Wednesday, May 31, 2006

Subsidizing Sin

If this isn’t gross patronage at its worst, I don’t know what is.
Yesterday, casino operators told the Illinois state treasurer that they will make payments under protest and that they will test the law's constitutionality, said Mickey Ezzo, a spokesman for the Illinois Racing Board.
Ezzo said a copy of the letter was sent to the racing board but that he could not release it.
Under the law, Illinois racetracks will receive the subsidy -- expected to yield $36 million a year -- based on the state's four largest riverboat casinos' paying 3 percent of adjusted gross receipts to a Horse Racing Equity Trust Fund.

The legislation would provide Arlington with approximately $10 million, he said, of which about $6 million would supplement purses and $4 million would go to capital improvements, including "marketing of the live racing product.

The new subsidy is intended to help the horse-racing industry counter declines in business since casinos opened in Illinois.

Can anyone explain to me what rational interest the state has in making sure that horse racing is competitive?

For those of you that are not familiar with the history of the Arlington Race trace, it is the same organization that closed its doors in a hissy-fit until the state allowed it to run slot machines. They didn’t get their slot machines so I guess that have just resorted to demanding hand-outs.

Its obscene that a company that does nothing more than provide entertainment can achieve the status of “essential service” for no reason other than the owners are well connected to the political elite.

Is it any surprise that Illinois is one of the most corrupt states in the country?

Taking Issue With Mankiw

Just a small complaint about Greg Mankiw’s op-ed in the Wall Street Journal.

A higher tax on gasoline, for example, is better than CAFE standards as a policy to improve the fuel efficiency of the American car fleet. It would also encourage people to drive less by, for instance, living closer to where they work

While it would encourage people to want to live closer to where they work, it simply isn’t possible in many areas.  I have chosen to live 30+ miles from work because I couldn’t afford to buy a home closer to my office.

Increasing the cost of fuel would only exacerbate housing prices in commercial areas as even more people would want to live there.  It is certainly possible that curbing emissions from automobiles is more important than affordable housing, but I have a feeling it was never even considered.

Tuesday, May 30, 2006

Belated Happy Memorial Day

So why do we make a bigger deal out of Memorial Day than Armed Forces day?

Some would like to think that it’s an MSM plot to slight the military.

Others would like to think its because the military of the past was more worthy of accolades than the military of today.

However, the answer is quite a bit simpler than that.  Most Americans get Memorial Day off.  So the real celebration is a three day weekend, not the sacrifices of young solidiers of yesteryear.

Libertarian Objectives: One Auction At a Time

There seems to be an interesting trend in Illinois recently, though I’m not sure if it is replicated across the rest of the country or not.  Illinois politicians are slowly selling away government services and assets to the highest bidder – Midway Airport, The Skyway, State Toll Roads, and even the sacred Illinois Lottery.

What is interesting about this process is that isn’t driven by a recognition that competitive markets provide better services, or that, perhaps, government is providing services that it has no need to provide.  No, it’s a never-satiable thirst for more funds to grow government even more.

What is a little frustrating is that they are merely replacing one monopoly with another (unless they split up the Tollway, which I doubt) so we Illinoisans will not receive any of the benefits of competition.  However, if this trend continues, might we end up with a government that owns very little in the way of assets and providing very little in the way of services beyond pensions, Medicare and required Federal programs?

If that is, indeed, the inevitable outcome is that something that supporters of limited government should welcome – the shuffling of monopolies from government to private parties?  There are no promises that this will improve the services, so there is very little chance of backlash (unless service deteriorates drastically) against privatization.

Once privatized is it possible that competition will emerge?  Government will have no need to jealously protect its monopoly, so it’s not impossible.  That leaves me optimistic that bloated government, itself, will lead to greater competition in services that government provides today.

Friday, May 26, 2006

More Solutions In Search of a Problem

Miriam, at Concurring Opinions, doesn’t like at-will employment (or so I assume by her blog-post).

As Professor Pauline Kim (Wash U) has empirically documented, many non-unionized workers (and, presumably, many 'Apprentice' watchers) do not fully realize the extent of their own job insecurity. Often, people believe that if they show up at the office and do their jobs, absent any obvious difficulties with management or economic downturns, their employment will last. They believe what they think the boss has promised them: continued employment for hard work. But that is not the law.

