Out of Control

Chicago could soon become the world's largest Internet cafe now that the city hall has put out a request for bids to build a city-wide wireless Internet system.

The goal is to provide inexpensive -- or even free -- Internet access to all residents in order to help Chicago bridge the digital divide, Mayor Richard Daley said in a statement Tuesday.
…

The city of Chicago will offer the long-term use of its infrastructure, such as street lights and lamp poles to a private firm or consortium to use to set up the antennas used to broadcast a high-speed wireless network.

The provider would have to: commit to keep rates low; provide access even in the city's poorest neighborhoods; offer free access in schools, public parks and other destination "hot spots"; and support digital inclusion projects to make computers more widely available to low-income residents.

Article here.

Related: Another Unpleasant Muni Surprise

Those “How’s my driving?” bumper stickers on commercial trucks and vans couldn’t possibly do more than make drivers feel like dopes, right?

According to Lior Strahilevitz they might actually make roads safer:

Although more rigorous study is warranted, the initial data is quite promising, suggesting that the use of “How’s My Driving?” placards in commercial trucks is associated with fleet accident reductions ranging from 20% to 53%.

Strahilevitz suggests fittin all cars with the placards. Feedback algorithms, like those used by eBay and other online operations, could help keep malicious intentions in check:

By delegating traffic regulation to the motorists themselves, the state might free up substantial law enforcement resources, police more effectively dangerous and annoying forms of driver misconduct that are rarely punished, reduce information asymmetries in the insurance market, improve the tort system, and alleviate road rage and driver frustration by providing drivers with opportunities to engage in measured expressions of displeasure.

Abstract here.

United Kingdom-based Megabus, which last month began service across the Midwest, is hoping to shake up intercity bus travel with a discount-airline approach.

From Chicago, the company runs daily express service to Indianapolis, Cleveland, Detroit, St. Louis, Milwaukee and Minneapolis. Indianapolis is a minihub, linked to Cincinnati and Columbus, Ohio.

Fares are outlandishly cheap: as high as about $28 for a one-way ticket from Indianapolis to Chicago, for example, and as low as $1 if you book enough in advance. Fares on traditional bus carriers such as Greyhound Lines are higher — usually $30 to $35 one way from Indianapolis to Chicago — and the routes sometimes include intermediate stops.

How does Megabus keep fares so low?

Megabus uses online booking and sidewalk stops, not bus stations. And because tickets are sold on the Web, passengers board with nothing more than a reservation number checked by the driver.

In addition, it offers only direct service between major cities, sidestepping time-consuming routes with multiple stops.

The company hopes to find a market in the era of $3 per gallon gas and the Midwest, where most major cities are spaced several hours apart, would seem to be a good fit for bus travel.

Article here.

Following in the footsteps of Oregon, Napa County voters will be voting on their very own regulatory takings ballot measure -- Measure A -- next week. If passed, Measure A will provide landowners compensation for property devaluations that result from the imposition of new land use regulations, or alternatively will allow the county to waive the implementation of the regulations on affected properties. According to the Napa Valley Register:

Long before there was a Measure A to debate in Napa County, voters in Oregon passed a law with the same idea in mind.

Known as Measure 37, the law is more sweeping than the Napa ballot proposal. The Oregon law, passed by 61 percent of the voters in 2004, allows private property owners to seek compensation from the state if land use laws -- including those passsed before Measure 37 was decided -- hurt private property values.

The Napa County proposal is more limited in key respects: It would take hold only in one county, and does not allow private property owners to seek compensation for laws already on the books.

But both measures stem from concerns about government encroaching on property rights, and seek to swing the pendulum toward landowners.

George Bachich, president of the Napa Valley Land Stewards Alliance, said, "We're not facing the onerous regulations that they had to face (in Oregon), and we're not proposing the radical solution that they had to take. But it's motivated by the same spirit."

Measure A differs from Measure 37 in two key respects. First, it is a prospective-based measure, meaning that it only applies to future land use regulations. Measure 37 applies retroactively to laws already on the books. Second, Measure A includes a potentially significant loophole; it would not apply to land use regulations approved by voters at the ballot box. Given the propensity of voters in places like Ventura County to pass sweeping land use laws that prevent development on vast swaths of land, this could significantly water down Measure A's property rights protections.

For more on Measure 37, see my recent study and my recent Planetizen.com op-ed on state efforts to replicate Measure 37.

As privatization plans for Chicago's Midway Airport get into gear, companies like BAA PLC and Macquarie are already expressing interest:

Some of the world’s biggest infrastructure investors are buzzing Midway Airport as the city of Chicago moves ahead with plans to privatize the southwest-side facility.

BAA PLC, a U.K.-based airports operator, and Australia’s Macquarie Infrastructure Group are among the players that have already expressed interest in taking control of Midway, sources say.

Macquarie, a financial institution with assets of $80.56 billion under management, recently teamed with Spain’s Cintra SA in deals to take control of the Chicago Skyway for $1.83 billion and Indiana’s toll road for $3.85 billion.

BAA is a leading airport operator, managing seven airports in the United Kingdom as well as Indianapolis International Airport in the U.S.

Plans to privatize Midway are in the very early stages. The City of Chicago hasn’t yet appointed a financial manager for the project or issued a request for qualifications to identify interested parties. Once it does so, the airport is expected to spark a bidding war.

“Midway should be one of the most attractive privatization candidates in the country,” says Matt Andersson, CEO of Aviation Development Holdings, a civil aviation investment and development company based in Chicago. “It’s limited only by its ability to expand its footprint.”

The airport serves as a major operations center for Southwest Airlines, which accounts for about 75% of its capacity, drawing passengers from as far as Iowa and Indiana. Also attractive to developers: much of Midway and surrounding property falls within a zone that makes new projects eligible for incentives from the city of Chicago.

State lawmakers in Illinois are holding hearings this week on privatizing the state's toll road system:

Last week, Gov. Rod Blagojevich suggested a sale or lease of the Illinois Lottery to put more money into the classroom. This week, a Senate committee will begin holding statewide hearings into privatizing Illinois' 274-miles of toll roads.

The deal could raise $14 billion for various state services ranging from repairing roads and bridges to shoring up the state's employee pension system.

"Through this innovative and increasingly common strategy, Illinois will undoubtedly be able to move forward to construct and rebuild roads and bridges and shore up our mass transit and passenger and freight systems," said state Sen. Jeff Schoenberg, D-Evanston, in a prepared statement. He will lead the hearings.

Full article here.

Check out this great blog by Andrew Chamberlin of the Tax Foundation comparing government tax revenues from gasoline taxes to oil industry profits, with a nice graph. Only a couple of times in the last 25 years have the oil companies made more profit than the gas taxes have made for governments.

Gas taxes as a means of reasonably funding roads makes sense. But this bit of data should give rational people pause before they lambaste oil profiteers. 'Cause the real moneymakers are the government.

Another reason people should question their impulse to ask the feds to "do something" about high gasoline prices. Do you really want to give them power over that, too?

The same 9th Circuit Court of Appeals that ruled the phrase under God in the Pledge of Allegiance to be an unconstitutional imposition of religion on the inmates of the public school system recently ruled that.....

Reciting aloud Muslim prayers that begin with "In the name of Allah, Most Gracious, Most Merciful . . "

Designing prayer rugs, taking an Arabic name and essentially "becoming a Muslim" for two full weeks.

......is not.

Imagine a teacher asking her class to give up candy in order to better understand Prayer and Fasting week at the local Baptist church. Uh-huh.

The lesson in this is a simple one. Public Education is an oligopoly that is largely controlled by a few well-connected individuals and organizations that are in ridgid philosophical lockstep with one another.

The debate will rage around what is taught and who gets to pick course material. But the real resolution won't come until there is something approaching choice in public education.

As my husband is fond of saying, lot's of people are pro-choice until it comes to public education.

Whole story here. More here.

Hat Tip to Nobody's Business.

That's the return on investment the federal government gets on "competitive sourcing" studies i.e., for every dollar spent on looking for more efficient ways to perform "vital" public services the government saves $27. Not bad.

Sadly, Congress is again trying to block this common sense reform...and they're using the appropriations process to do it by inserting language into appropriations bills that instruct the agency that they "can spend no money to study...competitive sourcing."

Brilliant. So we stop activities that actually demonstrate results and we keep all those programs that don't. Again, brilliant.

Russell Roberts mulls over the factors that determine wages:

[Douglas] Baird points out that one of the obsessions of Henry Ford was to improve the precision of the parts of a car sufficiently so that unskilled people could assemble a car. When the parts were not machined precisely, there was a highly skilled highly paid worker called a fitter who was able to get the imperfect pieces to mesh.

