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March - April 2008

Government & Business

Government & Competition

Bravo for the Auto!

McCain in Prescott

Sky High Subsidies Unnecessary

Guns and Schools

The Dirty Dozen

Iraq War at Five

For some reason, I was unable to access my web site for quite some time.  I don't know what the issue was, but the folks at HostRocket have resolved it, and now it is time to catch up on a few matters.

Sunday, March 23, 2008

   Government & BusinessAs part of my continuing participation as a "public member" of the editorial board of the Arizona Daily Sun, we are encouraged to pen individual weekly comments, based on the editorials the paper has run, or the topics we have discussed, but which haven't yet been editorialized upon.  Here is the third, in an ongoing series.  I am grateful for the opportunity, so am trying to use this soap box to preach a little free market economics.  The editorial ran on February 17.

Editorial Board Sounding:  Keep government out of economic development

Not a week goes by that we don’t hear about some new government program that is going to improve our lives.  I am usually skeptical about these efforts.  This week the county board of supervisors expressed interest in increasing its bureaucracy to include “economic development,” a course which Flagstaff has also been pursuing.  Aside from the huge potential for waste and mismanagement, my question is, “Why?”  What is the rationale for using taxpayer dollars to fund this kind of endeavor?

The usual response is that these efforts will generate higher paying jobs.  But, why is that the role of our city and county governments?  Quite simply, it isn’t.  Using government for these kinds of purposes should raise some moral and ethical red flags.  Government has one unique characteristic that distinguishes itself from the market – we are coerced into complying with its decisions, and to pay the taxes it assesses.

Using government to improve the public good should be a difficult task, since there is virtually no end to how many projects that can be dreamt up, be it an auto mall, or a convention center, or an economic development agency.  Let those who are most likely to benefit from these kinds of projects fund and promote them.  Indeed, it appears that the city’s agenda in this regard is to attract only a particular type of business to town, making the use of taxpayer money even more indefensible.

Dennis Foster has a Ph.D. in economics, teaches at the university level and is an avid Grand Canyon hiker.


The editorial that ran in the paper, on this topic, basically complained about the county wanting to duplicate the city's efforts at economic development.  Yikes!  There used to be a group called GFEC (Greater Flagstaff Economic Council) that was a public-private entity which pursued economic development.  The city decided to end its participation in this group and to follow its own economic development agenda.  To me, that means some kind of distorted focus on "green business."  Using tax money for this purpose is astounding, and, yet, seems to be done with little or no opposition.  It seems to me an excellent example of Milton Friedman's argument that people don't organize to promote the general interest.  They only organize to promote the special interest.

Wednesday, March 26, 2008

   Government & Competition My previous editorial touched on the proper role of government, and I felt that an additional commentary was appropriate.  In part this arose from the discussion we had in our editorial meeting, where the notion that we (Flagstaff) somehow compete with other cities was taken as an axiom of economic reality.  I tried to dissuade my colleagues of this idea, but I don't know if I was successful.  So, a bit more of a pointed argument, below.  The editorial ran on February 24.

Editorial Board Sounding:  Local government should serve, not compete

There is the idea that “we” are in economic competition with other cities, counties, states and nations.  That idea is false.  Businesses compete with one another, to maximize profits for their owners; cities do not.

For more than two hundred years, economists have understood that what raises our standard of living is the increased specialization of labor, which is used to produce the goods and services that we are relatively good at producing.  We call it the “law of comparative advantage.”  That is why oil is pumped out of the ground in Saudi Arabia, why automobiles are made in Michigan and why tourism businesses flourish In Flagstaff.

Do we really want the city, or county, to pick “selected industries for growth and support?”  I am sure that some cities across the Midwest decided to do just that a few years ago, throwing taxpayer money at the development of ethanol plants.  These “earth friendly” ventures are now being cited as potentially significant contributors of greenhouse gases.  [Whether that will “cause” global warming is,  pardon the pun, still up in the air.]

I don’t want my local governments to “jump start” business ventures, be it an electric car company, a wind power plant, or a biofuel facility that uses pine cones.  If these projects make sense, private capital will direct resources accordingly.

I do want my local governments to get more snow plows, fill more pot holes and find a way to quiet train horns at two o’clock in the morning.

Dennis Foster has a Ph.D. in economics, teaches at the university level and is an avid Grand Canyon hiker.

