Voice For Liberty

Tag: Free markets

  • Kansas and Wichita quick takes: Tuesday April 5, 2011

    Law, liberty, and the market symposium this week. This Friday (April 8) a symposium titled “Freedom, Liberty, and the Human Spirit” is offered in Wichita. The event is from 8:30 am to noon, in Alumni Auditorium in the Davis Administration Building on the campus of Friends University. The presenter is John R. Hays, Jr of Austin, Texas. The three sessions are titled Freedom’s not just another word for nothing left to lose; Who’s directing the show, and how can it possibly work without a director; and Markets, liberty, and economic progress. The event is free and open to the public, and attendees should reserve a seat by calling 316-295-5526. The sponsor for the symposium is the Fred C. and Mary R. Koch Foundation.

    Junket for Wichita lame ducks: the costs. Kim Hynes of KWCH Television reports on the expenses incurred by three lame duck Wichita City Council members to attend a training conference. It’s about $8,000. Particularly amusing — if it weren’t so sad — are the remarks made by Roger Smith as he attempts to justify attending a training conference when he — and the other two lame ducks Paul Gray and Sue Schlapp — will serve less than one month after returning from the conference. … It seems that some council members were not very careful with taxpayer funds when looking for airfares, as Gray spent $772.80 and Schlapp $688.80 on plane tickets. Several made the trip spending less than $400 on their ticket, and one for less than $300. Don’t we have a discount air carrier here in Wichita? … Deb Farris of KAKE Television reports, too. In her story Council Member Lavonta Williams and Mayor Carl Brewer attempt to justify the spending for the lame duck members.

  • Kansas and Wichita quick takes: Monday April 4, 2011

    Google announces Gmail motion. Google announced on Friday: “The mouse and keyboard were invented before the Internet even existed. Since then, countless technological advancements have allowed for much more efficient human computer interaction. Why then do we continue to use outdated technology? Introducing Gmail Motion — now you can control Gmail with your body.” See Gmail motion for more.

    Local elections tomorrow. On Tuesday April 5 voters across Kansas will vote in city and school board elections. For those who haven’t yet voted and haven’t decided who to vote for, here’s the Wichita Eagle voter guide. You can get a list of the candidates, along with their responses to questions, customized for your address.

    Wichita City Council this week. On Tuesday, the Wichita City Council has these items on its agenda: Under the city’s Economic Development Tax Exemption (EDX) program, Cox Machine Inc. seeks forgiveness from paying property taxes on a building addition. … The YMCA seeks permission to issue Industrial Revenue Bonds to finance its new downtown facility. Normally these bonds are used as a vehicle for granting tax exemptions, but as an institution that is already tax exempt, this consideration doesn’t apply in this case. … Pixius, LLC files petitions seeking special assessment financing under the city’s facade improvement program for a downtown building. While this financing is a loan that must be repaid, city documents indicate this is just the first time Pixius will ask the city for money. City documents note that Pixius emerged from bankruptcy in 2006. These documents don’t say that Pixius used bankruptcy to avoid paying back millions to the U.S. Government. … Rupert Investments, LP files petitions seeking to use the same special assessment financing for facade improvements at the buildings occupied by J.P. Weigand & Sons on Market Street. … Two housing developments seek housing tax credits.

    Public defender to present. This Friday’s meeting of the Wichita Pachyderm Club features Jama Mitchell, Deputy Public Defender, 18th Judicial District, speaking on the topic “Justice in Sedgwick County From a Defense Perspective.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers include Kansas Senator Chris Steineger on April 15, Friends University Associate Professor of Political Science Russell Arben Fox on April 22, and Wichita State University Political Scientist Ken Ciboski on April 29.

    What it means to be a libertarian. A video from LearnLiberty.org: “What does it mean to be a libertarian? According to Dr. Jeffrey Miron, libertarians have respect for individual decisions. Libertarians are different from Republicans and Democrats, because both of those groups attempt to use government to advance their ideas of how people should act or behave, while libertarians think that individuals should be able to live their own lives as they see fit.” … Miron’s most recent book is Libertarianism, from A to Z, described as an “encyclopedic exposition of libertarian thought.” An interview with Miron by Reason.tv’s Nick Gillespie is at Libertarianism From A to Z With Jeffrey Miron. This video is available on YouTube through LearnLiberty.org, a site which has many other informative videos.

