Out of Control

In 2005, Sarasota County, FL may become the next area to translate good intentions into bad housing policy via inclusionary zoning (stealthily called "balanced housing" in Sarasota). Homebuilders are rightfully concerned:

"We're working around the edges of the problem," [Jay] Brady, the building industry spokesman, said. "The county should do more with what it can control."

After all, builders say, they don't single-handedly determine the prices of new homes and who can afford them.

County zoning and other policies affect densities, land values and the various taxes and fees that get tacked onto plats, permits and certificates of occupancy. Impact and utility connection fees alone can add $10,000 or more to the cost of a typical house.

The state has repeatedly raided a trust fund for down payment assistance, a fund fueled by a tax on real estate transactions. Sarasota County's share this year was cut by nearly half, to $2.5 million. The home building industry supported that tax on the condition that it be reserved for affordable housing.

Employers, including public employers such as the county and the School Board, aren't paying many of their workers the wages they need to save for a down payment or keep pace with their rent increases.

An inclusionary zoning law ignores those factors and shifts the financial burden of subsidizing work-force housing strictly onto them, home builders say. And those builders will most likely shift it to their higher-income buyers.

Reason published two groundbreaking studies on inclusionary zoning this year which should serve as a cautionary tale for Sarasota County. They found that inclusionary zoning policies in numerous California cities resulted in outcomes diametrically opposed to their stated goals; these policies led to higher housing prices and restricted the supply of new housing.

According to the first study, in 45 Bay Area cities where inclusionary zoning was enacted, new housing construction decreased by 31 percent the year following the adoption of the policies. In the 33 cities with data for seven years prior and seven years following inclusionary zoning, 10,662 fewer homes were produced during the seven-year period after the adoption of inclusionary zoning. The study also found that the price of new homes increased by $22,000 to $44,000 in the Bay Area (and upwards of $100,000 in some individual communities) to compensate for the mandatory discounts on the “restricted” homes.

The second study found similar results in Southern California. Affordable housing mandates in cities in Los Angeles County and Orange County increased the price of new homes by $33,000 to $66,000 to compensate for the mandatory discounts on affordable homes. In all 13 cites studied, average production of housing fell the year following the adoption of inclusionary zoning. And in the eight cities with data for seven years prior and seven years following inclusionary zoning, 17,296 fewer homes were produced during the seven years after the adoption of inclusionary zoning.

Sarasota County should learn from the experience of California cities before it makes its housing situation worse through inclusionary zoning. And the builders are right: If the County's goal is to deliver more homes at lower prices, then perhaps they should step back and reconsider the existing land use policies (zoning, subdivision regulations, etc.) that are already contributing to higher housing prices.

Junkscience.com's Steven Milloy explains that environmental activists have shown no depths to which they won't stoop to exploit the tsunami disaster for their own anti-global warming/anti-development purposes. He notes some prominent examples and adds:

"Efforts to invoke supposed global warming as the culprit for this week's death and destruction are patently absurd as the multiple tsunamis were not a "weather event" in the slightest.

Earthquakes aren't caused by the weather or greenhouse gas emissions; they're caused by tectonics — that is naturally moving geological faults. While tectonics may cause climate changes, the reverse is not true.

. . . .

Moreover, the environmentalists are in feverish denial about the two factors that will, in the end, contribute most to the horrendous death toll from the tsunamis — the lack of an early warning system and lack of adequate post-disaster sanitation, both of which are tragic by-products of the region's severe economic under-development. Given that fact, how deceptive and calculating of the environmentalists to blame "development" as the deadly cause!

Here's another perspective from British MP Boris Johnson on the "blame man" argument:

"In this largely godless age, we have a more subtle interpretation of the relation between human excess and natural disaster. Our new high priests are the environmentalists and, when the icebergs calve early or the swallows fly the wrong way, it is they who cry woe and say that it is a judgment on us all, and our wicked ways; and that is why, in the case of a colossal undersea earthquake, you can sense the silent frustration of the told-you-so scientists.

Whatever you say about the slipping of tectonic plates on the sea-bed off Sumatra, it had nothing to do with global warming. It was not caused by decadent use of Right Guard, or George W Bush, or the flouting of the Kyoto Protocol, or inadequate enforcement of the Windows and Doors Regulation of April 2002."

The Wall Street Journal also weighs in:

"It is preposterous to blame the inexorable forces of nature on the development of industry and infrastructures of modern society. The more sensible response to natural disasters is to improve forecasting, put in place efficient communications and evacuation procedures and, should the worst arrive, conduct relief efforts and rebuild what nature has destroyed. Those cautionary measures, as is now clear, cost money. The national income necessary to afford them is made possible only by economic growth of the sort too many of environmentalists retard with their policy extremism."

The Wildlife Habitat Council has once again recognized that an oil company can drill oil and still do an outstanding job of preserving habitat and protecting species.

The Elk Hills Conservation Area is owned by Occidental Petroleum. Lots of endangered species live in the Area, including the San Joaquin kit fox, the giant kangaroo rat and the San Joaquin antelope squirrel. The federal government had protected 7,075 acres of the are before it sold the petroleum reserve to Oxy, and Oxy has increased the protected acres to 7,801.

O'Hare International inked a 2-year $26.6 million deal for window washers and janitors. The contract replaces 220 city positions.

No estimate on savings was given, however, experience tells us that it is likely in the 10-20 percent range.

Ron Bailey’s got ‘em. Here’s a sample of the gloominess:

President George Bush will renege on his promises to reform social security, overhaul federal taxes and lower the Federal budget deficit.

The Federal government will continue to lose the "War on Drugs," causing great and unnecessary damage at home and abroad.

I wouldn't bet against any of those. Read them all here.