Thursday, March 27, 2008

   Bravo for the Auto!The park service has issued an Environmental Assessment for its transportation plans at the Grand Canyon.  The editorial in the paper was standard stuff, calling for a "world class" transit system for this "world class" site.  While I have opined on this at quite some length, and even authored a guest editorial on the park's current plan, I welcome the opportunity to spout off once again on this topic. The editorial ran on March 2.

Editorial Board Sounding:  Cars and Grand Canyon made for each other

I suppose that we all have our moments of fantasy, whether daydreaming of tooling around intergalactic space on the U.S.S. Enterprise, or plying one’s way along the rim of the Grand Canyon in a speedy, clean and efficient light rail system.  Alas, these idle notions really are just fantasies and are not likely to ever come true.  Well, not unless someone actually does discover the secrets of warp drive.  We can keep our fingers crossed on that score.

In the meantime, we will have to content ourselves with visiting the Grand Canyon by car, except for the 25 percent that come by bus or train.  How awful to have to use the lowly automobile!  Of course, when you really sit down to think about it, the automobile is probably the greatest invention ever made.  Sure, the internet is pretty cool, and so is not getting polio.  But, you’d be hard pressed not to at least include the automobile in the top five inventions of all time.  Hmm, I wonder where parking meters would fit on that list?

The funny thing about the Grand Canyon is that it isn’t at all like Disneyland.  It isn’t small and contained – it is larger than our smallest state!  And, most visitors travel to the park, not through the park.  Congestion and frustration with the infrastructure at the park is a signal to improve roads and parking, not a signal that hundreds of millions of dollars need to be spent on a train ride through nowhere.

Dennis Foster has a Ph.D. in economics, teaches at the university level and is an avid Grand Canyon hiker.


A couple of ancillary comments:

Parking meters.  This aside refers to the current issue of putting parking meters up in downtown Flagstaff, basically to deter employees from using up the spaces.  I wrote on that topic, in this venue, earlier.

The Disneyland comparison.  This is a funny one.  The Daily Sun editor has often argued that Disneyland is an appropriate model to follow at Grand Canyon.  As noted above, I disagree.  However, most of the environmentalists that immerse themselves in this issue would be appalled at this comparison.  Consequently, it strikes me that the newspaper's commentary on a mass transit system resonates with very few readers.  Also, officials at the park have said, for years, that they don't want to turn the Grand Canyon experience into one akin to Disneyland.

The train ride through nowhere.  My attempt to associate this with the famous "Bridge to Nowhere", in Alaska.

Sunday, April 6, 2008

   McCain in PrescottJohn McCain was in Prescott yesterday to give a speech to mark a transition in his candidacy for President of the United States.  He had wrapped up the Republican nomination some time ago, but took this opportunity to restart his efforts insofar as wooing voters for the general election in November.  Barry Goldwater had used the courthouse steps, here in the territorial capital of Prescott, to announce his Senate bids and his entry into the 1964 Presidential race.  McCain has followed suit for his campaigns, so this venue is becoming quite a tradition.  Arizona's junior senator, Jon Kyl (photo at right), provided the introductions.  McCain was also accompanied by his wife, Cindy, who also spoke to the crowd.

     The courthouse block was packed, but there was space to wend through the crowd and there was still viewing space near the street.  We arrived right at 10 a.m., which was the advertised start time for the speech.  It didn't really get going until about twenty minutes after the hour.  The crowd was supportive, but not fanatical.  There were some Obama supporters walking around with signs, but not being disruptive.  There were some other groups of protestors - Ron Paul supporters, anti-war groups and even a group protesting to "Help Save the Petrified Forest," pictured to the left.  I've never heard of this cause - maybe it was a late April Fools joke?  The Petrified Forest National Park is only about seventy miles from where I live, and I haven't heard of any preservation issues.  Then, again, maybe they were referring to the old movie, starring Humphrey Bogart.

     McCain's speech seemed to be a one-of-a-kind affair.  He talked at great length of Barry Goldwater and Mo Udall, both giants of Arizona politics and both unsuccessful candidates for president, both friends of each other and both from different parties.  McCain was really flying his bi-partisan colors today and probably will be quite successful at winning over a lot of independents, even with the contentiousness about the war.