So was better precision a good thing or a bad thing? In the box view of the world, it was bad. America lost the high-paying jobs, the jobs for fitters. But in the forehead view of the world, the world where wages depend on human capital (skill, knowledge and knowhow), Ford's improvement was good for the world. By finding a more efficient way to make cars, wealth was created. The people who were once fitters went on to do new things, new things that were possible partly because people now had more resources available that were once spent on assembling cars.

To find out what all this forehead and box talk is about, read the whole post.

Sam’s recent post and his article on how Kelo has validated the collectivization of land and property reminded me of something the OC Register’s eminent domain-watcher Steven Greenhut mentioned.

A local politician wary of anti-Kelo sentiment recently used a picture of a Brazilian favela in one of his campaign brochures to suggest that if wise planners weren't allowed to control communities as they saw fit, American cities would transform into third-world shantytowns. In other words, we Americans need to get over our obsession with property rights or some day we won’t even have indoor plumbing.

But as Hernando de Soto has pointed out, shantytowns are ramshackle largely because folks there lack of secure property rights. If they owned their land formally, they’d be more likely to improve it, more likely to be able to get loans, and so on.

So each time our property rights get dinged we take a baby step toward those shantytowns.

And speaking of Greenhut:

Check out this cover article in the LA Times' Weekend section today by David Reyes. It features the booming nightlife in Fullerton. Lots of hip restaurants, night clubs ... It's a real downtown. What caused this amazing boom, the creation of a Pasadena-like city in the midst of Orange County? The marketplace. As the article points out, "[T]his isn't the downtown that redevelopment built. Talk to the business owners and they'll confide that they shied away from redevelopment bucks because it had strings attached."

And, fortunately, redevelopment officials didn't do what they did in Brea -- bulldoze the downtown and huge subsidies to boring chain-outlets and movie theaters. In Brea, interesting independent businesses would not be able to start up. City planners and officials make sure the right places locate there. In Fullerton's real downtown, if you've got an idea and the money to get started, you can start interesting nightclubs. Brea is like an outside strip mall with fancy signs, wheras Fullerton is a real place, with interesting shops and places to discover. They don't need all the silly stuff to tell people that they are downtown.

Said Supervisor and former Fullerton Councilman Chris Norby in the article: "This whole area was driven by the market. No bulldozing. No eminent domain. This is what free enterprise developed."

Because Brea's eminent-domain-supporting council members like central planning and tax subsidies rather than free markets, their city's downtown will never be like Fullerton's.

Marijuana smoking does not increase a person's risk of developing lung cancer, according to the findings of a new study at the University of California Los Angeles that surprised even the researchers.

They had expected to find that a history of heavy marijuana use, like cigarette smoking, would increase the risk of cancer.

Instead, the study, which compared the lifestyles of 611 Los Angeles County lung cancer patients and 601 patients with head and neck cancers with those of 1,040 people without cancer, found no elevated cancer risk for even the heaviest pot smokers. It did find a 20-fold increased risk of lung cancer in people who smoked two or more packs of cigarettes a day.

More here.

Apparently, only now is the US government confident enough in the outcome of the Spanish-American War to nix the luxury tax implemented to finance victory.

The brief Spanish-American War ended more than a century ago, but not the federal tax assessed to fund the victory.

Until now.

On Thursday, the U.S. Treasury said it would stop collecting the 3% federal excise tax on long-distance calls, a fee originally assessed in 1898. The government also said it will issue refunds requested by consumers and businesses that paid the fee over the past three years. Taxpayers will be able to request refunds when they file 2006 tax returns in early 2007.

The Treasury also said the Justice Department would cease litigation in support of the tax after a handful of federal appeals courts ruled the fee illegal in decisions rendered within the past year. The most recent loss in federal court occurred earlier this month.

"The Federal Appeals courts have spoken across the board," Treasury Secretary John Snow said in a statement. "It's time to 'disconnect' this tax and put it on the permanent 'do not call' list."

... In announcing his decision, Treasury Secretary Snow also called on Congress to eliminate federal taxes on local phone calls. That tax is separate from the long-distance fee.

Full story here.
U.S. Treasury Department Press Release here.

The most recent issue of the American Enterprise published by the American Enterprise Institute has an excellent interview with architect and Wharton Business School real estate professor Witold Rybyczynski. The interview covers all sorts of issues, including urban sprawl, New Urbanism, and Wal-Mart, but here are a few snippets that really caught my attention:

TAE: Statistics show that only a small percentage of our national territory has been developed, yet land is becoming expensive. How is that?

RYBCZYNSKI: I've been studying this in Pennsylvania, where it takes about four years to get permits for a project. In Texas it takes about four months. And that's roughly the comparison. Because it's so difficult (if possible at all) to get building permits in places like New Jersey or southeast Pennsylvania, while population and demand are growing, the result is that the few things which are permitted become extremely valuable. So when we say the land is more expensive, it's not because of some sort of physical reason. It's simply that less land is being made available for building, and so what there is costs more. And that's what pushes up the price of housing. It's not the cost of construction; it's not primarily about demand, it's mainly about supply.

....

TAE: How much hope do you have for the revival of New Orleans?

RYBCZYNSKI: It'll be a very different city. It'll be much smaller. I think the tourism and such will revive. If the historic network had not been preserved that would be very different. But eventually the convention center will get rebuilt, and people will still go there. There's nothing quite like New Orleans from the tourist's point of view. On the other hand, I think that they've lost a lot of employment that's not going to come back, because there are safer places than that particular city.

TAE: That's not a very bright prognosis, because tourism is a low-paying business.

RYBCZYNSKI: True. But New Orleans is actually much more like a rust belt city than a sunbelt city. ItÍs a bit like Camden, New Jersey. If Camden burned down, would it be rebuilt? Maybe, but it wouldn't be the old Camden. While cities grow very quickly, they decline slowly. The big reason is real estate; people with all their savings in real estate are stuck there, so you sort of tough it out. But if something comes along that cuts the cord, a decline can leap to the next stage. What should've taken decades suddenly happens in a week. And that's, I think, what really happened in New Orleans. This very gradual decline has been cruelly accelerated. Half the low-income people in New Orleans were tenants--a very high number. The landlords can't afford to rebuild houses for those tenants. If they rebuild, it's going to have to be for somebody with a lot more money, because rebuilding a house costs more than it's worth right now. That's a quandary I don't see any solution to.

Pardon the sophomoric expression, but there's just no other way to put it.

(CBS/AP) A major power outage stranded thousands of rush-hour commuters Thursday between New York and Washington, stopping five trains inside tunnels and forcing many passengers to get out and walk to the nearest station.

and ...

An Amtrak train was hit early this morning by a freight train in the Downtown station. Early reports say an approaching freight train misjudged the distance between it and the passenger train, hitting it at about 4 a.m.

"It was kind of scary," said Makiko Kurosaki, 22, of Portland, Ore., who was waiting to board the train to go to Washington, D.C. Kurosaki said after the accident she saw a man exiting the train, holding his chest and having a hard time breathing.

What else can be said; the free-lunch-taxpayer-funded-boondoggle-train service is just plain terrible. And it's not like this is anything new either. Reason's Adam Summers hit the nail on the head last year:

Labor costs alone exceed all passenger-related revenue and on-board food and beverage costs are twice as great as revenues. As of July 2005, for every $1 Amtrak received in revenue, it spent $1.61. Amtrak's debt now stands at nearly $4 billion. And its notoriously poor on-time performance and maintenance backlog continue to be major problems. ...

In mid-April, Federal Railroad Administration inspectors discovered that 317 of the 1,440 disc brake rotors in Amtrak's high-speed Acela trains, which operate on the flagship Northeast Corridor between Washington, D.C., and Boston, had developed cracks, forcing the company to suspend Acela service for months at a loss of $10 million per month.

In October, the latest in a series of damning Government Accountability Office (GAO) reports castigated Amtrak for its poor planning, management, and accounting. According to the GAO, "Fundamental improvements are needed in the way Amtrak measures and monitors performance, develops and maintains financial controls, controls cost, acquires goods and services, and is held accountable for results."

Maybe this power-outage is exactly what America needs - a wake-up call as to how truly incompetent Amtrak is.

As the Senate Committee on Commerce, Science and Transportation heads into hearings on network neutrality this morning, I call attention to today’s news that Yahoo and eBay have entered into an arrangement whereby Yahoo will be the exclusive third-party provider of all graphical advertisements on the eBay site. For Yahoo, it’s a big win against Google, its major competitor.

But it’s far from the type of neutrality that Yahoo, eBay and Google are demanding Congress impose on network service providers. Under the Yahoo-eBay arrangement, if you want an ad on eBay, you’ve got to broker it through Yahoo. I’m not criticizing the deal. On the contrary, it’s the way business works. That’s why network neutrality is a bad idea. It would prohibit service providers, which own the pipes which carry Yahoo’s and eBay’s paid advertising, from using similar business models to expand their own broadband opportunities.