    Profits and prices. In the June 1963 issue of The Freeman, Leonard E. Read explains the role of profits and prices: Let us reduce this debate to manageable proportions and reflect on what, for example, motivates a person to put his savings into a hamburger stand. The answer comes clear: to make as good a living as possible. We know from daily observations that it is the hope of profit, not humanitarian concern about the meatless diet of the population, which is responsible for the venture. Observe, however, that a large profit — the enterpriser’s aim — signifies customer approval. By keeping his eye on his own gain, he assures that others are well served. Their repeated purchases, leading to the enterpriser’s profit, prove this. Imagine how different this situation would be were the hamburger man to concentrate not on his own gain but only on the good of others! … Humanitarian? Yes, indeed: Assume that a surgeon has discovered how to do a brain surgery, that he can do only one a month that 1,000 persons a year need such an operation if they are to survive. How is the surgeon’s scarce resource to be allocated? Charge whatever price is necessary to adjust supply to demand, say $50,000! “For shame,” some will cry. “Your market system will save only wealthy people.” For the moment, yes. But soon there will be hundreds of surgeons who will acquire the same skill; and, as in the case of the once scarce and expensive “miracle drugs,” the price then will be within the reach of all. … Look to the improvement of your own position if you would be most considerate of others! And this is sound advice whether one’s business consists of earning profit or doing basic research or practicing medicine or saving souls or whatever. The best charity is to set an example by which others may learn to help themselves.

  • For New York Times, facts about Kochs don’t matter

    Perhaps it’s a small matter. But maybe not, as a New York Times op-ed chose to mention it in the limited space these things have.

    In today’s newspaper and yesterday’s online version, David Callahan wrote this: “One such group is FreedomWorks, which has received significant amounts of money from the Koch brothers and is a force behind both the Tea Party political movement and the conservative libertarian policy agenda it espouses.”

    The problem is that the alleged financial support from the Koch brothers to FreedomWorks doesn’t exist. A page on the Koch Industries website states: “For example, neither Koch companies and foundations nor members of the Koch family have ever contributed to FreedomWorks.” This was repeated in a Washington Examiner interview with Dr. Richard Fink, who heads the Charles G. Koch Charitable Foundation and serves as an executive vice president of Koch Industries.

    While this might seem like an inconsequential error, the op-ed’s topic is political contributions — those who make them, and those who receive them. So it’s not unreasonable for a prominent newspaper to get the facts used to bolster its argument correct.

    Generally, this is another example of the political Left’s obsessive slamming of Charles and David Koch, to the point where things like facts don’t matter, not to mention the politics and economics. As an example, critics portray the Kochs as pursuing policies that benefit only themselves. But the reality is different. As we are learning, it is easy for a corporation to mine the halls of government for subsidy, special tax treatment, and regulations that benefit it and harm its competitors. Competing in the marketplace, where consumers are king, is more difficult. These free markets, however, are what Charles and David Koch believe in and have supported for decades, because economic freedom makes everyone more prosperous. As recently written in the Weekly Standard:

    The second charge was that the Kochs’ talk about free markets was merely cover for economic self-interest. But if that were true, why doesn’t every major corporation full-throatedly support limited government? Are we really to believe that Koch Industries is the only self-interested corporation in America? The reality, of course, is that an easier way to advance corporate self-interest is the one taken by most giant companies: securing monopolies, bailouts, tariffs, subsidies — the opposite of free enterprise. “It’d be much safer economically to sit on the sidelines or curry favor with the Obama administration,” said Richard Fink.

    It was impossible for the liberal activists to acknowledge that libertarians might actually operate from conviction. Charles and David believed in low taxes, less spending, and limited regulation not because those policies helped them but because they helped everybody.

