January 2010 Update
Though though this blog is semi-retired, I am not. See, for example, my work at StateHouseCall.org, which is a site dedicated to critiquing existing laws and programs affecting health care, and offering alternatives that put the emphasis on patients and consumers rather than bureaucrats and politicians.

As time and interest permit, I'll be adding some material on issues relating to local governments, which too often receive a pass from local media as well as citizens. (permalink)

Five New Columns
I've added five of my recent columns to the publications vault.

Do stadiums bring economic growth?
http://www.policyguy.com/pubs/SPLL/SPLL-StadiumGrowth
This column summarizes an article from an economics journal. The authors looked at the economic effects of building new sports temples or hosting major sporting events.

A call for meaningful performance evaluations of teachers
http://www.policyguy.com/pubs/SPLL/SPLL-TeacherEvaluation.pdf
The New Teacher Project examined personnel policies in school districts in four states. Teachers get at best cursory performance reviews, a fact that harms teachers, taxpayers, and most importantly, students.

Privatization trends and the contract city
http://www.policyguy.com/pubs/SPLL/SPLL-ContractCity.pdf
The Reason Public Policy Institute published its annual report on how states and cities are using private companies to accomplish public tasks. This column highlights some of the report's findings.

Time to shrink the wedge in health care costs
http://www.policyguy.com/pubs/SPLL/SPLL-HealthWedge.pdf
This country wastes a lot of money as a result of the ways that it pays for health insurance. The Texas Public Policy Foundation has published a series of reports showing how something like ObamaCare would bring even more economic harm.

Making a federal case out of blogging
http://www.policyguy.com/pubs/SPLL/SPLL-FederalBlogging.pdf
If you're a blogger, you've heard that the FTC called for you to disclose every free cup of coffee you've received. Smart bloggers gain readers' trust without heavy-handed laws that, oh by the way, pose serious threats to the cause of limited government. (permalink)

Local governments shouldn't be in the business of business.
A hyper-local paper recently ran an article about city-owned enterprises. I wrote a response, which the paper published today

"No Place to Compete"

According to an article in the September 17 edition, city governments sometimes find themselves with a conflict of interest: While accepting advertising from an area business can add to the public purse, it means promoting a business that competes with a government-owned commercial enterprise.

There's one clear way to avoid such a conflict: Governments should not have commercial enterprises. Local government has enough to do in seeing to it that citizens have good roads to drive on, parks are maintained in good repair, and police address crime in an effective manner. These and a few other limited responsibilities are more than enough for them to handle.

There is no good reason for governments to own liquor stores and golf courses, or to run preschools, fitness centers, ice arenas, skating schools, or water parks. People who own and work at private companies can and do offer each of these services every day. If government must intervene, it would do better to regulate private businesses or offer targeted subsidies to needy residents. Government-owned businesses are unfair to private businesses, which, by their nature, have no power to tax or regulate their competitors. (permalink)

When governments compete against their citizens
Saint Paul Legal Ledger Capitol Report
July 20, 2009
John LaPlante

With the governor's cuts in state aid to local governments the topic of the month, it's a good time to ask what local units of government are doing -- and ponder what they should be doing.

We give governments unique powers and ask them to do unique things. For example, I've been exploring some local parks, noticing the features they offer and how they differ from each other.

Yet governments sometimes act as if they are commercial enterprises. For example, some Twin Cities-area units of government operate water parks that resemble amusement parks more than the municipal pool of years gone by.

Anoka County operates Bunker Beach, which advertises itself as having "Minnesota's largest wave pool." Apple Valley's Family Aquatic Center has less extensive offerings, but you can rent it for your exclusive use after hours. Eagan's Cascade Bay has, in addition to the usual water park features, a miniature golf course. Shoreview has the Topics Indoor Water Park.

So extensive and important are government-owned water parks that of the 18 Minnesota water parks listed by the Web guide About.Com, four (or 22 percent) are owned by a government agency.