Mayor Williams just signed legislation that will bring Major League Baseball back to D.C. Taxpayers might not be too pleased, but Williams is practically giddy:

"This is one of my proudest days as mayor," Williams said … He called the signing a "symbol of how we are keeping our commitments. Yes, to Major League Baseball, but also to keeping our city moving forward."

There might be a mountain of studies that say stadiums don’t spur local economies, but it’s still pretty tough for any mayor to pass up an opportunity to go down in history as the one who brought pro baseball (or any sport) to town.

Here’s a summary of how the city caved:

[Williams’] signature came after weeks of political wrangling as several members of the District of Columbia Council balked at an earlier plan to finance a new stadium along the Southeast waterfront.

So Williams, Council Chairwoman Linda Cropp and MLB officials negotiated a deal that would allow some private financing. MLB and the city also agreed to split the price of insurance to cover cost overruns or construction delays.

We’ll wait and see exactly what percentage of the total price tag “some” private funding translates into.

According to the Bowling Green Daily News, the newly elected leaders of the City of Bowling Green, KY are concerned about the (ab)use of eminent domain in the city's downtown revitalization efforts. The paper's editorial board validates this concern and offers some perspective and advice:

All over this country, lower-income neighborhoods, churches and businesses are being driven off their land by the use of government muscle so that a private developer can come in and put private businesses in their place. Public officials like these transactions because they often raise the tax base.

Yet, eminent domain was never intended for broadening the tax base.

. . . .

Some private-business owners in Bowling Green would gladly sell their properties at a fair price, just as every parcel in the transpark was purchased from a willing seller.

But taking private property for another private development seems to be an effort to acquire property on the cheap and distorts the original intent of eminent domain.

Perhaps a moratorium on eminent domain – except in cases where eminent domain serves a clear, public purpose – should be considered by the city in light of the pending Supreme Court decision.

There's an idea worth considering. And property rights advocates nationwide are hoping that the Supreme Court will provide much more clarity on what a "clear, public purpose" really is in their ultimate decision in the Kelo vs. New London case.

Check out Reason's Eminent Domain Resource Center for the latest on this important issue.

(Hat Tip: Eminent Domain Watch)

Reason did a policy study last month exploring the impact of switching cars over to hydrogen on greenhouse gas emissions. Turns out that we use so much energy to make hydrogen that emissions are at best unchanged.

A new paper by CATO looks at the same issue, with similar conclusions.

Given current technology, switching from gasoline to hydrogen-powered fuel cells would greatly increase energy consumption even if the hydrogen were extracted from water rather than from fossil fuels. That’s because it takes a tremendous amount of electricity to harvest hydrogen and to deliver it to consumers. Moreover, a transition from gasoline to hydrogen would nearly double net greenhouse gas emissions attributable to passenger vehicles, given the current fuel mix in the electricity sector.

Hydrogen may be one of the fuels of the future, but forcing a change in fuels when it is doubtful we can yet realize benefits from it is folly. Once the switch is beneficial, there will be plenty of incentive to switch, without mandates.

Gov. Mark Sanford is following through on his pledge to privatize services and cut the fat. The state released an RFP today for the operation of one of the state's golf courses and clubhouses - a second is likely to follow soon.

Earlier this month, a tackle shop at a state park was also privatized - while not a big contract it is expected to net the state $20,000 a year.

In addition, South Carolina is in the process of privatizing and centralizing its cabin and campground reservation system.

HOT lanes, that is.

Carpool lanes that drivers without the qualifying number of passengers can buy their way into are one of the hottest trends in transportation. The [California]state Legislature, Congress and Bay Area transportation officials all have embraced them as a creative way to finance highway or transit expansion and cut congestion.

The Metropolitan Transportation Commission, the Bay Area's transportation planning and financing agency, has grander plans. Its transportation plan for the next 25 years, released last month, suggests that the Bay Area complete its network of carpool lanes on every major freeway and pay for the work by making all of them combined carpool-toll lanes.

Brownsville, Texas' Valley Morning Star weighs in on Individual Fishing Quotas (IFQs):

One promising solution to the tragedy of the commons in a commercial fishery is the use of individual fishing quotas, which grant established captains a guaranteed and transferable share of allowable catch in a given fishery. This decreases the incentive to plunder, and increases the incentive to manage the fishery for maximum long-term sustainability.

It also permits fishers to catch their quota at their own pace, instead of participating in the mad crush that ensues during fishing season. This means seafood will be fresher for distributors and consumers throughout the year, and earn higher prices for the commercial fisher. As it now stands, the glut of product generated during a brief fishing season brings down the price fishers get for their catch.

. . . .

Critics fret that such innovations will lead to the "privatizing of the oceans." We just don’t see that as a major threat. All IFQs do is grant commercial fishers a temporary and transferrable ownership stake in the fishery. And, as experience shows, pride of ownership and a long-term personal stake in the health of a resource naturally make most people better stewards.

Well put. Successful implementation of IFQs would provide yet another example of property rights and markets working to advance natural resource conservation.

Reason's Michael De Alessi is one of the leading voices promoting IFQs; see here, here, and here for a sample of his work on the topic.

For more on IFQs, check out Reason's Private Conservation Resource Center, and don't miss IFQsforFisheries.org.

Nearly four years ahead of schedule...

Sallie Mae, which is formally known as SLM Corp., has successfully refinanced more than $100 billion of government-sponsored enterprise, or GSE, assets in an accelerated privatization plan begun in 1997.

The corporation set aside enough cash and U.S. Treasury securities in a special purpose trust to pay down the remaining principle and interest on $1.85 billion of outstanding GSE bonds. The move enabled the Treasury to sign formal documents officially separating Sallie Mae from the federal government.

"We applaud the transformation of Sallie Mae into a wholly private company, dynamically increasing its options to provide financing services to students," Assistant Treasury Secretary Wayne Abernathy said at a document signing ceremony at Treasury's headquarters.