The height of this absurdity can be grasped further down in the story. The Journal reports that the two companies will work together to develop “click-to-call” advertising technologies, which will allow a user to click on an ad banner and trigger a VoIP call to the advertiser. This is the exact type of application that can benefit from a level of management above and beyond “best effort” Internet, but that network neutrality would thwart. While a network neutrality law would allow Yahoo to be the exclusive provider of eBay ads, it would prevent a phone company from joining the agreement to guarantee the connection and quality of the VoIP traffic for those click-to-calls.

Network neutrality is not about fast and slow lanes on the Internet. It’s amounts to blind, pre-emptive and counterproductive government interference in the nascent market for IP management and optimization. As more deals like Yahoo-eBay’s are made, this simple fact will become more apparent. Let’s hope the damage isn’t done by then.

“We’re being left behind. The consumer’s sitting there going, I feel like I live in Communist Cuba—I’m forced to take what they give me.”

So says Bill Haynie, a resident of the Sycamore Hills neighborhood of Fort Wayne, Ind., in a Fort Wayne Journal-Gazette article that reports Verizon is selectively deploying its high-speed fiber-to-the-home service in specific neighborhoods. Based on the furor over video franchise reform, which Indiana passed earlier this year, the immediate thought is that Haynie lives in a poor neighborhood. After all, didn’t anti-reform groups like Free Press warn us about new cable entrants like Verizon “red-lining” poor neighborhoods?

“Cable and telecommunications companies are loath to wire low income and rural areas because they don’t find it profitable. Internet access is only available to those living near cable company networks who can afford to pay higher and higher premiums for service. Low income and rural residents are simply left behind,” FreePress declares at its “Defend Local Access” site.

But wait, Sycamore Hills is the ritzy section of town, surrounded by a Jack Nicklaus-designed golf course and where median home price is $246,000.

“It is not poorer neighborhoods that have been left out of what Verizon calls its ‘life-changing’ Internet service, but some of the city’s wealthiest,” the Journal-Gazette reports.

Perhaps thinking that it might get more for its marketing dollar if it sought customers where the incumbent didn’t, Verizon first rolled out service in Ft. Wayne’s Hanna-Creighton neighborhood.

“Hanna-Creighton…beset by vacant lots and decaying homes – is on track to be among the first areas in the Midwest to have Internet service that at its slowest download is 89 times faster than a traditional dial-up modem. At its fastest, the fiber-optic network is 536 times faster,” according to the report.

In what can only be described as an ominous sign of things to come, the city of Hercules, California has decided to seize private property to prevent it from being developed by Wal-Mart. The city has, in effect, decided to move beyond regulating land use to dictating specific land use and, for that matter, choose who owns and operates it. Under a Kelo type standard, this is a perfectly acceptable use of eminent domain.

The Hercules City Council voted unanimously Tuesday night to take the unprecedented step of using eminent domain to prevent Wal-Mart from building a big-box store on a 17-acre lot near the city's waterfront.

The vote caused most of the 300 people who had packed Hercules City Hall for the meeting to break out in cheers and applause.

"The city of Hercules is very unique. People from the outside have to understand that,'' said Hercules Vice Mayor Ed Balico just before the vote.

During a 90-minute public comment period that preceded the vote, nearly everyone who spoke urged the council to fight Wal-Mart.

"Throw the bums out," Hercules resident Steve Kirby said at the podium of Wal-Mart. "Wal-Mart will never understand what we want."

Another resident, Anita Roger-Fields, expressed concern for small businesses in the city, saying they could be driven out of business by the discount store. "(Wal-Mart is) the worst thing that could happen to our community. They want to crush the competition."

For more on this, see the article in the San Francisco Chronicle.

For a discussion of how Kelo has validated the collectivization of land and property, see my article here.

Hewlett Packard told the St. Cloud, Fla, City Council last week that it needs another $460,420 to fill in coverage gaps for its free citywide municipal wireless system, the Orlando Sentinel is reporting. The system, which has been plagued with coverage problems, crowded channels and user complaints since its March start-up, has already cost $2.6 million.

The Sentinel reported that the city council was “surprised” to hear about the need for additional spending.

Most of the cost, $236,920, will go to bring service to 14 neighborhoods that “slipped through a hole in the project.” It turns out that typically bad city planning was at fault. Although St. Cloud’s contract was signed last June, developers, who are ostensibly funding the project, didn’t have to begin paying until December. Right now, the city hopes that local developers will step up and cover the cost. The alternative is to dip into municipal coffers, which is how they deal with muni wireless overruns everywhere else.

More about St. Cloud problems here.

In the U.S. the biggest box is chased out of town by city council members or activists who can scrape up 51 percent of voters who want to deny the other 49 percent the opportunity to shop where they please.

But in South Korea, shoppers themselves booted Wal-Mart. They did it not by denying choices to others, but by freely choosing to shop elsewhere:

Wal-Mart Stores Inc., in a highly unusual move, is leaving the South Korean market because it's proved too tough for the world's largest retailer to make a profit …

For Wal-Mart, the move also reflects the company's effort to boost what have been flagging returns on capital. And it reflects the difficulty of penetrating South Korea's locally dominated market.

…
Wal-Mart has left an international market only once before and in a much smaller way. In early 1998, Wal-Mart got out of a three-year-old partnership to run two supercenters in Jakarta, Indonesia, which didn't allow foreign investment in retail stores.

Article here.

Randal O'Toole had a great op-ed in yesterday's San Francisco Chronicle on the Bay Area's housing affordability problem:

What happened in the 1970s to make Bay Area housing so unaffordable? In a nutshell: land-use planning. During the 1970s, Bay Area cities and counties imposed a variety of land-use restrictions intended to make the region more livable.

These restrictions included urban-growth boundaries, purchases of regional parks and open spaces and various limits on building permits. These regulations created artificial land shortages that drove housing prices to extreme levels. Today, residents of Houston, Texas, can buy a brand-new four-bedroom, two-and-one-half bath home on a quarter-acre lot for less than $160,000. That same house would cost you more than five times as much in Marin or Contra Costa counties, seven times as much in Alameda County, and eight to nine times as much in Santa Clara, San Mateo, or San Francisco counties.

In fact, planning-induced housing shortages added $30 billion to the cost of homes that Bay Area homebuyers purchased in 2005. This dwarfs any benefits from land-use restrictions; after all, how livable is a place if you can't afford to live there?

. . . .

The people most enthused about all these planning rules like to call themselves "progressive." But the effects of planning on home prices are entirely regressive. Planning-induced housing shortages place enormous burdens on low-income families but create windfall profits for wealthy homeowners. Does this steal-from-the-poor, give-to-the-rich policy reflect the Bay Area's true attitudes?

Homeownership is more than just a dream, it is a vital part of America's economic mobility. Most small businesses get their original financing from a loan secured by the business owner's home. Children in low-income families who own their own homes do better on educational tests than those who live in rental housing. Barriers to home ownership reduce this mobility and help keep low-income people poor.

Predictably, planners' solutions to the housing affordability problem often make the problem worse. Planners typically require that homebuilders sell or rent 15 percent of their homes at below-market rates to low-income families. The homebuilders simply pass that cost on to the buyers of the other 85 percent of the homes they sell. Existing homeowners, seeing that new homes suddenly cost more, raise the price of their homes when they sell. The result: A few people benefit and everyone else pays more.

The solution to the Bay Area's housing affordability crisis is not a few units of affordable housing, but widespread land-use deregulation that will make housing more affordable for everyone.

The numbers in Randal's oped come from his recent study, The Planning Penalty. It's well worth a read to understand the extent of the influence of land use regulation on housing prices in California and nationwide. I borrowed some of his numbers in my recent oped on Cali housing prices.

For more on growth and land use issues, see here.

TCS has a refreshing rundown of two recent studies that support the conclusion that less government allows for greater ... well, everything.

Here's a tasty snippet (though I highly recommend you read it in its entirety as it answers the most dim, er..., common questions small government naysayers natter on about):

First, a group of Swiss and Danish researchers from the WIF Institute of Economic Research in Zurich looked at whether government involvement in the economy is conducive to life satisfaction across 74 countries. The results show that life satisfaction actually decreases with higher government spending. This negative impact of the government is stronger in countries with a left-leaning median voter. It is alleviated by government effectiveness - but, crucially, only in countries where the state sector is already small. In general, a one standard deviation increase in government spending yields a median decrease of 4.42 percent in self-reported satisfaction by the voters, a drop in the degree of economic competition of 4.17 percent and a shift in voter preferences in rightward ideological direction of 4.15-9 percent.