If golf is your passion, Explore Minnesota says there are 498 golf courses in the state. Roughly half of the courses I have played golf at are owned by cities or another unit of government. Some of them, such as Superior National Golf at Lutsen, receive plaudits from industry magazines such as Golf Digest. But those awards can't overcome the fact that golf may be the least essential of non-essential government services.

After all, it's not as though you have to belong to a private club to golf. Explore Minnesota says that 90 percent of the state's courses are open to the public.

When winter comes, the commercial enterprises continue. The Three Rivers Park district, an independent unit of government in the west metro area, operates Hyland Ski & Snowboard area in Bloomington.

Under the authority of a special state law, Duluth operates its own ski hill, Spirit Mountain, that receives tax subsidies from a special tourist tax. The city tried to get federal stimulus money for snow-making equipment, saying it would create jobs. (The city didn't get the money.)

What do water parks, golf courses, and ski hills have in common? Aside from offering recreational opportunities, they are examples of businesses in which governments compete against citizens in a business in which the benefits (of playing in the water, playing golf, and skiing or snowboarding) accrue largely to the people engaging in the activity.

Whether we're talking of recreation or other lines of business, government-owned enterprises enjoy several advantages. They don't pay property taxes, and they can rely on the public treasury if needed.

When government goes into business, it may offer a bargain to its customers, but it imposes costs on everyone else. First of all, it discourages private citizens from going into business for themselves. They also expose taxpayers to financial risks, particularly for capital-intensive businesses such when cities start a broadband service.

Even if they don't need explicit subsidies from the treasury, government-owned enterprises impose opportunity costs. A piece of land owned by government is money that can't be used for a business that will pay taxes and employ people.

Public enterprises can also face a conflict of interest. More than 230 cities in the state own liquor stores, which means that one of four Minnesota cities is in the business of selling hooch. The City of Apple Valley addresses the conflict on its website this way: "While the purpose for municipal sales is to promote moderation and control in the sale and use of alcohol beverages, the municipal operations can also be profitable and generate income for the community." Some residents, no doubt, are uncomfortable at the thought of profiting from the sale of alcohol.

The conflict between these two goals is most blatantly evident in one New Hampshire rest area I visited. On one side of the parking lot is the conventional rest-area building with toilets and information for tourists. On the other side is the state-owned liquor store. "Hey kids, let's stop at the rest area and buy some Old Grand-dad before we visit Grandpa!" At least we don't have that situation here in Minnesota.

Sometimes local governments compete with home-grown businesses that have become household names elsewhere. Minneapolis is home to Caribou Coffee and Saint Paul is home to Dunn Brothers Coffee. Each business now operates in 10 or more states. But the Central Library, of the Saint Paul Public Library, offers its own coffee shop, and I suspect other libraries do the same.

In the business of fitness centers, LifeTime Fitness has gone national, but the City of Eagan, among others, operates its own fitness center.

Citizens grant government powers to government because they are essential to the public good, and having private citizens provide them is problematic. Police powers, to protect us from force and fraud, are one example. So is the responsibility to provide clean drinking water.

Serving up a fancy cup o' Joe? Not so much.

Labels: Legal-Ledger

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Government and Your Mouth
Almost every week I write something that is included in the update of the Minnesota Free Market Institute. Here's my contribution for this week's newsletter. (The formatting in the original is lost here.)

In response to my last Weekly Update commentary, someone sent along a note, which said in part, that my "ignorance about American obesity is amazing. It has become a forgone conclusion that the problem is in the over use of corn based products in our food. It has replaced sugar in everything from soda pop to almost every food product made in this country...Come on you guys don't make misleading statements it just furthers your lack of credibility."

Since I'm always on the prowl for writing fodder, I'll thank the correspondent for the excuse to write about something else. I mentioned obesity not to talk about obesity per se, but about poverty and wealth.

If we turn to obesity, however, high-fructose corn syrup (HCFS) is everywhere in food these days, and some people think that it's part of our national obesity problem. Daniel Engber, an editor at Slate, recently reviewed the literature on the subject. Public policy does work in favor of HCFS in at least two ways. The first is federal farm spending, which offers subsidies that make corn (and one of its derivatives, HCFS) cheaper than it would otherwise be. The second policy is a tariff on imported cane sugar.