  • Kansas and Wichita quick takes: Tuesday March 29, 2011

    Follow-up to Koch profile. A few pieces have provided amplification and commentary on the Weekly Standard profile of Charles and David Koch, notably Politico and Jennifer Rubin in The Washington Post. … Has a secret conspiracy been uncovered by Politico? Groups identified as lined up against the Kochs include a non-profit group titled Brave New Films, Greenpeace, Public Citizen, Common Cause, Ruckus Society, AFSCME (an arm of AFL-CIO), Service Employees International Union, and Center for American Progress with its attack blog ThinkProgress. Asks Post’s Rubin: “[a conspiracy] not of the Kochs but of the left-leaning groups that have mounted a campaign against them. … In other words, groups that purport to be nonpartisan are actually involved in a coordinated effort to smear the Kochs.” … Rubin notes the commonality shared between many of these groups: they receive millions from “foundations controlled by or linked to Soros,” referring to left-wing cause financier and anti-capitalist George Soros. … And are the Koch donations overly generous? Writes Rubin: “Left unsaid in all of this is the degree to which the Kochs’ political giving has been exaggerated. How much do they give? Over the last 20 years, about $11 million. Not chump change for you and me, but kind of stingy actually for billionaires whom the left would have us believe are taking over the American political system. By way of comparison, Duke Energy — the third-largest nuclear power plant operator — has been a major donor to Democrats, including the president. That would be the same Duke Energy that just forked over a $10 million line of credit for a single purpose — the 2101 Democratic Convention. Just the sort of thing Common Cause would be concerned about. After the next conference call with the other members of the Soros gang, I’m sure it’ll get right on it.” … Both articles are worth reading.

    The decline of Detroit: a lesson for Wichita? William McGurn in The Wall Street Journal: “Most Americans did not need to be told that Detroit is in a bad way, and has been for some time. Americans know all about white flight, greedy unions and arrogant auto executives. The recent census numbers, however, put an exclamation mark on a cold fact: A once-great American city today repels people of talent and ambition.” How did this happen? McGurn quotes Rev. Robert A. Sirico: “Detroit is a classic example of how a culture that was legendary for enterprise and innovation was slowly eroded by toxic politicization from the 1960s on.” … Later McGurn asks “What happened to this Detroit? In many ways the answer is liberal politics and expanding government.” … Could this happen to Wichita? Our population is not declining. But Wichita has been said to be more dependent on one industry (aircraft manufacturing) than Detroit was on automobile manufacturing. And Wichita government is becoming more liberal — notwithstanding the protests of several self-styled conservative city council members who will soon be leaving office. Increasingly business looks to city hall rather than markets for inspiration and financing. Our mayor, city council members, and bureaucrats want more “tools in the toolbox” for intervening in the economy. … Yes, the devastation seen in Detroit could happen here.

    Moran to vote “no” on debt ceiling. United States Senator Jerry Moran, a newly-elected Kansas Republican, has informed President Obama that he won’t vote for an increase in the national debt ceiling. Wrote Moran: “Americans are looking for leadership in Washington to confront the problems of today, not push them off on future generations. To date, you have provided little or no leadership on what I believe to be the most important issue facing our nation — our national debt. With no indication that your willingness to lead will change, I want to inform you I will vote “no” on your request to raise the debt ceiling.” The entire letter from Moran is at I will vote “No.”

    Golden geese on the move. Thomas Sowell: “The latest published data from the 2010 census show how people are moving from place to place within the United States. In general, people are voting with their feet against places where the liberal, welfare-state policies favored by the intelligentsia are most deeply entrenched.” Sowell notes that blacks, especially those young and educated, are moving to the South and suburbs. “Among blacks who moved, the proportions who were in their prime — from 20 to 40 years of age — were greater than in the black population at large, and college degrees were more common among them than in the black population at large. In short, with blacks, as with other racial or ethnic groups, those with better prospects are leaving the states that are repelling their most productive citizens in general with liberal policies.” Detroit, he writes is “the most striking example of a once-thriving city ruined by years of liberal social policies.” Finally, a lesson for all states, including Kansas: “Treating businesses and affluent people as prey, rather than assets, often pays off politically in the short run — and elections are held in the short run. Killing the goose that lays the golden egg is a viable political strategy.” (Mass Migration Of America’s Golden Geese.) The migration statistics concerning Kansas are not favorable, although some are trending in a better direction.