Another comprehensive study released by the Centre for Policy Studies (CPS) in the UK summarized available data from various sources, to show that modern governments that spend less can, indeed, provide better public services, a better standard of living and more equitable incomes than high-spending governments. ...

According to the report, "the most surprising finding to some observers is what has happened to public services. In the leaner government group, the growth in spending on public services accelerated to an average annual rate of 4.3% in 2000-2005, up from 2.4% in 1980-90. This suggests that an increased share of national income left in private hands stimulated greater efficiency and faster growth in the private sector, thus boosting individual and corporate tax revenues despite lower rates." The report cites Ireland as the exemplary case of what is known in the economic literature as the expansionary fiscal contraction phenomena - the case of reduced fiscal burdens of the state spending leading to improvement in government revenue. As Ireland's corporate tax rate fell to 12.5 percent, expanding tax base supported 6.4 percent average annual increases in public service spending since 1999, compared with just 0.1 percent growth during the 1980s.

With the vote on California's Proposition 82 (The Preschool for All Initiative) fast approaching, Reason's Education Director Lisa Snell explains why the push to expand government-run preschool spells bad news for kids and their families. Listen here. (mp3)

More on the perils of universal pre-K plans here.

Cedarfair, the owner of amusement parks such as Knots Berry Farm in California and Cedarpoint in Ohio, has agreed to buy five amusement parks owned by Paramount for $1.24 billion. The acquired parks include Kings Island outside of Cincinnati and sister parks in Toronto, Richmond (VA) and North Carolina.

Fortunately, federal regulators are watching this deal closely to protect consumers from this lifestyle threatening concentration of power:

Cedar Fair, the Sandusky-based owner of Cedar Point & Soak City and six other theme parks, said today that it had signed papers to buy the parent company of Kings Island – Paramount Parks – from CBS Corp. for $1.24 billion in cash. The deal is subject to regulatory approvals and closing, but is expected to go through in the third quarter.

For more, click here.

Mirroring the trend happening in Washington D.C. and elsewhere, the New York Times reports that workers in the NYC metro area are moving further and further out to find affordable housing:

Priced out of an increasingly expensive real estate market in close-in areas like Westchester, Bergen and Nassau Counties, some workers are pushing their commutes up to the two-hour mark, and even beyond.

It is the price they are willing to pay to own the home of their dreams, said Alan E. Pisarski, the author of a series of books titled "Commuting in America" (the third is being published by the National Academy of Sciences' Transportation Research Board).

"In essence, what this group of commuters is doing," Mr. Pisarski explained, "is contributing to their house payment with travel time."

. . . .

With the cost of residential real estate rising sharply in recent years, the geographical boundaries of the New York metropolitan area are being redrawn. Bulldozers are clearing farmland once considered too far away for a commute to Manhattan, real estate agencies are opening offices in outlying areas, and elected officials in once-rural communities are being pressured to contain the encroaching sprawl.

Meanwhile, public transportation providers like Metro-North are adding service earlier in the morning and in the evening to accommodate their riders' changing needs. And many of those riders are changing their routines, optimizing the increased travel time to and from work by opening their laptops and BlackBerries en route.

See this post from last year on a similar phenomenon going on in the regulation-happy D.C. metro area.

At a time when cities across the country are doing everything they can to limit growth, it's refreshing to see a city (particularly a California city) acknowledge that growth is going to happen and take steps to accomodate it:

At a time when many areas of the country are trying to contain sprawl, the City Council won approval this year to expand an area chosen for development outside city limits that could nearly double Bakersfield's size in the years ahead.

Critics see the expansion as a green light to builders that will encourage more suburban sprawl, gobble up more prime farmland and aggravate traffic congestion and air pollution.

Many developers and politicians, however, see a way to satisfy a feverish housing demand that has turned a once-conservative backwater — hometown of country icons Merle Haggard and the late Buck Owens — into one of the state's fastest-growing cities.

Mayor Harvey Hall says Bakersfield has little appetite for higher-density developments and other urban design trends. "I certainly respect the interests of the smart-growth people," Hall says. "But as the mayor, I support prosperity. You just can't stop growth."

Bakersfield has swelled by more than 50,000 residents since 2000. Its 4.7% increase last year, to 312,000, was more than any other California city over 200,000. Fueling the influx are home buyers from coastal areas eager to accept long commutes for a chance at a house with a yard they can afford.

"Single-family homeownership, the American dream, is Bakersfield's bread and butter," says James Movius, city planning director. "Bakersfield is definitely proud it can provide housing to the common guy."

. . . .

"If L.A. wants to shut down growth, if Las Vegas is getting crowded, if Phoenix is getting expensive, you could come here and get a good house," says [Robert] Lang, director of the Metropolitan Institute at Virginia Tech. "But it's rare to find cities that are flat-out still pro-growth."

Kudos to Mayor Hall and the City Council for taking a stand for homeownership and prosperity, rather than pursue the "close the gates" approach taken by so many of their peers.

The Pacific Legal Foundation has started the Rapanos Blog to offer news and views on the Supreme Court's upcoming opinion on the Rapans vs. United States wetlands regulation case. It's got a wealth of information on the case, including amicus briefs, oral arguments, related articles, and more.

Rapanos is one of two cases being considered by the Supreme Court challenging the Feds' overly expansive interpretation of the Clean Water Act. At the heart of the issue lies the question of whether the Fed's power to regulate "navigable waters" extends to wetlands and small streams. The broad interpretation of "wetland" has effectively allowed the Feds exercise significant power in the traditionally state and local domain of land use and development regulation.

See here and here for previous posts on Rapanos. Also, see Shikha and I's February Washington Times article on the cases, as well as Shikha's op-ed from last October.

Apparently, forgoing any and all driving on Sunday will solve all the world's ills, even the age-old issue of GREED! (If only all those folks condemned to an eternity of boiling oil in hell for committing the mortal sin of greed had known all they had to do for absolution was not drive on Sunday!)

So says the Don't Drive on Sunday website:

FIGHT GREEDY OIL COMPANIES - DON'T DRIVE ON SUNDAY!

Why are we paying more than Three Dollars per Gallon? GREED.
Why is every oil company raking in billions of dollars in profits? GREED.
Why has the current administration allowed this to happen? GREED!

Hmm. So it's greed that determines the price of gas? It's greed that creates profits?
How strange; all this time I thought it was the market that determined price and profit ... yet apparently panic has more pull than I thought.

Regardless, I'm looking forward to less traffic on Sundays.

So begins the obnoxious PSA that warns drivers that we are again on the verge of Click it or Ticket season.

CIOT begins Monday and in the past it’s included a barrage of road-rage-inspiring radio spots, steep fines, special seat belt patrols, check points, even sting operations.

Seems like every year the efforts to crack down on seat belt holdouts (only 18 percent of us) get a tad more severe. How will this year top previous “mobilizations”? Satellite tracking of drivers? Lie detector tests? Stay tuned.

Some of my previous work on this:

Buckle Boondoggle: "Click It Or Ticket" wastes time, diverts resources, helps nobody

Strapped: Unbuckling seat belt laws

Play a bit of Texas Hold ’em on-line in Washington state and you’ll be the legal equivalent of a sex offender.

The Washington legislature this spring passed a law making Internet gambling a Class C Felony, the same status as the state's sex offender laws, and punishable by up to ten years in prison. Gov. Christine Gregoire (D.) signed the bill March 28. It becomes effective June 7. So all you on-line players in the Evergreen State still have a few weeks to get even.

Failing that, you can always go out to a local tribal casino or card room, both of which are legal in Washington. If you've really got a jones to make a wager, you can always run down to the corner store to buy a state lottery ticket. Understand that it's not that legislators don't want to you to gamble--it's that they don't want you to gamble with outfits they don't control. Hey, that's been the deal with every numbers racket since Arnold Rothstein wore short pants.

For more information about this bill, plus a collection of Internet posts testifying to its unabashed hypocrisy, visit here.

Via the SanFranChron:

A group of performing artists led by alternative musician Moby and Michael Stipe of REM has joined the grassroots effort to derail a House bill that would let telephone companies and other broadband carriers set up toll roads on the Internet.

Since when did the idea of "toll roads" become a pejorative?

And more importantly, when did "neutrality" become a synonym for "government regulation"?

From 1980 to 2003, the average compensation of an American chief executive at a top 500 company rose by a factor of about six. The average compensation for the chief executives of these top companies reached roughly $11 million a year, including the value of options. …

Not surprisingly, many people think the American executives are overpaid. Their salaries are set by corporate boards, often filled with insiders or friends. Salaries for the top executive are far from transparent, especially when stock options and complex compensation plans are used. Nor is pay always linked to performance. Kenneth L. Lay received a salary and bonus of more than $8 million plus perks in 2000, less than a year before Enron's collapse.

