money has a correspondingly large opportunity cost. Indeed, GASB 34 requires governments to start depreciating their assets, and Mr. Chris Chronis, the Chief Financial Officer of Sedgwick County, has told me that the county will take depreciation expense for the downtown arena, or for a remodeled Kansas Coliseum, for that matter.

    My investigation and a series of email messages with Mr. Ed Wolverton revealed that the WSU center that prepared the estimate of profitability for the proposed downtown arena wasn’t aware that the county would be required to calculate depreciation expense.