It’s Fall in Washington and the Livin’ Is Still Good

Drawing on new census data, Newsweek finds that seven of the 10 richest counties in America, including the top three, are in the Washington area. Newsweek's former sister publication, the Washington Post, summarizes the data. Only three counties in the United States have a median household income over $100,000, and they're all Washington suburbs. As we've reported here before, these trends began even before the Obama administration started concentrating job creation on the federal sector. In the middle of the Bush bubble, the Washington Post reported:
The three most prosperous large counties in the United States are in the Washington suburbs, according to census figures released yesterday, which show that the region has the second-highest income and the least poverty of any major metropolitan area in the country. Rapidly growing Loudoun County has emerged as the wealthiest jurisdiction in the nation, with its households last year having a median income of more than $98,000. It is followed by Fairfax and Howard counties, with Montgomery County not far behind.
This of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. To slightly amend a ditty I posted a few years ago,
Mamas, don’t let your babies grow up to be cowboys, Don’t let ‘em make software and sell people trucks, Make ‘em be bureaucrats and lobbyists and such.

Posted on November 12, 2010  Posted to Cato@Liberty

How the Teachers Union Was Tougher than Microsoft

Joel Klein was able to impose his will on the Microsoft Corporation, much to consumers' detriment, but he made less headway against the Education Blob. Perhaps ironically for someone who had served as an antitrust enforcer, his first great accomplishment as chancellor of the New York City schools was to centralize control in his own office. Calculating test scores accurately revealed that they barely budged during his eight-year tenure. As for the "rubber rooms," where teachers accused of gross misconduct sit around for months or years, drawing full pay -- made famous in the documentaries "The Rubber Room" and "Waiting for 'Superman'" -- Klein got them formally eliminated. But teachers who can't be fired are now making six figures for doing clerical work. Maybe, in the words of "Waiting for Superman," Klein changed the system from "rubber rooms" to "dance of the lemons."

Posted on November 10, 2010  Posted to Cato@Liberty

The Mudville Revolt

The Wall Street Journal reports, "From New York to Florida to Arizona, some taxpayers are opposing agreements to fund baseball projects after a decadeslong boom in publicly financed ballparks. The fights are complicating plans for stadiums, pitting residents against one another and driving some local governments to turn to U.S. stimulus programs." Well, it's good to know that if local taxpayers don't want to line the pockets of millionaire players and billionaire owners, the U.S. government's stimulus program stands ready to oblige. Several Cato studies over the years have looked at the absurd economic claims of stadium advocates. In “Sports Pork: The Costly Relationship between Major League Sports and Government,” Raymond Keating finds:
The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the “substitution effect” (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports — or a possible negative effect.
In Regulation magazine, (.pdf) Dennis Coates and Brad Humphreys found that the economic literature on stadium subsidies comes to consistent conclusions:
The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.
And in “Caught Stealing: Debunking the Economic Case for D.C. Baseball,” Coates and Humphreys looked specifically at the economics of the new baseball stadium in Washington, D.C., and found similar results:
Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

Posted on November 6, 2010  Posted to Cato@Liberty

A Budget Plan: Don’t Buy Stuff You Cannot Afford

Some 75 new Republican members of Congress got there by promising to stop the federal government's massive overspending. And as Chris Edwards noted, there have been a number of lists of budget cuts proposed recently. Saturday Night Live did a sketch back in 2007 that might be useful to Tea Partiers and new members of Congress. It's about a self-help plan called "Don't Buy Stuff You Cannot Afford." Since the federal government is running deficits well over a trillion dollars a year, I'd say this plan would be good advice: Hat tip to Jonathan Witt at the Acton Institute's PowerBlog, who points out that if this were a perfect analogy, the book author would be more agitated because "the couple has been spending the author’s money using a credit card he had idiotically loaned them a few years before."

Posted on November 4, 2010  Posted to Cato@Liberty

The Real Job Starts Now

Tea Partiers are celebrating the biggest swing against the incumbent party in the House of Representatives since 1938. It always feels great to win an election. But the real job for fiscal conservatives and smaller-government advocates starts now. The usual pattern is that after the election the voters and the activists go back to their normal lives, but the organized interests redouble their efforts to influence policymakers. That's part of concentrated benefits and diffuse costs, which we talk a lot about here. People who want something from government organize PACs, hire lobbyists, fly to Washington, make phone calls, make political contributions, take senators to dinner, and otherwise "know no rest by day or night" (in the words of economist Vilfredo Pareto) in their effort to get their hands on taxpayers' money. Meanwhile, it's not in the interest of any taxpayer to become informed and seek to exert influence on each particular spending bill. Tea Partiers must change that pattern. They must keep up the pressure on Congress and state legislators. They must demand actual performance, not just promises. And they must also seek to change the attitudes of the American people. It's not enough to favor small government in principle; more voters have to agree to give up their own subsidies and benefits. There's some evidence that Tea Partiers know this. As Jonathan Rauch wrote recently in National Journal:
But, tea partiers say, if you think moving votes and passing bills are what they are really all about, you have not taken the full measure of their ambition. No, the real point is to change the country's political culture, bending it back toward the self-reliant, liberty-guarding instincts of the Founders' era. Winning key congressional seats won't do that, nor will endorsing candidates. "If you just tell people to vote but you don't talk about the underlying principles," [Tea Party Patriots coordinator Jenny Beth] Martin says, "you just have to do it again and again and again, in every election." ... One hears again, there, echoes of leftist movements. Raise consciousness. Change hearts, not just votes. Attack corruption in society, not just on Capitol Hill. In America, right-wing movements have tended to focus on taking over politics, left-wing ones on changing the culture. Like its leftist precursors, the Tea Party Patriots thinks of itself as a social movement, not a political one.
As George Washington said in his first inaugural address, "The preservation of the sacred fire of liberty, and the destiny of the Republican model of Government, are justly considered, perhaps, as deeply, as finally, staked on the experiment entrusted to the hands of the American people." We have a chance in the next two years to demonstrate that republican government can still work rather than spiraling downward into endless debt and depression. And of course Congress has a big job facing it, too, especially the newly Republican House. To capitalize on their victory, the Republicans must demonstrate to the voters that they're serious — finally — about more freedom and less government. They destroyed the Reaganite Republican brand during the Bush years. And it's harder to rebuild a brand than to destroy it. But the backlash against the Obama-Reid-Pelosi big-government agenda has given them another chance. Read more...