But in a new paper, "Why Has C.E.O. Pay Increased So Much?" (http://ssrn.com/abstract=901826), the economists Xavier Gabaix of the Massachusetts Institute of Technology and Augustin Landier of the Stern School of Business at New York University offer a contrarian view. They suggest that the higher salaries for chief executives can largely be explained by increases in the value of the stock market. Viewed as a whole, these salaries are a result of competitive pressures rather than the exploitation of shareholders.

Their core argument is simple. If we look at recent history, compensation for executives has risen with the market capitalization of the largest companies. For instance, from 1980 to 2003, the average value of the top 500 companies rose by a factor of six. Two commonly used indexes of chief executive compensation show close to a proportional sixfold matching increase (the correlation coefficients are 0.93 and 0.97, respectively; 1.0 would be a perfect match).

More from Tyler Cowen here.

I just saw a license plate border that read: “saving the planet one hybrid at a time.”

It was attached to a hybrid Ford Escape AKA an SUV!

Perhaps the reputation of SUV owners (at least hybrid SUV owners) has come full circle.

From a 2003 article of mine:

There was a time when SUV owners were depicted as robust outdoor enthusiasts and sporty soccer moms. Then as SUVs bulked up and became less fuel-efficient, public opinion started to turn against them and their owners. Buying an SUV stopped being simply a reflection of the owner as a consumer, and more about the owner as a moral agent. In some circles, buying an SUV was no longer a choice, it was a sin.

SUV foes demanded to know why someone would suck up natural resources, and trash the planet just to intimidate other drivers with his street-legal monster truck? As the moralizing mounted, the social standing of SUV owners continued to erode. Today, SUV owners can only claim moral superiority over the likes of smokers and spammers.

But I wonder how drivers of super-efficient hybrids feel about Escape owners who brag about their eco-friendliness. And as I pointed out here, many owners of regular non-hybrid cars have plenty to boast about too.

BTW, the most self-righteous message on the back of a hybrid is still: “How many lives per gallon do you get?”

Watch the South Part "Smug Alert!" episode here.

With all the evil carbs, sugars and partially hydrogenated oils out there, this new GAO report just about threw me into a tale spin. What can we eat now without wondering about the myriad of disastrous health consequences that could maybe-possibly hurt us ... maybe? Not mercury infested fish, blubber inducing soda or fluoridated tap water, which has been poisoned by the international communist conspiracy to sap and impurify all of our precious bodily fluids.

Yet, the GAO's conclusion is probably a bit more reasonable and legitimate than the plethora of food-Nazi "emergencies" infesting the nation. Basically, a policy and structure for emergency response needs to be put in place in the case that a Red Gum Lerp Psyllid finds its way across our borders. Foreign pests that could potentially destroy the nation's food supply is far more scary than a beef and steak burger.

Perhaps a bit less time should be spent bolstering the food police and more attention directed towards real threats to our food.

Why is the government always trying to regulate, "fix" and limit the free market? Not only is cold beer on the chopping block, but the "little cigar" could also find itself on the nanny-state no-no purge list administered by our very own Stali...er, Uncle Sam.

From WaPo:

Forty states have asked the U.S. Treasury Department to bar tobacco companies from marketing products they say are identical to cigarettes as "little cigars," a designation the states say lets the firms evade taxes and target younger consumers. ...

The "little cigar" label allows the companies to pay lower federal and state taxes, and to avoid payments and advertising restrictions required for cigarettes under the 1998 master agreement between tobacco companies and all 50 states, according to the petition for rule changes. ...

Norman F. Sharp, president of the Cigar Association of America, said the attorneys general are confused on many facts. "Little cigars are not cigarettes and, over the long term, they have never been substitutable for cigarettes," he told New Jersey legislators at a hearing this month. "They represent the cigar industry's attempt to give satisfaction to cigar smokers, not an attempt to attract cigarette smokers."

Imagine that! An industry trying to do right by its customers. Inconceivable!

But to get back to the original question; why does the government regulate? Because we let it(and sometimes even beg it to! Alas, the folly of regulatory leverage ...)

The Wall Street Journal devoted significant editorial space today to network neutrality, correctly recognizing that the proposed Congressional legislation would be the first significant regulation of the Internet. I like the fact that the author wonders whether Google will rue the day it lent support to MoveOn.org should the day come when these extremists decide that Google’s “pay for placement” policy on its search engine is no way “neutral.”

Network neutrality, at heart, is government regulation of the Internet.

In line with this, I did a radio appearance today on the Marc Steiner Show on WYPR, the NPR affiliate in Baltimore. The panel of guests included Sean Gallagher, Director of IT Strategy for Ziff Davis Media, Dr. Neil Kleinman, Dean of the College of Media and Communication at the University of the Arts.

While Dr. Kleinman and I clearly disagreed on the network neutrality issue, at least he did not shy away from saying what it was—a government regulatory regime to counter the effect market forces might have on the Internet and the World Wide Web. We talked a lot about the management challenges bandwidth-rich services would place on service providers and who ultimately should be responsible for bearing the cost of alleviating that strain. It was a welcome shift from the rhetoric about network neutrality being needed to save free speech on line.

The discussion should be available for download at www.wypr.org/M_Steiner.html within 48 hours.

I teased this in my previous post, but Sprawl author Robert Bruegmann has a must-read piece on urban sprawl in the June issue of The American Enterprise. In truth, I don't know that I've seen a better piece on the subject that so politely and efficiently demolishes many of the arguments that you hear from the anti-sprawl side. It was hard to select excerpts, but here are a couple:

When asked, most Americans declare themselves to be against sprawl, just as they say they are against pollution or the destruction of historic buildings. But the very development that one individual targets as sprawl is often another family's much-loved community. Very few people believe that they themselves live in sprawl, or contribute to sprawl. Sprawl is where other people live, particularly people with less good taste. Much anti-sprawl activism is based on a desire to reform these other people's lives.

Affluent exurban residents are among the most zealous guardians of the status quo. They are often adamant about preserving their area exactly as it was when they arrived. Yet rural areas, after a century of losing people as farmers abandoned their land for the cities, are now being repopulated, often at nineteenth-century densities. The new residents are urban families who want the look of old rural New England, but with all of today's urban conveniences. They demand the aesthetic experience of "traditional" settlements without all of the inconveniences associated with that kind of landscape.

. . . .

Although sprawl obviously causes considerable problems of all kinds, the same could be said of any kind of settlement pattern, and there is precious little evidence that the dislocations caused by sprawl are as serious as activists would have us believe. More important, many of their proposed reforms would likely create fresh difficulties. Some of the anti-sprawl remedies tried thus far have been highly ineffective; others have led to unintended consequences arguably worse than the problems the reformers set out to correct. Whether in London immediately after World War II, or in Portland, Oregon during the last couple of decades, previous anti-sprawl policies have failed to stop the outward spread of people and jobs, and may well have aggravated the very things they were supposed to alleviate, like highway congestion.

. . . .

Another misunderstanding grows out of the provincialism of critics living in fast-growing urban areas. Many such people have the impression that the entire country is fast being paved over. But in truth, cities and suburbs occupy only a small percentage of our country's land. The entire urban and suburban population of the United States could fit comfortably into Wisconsin at suburban densities. Moreover, the amount of land set aside permanently for parks and wildlife areas has grown faster than urban land.

. . . .

Although opponents of sprawl believe they are making rational and disinterested diagnoses of urban problems, their actions usually involve powerful, often unacknowledged, self-interest. The self-interest is clear in the case of the New Yorker who owns a weekend home in the Hamptons and rails against the continuing development of Long Island. In similar fashion, families who have recently moved to the suburban periphery are often the most vociferous opponents of further development of exactly the same kind that created their own house, because that would destroy their views or reduce their access to the countryside beyond their subdivision.

The power of self-interest can also be seen in individuals who press for mass transit yet are very unlikely to use it themselves. They assume someone else will ride, and free up highway space for themselves. Here again, members of the incumbents' club form alliances to protect their advantages, sometimes in unexpected and ephemeral ways.

. . . .

Enemies of sprawl often hold up dense European city centers as alternatives. But it's not so much the actual preferences of the inhabitants that make those areas the way they are, as simply the fact that their settlement patterns were fixed generations ago in a way that would be hard to alter now. Though many Europeans still live in small apartments in high-density districts, polls consistently confirm that the vast majority of them, like most people worldwide, would rather live in single-family houses on their own piece of land than in an apartment building.

And now that they are becoming affluent enough to act, Europeans are moving into suburbs in increasing numbers. They are bringing jobs and retail with them. In country after country across Europe, consumers are demanding the convenience of longer store hours, shops closer to where they live, and easier access by automobile. The result is a proliferation of large supermarkets, shopping centers, discount centers, and Big Box retail outlets like Wal-Mart or Target.