Indeed, while it may be good management practice to document reasons for firing someone, the law does not require it. Under the at-will employment rule -- the law in all jurisdictions but Montana -- an employer may fire an employee for a good reason, a bad reason, or no reason at all. Although federal and state anti-discrimination statutes, whistle-blower laws, and other legal provisions put restraints on an employer's ability to use a bad reason to fire an employee, the underlying at-will regime remains substantially unchanged. The reality of the worker's bargain looks a lot more like Trump's deal.

If most employees don’t realize that they can be fired at any time for any reason, wouldn’t this imply that it doesn’t happen all that often? If it was a wide spread practice everyone would be fearful of it (likely demand Congress take action to fix it, but that’s beside the point).

I think it’s safe to assume that at-will employment has caused a great deal of problems – what does it gain us?

It’s easier to find work when you need a job – since there is very little risk in hiring someone companies are more willing to hire when they need to.

It’s easier to change careers – I’ve personally been the beneficiary of this one. As long as you are willing to start at the bottom you can switch careers with little or no experience. Convincing an employer to take a chance on you is much easier when the employer knows there is an out if you don’t work out.

Out economy runs more efficiently – when companies, especially small companies need to downsize (a difficult decision to be sure) they can do so without the expensive severance packages. The US has a high rate of entrepreneurship compared to most of the world and I think that flexible labor laws are a large contributor to this.

So if there doesn’t seem to be much of a problem and there are many benefits to at-will employment why is there a sense that this is a problem that needs “fixed?”

Thursday, May 25, 2006

The Contract Doesn't Apply Here

Orin Kerr thinks that Hastert, et al are being inconsistent over the Jefferson/FBI debacle From the Contract with America:

On the first day of the 104th Congress, the new Republican majority will immediately pass the following major reforms, aimed at restoring the faith and trust of the American people in their government: FIRST, require all laws that apply to the rest of the country also apply equally to the Congress.

But the rest of the country is immune from searches of their Congressional offices too, so I’m not sure how this applies.

/sarcasm off

Wednesday, May 24, 2006

Immigration: Curing the Symptom, Ignoring the Disease

I simply do not understand the current discussion on immigration, it just doesn't seem to follow any rational thought process.

What exactly is the problem?
There are too many illegal immigrants in the US.

Perhaps. I'm not sure I agree but lets run with it.

Why are there too many illegal immigrants in the US?
It's too easy to get into the US.

Well that is clearly not true. People die in the desert, in the back of semi-trailers and at the hands of criminals. People dig tunnels to get here and generally risk everything to get here, I wouldn't classify any of those conditions as easy. Let's try again.

The benefits from living in the US outweigh the risks in getting here.

That seems more plausible. Conditions in, well everywhere, pretty much suck unless you are lucky enough to live in Europe or the developed parts of Asia. If you have no opportunity to improve your life where you are at it is only logical to assume you will try somewhere else. The US has long been the beacon of hope, rightly so in my opinion. As long as a poor life in the US exceeds the most optimistic life elsewhere there are going to be scores of people trying to enter the US by any means necessary.

So if the problem is there are too many illegal immigrants, and the reason why there are so many illegals is that any risk of getting into the US exceeds the benefits to being here how do we fix the problem?

Allow more people into the US legally.

Economists universally agree that immigration is a net benefit for the US, so what plausible reason is there for keeping the quotas so low? Some have argued that they drain social services, I'm not sure whether or not that is correct (immigrants that I know typically will refuse services from the government even if they are eligible), but even assuming that is true there are easy fixes for that. Simply deny benefits to all immigrants until they have been here for x number of years.

We want people to come to the US because they want to make a better life for themselves and those around them, we don't want them to free-load off the generousity of American citizens. If they don't believe that they can survive in the US without hand-outs refusing benefits will simply make it more likely that free-loaders won't want to immigrate.

So now that that reason is off the table, what more reasons are there? I simply can't think of any.

It's time to end the populist scare tactics that are surrounding the current debate around immigration. Once the proper questions are asked the solution is easy - but then again the debate really isn't about solving a problem, its winning an election and there is no easy solution to get rid of the problem of politicians.

Monday, May 22, 2006

Putin Should Read Freakonomics

Or, at the very least, research whether or not anyone else had tried this idea:

Cash for babies is the Kremlin's offer to women in its latest bid to reverse a population decline that threatens to leave large swaths of Russia virtually uninhabited within 50 years.

President Vladimir Putin last week defined the crisis as Russia's most acute problem, and promised to spend some of the country's oil profits on efforts to relieve it. He ordered parliament to more than double monthly child support payments to 1,500 rubles (about $55) and added that women who choose to have a second baby will receive 250,000 rubles ($9,200), a staggering sum in a country where average monthly incomes hover close to $330.