    Legislators will have more access to SRS case files. Kansas Health Institute News Service reports” “Parents whose children have become state wards now have the option of signing a one-page form that gives state legislators unrestricted access to information in their family’s case file.” Previously legislators had access to the information, but “social workers decided what information from the file would be shared. And legislators were not given documents or copies from the files but verbal briefings.” Some are concerned that information harmful to children will be made public.

    Wichita unemployment rate improving. Writes Friends University finance professor and Mammon Among Friends blogger, Malcolm Harris, as saying, “‘We’re seeing a trend, and that trend is in the right direction’…But, he cautioned, ‘we’ve got a long way to go.’” More at Wichita’s Unemployment Rate Falls Compared to Last Year.

    Government planners vs. individuals. Another reading from Economics for Real People: An Introduction to the Austrian School by Gene Callahan. The topic is individuals acting in markets vs. government planning: Economics does not hold that the desires of the consumers are pure or virtuous. It does illustrate that the market process is the only way to approximately gauge those desires. All other systems must attempt to impose the rulers’ values on the ruled. Those who plan on doing the imposing have a very high regard for their own judgment, and a very low regard for that of the rest of us. To paraphrase the economist G.L.S. Shackle, the man who would plan for others is something more than human; the planned man, something less. … [Ludwig von] Mises describes those who would coercively replace the value judgments of their fellow men by their own value judgments: [They] are driven by the dictatorial complex. They want to deal with their fellow men in the way an engineer deals with the materials out of which he builds houses, bridges, and machines. They want to substitute “social engineering” for the actions of their fellow citizens and their own unique all-comprehensive plan for the plans of all other people. They see themselves in the role of the dictator — the duce, the Führer, the production tsar — in whose hands all other specimens of mankind are merely pawns. If they refer to society as an acting agent, they mean themselves. If they say that conscious action of society is to be substituted for the prevailing anarchy of individualism, they mean their own consciousness alone and not that of anybody else. (The Ultimate Foundation of Economic Science)

  • Classical liberalism explained

    In a short video, Nigel Ashford of Institute for Humane Studies explains the tenets of classical liberalism. Not to be confused with modern American liberalism or liberal Republicans, classical liberalism places highest value on liberty and the individual. Modern American liberals, or progressives as they often prefer to be called, may value some of these principles, but most, such as free markets and limited government — and I would add individualism and toleration — are held in disdain by them.

    Here are the principles that Ashford identifies:

    Liberty is the primary political value. “When deciding what to do politically — what should the government do — classical liberals have one clear standard: Does this increase, or does it reduce the freedom of the individual?”

    Individualism. “The individual is more important than the collective.”

    Skepticism about power. “Government, for example, often claims ‘we’re forcing you to do X because it’s in your own interests to do so.’ Whereas very often, when people with power do that, it’s really because it’s good for themselves. Classical liberals believe that the individual is the best judge of their own interests.”

    Rule of law.

    Civil society. Classical liberals believe that problems can be dealt with best by voluntary associations and action.

    Spontaneous order. “Many people seem to assume that order requires some institution, some body, to manipulate and organize things. Classical liberals don’t believe that. They believe that order can arise spontaneously. People through their voluntary interaction create the rules by which people can live by.”

    Free markets. “Economic exchange should be left to voluntary activity between individuals. … We need private property to be able to do that. … History show us that leaving things to free markets rather than government planning or organization, increases prosperity, reduces poverty, increases jobs, and provides good that people want to buy.”

    Toleration. “Toleration is the belief that one should not interfere with things on which one disapproves. … It’s a question of having certain moral principles (“I think this action is wrong”), but I will not try and force my opinions — for example through government — to stop the things I disapprove of.”

