Voice For Liberty

Tag: Free markets

  • Decisions made through politics leads to conflict

    A 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, Williams says, both parties win, because in a free market, parties 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 column concludes with 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.”

    I’ve mentioned many columns by Walter 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 system of making decisions through politics rather than through markets.

  • Wichita facade improvement program bad for Wichitans

    Remarks to be delivered to the Wichita City Council on June 16, 2009. For background on this issue, see Wichita to consider grant to business and Wichita facade improvement plan updated.

    As this city council decides whether to give a grant of $20,000 to a private business, we need to consider the effect of programs like this on all the people of Wichita. And people are telling me that they don’t like it. They wonder why, at a time when the city is struggling with its budget, and when many are struggling with their personal budgets, there’s money available for programs like this.

    They also wonder why can’t everyone be eligible for grants like this. Many people throughout the city — not only in politically favored areas — would like help in repairing their buildings.

    Programs like the facade improvement program represent centralized government planning. It’s the polar opposite of free people trading voluntarily in markets. These programs represent politicians and bureaucrats deciding where money should be spent, rather than people deciding themselves.

    Strip away all the lofty talk and wishful thinking about downtown and revitalization areas, and what we have is this city council deciding that people don’t know how to spend and invest their own money.

    That’s a slap in the face to citizens. People don’t like that.

    Besides the personal insult, programs like this harm the wealth of our community. Free and competitive markets are the best way to decide where to make investments. Government simply doesn’t have all the knowledge necessary to make these decisions. Government doesn’t have the right incentives, either.

    These programs have a way of expanding and growing. Now we have the city manager and his staff deciding whether or not to pay certain bills as developers work on facade improvement. This seems to be an additional layer of city bureaucracy that we can’t afford.

    Mr. Mayor and members of the council, please respect the citizens of Wichita by voting against this grant of taxpayer funds to a private business.

  • Wichita facade improvement plan updated

    Wichita’s facade improvement plan has recently been updated. The updated plan isn’t yet available on the city’s website, so I’ve included it at the end of this article.

    This is the plan under which a local business, Delano Barbeque Partners, LLC, is likely to receive a grant of $20,000. See Wichita to consider grant to business for more. So far that business has not returned telephone calls asking for information about its application.

    It appears that this grant program is an entitlement, in that if a business meets specified criteria, it will receive a grant. No consideration is given to the economic worthiness or need of each applicant, or to the effect that this has on the citizens and taxpayers of Wichita.

    Programs like this are government planning. It’s our city government saying that investment in certain areas of town are more desired than investment in other parts of town. Since people aren’t investing enough to fulfill the city’s plan, the city must correct this alleged market failure by giving gifts of taxpayer money.

    This type of centralized government planning is an affront to freedom, liberty, and capitalism. It’s a slap in the face to those who have invested according to their own wants and needs, rather than satisfying the needs of politicians and bureaucrats.

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

  • John Stossel: The Reason.tv interview

    From Reason.tv.

    John Stossel is the best-known libertarian in the news media.

    As the co-anchor of the long-running and immensely popular ABC News program 20/20, auteur of a continuing series of specials on topics ranging from corporate welfare to educational waste to laws criminalizing consensual adult behavior, and author of best-selling books such as Myths, Lies, and Downright Stupidity, Stossel brings a consistent message of liberty to millions of viewers on a weekly basis.

    After watching part 1, watch part 2.

  • Markets could guide Wichita school district

    Yesterday I had a discussion with a person who had an idea how to save money in USD 259, the Wichita public school district.

    He believes that there are too many highly-paid administrators. It’s also a common complaint leveled by many people. Reduce either the number of administrators or their salaries, and that would make more money available for other things, such as teachers. Currently the district needs to cut its budget, however, so the savings would more likely be used to meet that demand.

    This brings up the broader question of staffing in the Wichita public schools. How does the district know how much management it needs? For that matter, how many teachers, custodians, etc. does it need?

    There is a simple solution that provides an answer to these questions. The public school lobby, however, resists this solution at every step. They spend huge sums in the political arena to make sure they aren’t subject to the discipline that this solution would impose.

    Market competition is the solution. It provides the incentive and imperative for firms to organize themselves in the way that will best meet the needs of their customers.

    Under the dynamic discovery process that market competition provides, we might learn that in some cases, under some circumstances, it might be best for students if more was spent on administration and management. Laws like the “65% laws” that dictate how school funds should be spent would prevent this discovery from being made.

    Market competition, if the public schools faced it, would give them a huge incentive to structure themselves to meet the needs of the customers, which are their students, parents, and the public at large.

    Public schools don’t face these market incentives. They organize themselves based on their own needs rather than the needs of their customers. I don’t think there’s much way to change that except for schools to face market competition, and they resist that in every way they can.

  • 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.

  • Kansas historic tax credits should end

    The Wichita Business Journal reports that without historic tax credits, some redevelopment projects might stop.