If Levitt’s research holds up (which I think it will) Russia will see an increase in crime in, say, about 18-20 years. From what I’ve heard about Russia, I would think that the last thing they want right now is an increase in crime.

The easiest way to fix a population decline is to attract immigrants. Of course that would mean that Putin would need to reverse his turn towards authoritarianism and begin some drastic market reforms.

I guess introducing a problem that won't be seen (and probably not correlated correctly) and make people love you by giving them mad amounts of money is probably an easier decision to make for you local despot.

HatTip:/ ElectEcon

Thursday, May 18, 2006

Does Government Actually Know Anything?

Sometimes you have to wonder about the mental capacities of government officials.

Businesses and individuals in Britain may soon have to give their encryption keys to the police or face imprisonment. The UK government has said it will bring in the new powers to address a rise in the use of encryption by criminals and terrorists.

So the British government is concerned that criminals and terrorists are using encryption for illicit purposes. Their solution? Make non-citizens hand over their encryption keys. Not only does this sound uniquely unenforcable, it won't do any good. People that are actually using encryption for illegal activities won't cooperate. It's much better to go to jail for failure to provide encryption keys than to go to jail for conspiracy to blow up Buckingham Palace.

Meanwhile the government and government employees all get to snoop around on private communications and files. I don't know about you, but that just doesn't sound very bright to me.

HatTip: SlashDot

Optimistic About Roberts

When Roberts was going through his confirmation hearings, I generally believed that he should (and ultimately would) be confirmed. However, in the back of my mind I feared that this would be a Justice that would side with the government more often than not.

While it is impossible to discern how a Justice will vote in future cases based on a few decisions, but his decision in the case Jones v. Flowers leaves me optimistic that my fears were for naught. The gist of the case, as I understand it, is the state sent Mr. Jones a number of notices that he was behind on taxes for his house and after he failed to respond, they sold it.

Mr. Jones, who did not live at the house at that time, claims to never have received the notices and objected that his house was sold. Chief Roberts, as well as four of the liberal Justices, agreed that the State should have taken greater steps to attempt to contact Mr. Jones and sided with the plantiff.

I certainly don't understand all of legal issues surrounding the case, but whenever an individual wins a case over government power I can't help feeling a bit relieved and this case is no different.

HatTip: IlliniPundit

Tuesday, May 16, 2006

Wal-Mart Under Attack - Again

The International Labor Rights Fund is suing Wal-Mart. Snore. Leftists group sues successful American company, I’m not even sure why its news anymore.

An American labor rights group filed a class-action lawsuit yesterday against Wal-Mart Stores Inc., alleging that suppliers in five countries violated workers' rights, including denying a minimum wage, requiring overtime and punishing union activity.
The suit, filed in California Superior Court in Los Angeles, accuses Wal-Mart of failing to enforce its standards for suppliers and, in some cases, observe local labor laws in China, Bangladesh, Swaziland, Nicaragua and Indonesia.

I’m not familiar with the laws involved, but I don’t understand how a company can be responsible for enforcing the compliance of its business partners. Most companies I know have a difficult time keeping track of everything in their own shop.

The suit is being filed in California, so anything is possible. However, that isn’t what got me blogging.

The International Labor Rights Fund, a District-based advocacy group, filed the suit on behalf of 15 foreign workers who claimed they were subjected to illegal working conditions, and four California grocery employees who claimed that Wal-Mart's cost-cutting measures resulted in lower wages and benefits.

The four California plaintiffs are employees of unionized grocery chains, such as Ralphs and Safeway Inc., that have cut wages and benefits to better compete with Wal-Mart. All four are members of the United Food and Commercial Workers Union, which is trying to organize Wal-Mart's 1.2 million U.S. employees.


These guys are suing Wal-Mart because their employer doesn’t pay them enough? Let’s put aside the fact that they are union employees and are probably over paid anyway, under what twisted logic is this a tort? Perhaps I should sue KPMG since the only way that we can compete with them is by offering our services at a lower cost and therefore I get paid less.

I hate to break it to these guys, but you do not have a right to make whatever you want, when companies compete sometimes workers get squeezed. But I can tell you that if they were given the real choice making a bit less money and having your employer go out of business the choice would be easy.

I don’t understand how Wal-Mart gets a bum rap for providing products that people want at a low cost. Isn’t the left up in arms about Big Oil charging too much? Oh yeah, it’s not the money that matters, but the success. Being successful is immoral and therefore must be punished.

There Is A Train Barrelling Down The Third Rail

It’s frustrating when politicians don’t understand history. Couple that with ignorance of economics and you have one very flustered blogger.

