Still No Consensus

A headline in the Washington Post (the actual newspaper, not the online version) reads:

Montgomery Still Lacking Consensus on Growth Policy

The article explains that officials in Montgomery County, Maryland, are having trouble agreeing on rules for limiting economic growth while leaving room for development. “I don’t think there is consensus on much of anything at this point,” said County Council member Nancy Floreen.

One reason that there’s no consensus, of course, is that there’s no consensus. The county’s 900,000 residents don’t all agree on who should be allowed to build new homes and businesses, who should have their property rights limited, who should pay the bills, and so on. This is why Hayek said that planning was not compatible with liberal values. The only values we can agree on in a big diverse society, he wrote, are “common abstract rules of conduct that secured the constant maintenance of an equally abstract order which merely assured to the individual better prospects of achieving his individual ends but gave him no claims to particular things.” That is, you set up property rights and the rule of law, and you let people run their own lives without being allowed to run other people’s lives. Try to go beyond that, and you’re going to infringe on freedom.

As I wrote a few months ago, another newspaper story reported

“As a consensus builds that the Washington region needs to concentrate job growth, there are signs that the exact opposite is happening.

Over the past five years, the number of new jobs in the region’s outer suburbs exceeded those created in the District and inner suburbs such as Fairfax and Montgomery counties … contradicting planners’ ‘smart growth’ visions of communities where people live, work and play without having to drive long distances.”

Maybe if tens - hundreds - of thousands of people aren’t abiding by the “consensus,” there is no consensus: there is just a bunch of government-funded planners attending conferences and deciding where people ought to live. It’s like, “Our community doesn’t want Wal-Mart.” Hey, if the community really doesn’t Wal-Mart, then a Wal-Mart store will fail. What that sentence means is: “Some organised interests in our community don’t want Wal-Mart here because we know our neighbours will shop there (and so will we).”

In her book It Takes a Village, Hillary Clinton calls for “a consensus of values and a common vision of what we can do today, individually and collectively, to build strong families and communities.” But there can be no such collective consensus. In any free society, millions of people will have different ideas about how to form families, how to rear children, and how to associate voluntarily with others. Those differences are not just a result of a lack of understanding each other; no matter how many Harvard seminars and National Conversations funded by the National Endowment for the Humanities we have, we will never come to a national consensus on such intimate moral matters. Clinton implicitly recognizes that when she insists that there will be times when “the village itself [read: the federal government] must act in place of parents” and accept “those responsibilities in all our names through the authority we vest in government.”

Governments would do better to set a few rules of the game and let market enterprises respond to what people really rather than try to push people into conforming to planners’ visions and phony consensuses.

The Media’s Snapshot View

An AP story on the minimum wage begins, all too typically:

The nation’s lowest-paid workers will soon find extra money in their pockets as the minimum wage rises 70 cents to $5.85 an hour today, the first increase in a decade.

Some versions of the AP story, though not the ones that ran in the Washington Post and the New York Times, did acknowledge the possibility that some low-paid jobs might disappear. But most of the news stories this week focus more on criticism of the increase for being too low than on the consensus of economists that minimum wage laws reduce employment for low-skilled workers. It’s enough to make you think Bryan Caplan’s right about the irrationality of the political process. But it’s really just an example of the tendency to look at market processes with a “snapshot view” rather than a dynamic understanding of costs and consequences.

On an unrelated note, unions are outsourcing the arduous job of picket lines to non-union workers. Apparently the carpenters and construction workers are too busy working in our booming economy to have time to picket non-union contractors. The picketers aren’t paid union wages, but they are paid above the minimum wage.

ER Doc Reviews Crisis of Abundance

In the latest issue of Health Care News, John Dale Dunn reviews Arnold Kling’s book Crisis of Abundance. Dunn is a professor of emergency medicine at CR Darnall Army Medical Center in Fort Hood, Texas. He writes:

Arnold Kling is a lucid writer and down-to-earth Ph.D. economist from the Massachusetts Institute of Technology. Really.

…Kling concludes with policy ideas born of intelligent analysis and economic expertise…He suggests consumer-oriented, market-based, rational solutions that deal with the limits and benefits of both public policy and free-market health insurance and health care…

Not bad for a professor from MIT. When dealing with those, I usually need a translator by my side. Not this time.

