Voice For Liberty

Tag: Economics

  • Government health care rations by making patients wait

    David Gratzer, a physician born and raised in Canada, gives us in the United States a preview of what government health care is all about: the waiting.

    His recent Wall Street Journal piece is titled Canada’s ObamaCare Precedent: Governments always ration care by making you wait. That can be deadly.

    He tells this story: “But Canadians wait for practically any procedure or diagnostic test or specialist consultation in the public system. The problems were brought home when a relative had difficulty walking. He was in chronic pain. His doctor suggested a referral to a neurologist; an MRI would need to be done, then possibly a referral to another specialist. The wait would have stretched to roughly a year. If surgery was needed, the wait would be months more. Not wanting to stay confined to his house, he had the surgery done in the U.S., at the Mayo Clinic, and paid for it himself.”

    An Ontario woman with a 40-pound liquid-filled tumor in her abdomen was within weeks of death when an American surgeon — working in Michigan — removed the tumor.

    “Ironically, as the U.S. is on the verge of rushing toward government health care, Canada is reforming its system in the opposite direction.” In 2005, the Canadian Supreme Court “struck down key laws in Quebec that established a government monopoly of health services.” Private-sector health care is growing in Canada, with 50,000 patients per year seeing private doctors in British Columbia. The United Kingdom and Sweden have initiated reforms, moving away from total government control.

    Dr. Gratzer asks “Why are [Americans] rushing into a system of government-dominated health care when the very countries that have experienced it for so long are backing away?”

  • More myths of green jobs

    On its surface, a seemingly strong argument for adopting a national policy of increasing reliance on renewable energy is all the jobs and economic growth that will result. It’s claimed by some that the switch to so-called “green” sources of energy will pay for itself this way.

    But there are many doubters. Here, the Property and Environment Research Center — “the nation’s oldest and largest institute dedicated to improving environmental quality through markets and property rights” — publishes a report titled 7 myths about green jobs.

    Here are some excerpts:

    The costs of the green jobs programs proposed by various interest groups are staggering. For example, the UNEP (2008, 306) report concludes that “No one knows how much a full-fledged green transition will cost, but needed investment will likely be in the hundreds of billions, and possibly trillions, of dollars.”

    The scale of social change that would be imposed is also immense. Green jobs advocates propose dramatic shifts in energy production technologies, building practices, food production, and nearly every other aspect of life. These calls for radical economic changes are wrapped in green packaging. The promise is not only a revolution in our relationship with the environment, but the employment of millions in high paying, satisfying jobs. Unfortunately, the analysis provided in the green jobs literature is deeply flawed, resting on a series of myths about the economy, the environment, and technology.

    To attempt to transform modern society on the scale proposed by the green jobs literature is an effort of staggering complexity and scale. To do so based on the wishful thinking and bad economics embodied in the green jobs literature would be the height of irresponsibility. There is no doubt that significant opportunities abound to develop new energy sources, new industries, and new jobs. A market-based discovery process will do a far better job of developing those energy sources, industries, and jobs than can a series of mandates based on flawed data. The policy debate should be open so we can dispel the myths and focus on facts and analysis.

    Like they say, economics is the “dismal science.” There really is no such thing as a free lunch. Wishing otherwise can’t make it so.

  • Seven principles of sound public policy

    Lawrence W. Reed, now the president of the Foundation for Economic Education, has a short booklet available that can help citizens analyze whether a government policy is sound.

    Titled Seven Principles of Sound Public Policy, it’s a comfortably short pamphlet of just 11 pages. But it’s full of a lot of wisdom.

    The seven principles are these:

    • Free people are not equal, and equal people are not free.
    • What belongs to you, you tend to take care of;
      what belongs to no one or everyone tends to fall into disrepair.