In FDR's America, an America where more and more Americans were finding themselves on the losing end of a new economy with nothing to cushion their fall, our President believed that if we're willing to share even a small amount of life's risks and rewards with each other, then we'll all have the chance to make the most of our God-given potential.

The New Deal gave the laid-off worker a guarantee that he could count on unemployment insurance to put food on his family's table while he looked for a new job. It gave the young man who suffered a debilitating accident assurance that he could count on disability benefits to get him through the tough times. And Franklin Roosevelt's greatest legacy promised the couple who put in a lifetime of sacrifice and hard work that they could retire in comfort and dignity because of Social Security.

The Great Depression was brought upon the US through government arrogance that felt they could pull the strings of capitalism to “make it better.” If they had avoided that conceit Social Security would never have been necessary. Now we are saddled with a program that can’t succeed.

Also note that Obama mentions the minor parts of Social Security that not even libertarians are proposing to eliminate – unemployment insurance and disability benefits, nothing like clouding the debate with non-sequitors.

Now, let me be clear. There are serious problems with Social Security, and Democrats are absolutely united in the desire to strengthen the program and make it solvent for future generations. As I said in the press club, this isn't an issue we want to play politics on. We want to work together with Republicans on this, and I believe we can.

Says Obama as he plays politics on the issue. Let’s make one thing clear – you cannot make Social Security “solvent.” It pays out more money than it brings in so has a long term problem that we are creaping up on. You can’t get a return on an investment that is stuffed under the mattress, and since the money was never invested in real assets there is no return. The beneficiaries outnumber the active workers which leads to a short term problem since active workers will have to pay a larger percentage of their paychecks to support the current retirees.

Even the “moderate” solutions to Social Security aren’t even solutions, they just extend the inevitable. Increasing the retirement age will help for awhile, but only for awhile, the math just doesn’t work, you can’t tinker with the numbers and accidentally stumble onto a permanent solution, the program is broken. Raising taxes is a non-starter (I hope) the long term harm it would do to the economy just isn’t worth sending paychecks to millionaires.

The only solution is to scrap the program entirely or start means testing recipients. Both have drawbacks which I won’t go into here, but until politicians admit that you can’t fix Social Security they will never make any progress on the issue.

Monday, May 15, 2006

Warning: Political Speech Ahead

You have to be careful when politicians start talking, because much of what they say seems truthful, but when you actually look at the facts thy are typically half-truths at best. Senator Obama teaches us this lesson well with his latest populist diatribe.

It seems like every year, as soon as headlines start announcing "Pain at the pump" and Americans start emptying their wallets to fill up their tanks, politicians revert to their Rolodex of responses, from tax rebates and tax holidays to investigations into price gouging by oil companies.

None of these proposals would do any harm, and many will provide Americans some temporary relief at the pump.

Wouldn’t do any good either, tax breaks would be eliminated as the price of gas went up to reflect the true price reflected in current supply and demand. And if you feel that generating additional profits for Saudi Arabia and Iran are bad, then his assertion that no harm would come is certainly false as well.

We must start by producing cars that use less oil. The auto industry has not been asked to raise fuel economy standards in 17 years, and lately both Republicans and Democrats have stopped asking.

That simply isn’t true. Car manufacturers HAVE produced cars that have higher fuel economy standards, hasn’t Barack jumped on the politico bandwagon of driving to photo-ops with his hybrid? And its not just the hybrids that have better numbers, plain Jane small cars have better numbers as well, people just aren’t buying them. Senator Obama needs to get off his high horse and stop blaming Big Business for the ills that he sees, businesses can only do so much.

But auto executives are right when they say that transitioning to more fuel-efficient automobiles would be costly at a time of sagging profits and stiff competition, and that's precisely why the federal government shouldn't let the industry face these costs on their own.

We should strike a grand bargain with the Big Three automakers whereby the government picks up part of the tab for retiree health care costs -- a tab that ran almost $6.7 billion just last year -- in exchange for the car companies using that savings to invest in more fuel-efficient cars.

What a brilliant tactician, he picks up three huge constituencies in one fell swoop. Unions love healthcare and any action that protects their jobs, enviro-nuts love fuel-efficient cars and Big Business loves free money. What I don’t understand is why government funded health care for GM is OK when it’s a free hand-out, but when Wal-Mart employees get it when they are eligible for Medicare it suddenly is a big deal. And can someone please explain to me what retiree health care has to do with R&D? I just don’t see the connection.