. . . .

Despite efforts by the French central government to channel growth, the outer Parisian suburbs and exurbs, with their low-density subdivisions of single-family houses, shopping centers, industrial parks, and freeways, function and look increasingly like those in the United States. This process of rapid dispersal has been visible in virtually every major city on the globe where incomes have risen and there has been an active real estate market--from Boston to Bangkok and from Buenos Aires to Berlin.

Do read the whole article. I'd post the whole thing if space permitted. Bruegmann's concise articulation of the current state of human settlement and his broad perspective on "sprawl" (and its enemies) should be required reading among urban planners.

There's an interesting interview with architect and urban scholar Witold Rybczynski in the June issue of AEI's The American Enterprise. Here's an excerpt on New Urbanism and land prices:

TAE: What is your view of the New Urbanist movement and its effort to restore the traditional pedestrian scale of historic communities in new suburban and urban development?

RYBCZYNSKI: Well, first of all one has to say they're the only game in town. Most architects have essentially abandoned any attempt to shape a broader environment--they're creating very exciting buildings, and architecture's probably more in the public eye today than 25 years ago, but it's very much about signature designers and individual flamboyance. New Urbanists are the only group of architects who have looked at the broader physical environment. I think they deserve enormous credit for that. And I'm certainly sympathetic to their focus on pedestrians versus automobiles, on studying older cities and trying to understand why they're successful, and how these things can be adapted to contemporary life.

I think they're sometimes too doctrinaire, almost religious in their inflexible dogma. Some of that I think has to do with having a movement. You have to be very strong in the way you express yourself, and if you start compromising all over the place, pretty soon you don't have a movement any more. They at least have an idea of what the city should be, and most city planners don't.

TAE: The New Urbanists are waxing indignant over sprawl, and we hear a good deal of gloating over fat people, McMansions, energy hogs, plastic, and so forth.

RYBCZYNSKI: This may be interfering with their ability to connect with mainstream America, although two of the most successful movements in the last century have been the environmental movement and the historic preservation movement, and New Urbanists have tried to form links with both. I don't think they're easy links. The environmental movement has been essentially anti-development, and the New Urbanists, whatever else they are, are about development, and building more stuff. So there's a real contradiction between the criticism of sprawl and wanting to build. There's a lot of New Urbanism that is part of sprawl. Celebration, Florida, is a nice place, but it's also part of the general sprawl around Orlando. Kentlands in Montgomery County, Maryland is part of the spread of the city farther out. These places first require using automobiles, and only then are about creating attractive places to walk. In any case, New Urbanist developments are not having a huge impact on how much sprawl there is.

TAE: Do you see denser living becoming a national trend?

RYBCZYNSKI: It's happening. It's happening because development has become more difficult, particularly in the Northeast and California. When development is difficult and land becomes increasingly expensive, naturally your lots get smaller and smaller, because people just can't afford more.

TAE: Statistics show that only a small percentage of our national territory has been developed, yet land is becoming expensive. How is that?

RYBCZYNSKI: I've been studying this in Pennsylvania, where it takes about four years to get permits for a project. In Texas it takes about four months. And that's roughly the comparison. Because it's so difficult (if possible at all) to get building permits in places like New Jersey or southeast Pennsylvania, while population and demand are growing, the result is that the few things which are permitted become extremely valuable. So when we say the land is more expensive, it's not because of some sort of physical reason. It's simply that less land is being made available for building, and so what there is costs more. And that's what pushes up the price of housing. It's not the cost of construction; it's not primarily about demand, it's mainly about supply.

Do yourself a favor and read the whole interview.

The June issue also has a fantastic piece by Sprawl author Robert Bruegmann, which is so chock-full of choice nuggets of wisdom that I'll have to blog it separately.

Well, yeah:

Economists do agree that highway congestion should be solved by pricing.

Things get more complicated after that:

Beyond that primary insight, however, there is much disagreement. Economists disagree over how to set tolls, how to cover common costs, what to do with any excess revenues, whether and how “losers” from tolling previously free roads should be compensated, and whether to privatize highways.

Robin Lindsey’s Econ Journal Watch article here.

Alex Tabarrok has written an open letter on immigration that reflects the consensus opinion of economists.

Selected bits here:

Overall, immigration has been a net gain for existing American citizens, though a modest one in proportion to the size of our 13 trillion-dollar economy.

Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

Immigration in recent decades of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to be small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.
…

We must not forget that the gains to immigrants from coming to the United States are immense. Immigration is the greatest anti-poverty program ever devised. The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.

And one that doesn’t show up on official tallies of foreign aid.

Whole thing here.

Alex’s blog partner Tyler Cowen points to papers on Latino assimilation here and here.

Even amidst a strong economic expansion, the most recent census data reveal a renewed migration out of our urban centers. This gives considerable lie to the notion, popularized over a decade, that cities are enjoying a historic rebound. The newest figures are troubling on two accounts. Not only are the perennial losers -- Baltimore, Philadelphia, Cleveland and Detroit -- continuing to empty out, but some of our arguably most attractive cities, like Boston, San Francisco, Minneapolis and Chicago, have lost population since 2000. Even New York, where foreign immigration has managed to counteract large scale outmigration, seems to be slowing down.

Continue reading Joel Kotkin’s article, The Ersatz Urban Renaissance, here.

Bonus bit:

[L]ong-established elite business centers, including Boston, New York and San Francisco, have seen little or no growth in either financial or professional business services since the national recovery began to take shape three years ago. This is in sharp contrast to the late 1990s dot-com boom, which created a sizable, albeit ultimately fleeting, surge in high-end employment. Nationally the economic outmigration also parallels the demographic one. Like people, jobs are shifting from the high-tax, expensive Northeast and coastal California to relatively affordable locales such as Phoenix, Reno, Las Vegas, Ft. Myers-Cape Coral, Fla., Boise, Idaho, and Provo, Utah.

Open most any newspaper’s metro section and sooner or later you’ll find an article that touts the supposed rebirth of various urban centers. Often the authors say empty-nesters just can’t wait to get back to the city. This is true in some cases, but, like the urban renaissance meme in general, it’s overstated.

Consider leisure time. I can’t recall the exact figures, but one of empty-nesters favorite activities is gardening and it’s much easier to tend to the begonias in the suburbs.

I admit that I was among those spooked by the report in USA Today that AT&T, Verizon and BellSouth rather casually turned over the phone records of millions of Americans to the National Security Agency.

Amid outright denials from the NSA, Verizon and BellSouth, and a sketchy statement from AT&T, Carol Wilson at Telephony has been following this story all week, trying to reconcile the diverse claims.

The NSA’s aim, according to USA Today, was to build a massive database of calling records in an effort to discern patterns that might point to terrorist activity. On the face of it, this sounds ridiculous, but given the way our Homeland Security effort has been misdirecting resources in the past, I figured it was par for the course.

What Wilson posits is that NSA was seeking international calling records only. This would fit with statements by BellSouth (BellSouth does not carry international calls) and Verizon (MCI’s international operation is treated as separate unit) that they were never even approached, Qwest’s statement that it refused the NSA’s request, and AT&T’s vagueness.

I’m not sanguine about the idea of the phone companies releasing customer data without at least some due process. And despite the comments from the telcos and the NSA about privacy, there’s a lot one can learn from a phone number.

Either way, the scope of this case may be far more narrow than thought. USA Today’s account has been challenged by all parties and it's another example of the mainstream media jumping on a too-sexy-to-be-true antibusiness story without checking facts.

The Louisiana House of Representatives last week passed a bill to create a statewide franchising process. The bill would allow telephone companies such as BellSouth, as well as other service providers aiming to provide multichannel cable TV-like services, to bypass individual negotiations with each local town. Unlike many other state franchise reform bills, Louisiana allows local sub-divisions to set terms for the franchise fee (usually a percentage of revenues), but caps the rate at five percent. Terms for franchise fees cannot be higher than those for incumbent cable companies either. Local franchise agreements currently in place will be allowed to run their term. Statewide franchisees also will not have specific buildout requirements.

More information and an account of the debate on the bill by the Louisiana House Energy and Commerce Committee can be found here.

Plenty of researchers are anxious to find that suburbia makes us fat, but those of us who grew up running around and climbing trees in big backyards might be more likely to appreciate how certain aspects of suburban living actually encourage healthy living:

SOUTH Australian children with big backyards are less likely to be overweight and inactive than those with small courtyards, a study has found.

Preliminary data from the Flinders University Achieving a Healthy Home Environment study, which surveyed the homes and lifestyles of 280 southern suburbs families, found the size and set-up of homes contributed largely to how fit and healthy young children were.