    Peace. Through free movement of capital, labor, goods, services, and ideas, we can have a world based on peace rather than conflict and war.

    Limited government. “There are very few things the government should do. The goal of government is simply to protect life, liberty, and property. Anything beyond that is not justifiable.”

    This video is available on YouTube through LearnLiberty.org, a site which has many other informative videos.

  • Weekly Standard: The left’s obsession with the Koch brothers

    Matthew Continetti of the Weekly Standard has written a profile of Charles and David Koch and Koch Industries, focusing on politics and the attacks by the political Left.

    A key passage in the story explains what those who believe in economic freedom have known all along: If Charles and David Koch really wanted to make a lot of money for themselves, they would act like most corporations: seek fortune through government intervention, not through competition in free markets:

    The second charge was that the Kochs’ talk about free markets was merely cover for economic self-interest. But if that were true, why doesn’t every major corporation full-throatedly support limited government? Are we really to believe that Koch Industries is the only self-interested corporation in America? The reality, of course, is that an easier way to advance corporate self-interest is the one taken by most giant companies: securing monopolies, bailouts, tariffs, subsidies — the opposite of free enterprise. “It’d be much safer economically to sit on the sidelines or curry favor with the Obama administration,” said Richard Fink.

    It was impossible for the liberal activists to acknowledge that libertarians might actually operate from conviction. Charles and David believed in low taxes, less spending, and limited regulation not because those policies helped them but because they helped everybody. “If I wanted to enhance my riches,” said David, “why do I give away almost all my money?”

    We’ve just seen the results of how an “aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting” can succeed, as we’ve learned that General Electric has been successful in avoiding income tax liability. GE, whose chief executive is said to be close to President Obama, also invests in industries like wind power that receive government subsidy, without regard for the underlying economic benefit of these investments.

    But Charles and David Koch believe that economic freedom and free markets are the best way to generate prosperity for everyone, and the Weekly Standard article shows they have worked for decades to promote this message.

    What may really gall liberals is that while believing that a powerful and expansive government is good for the country, they have created a complicated machine that a politically-favored company like GE can exploit for huge profits, all without creating anything that consumers value. Charles Koch calls for an end to this, as he recently wrote in the Wall Street Journal: “Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay. Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”

    The political Left just can’t believe that anyone would write that and really mean it.

    The Paranoid Style in Liberal Politics

    The left’s obsession with the Koch brothers
    By Matthew Continetti

    … For decades David and Charles have run Koch Industries, an energy and manufacturing conglomerate that employs around 50,000 people in the United States and another 20,000 in 59 other countries. Depending on the year, Koch Industries is either the first- or second-largest privately held company in America — it alternates in the top spot with Cargill, the agricultural giant — with about $100 billion in revenues. David and Charles are worth around $22 billion each. Combine their wealth and you have the third-largest fortune in America after Bill Gates and Warren Buffett. Like most billionaires, the brothers spend a lot of time giving their money away: to medical and scientific research, to educational programs, to cultural institutions, and to public policy research and activism.

    That last part has caught the attention of the left’s scouring eye. For unlike many billionaires, the Koch brothers espouse classical liberal economics: They advocate lower taxes, less government spending, fewer regulations, and limited government. “Society as a whole benefits from greater economic freedom,” Charles wrote in a recent Wall Street Journal op-ed. Judging by the results of the 2010 elections, there are millions of Americans who agree with him.

    Over the years the Kochs have flown beneath the radar, not seeking publicity and receiving little. But then the crash of 2008 arrived, and the bailouts, and the election of Barack Obama, and pretty soon the whole country was engaged in one loud, colossal, rollicking, emotional argument over the size, scope, and solvency of the federal government. Without warning, folks were springing up, dressing in colonial garb, talking about the Constitution, calling for a Tea Party. Some of them even joined a group called Americans for Prosperity — which the Kochs helped found and partly fund.

    Continue reading at the Weekly Standard.