Already, some cars on the road have the flexible-fuel tanks necessary for them to run on E85, a cheaper, cleaner blend of 85 percent ethanol and 15 percent gasoline. But millions upon millions of cars still don't have these tanks.
It's time for automakers to install those tanks in every single car they make, and it's time for the government to cover this small cost, which currently runs at just $100 per car.

It's also a time to start making E85 fueling stations more available to the public. Currently, only 681 out of 170,000 fueling stations in America offer E85 pumps. This is not acceptable. Every American should have the choice to fill up their car with E85 at any fueling station. And oil companies should stop standing in the way and join us in making this happen. If the big oil companies would devote just 1 percent of their first quarter profits this year to install E85 pumps, more than 7,000 service stations would be able to serve E85 to hungry motorists.

This is a prime example of a politician that doesn’t understand economics. When every car in America starts filling up with ethanol where is all this fuel going to come from? Even with the substantial subsidies given to ethanol producers the product is almost as expensive as gasoline, and the recent Congressional mandate to include more ethanol in all gas has caused the price to increase almost three-fold.

What also doesn’t make any sense is that we are, supposedly, trying to make our fuel supply less volatile – so the solution is to tie security to how well corn grows in Iowa? Talk to any farmer about floods, droughts, bugs, tornados or any other natural disaster and you will think twice about tying the cost of your daily commute to agriculture.

The solution is easy, undue the decades of restrictions on supply, ease the burdens of investment and the entrepreneurs will figure out a solution. Let government get in the way, and we will have $500 mouse traps and inventions that don’t work for problems that no one needs fixed.

It’s high time that we demand politicians attend a semester of Econ 101 before making their first trip to Washington, we could same millions of dollars in wasted time spent correcting their elementary mistakes.

Thursday, May 11, 2006

Republicans Don't Understand Economic Either

According to Henry Hyde, eliminating tariffs on imported ethanol would have no effect on the price of gasoline, going so far as to say “I just don’t see an economic plus in it right now.”

I think what Hyde meant to say was “I just don’t see a political plus in it for me right now.” I’m often left wondering politicians are really this stupid, or if it is just advantageous for them to appear so.

HatTip: Cato@Liberty

Wednesday, May 10, 2006

Money For Nothing and Your Cash For Free

Amtrak, the favorite whipping boy of many libertarians, is getting some free money from Illinois.

State funding for Amtrak will double under the 2007 budget bill passed by the General Assembly last week, setting the stage for additional service between Chicago and St. Louis as well as parts of Downstate Illinois, officials said Tuesday.

The proposed service enhancements come as Amtrak ridership throughout the state continues to grow.
The new state budget approved by the General Assembly allows IDOT to increase its $12.1 million contract with Amtrak to $24 million next year. Amtrak spokesman Marc Magliari said that's the largest amount of assistance Amtrak has received from the state in 30 years.

If ridership is growing, wouldn’t Amtrak want to increase service in order to meet demand? The fact that Amtrak isn’t doing this of its own accord tells me that it isn’t necessary. Why does government continue to pay for services that people don’t want or need?

Illinois struggles to meet it’s current fiscal needs, including massive unfunded liabilities in its pensions, why on earth would it promise to give more money to Amtrak? Something is telling me that someone’s brother is involved in this…

Chicago Makes Bid for 2016 Olympics

Yep, Daley needs an excuse to waste spend more taxpayer money.

Experts say everything Chicago has in place already – including a public transportation system, existing sports venues, plenty of hotels, and two major airports make the city a strong contender.

Mayor Richard M. Daley has talked about preparing for such a large-scale event.

He said it would require “improving the CTA, improving mass transit; of course, infrastructure is the key dealing with economic development, and that is very important when you get another generation; young people looking at the Olympics in 2016.”

The plan would be to go to business and private donors to underwrite the games. Big building projects would include an athlete’s village, which could later become affordable housing, and an 80,000-seat stadium, which could be made smaller later.

Published reports suggest a host city’s budget could run as high as more than $4 billion.

I don’t want the Olympics in Chicago.

I don’t want massive stadiums that will sit idle after the games are done.

I don’t want “beautification” projects that will build or rebuild structures that make people “ooh” and “aah” at government’s ability to build useless things.

I don’t want millions of people to flood into the area for several weeks screwing up everything.

But most of all I don’t want government to spend billions of dollars for no practical purpose. Even with the special math that governments use to measure the success of projects (you know the kind that only counts the benefits, but none of the opportunity loss) Olympics rarely make any money. When you factor in the nepotism that is prevalent in Illinois, the odds become even longer.