So it's pretty clear to me that government does in fact affect the foods we eat, making it more economical for companies to use one form of raw ingredient (HCFS) rather than another (cane sugar). But does that mean that this politically driven alteration of business choices make us fat? Maybe. But maybe not. Engber points out that Australia has a similar obesity problem, but relies instead on cane sugar.

Another obesity-related argument you'll run into is that the "food pyramid" propagated by the federal government for years also makes us fat, by encouraging people to eat the wrong kinds of food. (See this article for a presentation of the argument.)

I've got no brief for or against HCFS and you certainly shouldn't listen to me for diet advice. But the record is clear in policy area after policy area that government policies in general have unintended and unforeseen consequences.

Governments have constitutionally prescribed roles. Unfortunately, national, state, and local governments have repeatedly reached beyond those roles, inevitably injecting questions of political payoffs into questions that would otherwise be answered through the voluntary interaction of free individuals.

Labels: MNFMI

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Public School Spending has Doubled in 40 Years
Public school spending has doubled in 40 years, and yet some people are bothered by the fact that an education analyst said that schools ought to be "productive."

I offer a look at this fact, and the reaction, in an op-ed that the Kansas City Star published over the weekend.

Labels: K-12 education

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New Stuff
Here are some things I've been writing in lieu of posting here:

Schools Need to Be More Productive (PDF)
A comment about "unproductive" schools prompts an op-ed.

Decisions on Teacher Tenure Should Not Be Automatic (PDF)
A look at a report on state policies governing hiring and firing teachers.

Learning From a Football Star (PDF)
A tribute to the late Jack Kemp (permalink)

It's Time for Government to Cut Back, Too.
In a recession, many people have cut back on their spending. It's also time for Minnesota to cut back on its spending, as I argue in a new essay. You can read it at the Minnesota Free Market Institute. (permalink)

I'm a Michigander
Since "Michigander or Michiganian" (or is it "Michigander v. Michganian"?) is one of those phrases that bring people to this site, I thought it worthwhile to post a letter I wrote to my college alumni magazine. It was published in the most recent issue.

Here it is:

I'm a Michigander
In your article about the new provost ("New provost weathers early storms," Fall 2008) Mr. McDonald said that he feels "like a true Michigander." Good for him! Unfortunately, you mis-corrected him by asserting that he is now a "Michiganian."

It may be true that sometime in the 1970s--I forget the exact year--the Michigan Legislature passed a measure making "Michiganian" its preferred designation, But when did we start allowing politicians to determine what is appropriate for our language? After all, even the Michigan Historical Center, a unit of state government, says that " ... people who call Michigan their home use the word they like best.

There is no 'official' term."

Bryan A. Garner, author of the indispensible language reference "Garner's Modern American Usage" says that "Someone from Michigan is, by statute, called a Michiganian-but many Michiganians prefer to be called Michiganders." (See the entry on "Denizen Labels.")

In matters of language, I am a moderate prescriptivist, believing that we should use style guides, but that over time, popular usage prevails. And by that score, there's no contest: "Michigander" prevails by far. A Google search returns 156,000 results for "Michigander," but only 14,700 for "Michiganian." (permalink)

Lessons in Economics from the North Shore
Can you learn a lesson in economics by going on vacation?

On March 18 through 22, I spent some time at a convention on the North Shore, held for people who write about skiing, snowboarding and winter generally to talk about their work, swap stories, and ski and snowboard at Lutsen Mountains.

Over the next few weeks I'll be offering up some observations I gleaned about economics and public policy from the conference.

Today, the hat.

Though winter is on its way out, I'm still wearing a knit cap I received in the conference goodie bag.

This beanie hat works just fine. It keeps my head warm, it (almost) fits, and it looks good.

The hat is produced by Wintergreen Northernwear, of Ely, Minnesota. And that latter fact, I guess, is supposed to make me feel good.