    In other words — the Business Journal isn’t quite so blunt — if taxpayers don’t give developers money, some of their projects might not be economically feasible. Or so the developers say.

    Spotlighted in Wichita Business Journal reporting is Dave Burk, a well-known developer in Wichita who specializes in getting the taxpayer to fund portions of his developments.

    Often the funding comes in the form of TIF district financing or special assessment financing used in ways it’s not normally used.

    These complicated financial arrangements serve to hide what’s really happening. Developers like Burk say that these financing schemes don’t cost government or the taxpayer anything. But they go to great lengths to secure them. In the case of Burk, he makes sure to make plenty of campaign contributions.

    But tax credits are pretty easy to understand. They excuse someone from paying taxes. If they’re refundable tax credits, the government will even send you a check.

    This is a lot different from a tax deduction, in which case you get to reduce your income. That usually leads to a reduced tax liability, but by a much smaller amount. Maybe even nothing, if your business has a loss for the year.

    Instead, tax credits reduce your tax liability on a dollar-for-dollar basis. And unless government reduces its spending by an equal amount, the rest of the taxpayers have to make up the difference.

    The Kansas Legislature recognizes this, and in an effort to save from losing some revenue in a tough budget year, placed a cap on the amount of tax credits that could be issued over the next two budget years.

    That’s what has Burk concerned. Without his gift from the taxpayers, he doesn’t know if he can complete his project.

    Tomorrow, though, something might happen to change his prospects. That’s when the legislature meets for its ceremonial closing. Sometimes actual business is done, and there’s some talk, according to Hawver’s Capitol Report, that legislative action could be taken to help subsidized developers like Burk.

    Let’s hope that the legislature decides in favor of free markets. If people want to live in historic buildings, let them pay the full cost of what it costs to produce these properties. Anything else means that the taxpayers at large pay for a privileged few like Burk and his tenants.

    Sources tell me that Burk continually has his hand out a city hall, looking for whatever subsidy he can get — even to the point of annoying former city manger Chris Cherches.

    It’s time to let free markets work. If Dave Burk has an idea he can sell to the public and make a heap of money, more power to him. But let’s stop the taxpayer-subsidized gravy train.

  • Sedgwick County land development will harm private sector

    Remarks delivered at the May 20, 2009 meeting of the Board of Sedgwick County Commissioners.

    As Sedgwick County considers whether to enter the industrial land development business, there are many considerations that must be weighed before proceeding. My greatest concern is the impact that government land development will have on the private sector in Wichita.

    Information prepared by Sedgwick County states that there will be tracts as small as 18 acres, and that the county will be able to subdivide the tracts.

    I realize that it is the county’s intent to focus on large companies as tenants in this proposed industrial park. This is to correct an alleged “market failure,” in that the private sector is not providing the product the county believes should be provided.

    But as time goes on, the pressure to “do something” with the land will increase. Then, the county will be competing directly with existing private sector land development.

    Government has advantages that the private sector doesn’t. It has access to free capital. It can give away land to companies. It can forgive future taxes. It can offer free infrastructure.

    The effect of this will be to drive the private sector out of the new industrial real estate market.

    It might seem like with government having all the advantages, why not turn over all development to it? The answer is that government doesn’t have something the private sector has: profits and losses. It is the profit and loss system that lets us know whether resources are being used efficiently. The profit and loss system drives the inefficient producers out of the market and tells us who are the effective producers.

    Without the ability to calculate profit, government doesn’t know if it is being efficient.

    Government land development will also have the effect of harming existing development, too. As existing tenants see the perks heaped on companies that locate in the government’s industrial park, they’ll want the same concessions from their landlords, too.

    If the county proceeds with this industrial park, we need some way to minimize the harm to existing private sector development. We might, for example, limit buildings in the new park to a certain minimum size. We could restrict tenants to companies from outside our metropolitan area. We’ll also need to do something to help our existing industrial companies feel like they’re appreciated.

    An important and easy thing to do is to limit the size of the proposed industrial park to something much smaller than 808 acres.

    If the county decides we need to enter the land development business, let’s try to limit the harm to our existing private sector that’s in the same business.

  • New audio version of “I, Pencil” makes case for freedom, not government planning

    The Foundation for Economic Education has released a new audio version of the booklet I, Pencil. Written by FEE’s founder Leonard E. Read and first published in 1958, its message proclaiming the importance of freedom has not diminished with the passage of time.

    This audio recording, which you can listen to on your computer or Ipod, is just just short of 15 minutes in length. But it this short span it makes a compelling case for freedom instead of government control and planning.

    In Wichita, we have a mayor, city council, and business leaders that are steering us down the path of government control instead of freedom. We locally — and nationally too — need to heed the lesson of I, Pencil:

    I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies — millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

    The above is what I meant when writing, “If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing.” For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand — that is, in the absence of governmental or any other coercive master-minding — then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

    Listen to the recording by clicking on I, Pencil. Or, read it by clicking on I, Pencil.