If anyone can think of anyway I can get Chicago eliminated early in the process, I’d love to hear suggestions.

Tuesday, May 09, 2006

My Crystal Ball Knows All

Back in August of 2005 Hawaii decided it was going to flashback to the 70s and try playing with price caps to control the price of gasoline. Here is how I predicted it would play out:

So Hawaii is going to put price caps on the wholesale price of gasoline, so let's play out how this is going to work:
1. Supply is going to decrease. With an artificially set maximum price suppliers are going to be less excited about selling product to Hawaii and local refineries (if there are any) will have zero incentive to boost production.
2. As any red-blooded capitalist knows when supply goes down, price goes up.
3. Hawaiian citizens will be paying higher prices for their gasoline with price controls than without them
It’s almost a full year later, let’s check back in on how our nostalgic Hawaiians are doing.

One study by an economics professor showed the gas cap cost consumers 5 cents more per gallon. An analysis by the state Department of Business, Economic Development and Tourism estimated that island motorists paid $54.9 million more than they otherwise would have in the first five months under the cap. But research by cap supporter Rep. Marcus Oshiro indicated the limits saved drivers $33 million.

Two say worse, one says better, but the public perception is that it is worse, so the legislators are eliminating the caps for now. I guess they want to wait for a time when caps will cause long lines and general unrest before they bring them back again.

It really is amazing how well the crystal ball works when hack politicians decide they can control the market. I guess it would be too much to ask for them to finally get around to taking that Econ 101 class isn’t it?

HatTip: Hit and Run
More thoughts at Cafe Hayek
More of the same from Kip: He says that any college junior econ major could have predicted the outcome, I think he is over-estimating the difficulty here - I have never taken an econ class and I managed to figure it out.

Monday, May 08, 2006

Victory Over Terrorism One Man At A Time

If you ever wanted to know what victory over terrorism looks like, here it is:

I had thought that I would be sentenced to death based on the emotions and anger toward me for the deaths on September 11 but after reviewing the jury verdict [against a death sentence] and reading how the jurors set aside their emotions and disgust for me and focused on the law and the evidence that was presented during the trial, I came to understand that the jury process was more complex than I assumed...I now see that it is possible that I can receive a fair trial even with Americans as jurors...

Moussaoui was so convinced of the wickedness of the American system he had thought death was a foregone conclusion. After witnessing the jury process, something that does not exist in the Middle East, he is amazed that even someone like him – someone that loathes the US, can achieve justice.

I think he may just be a convert to the American Way. Our victory is going to be one person at a time, but if we stand by the American Way Of Life then victory is certain. If we fall victim to the seductive voices that promise to make us safer at the cost of our liberties then defeat will be slow and painful.

What is (Not) Privatization?

I don’t think politicians understand what privatization means because it’s tossed around like a silver bullet than can fix any problem.

Congressman Luis Gutierrez said he's tired of hearing about problems with Chicago's hiring practices and it's time for the city to privatize the process.Gutierrez told The Associated Press today that recent headlines about patronage hiring and Chicago's history of such problems show that the system can't be fixed and it's time to try something new.The Chicago Democrat said hiring a private human resources firm would help ensure that employees will have the skills and education needed to do their jobs.

Private enterprise doesn’t succeed because its private, it succeeds because the proper incentives are in place to succeed.  By simply handing a government process over to a private firm you are just moving the problem somewhere else.  The biggest problem with this approach is that when it fails to meet expectations opponents pontificate about how the private sector is just as bad as the public.

Until the entire process is based in free-market incentives (i.e. there are goals that must be met or you will be fired) the hiring process is likely to be poor.  Now I will say that if the human resources firm is giving complete control of hiring patronage should – and I do emphasize should, not will – eliminate patronage in city positions.

If the only purpose of hiring a private firm to do hiring is to eliminate patronage, this may actually work, but if you want human resources to improve (better people, etc) then give the services over to the private sector and let anyone and everyone compete to provide those services directly to the consumers.

Replacing a government process with a monopolistic private provider isn’t privatization, at least not in a way that may actually solve anything.

Favre's Back!

I speculated at the end of last season that Favre would probably come back and it turns out I was right. Favre announced over the weekend that he would return for at least one more year.

My desire and my commitment is why I'm here … [n]ot my footwork, not my mechanics, not arm strength or decision making. It's my desire to win. I want to win more than anyone else. I'm willing to do whatever it takes, and sometimes it's not pretty.