Posted on November 4, 2010  Posted to Cato@Liberty

Libertarians in the News

Libertarians are getting strange new respect. Or at least the major media are mentioning libertarians and libertarian ideas more often. Just a few items I noticed this weekend: New York Times political reporter Matt Bai profiles David Kirkham, founder of the Utah Tea Party, one of the first Tea Party groups to draw political blood when it knocked off Sen. Robert Bennett in the Utah Republican caucuses. Kirkham, he says, is a classic car enthusiast and a father of four. He was largely apolitical until he saw how socialism worked in Poland and then was shocked by the bailouts and overspending here at home. And, Bai says, now he's a "self-described libertarian." The Los Angeles Times reports from Flushing Township, Michigan, on how four "budget hawks," including libertarian economist Mike Gardner, got themselves elected to the township Board of Trustees and started cutting the budget. So far they have "shrunk the Police Department from 13 officers to six, eliminated the building inspector and park staff positions, and cut board members' dental, vision and guaranteed pension benefits." And my favorite: The Washington Post speculates on how a newspaper in 2020 might look back on the legalization of drugs if it happened in 2010. One of their fantasies:
As Ohio and other states ask their voters to make a choice on marijuana, the decades-old debate over coast-to-coast legalization shows signs of becoming a central focus in the 2024 presidential campaign. Hillary Rodham Clinton, again seeking her party's nomination, may back legalization as a way to win over libertarian-minded voters who still think of her as a big-government Democrat, even after her stint as chairman of the board at the American Enterprise Institute.
Yeah, it's hard to imagine those libertarian-minded voters not liking Ms. Big Government, even after she allied herself with the think tank that housed many of the intellectual architects of the Iraq war. Meanwhile, here's a story on a non-libertarian politico. In a wrap-up of Democratic problems in the Midwest, the Washington Post tells of one activist at Ohio State University:
Joey Longley, a 19-year-old sophomore, showed up on campus as an evangelical Republican. But five of the seven young men in his Bible group were Democrats, and he found that his Democratic friends shared his socially conservative, fiscally progressive views.
David Kirby and I have written a lot about fiscally conservative, socially liberal voters and how they give a libertarian tilt to voters often called "moderate" or "centrist." But this is a reminder that some swing voters hold the opposite set of views.

Posted on November 1, 2010  Posted to Cato@Liberty

Good Point

In his recent book Ill Fares the Land, a passionate defense of the democratic socialist ideal, the historian Tony Judt writes that Hayek would have been (justly) doomed to obscurity if not for the financial difficulty experienced by the welfare state, which was exploited by conservatives like Margaret Thatcher and Ronald Reagan.
Yes, if Hayek had been wrong about the viability of the welfare state, then his warnings would have had less resonance. This line appears in a generally thoughtful treatment of how The Road to Serfdom has stayed in print for decades and become a bestseller in the past two years. The article by Jennifer Schuessler appeared in the New York Times Book Review last July, but has only just come to my attention.

Posted on November 1, 2010  Posted to Cato@Liberty

The Budget Hearing Scam

Colbert King, the Washington Post's Pulitzer-winning columnist, has a pretty good handle on how D.C. mayor-elect Vincent Gray's call for "more public input" on the budget would work out in practice:
The council is elected to make decisions, not to take polls. What's more, people know a set-up when they see it. Gray's scenario, intentionally or not, is a prescription for raising taxes. Here is how it would work: Council members, with the elections safely behind them, produce a deficit-closing term sheet that reads like a doomsday manifesto. It describes deep cuts in areas likely to produce the most screams: public safety, education, health care, workforce reductions, arts and culture, etc. That is followed by council hearings at which long lines of witnesses representing nonprofit advocacy groups and employee unions produce gripping testimony that predicts untold pain and agony resulting from the projected program and payroll cuts. Following the hearing, which stretches late into the night or the next morning, the lawmakers conclude, reluctantly of course, that there is strong "public" opposition to cuts in government and that they, as conscientious legislators, have no alternative but to keep the government at its current size and, instead, close the deficit with tax increases on middle- and high-income D.C. wage-earners.
King, a longtime close observer of D.C. politics, is describing an example of the general problem of concentrated benefits and diffuse costs -- every government program has a few beneficiaries who will show up to defend it, while the taxpayers who will pay for each of these programs have much less incentive to devote time and money to opposing proposals for spending.

Posted on November 1, 2010  Posted to Cato@Liberty

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