After all, the company web site says "We take great pride in being one of the largest private employers in a small remote town where jobs are scarce but garment-making talents and pride in workmanship are in abundance. We're one of the last full-line outdoor clothing makers in the U.S."

That may explain why the beanie on my head sells for $40.00, while REI sells what appears to be a comparable one for $30.00, and Amazon.com sells it for $20.00. This cheaper model is, in the words of REI, "imported," which probably means that it was made in Bangladesh or the Dominican Republic, or some other country where wages are a fraction of those in Ely.

Is this bad? Some people say yes. But does it make any sense for Americans to try to outhustle people working on third-world wages? Buying Ely-made clothing may make you feel an authentic patriot, a supporter of the Iron Range, someone who strikes a blow for "community" and against the global economy and impersonal corporations.

But it also means that you've given up the opportunity to buy a hat AND spend the $10 or $20 on another business. We might say that you've paid a locality premium for a single product.

I suppose that's fine. People pay for more than the utilitarian value of products all the time. (With baseball season coming up, think of those Minnesota Twins jerseys you'll start seeing around the office.)

But it's not without costs, which I'll discuss next week.

Labels: MNFMI

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Teachers union sees budget crisis as opportunity to kill charter schools

President Obama made news last week for trumpeting charter schools. He called for states that have caps on the number of charter schools to lift them, arguing that placing a limit "isn't good for our children,our economy or our country."

While the head of the Democratic Party was praising charter schools,some of his DFL counterparts in Saint Paul were trying to bury them.

First came a proposal to forbid the creation of new charter schools within one mile of a closed district property. That attempt to protect incumbent district schools does nothing to help students or the economy. Fortunately, on March 10, members of the K-12 Education Finance Committee of the Minnesota House voted that proposal down, though only by a vote of 11 to 9.

Ironically, the day after President Obama's speech, Sen. Kathy Saltzman (DFL-Woodbury) proposed an amendment to a senate subcommittee that would ... impose a cap on the number of charter schools in the state. Of all the restrictions that legislators across the country put on charter schools, a cap is the bluntest and most damaging. Other restrictions contained in amendments offered by Saltzman and other legislators would impose additional shackles on existing charter
schools.

So what's going on here? Concern for children? Not exactly. The very existence of charter schools threatens the control that Education Minnesota has over public education. Though charter schools are public schools, only a handful in the country are unionized, and by design they operate free from many of the bureaucratic deadweight that is larded on traditional public schools by the bureaucracy and teacher unions.

Minnesota was the first state to implement charter schools, and its laws have been--at least until now--among the best in the country on the subject. If legislators enact the proposals being discussed in Saint Paul this week, they will have strangled the best hope that education reformers have.

(First published in the Weekly Update, from the Minnesota Free Market Institute, on March 20, 2009)

Labels: K-12 education, MNFMI

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Government unlimited, society constrained

President Obama and Congress are keen to inflict many changes on this country, changes that will inflict a lot of damage. Aside from the particulars, the most significant problem with the Obama agenda is that it is a full-frontal assault on the principle of subsidiarity.

Made most famous in Rerum Novarum, an encyclical published by Pope Leo III in 1891, subsidiarity is a defense against the omnicompetent state. As summarized by one scholar, subsidiarity is the idea that "nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization." In short, it's checks-and-balances writ large across a society.

Subsidiarity reflects the idea that families, religious communities, civic associations, businesses, government agencies and many other associations have important roles to play. But woe to the people who let government take on roles that are better suited to other social organizations.

It's easy and tempting for politicians to sell us on the proposition that government is the provider of our hopes and wants, the solution to our problems and provider of our needs. It's in their self-interest to do so, and to paraphrase the cliche about hammers and nails, to the man who is a politician, every problem is a political one.

Over time, a large portion of the general population has adopted this point of view. In general, leftists' preference for an active government is reflected in the fact that they give less money to charity.