Massachusetts is dangling cash in front of its cities and towns to entice them to adopt "smart growth" policies, but they are not biting:

The state's latest strategy to build more affordable housing and limit sprawl is drawing little enthusiasm [...] according to a new report and a survey of town and city planners.

. . . .

The most common concern cited in interviews with town planners and in the Metropolitan Area Planning Council report was the lack of permanent new funding for additional schoolchildren, expected as families fill the housing units. Another concern was the requirement for dense development, which was often described as especially out of character with suburban communities. Local leaders also balked at details such as a provision that towns return money if the housing is not built, and they were wary of the new streamlined approval process.

. . . .

"I have a real problem with the mandated densities for any community over 10,000 in population," said Kathleen B. Bartolini, director of planning and economic development for Framingham. "I also believe in home rule and do not think we need to give [the state] another layer of review and approval over our zoning. I believe in density and general housing production to help decrease housing costs -- supply and demand -- but this is too superficial to work well as a land-use tool."

It's refreshing to hear from planners skeptical of top-down planning 'solutions' and who are willing to take a stand for local control of land use decision-making. If only the American Planning Association would take note and halt its crusade to encourage states to adopt new "smart growth" legislation, with the ultimate end of expanding state control over local land use.

UPDATE: Here's an interesting take on this from the libertarian blog, The Modern American.

After 107 days, the Vegas monorail opened for business again:

Three times metal parts fell from moving trains this year, necessitating a redesign of the train's drive shaft.

The last incident, Sept. 8, prompted the shutdown that ended Friday.

Tom Kirkendall has more scoop on the monorail, which has earned the nickname “monofail.” (Although, given its many mishaps, should be “multifail”?)

Anyhow, the project is rather unique in that is mostly private, but it looks like future lines will seek out public dough.

One of Reason's sister think tanks in Michigan, the Mackinac Center for Public Policy recently conducted a survey of Michigan’s 555 school districts in order to assess the extent and effectiveness of contracting with private-sector firms. Of the 517 districts that responded, 176 districts — 34 percent — said they outsource at least one noninstructional service. Of the duties these public school districts outsource (some schools outsource more than one service), the most popular by far is food services with nearly 80 percent employing a private company to manage district cafeteria employees or programs. Another 18 percent contract for custodial duties, and nearly 16 percent do so for their transportation needs.

Bolt your doors and watch your wallets, Sacramento! According to the Sacramento Bee, busybody planners from "smart growth" mecca Portland, OR are flocking to your town, with utopian dreams of replicating their statist, control-minded agenda there:

"Call it the invasion of the planning warriors from the north.

These migrants from the misty, "smart growth" mecca of Portland, Ore., seek not to ransack California's sunny capital, but to build loft-style apartments downtown, make the region an easier place to walk and relieve its traffic woes.

Although the evidence is strictly anecdotal, people working in the urban planning and building arenas say they've noticed a recent influx of people who've made their mark in Portland and now seek to do the same thing here."

Why should this concern Sacramento residents? Well, if the planners have their way, you can probably look forward to future light rail boondoggles, rising housing prices, higher development costs, more regional growth controls, less local land use control, and of course, more bureaucratic red tape.

These Reason studies will give you a good overview of these topics:

• Urban-Growth Boundaries and Housing Affordability: Lessons from Portland (1999)
• Line in the Land: Urban-Growth Boundaries, Smart Growth, and Housing Affordability (1999)
• San Jose Demonstrates the Limits of Urban Growth Boundaries and Urban Rail (2003)

But this is only a sampling of the resources we have available. For more on Reason's land use and urban policy work, please visit Urbanfutures.org, our website devoted to providing market-oriented analysis of land use and economic development issues.

So reads the headline of this LA Times story

"I can't imagine not having a car," he said. "It's not as essential as breathing or food, but, honestly … this is Los Angeles."

But he doesn't think much of L.A.'s public transportation, and he uses the car frequently — to visit clients, shop for groceries, even to reach such downtown destinations as Arnie Morton's Steakhouse at 7th and Figueroa streets.

He just wants to drive, he likes it better.

He and other downtown residents ride public transit for just 7% of their overall trips for work, shopping and other purposes, according to the Southern California Assn. of Governments. The other 93% — minus a statistically insignificant number of trips on foot — are made by car.

"I'm really ashamed of myself that I'm doing it," said Condron, who is married to an urban planning student and believes in reducing society's reliance on automobiles.

It is just much more convenient and flexible for her to drive.

All this in the densest city in the nation, where hundreds of millions are spent on public transit.

Nuff said.

A rail project is sold as a congestion reliever, transportation improver and job creator. The process to design, build and fund the thing moves ahead. But then, it turns out that the project will cost much more than anticipated.

We’ve heard the story before, but this version comes from the Heartland:

The projected cost of a proposed Midwestern network of high-speed trains has more than doubled over the past six years, to $7.7 billion, including about $1.2 billion in Wisconsin alone, a new report shows …

While the proposed 80-20 funding ratio has held steady, the projected price tag for upgrading tracks and buying trains is up 122%, according to a recent revision of the plan.

Another common theme is that the higher cost isn’t really anyone’s fault. Things change, after all.

In this case, one reason for the cost hike is that planners decided to go for faster and more frequent service. Another reason is that, after more detailed engineering work, planners found the project to be more costly than they suspected.

No need to point fingers or assign blame. The taxpayer will simply wait patiently, checkbook in hand, for the final bill.

Ever seen the Grandfather Economic Report?

You should. There, grandpa economist Mark Hodges examines streams of economic data highlighting "threats to the economic future & freedom of families and their children."

One of my favorite sections, and the most disturbing, is his page on the growth of state and local government and its impact.