Researchers looked at more than 75 physical and nutritional variables in each family home over the past year.
"We found the bigger the backyard, the more active the kids," said Flinders Medical Centre consultant pediatrician Dr Nicola Spurrier, who headed the study that will continue until next year.

"But we also found the amount of play equipment and play areas in a back yard had a big impact too."

Researchers also uncovered other rather obvious points: active parents are more likely to have active kids; healthy kids are more likely to have parents who limit their TV-watching and stick healthy food in the fridge.

Article here; via Peter Gordon.

Related: Sprawl Brawl Continues

Related: Make Up Your Mind

Related: What’s making the kids fat?

To those of you following California housing issues, this news will hardly come as a surprise:

Housing affordability in California continued to be the worst in the nation during the first quarter of 2006, according to a national survey released today, the California Building Industry Association announced.

In fact, because three additional metro areas in California were added to the survey, prepared by CBIA’s sister organization, the National Association of Home Builders, California is now home to the nine least affordable metro areas in the nation and 18 of the bottom 20.

Layne Marceau, CBIA’s 2006 Chairman and a Bay Area homebuilder, said the state’s growing housing affordability crisis won’t improve until state and local policymakers enact long-overdue reforms that will allow builders to meet the strong demand for homes and condominiums at all price points.

“California homebuilders are eager to meet the demand for new homes and condos, and we continue to work with policymakers in Sacramento and around the state to enact reforms that would allow us to produce the range of new homes that is needed to accommodate our growing population,” Marceau said.

“Unfortunately, if these reforms aren’t made, there’s little hope that affordability will be significantly increased or that California’s dismal homeownership rate, now 13 percentage points below the national average, will significantly improve.”

Marceau said reforms include legislation now pending to require communities to plan for new growth, streamline the process for building new high-density homes and condos in existing urban areas, and require local governments to show a connection between the impacts of growth and the developer fees they charge. He noted one Sacramento-area community is now considering boosting its average “developer fee” — in reality a hidden tax on new-home buyers — to $100,000 per home.

According to the quarterly NAHB/Wells Fargo Housing Opportunity Index, Los Angeles County once again was the nation’s least affordable metro area, as only 1.9 percent of the new and existing homes sold between January and March were affordable to county residents earning the median income. That’s down from 2.3 percent in the fourth quarter of 2005.

The second-least affordable metro area was Orange County at 2.5 percent, followed by Santa Barbara County, Stanislaus County, and Monterey County. Other California metro areas in the bottom 10 nationally were San Diego County at No. 6, followed by Merced County (7), Napa County (8), and Santa Cruz County (9). The New York City metro area and its neighboring Long Island suburbs tied for 10th.

I wrote about California's housing crunch in an op-ed last month. As I see it, California is in a tight spot, and the stakes of inaction are huge:

The only realistic way for California to begin to produce the massive quantities of new housing needed to address the supply-demand imbalance and reduce housing costs is for state and local governments to remove regulatory obstacles to new housing and ensure a sufficient supply of developable land to meet long-term housing needs.

This is no small task. Current homeowners have a strong incentive to maintain their high property values by keeping a tight rein on new development. California law gives citizens a strong voice in local planning decisions, and in many areas, citizens have successfully used the ballot box to impose strict local growth limits. Likewise, California's strong environmental lobby is heavily invested in current policies aimed at controlling growth and restricting development and will likely resist any effort to relax growth controls.

Hence, California politicians are trapped between a rock and a hard place. If they embrace sweeping reforms that would relax land use regulations and limit citizen involvement in the development process, then they are likely to face a backlash in the current political climate. If they do nothing, then housing supply shortage is likely to worsen, the repercussions of which could ultimately drive citizens and businesses to other states and damage California's long-term economic outlook.

The key to California's future is increasing the awareness on the part of politicians and citizens of the high costs of the state's current approach to growth management and the severe economic impacts on millions of families. Without strengthening the political will to radically revamp growth management in California, then we face the danger of killing the goose that laid the Golden State.

For more on this, see Reason's research on growth and land use issues here.

Can you smell the bacon? Today is opening day of appropriations season; Wednesday's behemoth is the $18.4 billion Agriculture appropriations bill and Thursday's beast is the ever important Interior-Environmental Protection Agency spending bill (such a great use of $25.9 billion).

Luckily, there are some wiley earmark hunters gearing up to pick off the waste in the bills; however, hunting pork is much more difficult than hunting wabbit.

Peter Cohn, of CongressDaily explains:

Flake's spokesman declined to provide details so as not to alert earmark sponsors of his floor strategy. But he said Flake has prepared roughly a dozen amendments each to the Agriculture and Interior spending bills that would block the agencies from spending money on particular projects.

Preliminary lists of earmarks conservatives might target include $668,570 for diet nutrition and obesity research in New Orleans, and $1.5 million for an entrance to the National Arboretum in Washington, D.C., both in the Agriculture bill. Interior-EPA earmarks that could face Flake's scalpel include $300,000 for ivory-billed woodpecker research and $200 million for clean water infrastructure projects the White House did not request.

Despite a push for more disclosure required by the recently passed House lobbying bill, there is no listing of earmark sponsors in the committee reports accompanying the bills. Asked why the Appropriations Committee was not providing the list, as the lobbying bill would require, Majority Leader John Boehner, R-Ohio, offered only a "no comment" Tuesday.

Network neutrality would prohibit telephone and cable companies from allocating the costs of managing large amounts Internet traffic to the parties directly responsible for that high-traffic volume. Network neutrality proponents don’t deny this. In fact, they embrace it as a virtue.

But in this type of environment, companies that supply Web-based services like movie downloads and multiplayer games that consume the large amounts of bandwidth and require real-time, error-free delivery will be economically divorced from bandwidth they consume and the management resources they use.

Right now, there is no shortage of bandwidth, thus it remains fairly inexpensive. Some engineers argue that advances in IP technology will always ensure adequate bandwidth. In that case, the network neutrality issue is moot. Others say that it is inevitable that applications will consume the bandwidth available, and that sooner or later, carriers will be required to engineer their networks to manage and optimize high bandwidth services. A network neutrality law would leave carriers with two lesser options: Spread those management costs among all users, raising the cost of broadband service for everyone, or continue to attempt to manage traffic within the current “best effort” framework of IP.

Carriers will likely attempt to mix the two, with the result being an expensive yet mediocre Internet experience. Lack of management resources will diminish the performance of the bandwidth-intensive applications. At the same time, these big applications, because of the bandwidth they are consuming, will disrupt more limited applications as they try to move down the pipe.

What we'll end up with is the same result that we’ve seen time and again when government mandated pricing controls interfere with the law of supply-and-demand: a commons problem where too many parties are competing for too few resources.

Without the market to regulate supply and demand, the solution becomes simple enough—rationing.

This can take several forms. Under “hard rationing,” carriers may elect to cap bandwidth to homes, say at 4 or 6 Mb/s, enough to accommodate two simultaneous video streams, with some space capacity leftover. Technology that can deliver much more would be throttled down to regulate individual bandwidth use.

But bandwidth caps are doubtful. Since network neutrality is largely a liberal idea, I’m wagering that if it comes to pass, we’ll see the familiar form of soft rationing that liberals love—social conditioning through shaming.

Remember the energy crisis of the 1970s? Back then, electricity and natural gas rates were capped. Because market forces weren’t allowed to allocate demand in a fair way, excessive use of electricity was deemed bad manners. To set up elaborate holiday display in front of your house was to invite local tut-tuting. Gasoline price controls gave birth to the pejorative—gas guzzler—which persists to this day. Today, in areas where local governments keep the cost of water artificially low, a green lawn signifies selfish excess.

Because network neutrality would inevitably lead to greater network congestion, we can expect a new slate of public service messages urging us to use only “our fair share" of the Internet. The U.S. may end up with the most advanced fiber optic technology running to every home, but use it to stream a few James Bond movies while playing Grand Theft Auto with 10,000 other gamers and you’ll be tarred a broadband “hog.” I expect some sort of stylized cartoon icon, dubbed Auntie Bandwidth or some such, who will regularly pop up on Web sites and pay-per-view menus to wag a finger at us about excessive Internet use.

Face it, liberals love doing this sort of thing. The chip-munching, beer-guzzling, channel-surfing male couch potato is already in their sites (because supply and demand in health care is disrupted). Their crusade against violent video games is in full swing. Nothing would give these groups greater pleasure than to tell us how we’re misusing “limited” broadband resources.

Rather than deal with the etiquette of whose applications are more worthy than others, I’d just settle for the time-honored approach: everyone pays his way.

Today the U.S. Department of Transportation announced a new initiative to battle traffic congestion with a six-point plan that includes offering incentives to states and urban areas to expand their use of market pricing and public-private partnerships.