President Obama, to his credit, wants to be true to at least one of his campaign promises. Unfortunately, it's to raise tax rates on the higher-income earners an act that will have repercussions beyond the category of hedge-fund managers. Obama would raise rates, in part, through further limiting the value of deductions for charitable giving---that is, financial contributions to organizations in the non-governmental sector.

Writing in National Review Online, Peter Wehner and Phillip Merrick point to a recent study that estimated charities would have lost $4 billion in 2006 had Obama's idea been in place then. Much of that money would have gone to organizations serving the poor, meaning that Obama's policy favors government solutions to poverty to those offered by churches and voluntary associations.

To be sure, a sizable chunk of charity doesn't flow to the poor (think of colleges and arts organizations), and some charitable funds go to organizations that in turn lobby for increased government activity.

Even so, charitable giving respects the principle of subsidiarity. In various ways, including its tax policies, the Obama Administration weakens the national respect for subsidiarity. If its tax ideas are allowed to stand, we will all be worse off.

(First published by the Minnesota Free Market Institute, March 4, 2009)

Labels: MNFMI

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Our Healthcare Future: Affordability and Access or Regulation and Rationing

In Minnesota as well as in Washington, DC, there's a push for a goverment takeover of health care. People who value freedom are right to warn of the horrors of single-payer systems in Britain, Canada and elsewhere. But they should also offer a positive prescription for change.

One prescription is the Cato Handbook for Policymakers, available at the Cato web site (www.cato.org). While the handbook covers ten broad areas of policy, five chapters focus on health care: Medicare, Medicaid and SCHIP, the tax treatment of health care, regulations on health care, and regulations on health insurance.

The most controversial chapter may be the one on regulations. It calls for state policymakers to eliminate laws and regulations that restrict the supply and drive up the costs of medical services. Examples include licensing requirements for physicians and scope-of-practice laws that limit, by law, what nurse practitioners can do. At the least, they say, states should recognize licenses granted by each other.

While the idea was first proposed by Milton Friedman, the Nobel-prize winning economist, in his 1962 book Capitalism and Freedom, it still strikes many people as ridiculous, akin to letting people die at the hands of quacks. Another argument against it is that the by their superior knowledge of the medical field, doctors have power over patients that must be counterbalanced by the state.

The Cato authors argue, however, that "producers have been the driving force or have subsequently captured most health care regulations, and have used them to protect themselves from market competition at the expense of consumers." This is true in health care as much as it is in other fields.

Clayton Christensen, a professor at Harvard Business School, has argued that the best innovations within any industry allow services to be performed "in a more convenient, less-expensive setting" by people with less extensive---and cheaper---qualifications. In the field of health care, one recent innovation is the retail clinic. These businesses, offer a limited number of services, at a predictable and inexpensive price. They are placed in convenient locations such as grocery stores and pharmacies. (MinuteClinic, a national leader in the field, is based in Minneapolis.) These clinics make health care (again, on a limited basis) more affordable and accessible.

Who could be against increased affordability and access? People with an interest, financial or otherwise, in the regulatory model. So these clinics must fend off would-be regulators who wish to further limit the services they can provide or increase the number of physicians who must be involved in a clinic. A significant part of the retail clinic's business model is to offer lower prices by using fewer doctors and more physicians assistants or nurse practitioners. Staffing-level regulations would in effect limit the limit the number of clinics to those preferred by politicians, not patients. Not coincidentally, they would benefit people employed elsewhere in the health care industry.

Restrictions on the supply of services abound in the health care sector. They include minimum-education requirements and certificate-of-need laws, under which politically-packed boards decide which communities "need" a hospital, surgery center, or even piece of medical hardware.

Even though supply restrictions increase costs by limiting competition among providers, they do little to improve patient safety. The Cato authors cite the group Public Citizen, which found in one report that two-thirds of the doctors who committed the most acts of malpractice received no discipline from regulatory boards.

If we eliminate political restrictions on the number of health care providers, will we have chaos and ignorance about provider quality? Hardly. "In the absence of licensing, private credentialing and the desire to protect brand names and reputations would do even more to safeguard patients from incompetent providers."

