My love of trains has been discussed before. However, in a recently released study recommending against adding an Amtrak line connecting Saint Louis to Springfield (MO), the State Department of Transportation and Amtrak seem to have sided with common-sense and the free-market. Subsidizing a train connecting your two largest cities with the State Capitol is one thing, but adding to that without the market demand would be poor policy and even worse economics. Not to mention the increased subsidy required might jeapordize the one existing route. Much more important is connecting St. Louis to New Orleans without a required bus ride to Carbondale. Maybe the market would support it, maybe not, but this is New Orleans we are talking about here for christsakes… 

The St. Louis School Board may reconsider its contract to bash the charter schools:

School Board member David Jackson said Wednesday that he would seek to place the contract on the agenda for the board’s June 12 meeting and will change his vote.

"I don’t want to pay $25,000 to dog another entity," said Jackson, one of four board members who supported the contract. He now prefers the money be spent to promote the city schools rather than denounce charter schools.

And here’s the Board Vice President explaining why he favored the contract:

"This is an emergency," Purdy said. "We had to reach out to the parents making the decisions about where to send their children now. By August it will be too late."

The School Board seems to have gotten the message that parents will go elsewhere if they have the choice. What the district doesn’t realize is that advertising alone won’t keep students in the district. Parents aren’t flocking to charter schools because of a few commercials.   

If the St. Louis Public Schools want to retain students, they should improve their product. Public schools in the suburbs don’t have to advertise; everyone knows which ones are the best from word of mouth.

George Orwell famously warned about the use of political terminology to obscure meaning, rather than to reveal or enlighten. It’s a problem that continues today, as I was reminded by an article in the Springfield News-Leader:

Commercial Street business owners are working to improve that area’s image — but to get needed tax help, they may have to put up with the label "blighted."

Mike MacPherson, senior planner with the city of Springfield, supports using tax-increment financing — available only to areas officially designated as "blighted" — to pay for changes on Commercial such as more parking and outdoor stages. TIF uses tax revenue collected from new development to fund projects beneficial to the public in those areas.

MacPherson said Commercial Street is blighted under any definition. About half the buildings on the street are vacant. Most are deteriorating.

But the ominous-sounding label does not mean supporters are wrong to say Commercial Street conditions are improving, according to MacPherson.

An area in which things are improving is labeled as blighted. A quick look at any dictionary will reveal definitions for "blight" such as these: "something that frustrates plans or hopes," "something that impairs or destroys," or "a deteriorated condition." If the vacant buildings on Commercial Street were gradually destroying the area, making things continually worse over time, the area could be called blighted. But even if there are negative aspects, an area can’t be called blighted if it’s improving despite them. That’s the opposite of blight.

The article continues:

Lyle Foster, owner of Big Momma’s Coffee and Espresso Bar at 217 E. Commercial, has worked to change negative perceptions about the street.

At a recent news conference, he listed a number of improvements made in the last two years: over $4 million in investment, "green" building initiatives, 25 lofts now under development and 40 lofts completed and occupied.

This is the sort of development that actual blighted areas would never see. The term is also being misapplied right here in Clayton, as David Stokes noted last week.

It’s an abuse of language to look at a healthy, thriving area and call it "blighted" just because it’s not doing quite as well as you think it could under different ownership. Using that terminology to obscure truth and then take people’s property through eminent domain provisions is an abuse of justice.

The St. Louis School Board has decided to spend more money on:

a) New textbooks and computers.

b) Hiring better-qualified teachers in hard-to-staff subjects like math and science.

c) Repairing old school buildings.

d) A PR campaign to slander the charter schools.

Answer: d. That’s right, the St. Louis School Board has hired a marketing firm for $25,000 to publicize the "negative impact of charter schools."

The St. Louis Post-Dispatch article notes that the School Board didn’t take bids for this contract. Surprise, surprise. It’s not exactly like they’re enthusiastic about the benefits of competition.