  • Reform health care so it really works

    One year after the passage of major health care legislation, Harvard economist Jeff Miron says more reform is still needed. Dr. Miron gives his top 3 policy proposals for fixing the U.S. health care system: 1) Throw away the notion that health care is a right; 2) Repeal Obamacare; and 3) Phase out Medicare.

    Miron’s latest book is Libertarianism, from A to Z.

    .

  • Kansas and Wichita quick takes: Friday March 25, 2011

    Elections coming up. On Tuesday April 5 voters across Kansas will vote in city and school board elections. Voting has been underway for about a week through the advance voting process. For those who haven’t yet decided, here’s the Wichita Eagle voter guide. You can get a list of the candidates, along with their responses to questions, customized for your address.

    Campaign signs. The placement of political campaign signs can be an issue. Here is a City of Wichita letter describing placement rules, and a diagram. … If you live in a neighborhood with covenants prohibiting campaign signs, the covenants don’t apply at election time. See In Kansas, political signs are okay, despite covenants.

    In Kansas, cutting unnecessary spending can avoid service cuts. Following up on Kansas state agency spending, Kansas Policy Institute finds examples of spending on overtime, advertising, cell phones, and dues, memberships and subscriptions totaling $50 million. KPI president Dave Trabert remarked: “Hardly a day goes by that we don’t see some group or state agency saying they will have to cut necessary services if their funding is reduced, but it’s pretty clear that there are lots of other ways to reduce spending. Some degree of spending in these categories is understandable, but the data clearly show that large amounts of taxpayer money are being spent unnecessarily.” Other examples uncovered by KPI: “The Legislature spent $144,408 to join the National Council of State Legislators and also spent $107,022 to join the Council of State Governments. The Governor’s office bought memberships in three governors’ associations: the National Governor’s Association ($83,800), the Western Governors’ Association ($36,000) and the Midwestern Governors’ Association ($10,000).” More is in the KPI press release K-State #1 in Cell Phone Spending: Cutting unnecessary spending can avoid service cuts.

    March to Economic Growth stalled. The Kansas House of Representatives has passed a bill that would gradually reduce Kansas personal and corporate income tax rates. The so-called MEGA bill wold create a mechanism where if revenue flowing to the state increases, income tax rates would be reduced proportionally, after adjusting for inflation. Besides lowering these tax rates, which would make Kansas more attractive to business and jobs, the bill would also decrease the rate of growth of spending. But Senate leadership, namely its president, doesn’t care for the bill, so it appears it is dead this year. Last year Senate President Stephen Morris was strongly in favor of the statewide sales tax increase. Despite being a member of the Republican Party, he is part of the Senate’s liberal wing, according to the Kansas Economic Freedom Index and other legislative ratings.

    Open records under attack. CommonSense with Paul Jacob reports on efforts underway in Utah to reduce citizens’ ability to learn about their government: “House Bill 477 changes the core of the GRAMA law, mandating that citizens must prove they deserve access to records, rather than the previous rule requiring government officials to show cause for why a document should not be released. The legislation also exempts text messages, emails and voicemails from being disclosed, the better to keep lobbyists and special interests out of the limelight.” The Daily Herald wrote: “The principle of open government now would apply only when ‘the public interest favoring access to the record outweighs the interest favoring restriction of access to the record,’ in the opinion of the government.” … This bill actually became law, but so much public opinion was roused that it is likely the Utah legislature will overturn the act, according to reports. … Jacob’s email on this matter was subtitled “Paul Jacob notices nearly absolute power corrupting GOP legislators in Utah.”

    Ignorant or just ill-informed? L. Brent Bozell in Investor’s Business Daily: “Anyone who’s ever seen Jay Leno do one of his ‘Jaywalking’ segments on NBC, locating average Americans and asking them factual questions on street corners, knows there are far too many Americans who know next to nothing about just about everything. They can’t name our first president or don’t know what the phrase ‘Founding Fathers’ means. Ask them to name our current vice president and watch the brain waves flat line. Newsweek magazine recently announced its disgust after it offered the government’s official citizenship test (the one we require immigrants to pass before being naturalized) to 1,000 Americans. Thirty-eight percent of the sample failed. Newsweek worried in its headline: ‘The country’s future is imperiled by our ignorance.’” Locally, I am reminded of the Kansas Policy Institute and its survey of Kansans and their knowledge of school spending. Regarding that, I reported: “When talking about Kansas school spending, few Kansans have accurate information. Those with children in the public school system are even more likely to be uninformed regarding accurate figures.”