He shows how state and local government is growing "2-3 times faster than the general economy, now spending $5,155 per man, woman and child, or 17% of the total economy and with an excess of 11.9 million government employees
a new record high last year because the number of employees continues to increase faster than the national population."

Since offshoring is allegedly making us a nation of burger flippers, this christmas carol** is a must listen!

**Prepare to laugh your ass off.

Here's some sage advice for "Smart Growth" proponents from Bill King, editor of Expansion Management, an online newsletter that aims to assist its readers (mainly small and medium-size employers) in making company relocation decisions:

"Smart Growth is spreading like wildfire throughout the United States, though I wonder whether or not it will deliver its desired results, or whether it will only further exacerbate the situation — urban sprawl and urban decay — that it seems to hope to turn around.


It’s not that I wish them ill. It’s simply that I think that the movement is built upon a well-meaning, but off-target, foundation.


That’s because, in my opinion, it ignores the single largest obstacle to urban economic revitalization — school districts that don’t deliver the type of educated work force the current (and future) economy demands."

Read the whole thing. King makes an important point, and one that is often lost in the environmental/livability rhetoric common to smart growthers. Companies want to locate in places with a large pool of educated workers. This is a major reason why companies have been flocking to the suburbs and away from central cities for decades. Simply put, "it's the education system, stupid!"

Greenbelts and light rail systems may be hip and trendy, but businesses are far more concerned with the availability of a qualified labor pool when making location decisions. Not to mention that it can be hard to convince existing employees to relocate to a new area where their kids could look forward to a mediocre public education system.

How do we start improving urban schools? You've come to the right place! Reason has been a leader in the national education reform movement. Visit our Education and Child Welfare center for the latest education news and policy ideas. And don't miss Lisa Snell's education blog, Education Weak.

Related to my earlier post is this question: Why would the government change the tax code to give Americans less incentive to be charitable?

Today, I have a reasononline article that explores that question:

New laws that take effect just after the holiday season allow Uncle Sam to take more money come tax time. The extra money comes from those who donate their cars to charity, but discover that the amount they can deduct has shrunk dramatically. The truly humbug twist is who will get hurt by the grab—charities that generate income from donated cars and the needy people they help. More than 4,000 organizations help everyone from battered women to single moms to disabled veterans, but Americans will soon have less incentive to support such efforts.

Could this be another instance in which government action steps on private action, and civil society shrinks a bit more?

One thing that has marveled observers for centuries is America’s vibrant culture of voluntary organizations, from charities to churches to groups of skateboarding moms to fraternal organizations and mutual aid societies. It's aways a shame when government makes it tougher for these groups to flourish.

David Beito is the guru on a lot of this, and I heartily recommend his book, From Mutual Aid to the Welfare State.

Last week the United States Department of Justice released "the most thorough analysis of the Second Amendment ever conducted by the Executive Branch of the United States government." The 93 page report, "Whether the Second Amendment Guarantees an Individual Right." As the report's subtitle states, "The Second Amendment secures a right of individuals generally, not a right of States or a right restricted to persons serving in militias."

Thanks to David Kopel at the Independence Institute for the lead on this, and you should check out his great Second Ammendment site.

Yesterday’s Daily Dish looked at some who see potential for common ground among red-state evangelicals and blue-state liberals. Both groups are very concerned with helping the poor, so it would seem like there’s a nice opportunity for everyone to get along.

The Dish points to this Nicholas Kristof piece:

Members of the Christian right...are the new internationalists, increasingly engaged in humanitarian causes abroad -- thus creating opportunities for common ground between left and right on issues we all care about... Liberals traditionally were the bleeding hearts, while conservatives regarded foreign aid, in the words of Jesse Helms, as "money down a rat hole."

Of course, Christians have long reached out to the world’s needy, and I bet most people would be rooting for a new, a broader coalition aimed at helping the poor.

But as with many policy issues, the what is not the big issue, the how is. When it comes to welfare, whether at home or abroad, it’s better to teach the needy to fish, than to give them fish.

Here’s James Shikwati, director of a Kenyan think tank:

Since independence Africa has invested too heavily in seeking donor aid, which has compromised African productivity. Our aim is to find homegrown solutions to the major problems afflicting Africa - disease, war, illiteracy and desperate poverty … Free market solutions can liberate Africa from her economic misery. It is now up to Africans to use trade to dismantle barriers and create a huge market for themselves. Trade will bring with it cultural exchange, knowledge, competition, productivity, peace and prosperity.

Private space exploration doesn’t stop with Scaled Composite’s SpaceShipOne:

While Scaled Composites got the first FAA license for a manned suborbital spacecraft, the company’s neighbor at Mojave Airport, XCOR Aerospace, received a similar license just a few weeks later for its own suborbital vehicle. Several other companies, including Armadillo Aerospace, Blue Origin, Rocketplane Ltd., TGV Rockets, Starchaser, and Cosmopolis 21, are continuing work on suborbital vehicles to serve space tourism and other markets.

Another encouraging sign:

NASA has also caught the prize bug. The agency this year unveiled Centennial Challenges, a prize program inspired by the Ansari X Prize and similar competitions. While the first prizes, scheduled to be unveiled in the next several months, will be modest, NASA plans to offer larger prizes, in the $10-50 million range, down the road for efforts like commercial lunar missions.

If someone does something better than you, you're supposed to work hard at whipping yourself into shape and improving, or you and your business go kaput.

Increasingly, it’s becoming more popular for those who benefit from the status quo to simply lobby their political buddies to squash emerging competitors. We see it all the time, and now we see it with specialty hospitals:

Specialty hospitals are typically smaller than traditional general hospitals and focus on a few specific areas of care such as orthopedic surgery or heart care. They typically offer a higher level of care than general hospitals because specialization allows them to be more effective and efficient. Specialty hospitals typically have more nurses per patient, lower infection rates, less bureaucracy, and lower costs.