     After the speech, John and Cindy shook hands along the crowded line of supporters.  We got pretty close, but decided to head around the back side of the courthouse to snap a few photos as the couple neared the Straight Talk Express.  Well, we really lucked out here.  There weren't many people over here, and when the McCains rounded the bus, they headed over to shake hands.  I was able to wedge myself into a spot where I could lean over and got to shake hands with both.  Any photos you might ask?  Well, no, because I was holding the camera!  So it goes.

     After they boarded the bus, Cara Lynn and I headed across the street to get some ice cream at Kendall's.  That hit the spot.  The weather was pleasantly warm, and, during the speech, the winds were calm.  We wandered back to the bus, where some TV interviews were going on, and stuck around until they drove off.  We had a nice spot standing on top of some kind of a storage bin, from where we could survey all the goings-on in the area.  We also were well-positioned to wave to Cindy McCain, who was standing alongside the driver as the bus pulled out of the driveway.

Click on any photo below (or the ones in the text) to see a larger image. 

The mall leading up to the front of the courthouse was lined by state flags.  The press stand blocks the view of the speakers podium. 


McCain speaks to the friendly crowd.  

The front of the Yavapai County Courthouse, where Barry Goldwater would announce his candidacies.  McCain has emulated his style. 


Prepare for more hand shaking! 
The Straight Talk Express. Ron Paul supporters. So long from Prescott.

 

In Prescott, students get mixed messages.  While the street parking for the McCain event was tight, we were able to easily get a spot on the top deck of a parking garage just a couple of blocks from the courthouse.  From this vantage point we could see all around the city.  We could even make out the tops of the San Francisco Peaks, which serve as the backdrop to our home in Flagstaff.  We watched as an Arizona DPS helicopter landed, and then took off, from a middle school just a couple of blocks away.  I just had to get a picture of the school's sign here.  Do you think that the students at the "Mile High" middle school would be able to notice that it was "substance abuse awareness month?"  Makes you wonder.

Thursday, April 10, 2008

   Sky High Subsidies UnnecessaryThe city council wants there to be more daily flights from our local airport, into which we have poured millions of dollars to spruce up and which the Feds have spent millions on runway improvements.  Probably not the best use of public funds, but its a done deal.  But, it gets worse.  To "promote" competition, the city has been willing to pay up to a million dollars to guarantee passenger loads in order to attract another airline.  Alas, does anybody understand the principle of competition?  It seems not.  So, time to speculate about what a truly free market would look like.  The editorial ran on March 9.

Editorial Board Sounding:  Privatize Pulliam Airport and let the free market work

Although there are a myriad of rules that apply to government airports, what if Pulliam were privatized and competitively operated . . . ?

A traveler arrives at the airport to find plenty of parking, thanks to the new J.W. Powell Parking Garage.  Built in less time than it takes to have a second reading on parking meters, it provides wintertime travelers great shelter.  Or, park in one of the private surface lots, and save a few bucks.

Once in the terminal you can check in at a computer kiosk, or with a “flight agent.”  They can help you with a reservation on any one of the twenty flights scheduled for today, like the Southwest flight to El Paso, or the Continental flight to Denver.  And, don’t forget that a new start-up airline has a noon flight to John Wayne Airport out in California.

Flights change daily.  Airlines don’t need to contract to provide a specific level of service for a specific period of time.  All they do is bid on landing and take-off windows.  Airlines publish schedules about a week in advance, although some schedule particular flights up to six months in advance.  Some airlines have come, and gone.  Some successful travel destinations have been a surprise, like the twice monthly flight to Lincoln, Nebraska.

Instead of using taxpayer money to pay for airline service, let’s use this opportunity to let the vibrant, creative and dynamic forces of the free market work their magic.  No, we can’t?  Yes, we can!

Dennis Foster has a Ph.D. in economics, teaches at the university level and is an avid Grand Canyon hiker.


Shortly after this, the council agreed to put up $600,000 to get Horizon Air to sign on for two (yes, 2!) daily flights to Los Angeles.  So far, Horizon plans to have one of these flights stop in Prescott, lengthening the flight time.  And, these flights will be turboprops, not jets, which was the whole point of the runway extension to begin with.  The problem, of course, is that the city wants the airline to sign a long-term commitment, which deters true competition here.

Another interesting aspect here is that the presumed purpose of this new service will be to promote business growth in Flagstaff.  That is, if there is regular service to L.A., as well as to Phoenix (the existing service), then new firms may be more easily enticed into locating here.  Not only does that seem absurd, but now there's proof positive - Horizon is now touting this service as "Flagstaff/Grand Canyon," meaning that they will be catering to the tourist market, not to business travelers.  Who'd thunk it?  Certainly, nobody at City Hall!