The threat of legal action, meanwhile, can help discipline bad actors. Yet some commentators, especially conservative ones, have complained about the costs of the legal system. Capping punitive damages and limiting contingency fees are popular ideas in some circles. Yet the Cato authors say that imposing these measures through government, creates other problems, starting with the fact that people have different risk tolerances. What works for one person may not be best for another.

Better, they say, to allow tort reform on a case-by-case basis. "A more patient-friendly and liberty-enhancing approach" to state-wide caps "would allow patients and providers to write their own medical malpractice reforms into legally enforceable contracts." So for example, patients who voluntarily agree to limits on when they sue and for how much, could be given lower rates by providers. The goal, as with retail clinics, is to increase access to care.

I've touched on only one of the four chapters dealing with health care policy. Read the others, and you'll find not only plenty of reasons why increased government involvement in health care policy is bad, ways in which free markets and competition can go beyond the misguided goal of "universal coverage" to what's really important, affordable health care.

First published by the Minnesota Free Market Institute on March 3, 2009

Labels: MNFMI

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Whose Children Are They?
Recently a member of the Minnesota Legislature--I forget who, and it's not really important--asserted that the state needs a booster-seat law, adding onto a requirement that children ride in such seats until age 4. It's "to protect our children." The Star-Tribune editorialized that substituting political judgment for parental judgment is "a small price to pay to protect our kids."

Excuse me, but whose kids are we talking about?

One of my favorite comedy sketches of all time is Bill Cosby's Chocolate Cake for Breakfast, in which he describes an unusual morning at his house. Rather than cook eggs and bacon for his children, he gives them some leftover chocolate cake. He rationalizes his decision this way: "eggs, eggs are in chocolate cake. And milk. Oh goodie. And wheat. That's nutrition!"

After he then mentioned giving his four-year old grapefruit juice to go with the chocolate cake, some people in the audience gave scornful howls.

His response is one that every parent should recite to those who would expand the power of government in the name of protecting children: "This is not your child."

In recent years, Cosby has gained prominence for his stinging rebukes to men who don't live up to their familial responsibilities. How each father treats his own children does have social ramifications, so a rebuke or commendation is fair game, if it occurs within the context of a civil society.

To his credit, Cosby hasn't called for politicians to force men to adopt a certain style of parenting: Should they be stern or soft? Required to change diapers? Forbidden to engage in playful wrestling on the floor? Human beings are too complex, and the political process is ill-suited to have the state take on the function of parents. And as the example of totalitarian regime demonstrates, freedom of the family from state intervention is a bedrock of freedoms we take for granted, including economic freedom and freedom of thought.

So if you think that children should be in booster seats until age 4--or age 12, for that matter--have at it. Set up a web site and a foundation. Purchase advertisements and talk up your cause on radio shows and in community groups.

But don't forget: they're not "your" children.

Published by the Minnesota Free Market on February 13, 2009

Labels: MNFMI

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Public School Children are "Captured" Audience
Large, bureaucratic organizations, especially government agencies, are well known for using words to shape public perceptions and obscure their own failures. (George Orwell's "1984" was simply an extreme literary example.)

I realized this truth again when I was reading one of the local newspapers published in Dakota County, Minnesota. Various editions of the newspaper "This Week" published an article that could have come straight from the marketing machine of Independent School District (ISD) 196.

The article praised the ISD 196 for being of such high quality that virtually every school-aged student who lives within its boundaries attends one of its schools. It's a variation of the age-old marketing appeal: the WhizBang Gizmo simply must be great, because everyone owns one.

Thanks to some quotes from district officials as well as some rather kind words--and some words that could have been said but were not--the article amounted to a puff piece for the district: Isn't it grand?

I instantly saw several major logical problems with the argument, starting with the fact that the consumption of the service being offered--a seat in a school--is mandatory. If 90 percent of the population owns an iPod music player, that fact is a tribute the to merits of that the product. Nobody is required by law to own an iPod.