    Government spending overrides privates spending. The last two days have featured readings from Robert P. Murphy’s book Lessons for the Young Economist on the importance of profits and loses in guiding investment, and how government is unable to calculate its profit or loss. Today, Murphy explains government spending and the political process: For example, suppose the government decides to build a public library in order to make books and internet access free to the community. Because the government only has a limited budget, it won’t do something ridiculously wasteful such as coating the library with gold, or stocking the shelves with extremely rare first editions of Steinbeck and Hemingway novels. Suppose the government tries to be conscientious, puts out bids to several reputable contractors, and has a modest library constructed for $400,000. Yet even if outside auditors or investigative journalists could find nothing corrupt or shocking about the process, the question would still remain: Was it worth it to spend $400,000 on building this particular library, in this particular location? The crucial point is that we know one thing for certain: No entrepreneur thought that he could earn enough revenues from charging for book borrowing to make such an enterprise worthwhile. We know this because the library didn’t exist until the government used its own funds to build it! One way to think about government expenditures is that they necessarily call forth the creation of goods and services that people in the private sector did not deem worth producing. When the government spends money, it directs resources away from where private spending decisions would have steered them, and into projects that would not be profitable if private entrepreneurs had produced them relying on voluntary funding. Thus the political authorities in an interventionist economy face one-half of the socialist calculation problem. … The government in essence is a giant distributor of charitable donations. Even those citizens who welcome the concept should ask themselves: Why do we need to route our donations through the political process? Why not decentralize the decisions and allow each person to donate his or her funds to the various charities that seem most worthy? … Regardless of its possible benefits, government spending suffers from the calculation problem afflicting socialism. The system allows a select group of political authorities to override the input of private individuals in how (some of) their property should be used to steer resources into various projects. This is a very serious drawback for anyone who favors interventionism as a way to increase the “general welfare,” however defined.

    Kansas income is growing. While still lower than its peak in 2008, wage and salary income in Kansas is on the way up, and has been throughout 2010.

    iPhone screen

  • Kansas and Wichita quick takes: Thursday March 23, 2011

    Owens still blocks judicial selection reform. Kansas Reporter writes that one man, Senator Tim Owens, an attorney and Republican from Overland Park, is still blocking judicial selection reform. But a move by the House gives Senate President Stephen Morris a chance to let Senators vote to concur with the reform measure passed by the House. Or, Morris could refer the measure to Owens’ Judiciary committee, where it will die. See New way of picking appeals judges gets second shot.

    Greed is killing Detroit. Greed is often portrayed as a negative quality of the rich. But Investor’s Business Daily tells what happens when union greed — yes, everyone can be greedy — runs wild in a city: “Census data released Tuesday show Detroit’s population has plunged 25% since 2000 to just 713,777 souls — the same as 100 years ago, before the auto industry’s heyday. As recently as the 1970s, Detroit had 1.8 million people. What’s happening is no secret: Detroiters are fleeing an economic disaster, the irreversible decline of the Big Three automakers. … Sure, a lot of the blame goes to a generation of bad management. But the main reason for Detroit’s decline is the greed of the industry’s main union, the UAW, which priced the Big Three out of the market.” … Having killed the goose with the golden egg once, union leadership seeks seek to do it again: “Even as Detroit collapses, new UAW chief Bob King promises to ‘pound’ the transplants into submission and force them to drink his union’s poison, too. Given what we know, every town that is now home to a foreign automaker should be very afraid. If King has his way, they’ll soon suffer Detroit’s fate.”