He loves to play football and I think will continue to play as long as he is capable of doing so, though if the Pack has another losing season the chances that he will return diminish drastically.

The good news is that the Packers had a phenomenal draft picking up several defensive players that can probably make an immediate impact. They also picked up Charles Woodson, though he isn’t he impact player that he was five years ago, can probably mentor the younger players and add some much needed leadership in the defensive locker-room.

Over all, I’m optimistic that the Packers won’t suck this year and am looking forward to beating the Bears on the first and last days of the season.

The Catholic Church's Slow Decent Into Hell

The Catholic Church doesn’t like the Da Vinci Code, so they are pursuing legal remedies to impose their will on everyone else. What is their legal justification for censorship?

This is one of the fundamental human rights: that we should be respected, our religious beliefs respected, and our founder Jesus Christ respected

If there is one thing that I know for certain it is that there is absolutely, positively no “fundamental human right” to be respected. You have no right, no priveledge to control what other people think, say, write or act.

The church has a long (very long) sordid history with controlling everything that everyone does, now that they no longer have that direct power I sincerely hope that we don’t give them the indirect power by way of the court system.

HatTip: Volokh Conspiracy
Update: Professor Bainbridge has similar thoughts.

Thursday, May 04, 2006

Much Ado About Term Limits: Part II

In Part I I discussed why term limits wasn’t going to fix the problems of pork and special interests in Congress.

So, if forcing Congressmen out every couple of years isn’t going to do any good,  what is the right answer?  Well, there isn’t going to be any silver bullet, but you have to either address the incentives involved or change the process to make it more difficult for Congress to meet those incentives.

The primary incentive is to retain power and get re-elected and nothing can be done to change that incentive, but you can use that incentive against them.  One of the reasons that pork barrel spending and special interest legislation has become so prevalent is it is buried in huge bills with hundreds of amendments that are tacked on at the last minute.

The reason that bills are passed this way is that there are competing interests that Congressmen want to keep in the dark.  The constituents from NY wouldn’t likely approve of bridges built in Alaska any more than people in Alaska would approve of building subways in NY.  So they hide the spending so that the people that matter (the voters) aren’t likely to find out.

The same goes with special interest spending – how do you know whether your Senator is voting for the tax breaks for Big Oil or tougher emission standards when they are all rolled up in the same bill?

The solution is a two parter, both of which have been proposed recently, but are typically tied up with so much extraneous crap to make them unpassable.  The first is to mandate a minimum amount of time between when a bill is written and when it can be voted on.  First, it can prevent bad law from being enacted like SOX, PATRIOT and the like, second it gives voters a chance to provide feedback to their representatives before action is taken.

The second solution is to limit the number or nature of amendments that can be tacked on a bill.  The legislative process is a horse-trading carnival where minority factions in Congress wield a substantial amount of power.  “Moderate” members know that they can get nearly anything they want simply by holding out.  

The central tenants of a bill are rarely voted on the merits alone, when the leadership starts canvassing for support the natural indication for most should be “Maybe.”  By saying maybe the legislator can sell his “Yes” for something else that he wants.  So typical legislation includes anything and everything regardless of what the bill is supposed to be about.  If each amendment were voted on the merits alone I have little doubt that many of them wouldn’t pass muster.

Unfortunately, the mechanics of a such a measure would be difficult to craft.  You do not want to prevent the ability to amend legislation, merely the horse trading that is associated with it.  By making our Legislators vote on every bill (without confusing amendments) and giving citizens the time to see what they are going to be voting on, our Congressmen will become more responsive to actual voter needs.

Much Ado About Term-Limits: Part I

It seems like every political season the subject of term limits makes it rounds amongst the punditsphere. This season doesn’t seem to be much different.

By standing up by himself in the beginning and then persevering through the insults, counter-attacks and tirades of the old bulls of the Senate, Coburn has given the country a vivid demonstration of genuine political courage. One result has been that many more Members of the Senate have begun to vote with him instead of against him.
But there is another aspect of Coburn's demonstration that bears comment and that is how he has also provided a demonstration of the tremendously salutary effects of term limits.

So by proving that there are, indeed, some good eggs in Congress we should chase everyone out? I’m not sure I understand, but Mr. InstaPundit himself seems to agree

I think we should term-limit some folks this November, but he's right. The argument against going ahead on term limits was that electing Republicans would fix things. It didn't.
I think there are two primary arguments against term limits. The first is a very practical one, you get rid of the good along with the bad. As a proponent of limited government I am quite happy to retain Mr. Coburn, Mr. Ron Paul and others that actively pursue a small government agenda. Why should we eliminate those that we like in order to enforce our preference (an opposition to big government) upon a populous that seems to disagree with us? Especially when there is no reason to believe that our big budget foes won’t be replaced by big budget replacements. Or worse, our small government heroes replaced by big budget busting antagonists?