    • Sound policy requires that we consider long-run effects and all people, not simply short-run effects and a few people.
    • If you encourage something, you get more of it; if you discourage something, you get less of it.
    • Nobody spends somebody else’s money as carefully as he spends his own.
    • Government has nothing to give anybody except what it first takes from somebody, and a government that’s big enough to give you everything you want is big enough to take away everything you’ve got.
    • Liberty makes all the difference in the world.

    In the booklet, Reed expands on each principle.

    Click on Seven Principles of Sound Public Policy to read the booklet. There’s a pdf version available for downloading and printing.

  • Sedgwick County needs to slow down, deliberate land purchase

    Sedgwick County seems to be in a rush to make a huge decision that will have far-reaching and long-lasting effects on our county. We don’t have, however, anywhere near all the information we need to make this decision. We need to slow down and decide what role we want to have county government play in economic development.

    The stated goal of Sedgwick County’s purchase of the Bel Aire industrial park is to have a site ready for companies of 1,000 or more employees. The Wichita Eagle article Sedgwick County seeks to attract industry with land plan tells us, though, that there are just five or six deals like this each year. Research by the Eagle reporter found more than 100 sites already exist, from all across the country, that meet the necessary criteria. So we’re entering a contest with pretty long odds.

    On top of that, according to Sedgwick County, the goal of the industrial park is “to welcome only companies in the composites and alternative-energy fields.” This limits the companies the county would pursue to a number smaller than the five or six deals each year mentioned above.

    (It’s worth noting that alternative-energy companies, such as wind turbine companies, exist only because of government subsidy aimed at curing a problem that can’t be fixed. Last year, as the production credit for wind power was about to expire, Congress was told that no further wind power would be developed unless the subsidy was restored.)

    If the county asks “do you need rail access?” and it is provided for free, why wouldn’t any company say they need it? I’ve been told, however, that it’s not uncommon for companies to list rail access as part of their requirements, but then never need any rail cars once the facility opens. Some of the industries that composites may be used in are industries like medical devices. These products aren’t shipped by rail.

    The issue of needing water and sewer utilities in place before the park can be marketed doesn’t make sense. These utilities could, if government wanted to, be installed very quickly, much faster than a building can be built.

    That brings up another point — what about electricity and natural gas service? Depending on the type of industry, these utilities are vitally important. We don’t hear about the lack of these utilities being a problem. The likely reason for this is that electricity and gas are provided by private sector companies (even though most are highly regulated).

    If a private utility can provide complicated and expensive electrical service infrastructure quickly to a building, why can’t a government quickly provide water and sewer?

    It’s also claimed that the reason Wichita didn’t get the Target Distribution Center a few years ago was the lack of land ready to go. “Shovel ready,” so to speak. But according to reporting in the Topeka Capital-Journal, that city had to use eminent domain to forcibly acquire some of the land needed to assemble the tract.

    Topeka used purchase options to secure the availability of land, too. I am told that when this strategy was presented to county staff, they had no idea of what this meant. This is evidence that Sedgwick County is not experienced and equipped to be in the land development business.

    If Sedgwick County is determined to proceed and acquire the industrial park, we need to find some way to mitigate the damage to existing real estate developers in the Wichita area. That’s because when government can give away land, when it can dish out tax exemptions and other perks, the private sector is at a severe disadvantage.

    Some ideas that have surfaced are these:

    • Limit the industrial park to large — very large — buildings only. Don’t allow smaller buildings that compete with what the private sector already has made available.
    • Restrict tenants to companies from outside the Wichita metropolitan area.
    • When existing Wichita-area companies see the perks — free land, etc. — lavished upon companies that move to the industrial park, they will want the same incentives. These incentives could be made available to companies in all industrial parks in the county. After all, we need to retain existing jobs.

    There seems to be a great deal of haste towards making a decision on purchasing this land and the county being in the industrial park development business. This decision process is moving much too quickly. Finding a stable set of facts from which to conduct debate is a problem too, as some of the details in the Sunday Wichita Eagle story are different from what was presented at the commission meeting less than one week before.