Let's turn to education. Since children are required by law to "purchase" schooling, the fact that 90 percent of them actually attend school X, or even any school at all, tells us nothing about the school(s) in question.

The argument put forth by ISD 196--and I suspect, many other districts--has many other holes in it, too. So many that I dashed off a letter to ThisWeek. They chose to not publish my letter, but they did run a letter that expressed similar sentiments.

In a letter printed in the the January 22 edition of This Week, Rosemount resident Larry Goedtel properly called the newspaper and the district to task:On Page 2A of the Jan. 16 edition, there was the headline "District 196 Residents prefer public schools." The article indicated that the "capture rate" of students in District 196 is 88.6 percent.

It appears that Superintendent John Currie is pretty happy with that number since he's quoted as saying, "I think everybody read a lot about students flocking away from public schools to other options, and that's not necessarily true in our district."

Right now public school has a monopoly on education. Sure a child can go to a private school, or a parent can choose home schooling, but it is done primarily at that families own expense. Oh, and that family is still forced to pay taxes to support public education. So the "capture rate" statistic is totally meaningless.

Let's make it more fair. If tax money followed the child and not the "public monopoly," would public schools still maintain their current "capture rate" of 88.6 percent? I highly doubt it. So to use this figure and the interview with the superintendent, to support the headline that "District 196 residents prefer public schools," is at best a joke.

We'll never know how good our public schools really are until they have to compete on an equal footing with private schools and home schooling. Until then, please, save me the propaganda.

By the way, I thought it was totally fitting that it is called "capture rate" and not "choice rate."

Mr. Goedtel nails it.

(First published by the Minnesota Free Market Institute, February 6, 2009.)

Labels: K-12 education, MNFMI

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Who does government really--and inevitably--work for?
A while ago, MNFMII attended a panel discussion on the life of John Brandl, held at the University of Minnesota and cosponsored by the Minnesota Free Market Institute. Among the several points I could mention from that 90-minute event, I'll stick with one.

During the discussion, one of the panelists said something like this: "We need to make government works for the people who need it the least, rather than say, Vance Opperman. Now I like Vance and all, but we need to focus government services on the poor."

That's a high-minded sentiment in some ways. But can it actually be implemented? Can we expand government with pure motives and pure results, giving an advantage to the poor and to nobody else? That, in my mind, is the idealized form of Minnesota socialism-lite. But can it ever be achieved? I don't think so, which means that even on its own terms, liberalism fails.

Let's start with the example given by the panelist. I've never met Vance Opperman and I don't know much about him. But the web site OpenSecrets.org says he has given over $1 million to various political candidates and campaign committees (all Democrat, as far as I can tell) since 1993.

So who do you think will get his phone calls returned sooner? Opperman, or the putative beneficiary of one of government's many social, health and welfare programs? Just who is getting the advantage from an expansive vision of government? I don't know if Opperman has reaped financial benefits from his contributions, but at the least, he's gotten to make his voice heard by those with official power, which is more than can be said for the average person, let alone the indigent, weak, or vulnerable.

Lest you think I'm picking on Opperman, I don't begrudge him for using his wealth to express his views. Good for him. But his record does suggest that people of substantial means aren't simply going to pay their (substantial) taxes and then say "OK, politicians. Whatever you want to do with my money is fine with me."

So that's one strike against the notion that government can be an altruistic enterprise, serving the least of these and nobody else. If big-time donors can get financial gain or at least enjoy their connections, the everyday people who populate government (and receive government grants) gain financially. Government is now the largest employer in the state of Minnesota. Government employees have enviable job security, generous health and pension plans, not to mention other benefits, so it's not as though they're humanitarians nobly sacrificing themselves for the good of mankind. No, they too benefit--sometimes rather handsomely--from expanding the role of government. Do their interests correspond with those of the poor? Given the failure of many programs (Medicaid, public schools and so forth) to adequately serve their alleged beneficiaries, the answer must be "not exactly."