Instead, general hospitals lobbied Congress to include in the recently passed Medicare reform bill an 18-month ban on the construction of new specialty hospitals. They are now lobbying to make the ban permanent.

After briefly showing some spine, D.C.’s mayor and Council Chair have agreed on a financing package that strips the requirement that half the construction costs come from private financing. It looks like Major League Baseball will come to the District, after all:

Under the new proposal, which the 13-member council is to vote on today, the city will purchase insurance for potential cost overruns on the stadium and split the payments with Major League Baseball. Also, District officials will continue pursuing private financing for the project for several months. But Cropp said she will drop a requirement that 50 percent of the construction costs be paid for with private money …

The new stadium, to be built near the Navy Yard and South Capitol Street in Southeast Washington, has been estimated by various city officials to cost from $440 million to $584 million, including infrastructure and land acquisition. The ballpark itself would cost $279 million, meaning the legislation adopted last week would require $140 million in private financing.

But even if officials can scare up some private financing …

the city still expects to implement a gross receipts tax on large businesses and a utilities tax on businesses and federal offices.

And D.C.’s tax burden is already higher than average for big cities.

My colleague Jeff over at Reason Express tipped me off to a law being considered in Ohio to ban city governments from starting broadband telecommunications businesses. Apparently Pennsylvania passed a similar law this year. And the American Legislative Exchange Council has created model legislation to limit municipalities from competing with private providers of broadband telecommunications.

I think there are a lot of good reasons for such restrictions. Right now in virtually any spot on the US map that has an incorporated city government, you can get broadband via at least satellite, and in most via phone wire and cable. There is rarely if every any good reason for local governments to get into a new line of business by providing broadband telecom. Many bad things can and do happen when they do so--a number have lost money hand over fist, and that takes real doing in that serve, while others have cross-subsidized from other service for which people pay fees. Economist Don Alexander did a nice analysis a few years ago of the reasons why government should not get into the internet access business.

Any justification for cities to provide broadband could just as well apply to having them provide grocery stores, WalMarts, and gas stations.

Some organizations advocate for municipal provision of telecoms and it doesn't take long looking at their stuff to see they are arguing for internet access as a fundamental right akin to the right to vote and building a new entitlement system around it.

How quickly a new technology goes from being vilified by the left for destroying jobs to being the core of a new expansion of government.

An new audit of the General Services Administration's procurement operations show widespread and consistent mismanagement. This is particularly bad as GSA manages procurment for many other federal agencies.

Get the full audit, you masochists, here.
Or, dip in your toe with a GovExec article on it.

This is but another sign that changes discussed in Governing by Network are much needed.

The cool blog Eminent Domain Watch clued me in to a forum by the National Law Journal on “Life after Poletown: What is the Future of Takings in America?.” Read the blog on it or go to the full transcript of the forum.

Seems like the reason most anyone would give for not using transit. But what’s interesting here is that this comment comes from a Washington, D.C. Metro transit board member.

In fact, it's worth having a look at the whole quotation:

“My travel, my destinations and my time frame make it very difficult for me to use the system,” she said. “I would have to take two trains and two buses.... It just makes it very inconvenient for me to depend on the system on a regular basis.”

Turns out, when asked by the Washington Post, only five out of 10 board members said they rode the system regularly (two others refused to talk, so it’s probably safe to file them under "infrequent transit user"). Not one is a daily user, and most have either never ridden a Metro bus or can't remember the last time they did.

The Philadelphia Inquirer found similar results after questions SEPTA board members: Only four of 14 members interviewed use the system at least twice a week.

No wonder transit agencies so often pursue sexy but expensive projects that do little to improve transportation, and then fail to do the boring and cheap things that really would improve transit service.

The Transportation Department Wednesday unveiled its 20-year road map for modernizing the nation's air transportation system, aiming to make it more secure and built on quieter, cleaner technologies …

The plan says the demand for air transportation is outpacing the ability to increase capacity in airports and calls for development of an airport infrastructure to meet those demands. It calls for an effective "curb-to-curb" security system that will not impede mobility or civil liberties. It also recommends developing environmental safeguards that allow sustained aviation growth.

Here’s the article.

Here’s the DOT report.

Here’s Bob Poole’s latest aviation security newsletter.

D.C. council members insisted that private funding be included for a new baseball stadium in Washington. The decision could halt the arrival of Major League Baseball, but at least D.C. leaders refused to fall at the feet of zillionaire team owners like so many other cities:

[The] amendment to the stadium-financing bill is a modest and sensible one, requiring that half the actual construction costs of the ballpark be privately funded. Take away the estimated site acquisition and infrastructure costs and that's about $140 million -- a lot of money, sure, but only about one-quarter of what the overall package may wind up costing. It's a reasonable amount when you consider the city is still on the hook for finding a probable $450 million more.

In other words, major league owners want the D.C. public to not only finance a possible $600 million stadium project, they want them to subsidize league profits on the sale of the team as well.

So it’s not just welfare for one zillionaire, but for many.

Here’s Jacob Sullum with some more objections:

- Since baseball is seasonal, local businesses won't see a year-round increase in demand.

- A more fundamental problem with the economic case for taxpayer-financed stadiums is the assumption that spending associated with a ballfield will be new spending, as opposed to spending shifted from other parts of the city or the metropolitan area. If people who used to go to nightclubs in D.C. start going to baseball games instead, for example, the city's economy won't be any stronger as a result.

Now there’s talk that the D.C. Council Chairman (who spearheaded the private financing amendment) wants to bring baseball to the District and is willing to sit down with the mayor and MLB to work out a solution. Here’s hoping she doesn’t cave in.

For Pittsburgh’s transit agency, it’ll just be business as usual until the money runs out:

The Port Authority board surprised its own administration yesterday with a proposal to maintain present fares and service levels until the cash-strapped agency goes broke, probably in March, betting that someone in Harrisburg will come to the rescue fast enough to avert a shutdown.