    A project of this scope would take from four to six months for experienced land developers to consider and perform due diligence. Sedgwick County has been considering this deal for about two weeks. As we’ve seen, the county is in no way experienced in this type of business.

  • In Kansas, government grows while private sector contracts

    The Flint Hills Center for Public Policy has released research titled Government Growth Adds to Private Sector Burden. It doesn’t hold good news for Kansas.

    The inverse relationship between government and private sector employment does not bode well for the economy. “Economic research has consistently shown that the larger the government is relative to the economy, the slower the economy grows,” said Dr. Art Hall, Executive Director of the Center for Applied Economics at the University of Kansas School of Business. “We’ve known about that empirical data internationally and now it’s showing up at the local level.”

    (This is a Scribd document. Click on the rectangle at the right of the document’s title bar to get a full-screen view.)

    Government Growth Adds to Private Sector Burden

  • Here’s what the Wichita Chamber of Commerce could do

    Today’s Wichita Eagle has a story wondering if economic conditions have affected local chambers of commerce. (Has economy affected area chambers?)

    In particular, Wichita Metro Chamber of Commerce CEO Bryan Derreberry mentioned measures aimed at retaining members.

    The context of this, besides the current economic conditions, is the shift of the local chamber of commerce away from promoting free markets, limited government, and capitalism. But today, as Stephen Moore wrote two years ago in the Wall Street Journal, “chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government.”

    In other words, local chambers now support big-government crony capitalism. See The Decline of Local Chambers of Commerce.

    Recently I asked Derreberry a question based on Moore’s assertion. In an noncommittal response, he disputed that this transformation has taken place in the Wichita Chamber. (See Wichita Chamber of Commerce makes case for interventionism.)

    An illustration of this shift is last year’s election for the third district Sedgwick County Commission seat. One candidate, Karl Peterjohn, had a long and proven record of supporting free markets, limited government, and capitalism. His opponent had no such record, and in fact, had recently presided over a large tax increase in the small town she served as mayor.

    So what did the Wichita Chamber do? Support the proven fiscal conservative?

    No. Its political action committee spent some $19,000 — 44% of all it spent on campaigns — on Peterjohn’s opponent.

    What should the Chamber do? Abandon its present course of supporting government interventionism. Instead, support policies that will generate prosperity for everyone, which are free markets, limited government, and capitalism.

  • 80 Years Later: Parallels Between 1929 and 2009

    Austrian economist Walter Block delivers a lecture that draws the parallels and differences between now and the Great Depression.

    Block lays blame for the current mess squarely on the Federal Reserve System.

    “Hoover was no free-enterpriser,” Block says. Neither was George W. Bush, or Ronald Reagan, for that matter.

  • What kind of man was Ludwig von Mises?

    What kind of man was Ludwig von Mises? As this unique film shows, Mises (1881-1973) was a man who never stopped fighting for freedom: not when the Nazis burned his books, not when the Left blackballed him at universities, not when it seemed as if statism had won. With courage and genius, he fought big government until the day he died … in 25 books, hundreds of articles, and more than 60 years of teaching.

    Mises’s battles against Communists, Nazis, and other socialists, are featured in this film, as are his ideas of Liberty.

    Among his many accomplishments, Mises showed that socialism had to fail, that central banking causes recessions and depressions, that the gold standard is honest money, and that only laissez-faire capitalism is fully compatible with Western civilization.

    Mises was the twentieth century’s foremost economist, and one of its most important champions of Liberty. Here is a film that does justice to this extraordinary man, and to his equally extraordinary ideas.

  • How to create wealth and peace

    In this short video, Milton Friedman explains how people — even those who might hate each other — cooperate peacefully through free markets, coordinated by the price system, to make the economy work.

    In conclusion, he says: “That is why the operation of the free market is so essential not only to promote productive efficiency, but even more to foster harmony and peace among the peoples of the world.”