Finally, I decided to embrace Barack Obama's rhetoric by closing with his oft-used refrain of "Yes, we can!" 

Saturday, April 12, 2008

   Guns and SchoolsSomeone at the state legislature has been kicking around the idea of allowing guns in restaurants and in schools.  The usual hue and cry erupts in opposition, implying that people will be shooting up these places!  How bizarre can you get?  Indeed, one of my compatriots on the editorial board wrote a dissenting opinion on this topic and included the suggestion that two year olds would be carrying guns.  The editorial ran on March 16.

Editorial Board Sounding:  No magic wand will make schools safe

“What if … ?”  That seems to be the major argument against allowing citizens to legally carry weapons in public places, especially in schools.  This argument is rooted in the “magic wand” theory of public policy – with a simple wave we can declare schools “gun-free” zones, and these places will be safe.  Of course, reality is quite different.  Our current law really means that only homicidal maniacs may carry weapons into a school.  In the world I live in, incentives matter, and this law does not create the right kind of incentives.  [Yes, even homicidal maniacs respond to incentives.]  Those that are pushing to allow guns in schools are at least trying to change this incentive structure so that students, faculty and staff are not subject to this perverse consequence of the magic wand.

Still, there might be some middle ground here.  How about allowing only holders of CCW permits to be so armed in public venues, when such venues don’t otherwise screen for weapons?  Perhaps the requirements for the CCW permit can even be raised a notch or two as well – for example, some proficiency requirements and biannual renewal classes to keep up with legal issues.

Another idea is to keep the gun ban in place, but to require the installation of non-lethal devices, like tasers, throughout a facility, as is done with fire alarms, and with increasing frequency, defibrillators.  This certainly would go a long way to creating the right incentives without arousing all the “what if" arguments.

Dennis Foster has a Ph.D. in economics, teaches at the university level, is an avid Grand Canyon hiker and doesn’t own a gun, but knows people who do.


I try to use this platform to not only criticize, but also to make suggestions.  While it may seem more than a bit off the wall to argue for installing tasers like they were fire alarms, I rather like the idea.  In keeping to the word limit, I had to drop a line I really liked about the homicidal maniacs responding to incentives - "that's why they attack schools instead of motorcycle rallies."  See, they are rational.  Just go ask Nobel-prize winning economist Gary Becker.

Sunday, April 20, 2008

   The Dirty DozenSuch is the title of a new book by Robert Levy and William Mellor.  [The image to the right is linked to the Amazon web page.]  It is the story of the "worst" twelve Supreme Court decisions in the modern era, meaning since about the Great Depression.  Yes, way too many would otherwise come from the first hundred years!  Author Robert Levy was featured at the Goldwater Institute this past week as part of their "Who's Writing Now?" series, which Cara Lynn and I were fortunate enough to be able to attend this past Thursday.

     Levy gave a fascinating talk to the crowd of one hundred, or so, out on the patio behind the institute building.  He pursued a law degree in his mid-40s after having been a successful entrepreneur.  He clerked for Clint Bolick, who is currently the director of the Scharf-Norton Center for Constitutional Litigation at Goldwater.  Bolick said that Levy, now a senior fellow at Cato, was the most unusual law clerk they ever had - during his lunch breaks at the firm, he would be on the phone to his broker buying and selling stock!  And, apparently, doing quite well for himself.  In fact, the firm not only offered Levy a job, but put him on their board of directors.

     Levy was a very engaging speaker and had the crowd listening in rapt attention.  The stories of these cases, chosen in part from a survey he and his co-author conducted among other lawyers, were fascinating, if brief for this venue.  Still he talked to us for close to an hour and took questions at the end.  Afterwards, we got a copy of his book (not available at stores until May 1), and Cara Lynn got Levy to sign a copy for us.

     The book is great.  The chapters can be read in whatever order you wish.  I started with some of the more peculiar economics-related cases - Wickard v. Filburn (Congress can pass a law that you can't grow wheat for your own consumption because it interferes with interstate commerce!); the Gold Clause Cases (where a building owner in Des Moines had to keep the rent on his 143,000 square foot office building fixed at $23,000 from 1933 to 1993 because the government ended the gold standard!!); Whitman v. American Trucking Associations, Inc. (Congress can defer its legislative abilities to unelected bureaucracies - in this case the EPA - who can establish rules, determine penalties and adjudicate guilt!!!).