The outcome will affect people who account for 225,000 daily rides on buses, trolleys, the Mon Incline and ACCESS paratransit system.

How about contracting out transit service?

The governors of RAI, Italy's state broadcaster, will this week get down to the nuts and bolts of what is possibly the most politically sensitive privatisation in Europe since the early days of the Thatcher government. At a board meeting in Rome, they are to consider a business plan drawn up by the management as a first step towards valuing the sprawling corporation and thus how much of it to put on the market.

In a country like Italy, where only a tiny percentage of the population derives its political news from printed media, a change in the ownership structure of a television empire such as RAI, which has 45% of the TV audience, would be an issue of intense political concern. But in this case, there is the additional fact that the prime minister, Silvio Berlusconi, owns RAI's main rival, Mediaset, whose channels control 44% of the market.

Here’s the story.

From Arlington County:

The County Board, responding to what they said is a growing crisis, had been asking developers of residential buildings to set aside voluntarily at least 10 percent of floor space for affordable housing. Board members similarly asked developers of office buildings to volunteer to make substantial monetary contributions.

Friday, Arlington Circuit Judge Joanne F. Alper issued a ruling finding that those requests were in fact requirements, and that as a result, the county had exceeded its legal authority under state law.

For more, see this Reason study.

Perhaps cities waiting for light rail should lower their expectations again. Usually, environmental impact reports promise at least slight congestion relief. At this point, folks in Minneapolis would be thankful for a completely neutral effect:

Officials poorly planned the traffic-signal system along the Hiawatha light-rail line, subjecting drivers on south Minneapolis streets to unnecessary waiting at train crossings, according to a review by federal highway experts.

Since the line opened in June, drivers have faced traffic tie-ups and excessive waiting on cross streets, where the light-rail trains always have the right of way. Hiawatha Avenue traffic also has slowed because traffic lights no longer can be coordinated to minimize stops.

Don’t get me wrong, I think they’re cool, but sometimes hybrid fever runs ahead of reality. A while back Consumer Reports noted that hybrids actual milege is about 25% lower than the advertised mileage. And now a similar story with hybrid transit busses:

Expensive new hybrid diesel-electric buses that were portrayed by King County Metro as "green" heroes that would use up to 40 percent less fuel than existing buses have fallen far short of that promise.

Metro was the first agency in the country to buy a 60-foot articulated bus with a hybrid diesel-electric technology. It ordered 235 of them, 213 for itself for $152 million and 22 for Sound Transit. Metro now has the largest fleet of hybrid buses in the world.

Still that line “world’s largest fleet of hybrid busses” will look mighty good in promotional pamphlets. After all, no matter what happens in the real world, the term “hybrid” still equals eco-cred, and it's got to look good to all those groups who hand out "livability" awards.

Well, at least compared to Europe. One side note to the offshoring debate is soem nice analysis by the McKinsey Global Institute of the economic impacts to a national economies from offshoring.

Turns out that for every $1 offshored from the US, the US economy gains $1.12-1.14. This thanks to our flexible and relatively free labor markets. McKinsey's analysis shows the gains are composed of:
--a lot of savings for customers and investors;
--a fair amount of new production from re-deploying labor to other efforts; and
--a bit of gain from imports and increased transfers (insourcing) from the nations to which we offshore.

On the other hand, in Germany for example, restrictive labor markets lead to a very different outcome. McKinsey's analysis shows that for every euro offshored from Germany, the German economy gains only 0.80 euros. Ouch!

Why? According to McKinsey it is due to "the limited ability of German workers to find new jobs. If the rate of re-employment matched that in the U.S. – nearly 70 percent – offshoring would create €1.05 of value for the German economy for every euro of corporate spending offshored."

The US economy is a job creation machine that can swiftly find new productive work for people who's previous jobs are offshored in order to lower costs for consumers. Companies are thus more competitive and able to invest in new products and create new jobs. High profits and low prices increase demand and help curb inflation. Customers save money and use it more old stuff or some new stuff, stimulating innovation and investment, and yet again, more jobs.

It's lovely. We should be rejoicing, not wailing. And focusing our energy instead on how to make labor markets and workers even more flexible so the transitions that every career now entails can be as painless as possible.

Former Reasoner Bill Eggers teamed up with former Indianapolis mayor Steve Goldsmith to write a great new book--Governing by Network: The New Shape of the Public Sector.

Top-down government is losing its predominance as the primary method to deliver public services and fulfill public policy goals in America. Emerging in its place is a fundamentally different approach, in which government executives are redefining their core responsibilities away from managing government workers and programs to orchestrating both independent and public organizations to deliver services.

This new model, which the authors call “governing by network,” is characterized by the web of relationships and partnerships that increasingly constitutes modern governance.

You can get more info on the book, read articles about it and interviews with the authors, and link to order a copy here.

In an effort to raise more than $1 billion, the Metropolitan Transportation Authority wants to sell or lease for commercial use many of its 14,000 properties, including train stations, commuter parking lots and maintenance yards.

Here’s the story.

Last February, W’s top economic advisor Gregory Mankiw took a drubbing for being a straight shooter. He defended outsourcing as the latest manifestation of trade, and something that would be good for society. Sadly, politicos on both sides of the aisle reacted as if he defended wife beating.

Now Mankiw’s at it again, this time telling the truth about Social Security:

"The [Social Security] benefits now scheduled for future generations under current law are not sustainable given the projected path of payroll tax revenue," Mankiw said at a recent tax policy conference. "They are empty promises."

And, as Jacob Sullum explains, Mankiw is once again getting drubbed. No wonder he’s leaving his post.