The second reason is, perhaps, somewhat counter-intuitive – by imposing term-limits we make congressmen more likely to waste government resources. Why do I think so? Look at what incentives are driving behavior. Congressmen want to retain power, so they spend government resources buying influence and increasing their public standing.

Sometimes that means promoting a big name project that they can bring back to their constituents to flout how much he/she has done for them (i.e. the Bridge to Nowhere). Sometimes it means making life easier for a politically powerful ally in the form of corporate welfare or permissive legislation. All the time the Congressmen must at least give the appearance of doing what is best for his constituents, if they push the envelope too far it will weaken themselves politically.

So what happens when you remove the incentive to retain power? You remove all need to please the constituents, and leave only the self interest. There is no longer a need to temper spending at all, in fact you have given them every incentive to increase spending in ways that benefit, not the people that he/she is representing, but themselves. Instead of Bridges to Nowhere we’ll build specific projects for specific people or businesses.

If Joe Congressmen wants to become a lobbyist for Big Oil after his term limit is up he will fight like made to get Big Oil anything that it wants without even a thought about the political consequences. Term limits are going to exacerbate a problem that is already pretty bad. I’ll address my thoughts on how to fix the problem in Part II.

Tuesday, May 02, 2006

A Blow to FDA?

I have no choice but to mimic Mike’s response.


the right of a mentally competent, terminally ill adult patient to access potentially life-saving post-Phase I investigational new drugs, upon a doctor’s advice, even where that medication carries risks for the patient.

I’m not convinced that such a ruling would weather a Supreme Court review, but it certainly puts a dent into FDA’s power, which would be welcome news in my opinion. Orin Kerr has a bit more.

I Guess That Means Schools Are Better?

The U.S. Justice Department and the city's school system have reached a tentative agreement to release the district from a 26-year-old desegregation case as early as next year.

Under the settlement filed in federal court Monday, the district would be allowed to set its own plan and budget for integrating schools starting with the 2007-2008 school year.
Schools chief Arne Duncan has called the agreement "a huge victory for the schoolchildren of Chicago."

In 1980, the federal government ordered the city to desegregate its public schools, requiring it to provide additional educational services for children in racially isolated schools and to integrate to "the extent practicable."

How many millions of dollars were wasted for absolutely no gain? As long as schools are not segregated by legislative decree what difference does it make what the makeup of a school is?

Government continues to prove time and time again that it is capable of accomplishing little more than spending money.

Hard Problems Require Clever Solutions

Rep. Jeff Flake (R-AZ) pinpoints the problem.

Political anxiety in an election year is to blame for a lot of the bad bills Congress passes," said Representative Jeff Flake, Republican of Arizona, who on Monday called the rebate a "knee-jerk populist idea" that voters would see through.

I think I have a solution – no new legislation for six months prior to an election. Heck, given the growing length of the election cycle, it may be safer to make it a full year. Given congressmen’s penchant for getting something for nothing, I don’t even think it would be a hard sell.

Try Commuting for Two Hours!

The Environmental Economist thinks that gas prices will hit $4 by the end of July.  I’m going to make a bold prediction that gas prices will cap at $3.50 or $3.60 barring major disruptions in the supply chain.

I think that consumers, in general, will balk at prices as high as $3.50 and will drastically change their habits if it gets that bad.  $3 sucks, but it’s not that bad when you know that it’s a temporary condition - $3.50, on the other hand is just way to freaking much.

I know that I would have a little sit down with my boss and tell him my days of a two hour commute are over and I assume that others would do the same.

Monday, May 01, 2006

The New Face of the Low-Wage Labor Force

The rhetoric that surrounds immigration is rife with protectionism, the same protectionism that has plagued the US forever. Whites were fearful that blacks were going to take "our jobs" so "prevailing wages" regulations were enacted to make it harder to hire blacks.

After WWII it was women that were taking jobs away, so Congress enacted minimum wage laws to protect men against the new low-wage entrants to the work force. Fortunately these protectionist schemes didn't work and we became a wealthier country in spite of attempts to maintain the status quo.

Change is hard, but change is what drives progress forward. Can anyone honestly say that we would be better off today if we had succeeded in protecting "our" jobs from blacks and women? The circumstances today are identical to the circumstances of yesterday, merely the faces have changed.