Talk about our need to have government to serve the poor, then, is largely that: talk. Among the middle-class and well-to-do, there's a lot of self serving going on, making government not a tool of the weak, but of the powerful--and on the terms of much of what passes for support for government, unachievable.

(First published by the Minnesota Free Market Institute on January 30, 2009.)

Labels: MNFMI

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Once a subsidy, always a subsidy.
Here's something from the "once you start a subsidy, there's no end" department: In 1973, the Minnesota Legislature created the Spirit Mountain Recreation Area Authority. With its views of Saint Louis Bay and trails that are longer than just about anywhere in the Midwest outside of Lutsen, Minnesota, it's a fine place to go skiing or snowboarding.

But it's also an example of the dubious practice of government-practiced "economic development" activities. As a public entity, Spirit Mountain has competitive advantages over Lutsen and other privately owned ski areas. For example, it receives $225,000 per year for its share of Duluth's tourism tax.

If the City of Duluth gets its way, Spirit will soon receive $6 million of federal "economic stimulus" dollars. The money would be used to buy snowmaking equipment.

You might scoff at the idea that a ski area on the shores of Lake Superior actually needs snowmaking equipment, but as a snowboarder and skier, I'll testify to the value of snowmaking equipment in extending the season and providing a solid base for an area's customers.

But should taxpayers foot the bill for this? On a statement published by the U.S. Conference of Mayors, Duluth says that the $6 million will create 70 jobs. That's $83,000 a job.

Or as you might call it, a snow job.

(First published by the Minnesota Free Market Institute, January 16, 2009)

Labels: MNFMI

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Taxes are Not Charitable
(First printed at the Minnesota Free Market Institute)

Advocates of placing more and more of our incomes and lives under the control of government sometimes say that those of us who favor cutting down the size and burden of government are selfish. By contrast, proposing a significant role for government is a sign of altruism and charity.

In this Christmas season, it's important to remember just what "charity" is.

Charity is when you see somebody in need--let's call him Doug--and you, on your own volition, give him cash, groceries, a trip to the doctor's office, a shoveled-out driveway, or what have you.

That's charity. Now let's move to the world of politics.


Paul the politician levies taxes on Amy and hires Brenda to make sure that Amy pays her taxes. Paul also hires Charlie as a government employee (with lifetime tenure). After Charlie takes his cut for salary, pension benefits and cushy office furniture, spends money from Amy and many other people in a way that provides some modest benefit to Doug.

Meanwhile, Charlie's union gives fat campaign contributions to Doug. It also distributes campaign literature, makes phone calls, and does other work to make sure that Paul gets re-elected. If for some reason Paul loses his election, Paul benefits from a cushy pension that he himself designed.

So where's the charity in all that? Where's the altruism? Nowhere to be seen. Everything that happened resulted from self-interest.

The self-interest of the bureaucrat and the politician is no more virtuous than the self-interest of the taxpayer. Unfortunately, each time the bureaucrat and the politician levy a dollar of taxes--cheered on by activist groups--the rest of us lose an opportunity to offer charity to those we see in need.

Labels: MNFMI

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Crowdsourcing Government
Part lobbying effort, part wisdom-of-crowds at work, Minnesota Budget Solutions is an effort of several groups, some educational and some political, to discuss and act on the massive budget deficit that the state of Minnesota will face if it starts the next fiscal year as planned.

If you live in Minnesota or are interested in tax and budget issues, check it out. (permalink)

Private Initiative in Detroit Responds to Public Failure.
From time to time I write a piece for the Mackinac Center for Public Policy, one of my favorite think tanks.

Last fall I wrote an article a private neighborhood association in Detroit. The public school system may be the worst in America--25 percent of students who enter high school leave four years later with a diploma--property taxes are high, and last year the city government was embroiled in a controversy involving the mayor, who eventually left office.

Even while all this goes on, the residents of the Boston Edison neighborhood work to thwart crime, rehabilitate great but fallen houses, and in general make it a place where people would want to live. And they do all this without government money.

This last week, the Mackinac Center published the article in their magazine Michigan Privatization Report. (permalink)