There's an interesting article in today's Wall Street Journal (available for non-subscribers for a week) that details the growing (ab)use of eminent domain by local governments to make land available for big box retailers. My favorite part:

"[Costco's senior vice president for legal and administrative affairs] says the practice doesn't violate laws or any rules of the free-market economy and rejects as "simplistic" libertarian arguments that condemnations should be confined, as some property-rights advocates argue, to roads, bridges and purely public uses. He says communities, balancing their fiscal needs against the rights of a few, often clamor for a Costco store. "We are viewed as a solution to a problem," he says."

Apparently it's "simplistic" to think that one of the major pillars of a free-market economy is the ability to hold private property without fear that bureaucrats will arbitrarily decide that your land would better serve the "public good" as a Costco parking lot.

The Supreme Court must not find it such a simplistic issue, as they've decided to hear the pivotal Kelo vs. City of New London case. Their decision in this case will clarify how far governments can stretch the boundaries of the concept of "public use," as it relates to the Fifth Amendment's Takings Clause.

In case you missed it, Reason recently filed an amicus brief in the Kelo vs. City of New London case. Also see this recent post.

And make sure to visit our new Eminent Domain Resource Center for more eminent domain research and news.

The Onion does great satire because there stuff usually has that brilliant kernal of truth. One of their latest builds on the absurdity of beliefs about urban transit.

Report: 98 Percent Of U.S. Commuters Favor Public Transportation For Others

WASHINGTON, DC—A study released Monday by the American Public Transportation Association reveals that 98 percent of Americans support the use of mass transit by others.

"With traffic congestion, pollution, and oil shortages all getting worse, now is the time to shift to affordable, efficient public transportation," APTA director Howard Collier said. "Fortunately, as this report shows, Americans have finally recognized the need for everyone else to do exactly that."

. . .

And it just gets funnier.

APTA is kicking off a campaign to promote mass transit with the slogan, "Take The Bus... I'll Be Glad You Did."

The campaign is intended to de-emphasize the inconvenience and social stigma associated with using public transportation, focusing instead on the positives. Among these positives: the health benefits of getting fresh air while waiting at the bus stop, the chance to meet interesting people from a diverse array of low-paying service-sector jobs, and the opportunity to learn new languages by reading subway ads written in Spanish.

There’s lots of talk about outsourcing, not too much about outforcing—when costly regulations chase jobs out of town. Analysis from the BLS, Public Policy Institute of California and others say outforcing is a much bigger deal than offshore outsourcing.

Here’s a case in point. After being in San Diego for many decades, Buck knives is moving to Idaho, where the cost of doing business is much cheaper.

If you haven't been following the Supreme Court case over the right to sell wine accross state lines, it is a corker. (he, he)

Over at the Volokh Conspiracy legal genius Todd Zywicki analyzes how the Supremes are likely to vote on the case.

One nugget. . .

The bottom line is that the 21st Amendment was designed to repeal the 18th Amendment and to remove the federal government from meddling in local police power affairs and to protect dry states from the possible repeal or overturn of the Webb-Kenyon Act. There is nothing to indicate that it was designed to give a novel and unnecessary power to the state governments to erect protectionist barriers to interstate commerce or to allow wet states to engage in economic warfare with the products of other wet states.

Grant McCracken tells an interesting story about groups dynamics in generating--or not generating--ideas. A highlight. . .

But how are we to separate the good from the bad ideas? The good news here is that bad ideas go away all by themselves. No one picks them up. No one remains their champion. Groups flock, and they always move in the direction of the good ideas.

One of the conditions of profusion is a “non proprietary” approach on the part of the participants. The moment an idea escapes your lips, it belongs to the group, and, if it’s a good one, to the corporation. You have to learn to say goodbye. You will get credit in general for your performance and might get a high 5 from a fellow participant when you have distinguished yourself, but otherwise ideas end up belonging to everyone.

Govexec reports that a couple of acquisition reform panels have approved "share in savings" contracts. Much like it sounds, these contracts use shared savings from the outsourcing to pay the contractor, rather than up front or flat fees.

The critics are right that accountability controls for these kind of contracts have to be tight, as they do for all acquisition. But they are wrong that share is savings in itself creates problems.

The Florida Center for Efficient Government has published there new guidelines for managing public-private competitions in the state. The Center developed a centralized "Gate Process" for evaluating the best source to deliver services. This process consists of a robust set of standards, templates, guidelines and a transparent method of managing each stage of any outsourcing initiative. The five steps or gates of the process are the development of a business case, procurement, contract managment, transition managment, and post implementation.

Reason Foundation experts assisted the Center with the development of the criteria and applaud the Governor and his staff for the leadership and vision.

Since young drivers (especially males) are the most dangerous people on the road, many folks will likely be pleased about this:

Only 43% of all 16- and 17-year-old Americans were licensed in 2002, the last year for which statistics were available, according to the Federal Highway Administration and U.S. Census Bureau. In 1992, that figure was nearly 52%. Meanwhile, in supposedly car-addicted California, teens are even less likely to be driving. Slightly less than 27% — about 1 in 4 — of the state's 16- and 17-year-olds were licensed last year, a figure that has been sliding since at least 1978, when it was 50.1%.

Property rights advocates nationwide rightly cheered the recent passage of Oregon's Measure 37, which would force the government to either (1) compensate property owners suffering economic loss as a result of environmental and land use regulations, or (2) grant an exemption from the rules.

But Measure 37's passage was only the opening salvo in what will likely prove a lengthy and contentious series of legal challenges. According to this article in The Oregonian, some city and county governments are planning on setting up high hurdles for Measure 37 claims, moves almost certain to provoke legal challenges:

"Oregon landowners may face a high price of admission Thursday when they start testing Measure 37, the state's new property-rights law.