Politicians Seeking Pro-Growth Tax Cuts to Lure Successful People Back to France

The International Herald Tribune reports on the tax-cut battle in France. The President and his Finance Minister are seeking to cut taxes and change the French attitude about wealth creation. In another sign that tax competition is a valuable tool for better policy, the articles explains that a key selling point is the need to make the country attractive once again to the numerous French tax exiles living and working in nations with lower tax rates:

In proposing a tax-cut law last week, Finance Minister Christine Lagarde bluntly advised the French people to abandon their “old national habit.” …Citing Alexis de Tocqueville’s “Democracy in America,” she said the French should work harder, earn more and be rewarded with lower taxes if they get rich. …The government’s call to work is key to its ambitious campaign to revitalize the French economy by increasing both employment and consumer buying power. Somehow it hopes to persuade the French that it is in their interest to abandon what some commentators call a nationwide “laziness” and to work longer and harder, and maybe even get rich.
France’s legally mandated 35-hour workweek gives workers a lot of leisure time but not necessarily the means to enjoy it. Taxes on high-wage earners are so burdensome that hordes have fled abroad. (Sarkozy cites the case of one of his stepdaughters, who works in an investment banking firm in
London.) In her National Assembly speech, Lagarde said that there should be no shame in personal wealth and that the country needed tax breaks to lure back the rich. “All these French bankers” working in London and “all these fiscal exiles” taking refuge from French taxes in Belgium “want one thing: to come back to France,” she said. “To them, as well as to all our compatriots who are looking for the keys to fiscal paradise, we open our doors.”

Finally Legal!

I can finally report that I am driving a legal automobile.

As readers will recall, this was my third trip (see here and here for previous installments in the saga). Actually, it was my third and fourth trip. When I got to the DMV this morning, happily clutching the Fairfax County tax receipt to my chest, I was told that I also needed an emissions test. It would have been nice of the bureaucrats to tell me that on my first trip, but why expect miracles.

So I had to exit the line, go back out to my car, and drive (illegally, once again) to a nearby service station. This interaction with the private sector was predicatably brief, so I was back at the DMV in less than 30 minutes. Unfortunately, Dan Griswold must have been hard at work in the interim since there was now a long line of people, none of whom appeared to be native-born Americans.

But after a 90-minute wait, I got up to the counter, and was able to get registered - but only after dealing with a libertarian quandary. While twiddling my thumbs, I noticed that I could request a vanity plate. Wouldn’t it be nice, I thought, to have a license plate reading “anti gov.” But getting a special plate also involved paying more money - funds that presumably would help finance the sloth-like bureaucracy that I despise. After wrestling with my conscience (which usually comes out on the short end), I decided that the cause of freedom would be best served by having the vanity plate.

I feel guilty about giving government more money, but I somewhat compensated by paying for my registration and vanity plate with a credit card, which means at least some small slice of the $103 gets diverted to the financial services industry. It ain’t easy being libertarian, but I somehow muddled through.

Air Traffic Control

You often need a crisis, real or imagined, to get major policy changes enacted. There are two looming challenges in our backwards and bureaucratic air traffic control system that might nudge Congress toward reform. The first is that the government system is having a hard time keeping up with the continued growth in air travel.

The second, as Government Executive magazine reports today, is that a large group of controllers are nearing retirement and the government might have a hard time finding replacements.

These challenges add to the woes of the Federal Aviation Administration, which has mismanaged the air traffic control (ATC) system for decades. The FAA has struggled to modernize ATC technology in order to improve safety and expand capacity. Its upgrade projects are often behind schedule and far over budget, according to the Government Accountability Office. (Discussed in here). 

Privatization of U.S. air traffic control is long overdue. During the past 15 years, more than a dozen countries have partly or fully privatized their ATC, and provide some good models for U.S. reforms.

Canada privatized its ATC in 1996, setting up a fully private, non-profit corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has received rave reviews for investing in new technologies and reducing air congestion, and it has one of the best safety records in the world.

The United States should be a leader in air traffic control, especially given the nation’s legacy of aviation innovation. A privatized system would allow for more flexible hiring policies, replacement of expensive human controllers with machines, and access to private capital for infrastructure upgrading. It is also likely that privatization would help improve safety and reduce air congestion by speeding the adoption of advanced technologies.

NR Editors on SCHIP

In an editorial released Friday, National Review’s editors highlight the many problems with the State Children’s Health Insurance Program, or SCHIP.  That program ostensibly was created for low-income children.  Congress is presently trying to expand the program to cover as many non-poor children – and even non-children – as they can get away with.

I agree with most of the editorial, though I worry about its conclusion:

If the Democrats agree to enact some free-market reforms, it might be worth supporting a modest expansion of S-CHIP. Otherwise, President Bush should make good on his veto threat.

I think one would have throw in some pretty hefty free-market reforms to offset the harm done by expanding SCHIP.  Letting people purchase health insurance out-of-state wouldn’t be enough.  The package would have to include weightier reforms, such as President Bush’s proposed standard deduction for health insurance or large health savings accounts.

I discuss the many problems with SCHIP in an upcoming Cato Institute Briefing Paper.