     Why is it that these cases are unfamiliar to me?  I am reasonably intelligent and well-read.  I guess that they just didn't make it into the educational curriculum at the schools I attended, probably because they are so crucial to the foundation of the current welfare/nanny state mentality that so infects the body politic.  Yes, we did cover the Dred Scott case, but that didn't make Levy and Mellor's book because it was an old case, and, of course, since overturned by constitutional amendment.  And, there is another thing.  Someone asked Levy if the notion that the constitution is a "living document" was legitimate.  Absolutely not, was Levy's response.  That notion denigrates the value of the constitution, making it meaningless.  Times do change, and the framers constructed a method by which we can amend the constitution to reflect those changes.  This has been done seventeen times.  Yet, we have been inculcated with the notion that the "living constitution" is some kind of special gift, when, in fact, it is a curse.  Two thumbs up.

Tuesday, April 29, 2008

   Iraq War at Five - The previous editorial on guns ran in the paper on the weekend at the start of our spring break.  I had planned to be hiking in the Grand Canyon for some eight days, but was stymied by the snow packed roads on the north rim.  Consequently, I only ended up doing a couple of days of cross-country skiing before returning home.  I did write up a story for the paper on this mini-adventure, which they published under the title, "North Rim Skiing Likely to Last."  The bottom line here is that I was home during most of the spring break and had the opportunity to get another editorial in the paper for the following weekend.  The Iraq War had just "turned" five years old this week, and the paper ran an editorial on the conflict, lamenting on the "futility of peace" and arguing that it is time to go.  Well, we didn't have an editorial board meeting this week, so this was not a topic of discussion among the group.  And, I thought that the tenor of the editorial was totally wrong.  So, I decided to pen a counter; my editorial ran on March 23.

Editorial Board Sounding:  Future Peace Worth the Sacrifices

As General Sherman noted, “War is Hell.”  And, so it is.  Brutal, bloody, rife with paradox.  What is interesting about the American experience with war is that we don’t fight for the expansion of our territory, our acquisition of Guam notwithstanding.  While we are not, and should not be, the world’s policeman, we have come to accept that our might, and our blood, can be used to help make the world a better place.  We fought against Germany and Japan, and turned to rehabilitate them, not subsume them.  Is not the world better off as a consequence?  Of course it is, and we take it for granted.

In Korea, can there be a starker contrast between the north and south?  Would the world have been better off if we had consigned the millions of South Koreans to the cruel fate of their northern kinsmen, surviving under the pathological two Kims?  South Korea didn’t become an instant and vibrant democracy.  Far from it.  But, they have evolved into a nation that would be considered a role model for Iraq.

Conversely, in Vietnam we lost sight of our objectives, and with the myopic nature of politics, cut a bad deal to end the war “with honor.”  Soon thereafter, we were watching on as the horror of the killing fields enveloped neighboring Cambodia.

Yes, Iraq is a mess.  But, a generation, or two, from now, perhaps the world will recognize the value of the sacrifices made.  Or, perhaps they’ll just take it for granted.

Dennis Foster has a Ph.D. in economics, teaches at the university level, is an avid Grand Canyon hiker and encourages contributions to www.soldiersangels.com.


     I think the main point is pretty straightforward - we should contemplate the notion that this is going to be harder than we thought, but that is the nature of war and peace.  I was going to include the fact that casualties during five years in Iraq still are less than an hour along the Bloody Road at Antietam.  Perspective is everything.  And, since we no longer have a military draft, those soldiers that do enlist know that they may face some danger.

     Some weeks later this topic did come up in our editorial board meeting.  Although some argued that it was obvious that we've failed in Iraq and should leave, I remarked that the "boots on the ground" - the men and women doing the heavy lifting over there - are supportive of their efforts to bring some sanity to this region.  Despite the price tag, which is a different issue, the views of our soldiers should carry some weight in these discussion, but often aren't.

     There was some blowback from my letter, and a counter letter by Marcus Ford.  We have clashed before, and will certainly do so again.  But, his point seems to be that America is better defined by its conflict with the Spanish and the Indians than it is by our conflict with Germany and Japan.  Too bizarre.

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