“Congestion has become intolerable, and it’s great to see the DOT declaring war on this national scourge,” said Reason Foundation’s Director of Transportation Studies Robert Poole, an advisor to the last four presidential administrations who has also consulted with the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, and numerous state departments of transportation.

“DOT recognizes that it’s going to take many billions of dollars in additional investment to add the capacity needed to catch up with transportation growth, after two decades of falling behind,” Poole said. “That’s why a national push for public-private partnerships and much greater use of value-priced tolling are so important to this effort.”

“It’s also very welcome to see the emphasis on long-haul, multi-state corridors and urban freight bottlenecks. It’s often said that ‘Trucks don’t vote’; therefore, goods movement has been the poor stepchild in transportation planning for way too long. I hope DOT’s new effort will jump-start emerging projects for truck-only toll lanes,” Poole said.

Reason's Transportation Research and Commentary

In his latest Bacon's Rebellion column, Reason's Director of Government Reform Geoff Segal examines the $522 million, 99-year lease deal that Virginia signed with an Australian company to operate the Pocahontas Parkway and wonders why the state isn't looking to cut similar agreements for its other roads:

In light of the Pocahontas experience, the Dulles Toll Road would seem to offer tremendous opportunity to benefit the people of Virginia. With offers upwards of $1 billion in cash and capital upgrades on the table, the potential concession deal seemed like a classic win-win proposition. Unfortunately Gov. Kaine threw away those benefits when he signed a Memorandum of Understanding with the Metropolitan Washington Airports Authority (MWAA) to choose a public-public partnership instead of a public-private partnership.

...A modern transportation system is important to the future of Virginia. But "being stuck in the past" in the way we choose our projects and invest our resources will bring only disappointment and further citizen distrust in government. The Pocahontas Parkway deal is an example of the future while the rail-to-Dulles deal lacks the thoroughness and creativity required in today's world.

Full Column Here

Reason's Transportation Research and Commentary Here

Reason's Sam Staley looks at Hawaii's recent gasoline price cap debacle and the 1970s oil shortage and writes:

As prices went up, they conserved. They did it first, as they are now, by driving less. Then, as they realized the higher prices were permanent, consumers changed what and how they drive.

Average fuel consumed per vehicle dropped 14 percent in the 1970s and another 10 percent between 1980 and 1985. Average fuel consumed per vehicle has remained remarkably stable since then, reflecting the stability of gas prices during that period.

Meanwhile, we started driving more fuel efficient vehicles. In 1980, we were sputtering along traveling just 13 miles per gallon. By 1997, we were traveling 17 miles on each gallon of gas. That's an increase of almost a third.

Competition helped this along, too. In 1980, imported passenger cars averaged almost 30 miles per gallon and the average domestic car clocked in at just 23 miles per gallon. By 2000, the two groups had reached parity at about 29 miles per gallon. Gas, as a share of the total costs of driving a car, has fallen from 28 percent in 1980 to 12 percent in 2004.

What's the takeaway for U.S. policymakers and citizens? If we're serious about conserving oil, the best policy is to let markets work.

Full Column Here

At Reason.com, Reason magazine's Ronald Bailey answers two of today's biggest questions: Is the world running out of oil? and can the US switch from gas to ethanol?

Why not? Just look at the University of Texas - Austin; the Wall Street Journal reports today that Computer billionaire Michael Dell and his wife will give $50 million to the University of Texas for a pediatric research institute, a computer-sciences building and a center for healthy living.

This type of private academic funding is much preferable to the method of rent-seeking that university lobbyists have been relying on more and more over the years; they focus more on (often taxpayer-funded) free football tickets than free thinking. By requesting so-called "directed grants," or academic earmarks, universities are subverting the time-honored process of academic competition to garner research funds. In short, earmark-seeking academic researchers are becoming welfare queens in white coats.

Directed grants are academic ersatz; they fundamentally undermine scholarly competition and the peer review process that ensures quality in academia. Instead of relying on their academic acumen, universities must rely on connections to members of the powerful appropriations committees in Congress, which set the budget, to obtain earmarks. For example, New Hampshire, the only state with no earmarks in 1995, leapt to seventh among states in 2001. Why the jump? Because in 1999, one of the state's senators, Judd Gregg, a Republican, became the chairman of an appropriations subcommittee and began working actively to secure the funds.

Apologists for academic pork have long held that the dollar amount dedicated to it pales in comparison to the government's spending on peer-reviewed research; however, if spending on earmarks continues to rise sharply, that gap may soon narrow. What is more, the practice of rent-seeking instead of truth-seeking far outweighs any monetary incongruities. To put it simply (if not a tad dramatically) academic earmarks threaten the very fabric of competition and free thinking in the academic world.

Yet supporters of the grants also say that without the earmarked appropriations, some worthy projects wouldn't get through the difficult and highly competitive process of review. The government's competitively awarded research grants go to a disproportionately small group of elite institutions, the supporters say, and the agencies' spending priorities are too narrow.

To that I say, so what? If the project is so worthy, it'll get funded by someone. Good ideas don't languish in a healthy and competitive culture; however, they will if such ideas have to compete with sky-box tickets to a championship game.

So back to the question: Can universities survive without academic earmarks? If they can't, they shouldn't.

Policymakers worldwide are watching with interest as the European Union’s fledgling carbon emissions market rides out the turbulence created by its first annual official report, which today confirmed a 45-million-ton gap between total carbon emissions and carbon allocations for 2005.

While Europe faced a quandary over surplus pollution credits, Canadian representatives indicated that their nation will not meet Kyoto Protocol goals for 2012. Canada’s Environment Minister, Rona Ambrose, was widely quoted Friday in reports of that government’s increasingly cold feelings about Canada’s position in the Kyoto climate agreements:

“Frankly, when Canada makes up 2 per cent of the global emissions, I believe that the best way for Canada to participate in the global environment is by developing and deploying clean technologies to those countries that actually are the largest contributors to greenhouse gas emissions; that is the United States, China and India.”

Canada is apparently trying to edge out of the climate agreements--but others can’t wait to get in. Seattle-area King County announced intentions today to become the first US county to join the two-and-a-half-year-old Chicago Climate Exchange, North America’s unique voluntary greenhouse gas emissions exchange, which operates outside of Kyoto Protocol mandates. King County Executive Ron Sims stated:

"This is the time when carbon markets are maturing and the rules are being written. The victory goes to those playing the game… In the world of carbon emissions trading, you can't win if you don't play. And you can't credibly affect future rules if you are not actually engaged in the existing market forums."

There isn’t any indication yet that nations in the EU emissions trading scheme are feeling like “winners,” though.

Minister Ambrose chairs the UN climate-change conference in Bonn this week amid German promises to retroactively cut their carbon emissions allocations for last year. Too bad cutting actual emissions is a little trickier.

Not to worry; we're not succumbing to the Paris Hilton lexicon.

HOT refers to the ingenious transportation policy of converting High Occupancy Vehicle (HOV) lanes into High Occupancy Toll (HOT) lanes, a change that is happily catching on across the nation.

Cathy Proctor of The Denver Business Journal reported yesterday on the progress of HOT lanes in Colorado:

In the space of 48 hours in early June, the Denver metro area will observe the 15th anniversary of the opening of the E-470 toll road -- and the expected opening of toll lanes on Interstate 25 between downtown and U.S. 36.

June 1, E-470 will celebrate the 15th anniversary of operations.

The next day, CDOT expects to open so-called "express lanes" on I-25, completing a $9 million conversion of the existing HOV carpool lanes between downtown and U.S. 36. Carpools and buses still would be allowed to freely bypass I-25 traffic during the morning and evening rush hours on the HOV lanes, but solo drivers also would be allowed to cruise through -- as long as they have an electronic transponder to pay the sliding-scale toll to access the lanes.

"There's a broad acceptance of tolling; you see that in the numbers we have," said Ed DeLozier, executive director of the highway authority, which operates and maintains E-470.

About 70 percent of E-470 drivers use electronic transponders to pay the tolls, DeLozier said, as opposed to pulling through a toll booth to hand over cash.

DeLozier credits E-470's success to customers' willingness to pay to drive a clear road.

"We're selling services and alternatives," he said. "People wouldn't be using the road except they look at the alternatives and say they don't want to sit in the traffic jam, they want to go around it."

For more on what's HOT and what's not in transportation policy, be sure to check this out.

Ever wonder what pork-barrel politics looks like in the flesh? Sure, you hear about the millions and millions and billions in special interest pet projects congress slips into those massive appropriations' bills every year, but do you really know what that taxpayer cash is buying?

The adventurous folks over at Americans for Prosperity are setting out on the second leg of their Ending Earmarks Express, a bus tour that lets you the taxpayer actually see the parking garages and tobacco barns that are eating up America's fiscal future.

Make sure to follow t