    Liberal Bias at NPR? Stephen Inskeep, co-host of the National Public Radio program Morning Edition, defends his network against charges of liberal bias. In The Wall Street Journal Inskeep writes that NPR draws an audience with diverse political views, including conservatives: “Millions of conservatives choose NPR, even with powerful conservative alternatives on the radio.” Which, I would say, is all the more reason why the network should stand on its own without government funding. … Inskeep also writes about the recent undercover video by James O’Keefe, who NPR claims, through a spokesperson, to have “inappropriately edited the videos with an intent to discredit” NPR. If true, shame on O’Keefe. The NPR spokesperson concedes that then-NPR chief fundraiser Ron Schiller made some “egregious statements.”

    Electric cars questioned. Margo Thorning writing in The Wall Street Journal, explains that the new crop of all-electric or near-all-electric cars not worthy of government support. She notes the Consumer Report opinion of the Chevrolet Volt: “isn’t particularly efficient as an electric vehicle and it’s not particularly good as a gas vehicle either in terms of fuel economy.” … Batteries remain a problem: “A battery for a small vehicle like the Nissan Leaf can cost about $20,000 and still only put out a range of 80 miles on a good day (range is affected by hot and cold weather) before requiring a recharge that takes eight to 10 hours. Even then, those batteries may only last six to eight years, leaving consumers with a vehicle that has little resale value. Home installation of a recharging unit costs between $900 and $2,100.” … Thorning notes that half of the electricity that powers America is generated by coal, so all-electric cars are still not free of greenhouse gas emissions. Also, “a substantial increase in the numbers of them on the road will require upgrading the nation’s electricity infrastructure.” … While electric cars are not ready to save the earth, the U.S. government insists on intervention: “Despite these significant flaws, the government is determined to jump-start sales for plug-ins by putting taxpayers on the hook. The $7,500 federal tax credit per PEV is nothing more than a federal subsidy that will add to the deficit. There are also federal tax credits for installing charging stations in homes and businesses and for building battery factories and upgrading the electric grid. The administration’s goal — one million PEVs on the road by 2015 — could cost taxpayers $7.5 billion.” And saddle Americans with expensive automobiles that do little to address the problem they’re designed to solve. Reading the Journal article requires a subscription, but it is also available at The American Council for Capital Formation, where Thorning is Senior Vice President and Chief Economist.

    Government as business. Yesterday’s reading from Robert P. Murphy’s book Lessons for the Young Economist explained the value of the profit-and-loss system in guiding resources to where they are most valued. For those who wan to “run government like a business” I offer today’s excerpt from the same book, which explains how lack of the ability to calculate profit means this can’t happen: [Regarding a capital investment made by Disney as compared to government:] The crucial difference is that the owners of Disneyland are operating in the voluntary market economy and so are subject to the profit and loss test. If they spend $100 million not on personal consumption (such as fancy houses and fast cars) but in an effort to make Disneyland more enjoyable to their customers, they get objective feedback. Their accountants can tell them soon enough whether they are getting more visitors (and hence more revenue) after the installation of a new ride or other investment projects. Remember it is the profit and loss test, relying on market prices, that guides entrepreneurs into careful stewardship of society’s scarce resources. In contrast, the government cannot rely on objective feedback from market prices, because the government operates (at least partially) outside of the market. Interventionism is admittedly a mixture of capitalism and socialism, and it therefore (partially) suffers from the defects of socialism. To the extent that the government buys its resources from private owner — rather than simply passing mandates requiring workers to spend time building bridges for no pay, or confiscating concrete and steel for the government’s purposes — the government’s budget provides a limit to how many resources it siphons out of the private sector. (Under pure socialism, all resources in the entire economy are subject to the political rulers’ directions.) However, because the government is not a business, it doesn’t raise its funds voluntarily from the “consumers” of its services. Therefore, even though the political authorities in an interventionist economy understand the relative importance of the resources they are using up in their program — because of the market prices attached to each unit they must purchase — they still don’t have any objective measure of how much their citizens benefit from these expenditures. Without such feedback, even if the authorities only want to help their people as much as possible, they are “flying blind” or at best, flying with only one eye.