Asking to be excused from land-use rules or paid to follow them could cost at least $1,500 and require an inches-thick application form. Not all cities and counties are taking those tacks, but consider: Cities ranging from Bend to Canby will allow neighbors to sue landowners who use the measure to change their property.


Eugene will consider development allowed by waivers a nuisance after property changes hands, meaning it would have to be removed. Multnomah County proposes forcing owners to have a development application rejected, costing as much as several thousand dollars, before they could make certain Measure 37 claims.


Cities and counties putting the measure in place say strict standards will protect them from lawsuits and financial disaster. But proponents of the measure, which promises relief when planning decisions hurt land value, say local governments are undermining voters' intent."


This contentious start means Oregon's latest land-use experiment will wind up in court, where it probably will be decided piecemeal over at least the next year.

So much for the will of the voters (M37 passed by a 60%/40% margin). Hold on tight Oregon property owners, this is going to be a bumpy ride...

You don’t have to be a space nerd to enjoy this excellent three-hour Discovery Channel documentary on maverick aircraft designer Burt Rutan, Mike Melville (the world’s first private-sector astronaut), and the rest of the team that won the X-Prize.

Might also want to check out this essay of mine on how space policy ought to proceed now.

The Feds are holding a competition for the contract to manage Los Alamos National Laboratory after decades of the University of California have a monopoly lock on the contract.

The Lord speaks to Noah and says:
"In one year I am going to make it rain and cover the whole earth with water until all is destroyed. But I want you to save the righteous people and two of every kind of living thing on the earth. Therefore, I am commanding you to build an Ark."

In a flash of lightning, God delivered the specifications for an Ark.

Fearful and trembling, Noah took the plans and agreed to build the Ark.

"Remember," said the Lord, "You must complete the Ark and bring everything aboard in one year."

Exactly one year later, a fierce storm cloud covered the earth and all the seas of the earth went into a tumult. The Lord saw Noah sitting in his front yard weeping.

"Noah." He shouted, "Where is the Ark?"

"Lord please forgive me!" cried Noah. "I did my best but there were big problems. Fi! rst, I had to get a permit for construction and your plans did not comply with the codes. I had to hire an engineering firm and redraw the plans.. Then I got into a fight with OSHA over whether or not the Ark needed a fire sprinkler system and floatation devices.

Then my neighbor objected, claiming I was violating zoning ordinances by building the Ark in my front yard, so I had to get a variance from the city planning commission. I had problems getting enough wood for the Ark, because there was a ban on cutting trees to protect the Spotted Owl. I finally convinced the US
Forest Service that I needed the wood to save the owls.

However, the Fish and Wildlife Service won't let me catch any owls. So, no owls.

The carpenters formed a union and went out on strike. I had to negotiate a settlement with the National Labor Union. Now I have 16 carpenters on the Ark, but still no owls.

When I started rounding up the other animals, I got sued by an animal ! rights group. They objected to me only taking two of each kind aboard.

Just when I got the suit dismissed, the EPA notified me that I could not complete the Ark without filing an environmental impact statement on your proposed flood.

They didn't take very kindly to the idea that they had no jurisdiction over the conduct of the Creator of the universe.

Then the Army Corps of Engineer demanded a map of the proposed new flood plain. I sent them a globe.

Right now, I am trying to resolve a complaint filed with the Equal Employment Opportunity Commission that I am practicing discrimination by not taking godless, unbelieving people aboard!

The IRS has seized all my assets, claiming that I'm building the Ark in preparation to flee the country to avoid paying taxes.

I just got a notice from the State that I owe some kind of user tax and failed to register the Ark as a recreational water craft."

Finally the ACLU got the courts to! issue an injunction against further construction of the Ark, saying that since God is flooding the earth, it is a religious event and therefore unconstitutional.

I really don't think I can finish the Ark for another 5 or 6 years!" Noah wailed. The sky began to clear, the sun began to shine and the seas began to calm. A rainbow arched across the sky.

Noah looked up hopefully. "You mean you are not going to destroy the earth, Lord?"

"No," said the Lord sadly. "The government already has."

We all know public employees are motivated primarily by the public interest, so I am sure this story from my colleague Bob Poole is an abberation. . .

Inspector General Ken Mead has performed another real service with his Sept. 20th audit of the process for recording operational errors (violations of the FAA’s standards for keeping planes safely separated). FAA claims to have made modest progress in 2004 in reducing these errors, but the IG’s audit points out that accurate data only exist for 20 of the 524 ATC facilities. Only the 20 en-route centers have automated systems for identifying impending loss of separation, alerting controllers, and recording that fact. All towers and TRACONs, by contrast, rely on self-reporting of operational errors. And according to the IG’s report, such reporting is, shall we say, suspect.

First, consider the raw data. Although en-route centers handle about 25% of all operations, their automated systems reported 684 operational errors in FY2003. By contrast, for the 75% of operations handled by towers and TRACONs, only 501 total errors were self-reported. And of those 501 reported tower and TRACON errors, 22% came from an outside source (i.e., were not self-reported by a controller or manager). By contrast, at en-route centers, only 4% of the errors were identified by outside sources.

To reinforce your intuition that not everything is getting self-reported, the IG staff followed up on a whistle-blower complaint regarding the Dallas/Ft. Worth TRACON. Though this investigation is still in process, the preliminary findings are troubling. That facility had self-reported only two operational errors between January and June 2004. But digging into the data for just May and June, the IG’s sleuths found five more (unreported) operational errors.

A new report from the National Taxpayers Union analyzes the actions of Congress in 2004 and finds big government on the march. A few highlights:

In the Senate, each $1 saved from legislation that would reduce spending was overwhelmed by $18.16 in new spending. In the House, each $1 of savings proposed in legislation was swamped by $47.66 in spending increases.

Only two Senators produced net agendas to reduce spending, while 27 Democrats and one Republican had net agendas to increase spending by greater than $100 billion.