In New York City, the value of a taxi medallion, simply a license to operate a taxi cab, is $477,000. That is an amazing sum, but certainly understandable by the law of supply and demand. The demand for taxis is always high in NYC, and with Mayor Bloomberg’s proposal to dramatically increase the tax/tolls to enter Manhattan via car, it is likely to grow even higher. As for the supply, NYC limits the number of licenses available, so it does not take a genius to see why the prices of medallions are outpacing other investments in New York.

Here in St. Louis we have the Metropolitan Taxicab Commission. While I don’t like all the regulations it has for cabs (the dress code for drivers is particulaly stupid), it is certainly preferable to the system in place before its establishment in 2003. Before then, the county and city each regulated their own cabs and prevented crossover, so a county cab could pick someone up in the county and take them to the city, but then was not allowed to pick up a fare in the city. So the current system is at least a little better. 

Unlike NYC, St. Louis does not, as far as I can tell, set a numerical limit on the number of licensed taxis. This is a good thing from a free-market perspective, but the commission does have broad powers to deny new licenses if it feels the market is currently being met with existing licenses. As the commission is largely composed of people with direct involvement in the taxi industry, the potential for limiting the number of competitors by limiting new licenses is certainly there. 

The cost for a taxi license in St. Louis is $55 per year. Judging by how hard it is to get a cab in St. Louis, I’d say there is not exactly a line forming (pun intended) to drive that value up. In NYC it is $477,000 for a medallion. That is an 867,172-percent greater value. Based on my perceptions of the cab industries in both towns, I’d say that sounds about right.

An editorial in the Joplin Globe titled "Good Use of Incentives" praises the proposed Missouri Quality Jobs Act:

Without the additional funding, local leaders say, Missouri can’t run with the big dogs — namely other states that offer more incentives to employers. Meanwhile, folks looking to make a decent wage are looking or moving elsewhere. According to the U.S. Department of Labor, of the 77,760 jobs in the Joplin metropolitan area, more than 50,000 of them paid less than $10 an hour in 2005.

The editorial portrays economic growth as an auction in which states bid for a few companies that pay well. The lucky residents of those states then benefit from higher wages.

The real economy doesn’t work that way. Any company can afford to pay its employees well if they’re productive enough. But first, employees need to invest in their own education and skills, and their employers need to train them.

A tax incentive program requiring companies to pay high wages is at best a temporary fix. The jobs will probably go to the most productive Missouri residents, who already earn high wages. And most businesses that come to Missouri for a special tax break will leave as soon as some other state offers a better deal.

A better idea is a tax cut that treats all businesses equally, which would give existing companies the chance to spend more on job training or to hire new employees. It would also make life a little bit easier for imaginative entrepreneurs who are dreaming of creating some well-paying jobs from scratch.

There’s a great column in the Post-Dispatch today about the midwife legislation:

Every mother has a particular way in which they want to give birth and their reasons are motivated by their interests and those of their children. Until a week or so ago, Missouri had a knee-jerk rejection of home birthing — it is a felony to practice midwifery without a doctor’s oversight[...]

Opponents say the bill lacks penalties for bad midwives. Why have they not addressed the matter previously? It’s not like they didn’t have the opportunity. Do they think that nothing bad ever happens at a hospital and there is never any negligence, ever? Ever hear of the soaring 30% cesarean rate? Apparently, a medical mistake is only criminal if you aren’t a doctor. There are bad doctors just as there are bad midwives.

And here’s an interesting article about the legislation’s diverse supporters. It’s remarkable how people with different opinions and lifestyles can join together to lobby for more freedom in health care. This is an advantage of allowing people to make their own decisions: There’s less arguing when people are free to be different.   

An editorial in today’s Post-Dispatch says:

Almost half of the 23 school districts in St. Louis County have slammed their doors in the faces of kids who want to transfer out of the beleaguered St. Louis Public Schools after the district loses its accreditation. The rest are undecided.

Sadly, not a single district so far has agreed to take more kids from the city schools. That’s bad news for parents desperately searching for educational options, bad news for kids and bad news for the future of our work force.

We already know that Missouri parents support school choice by huge margins. The Show-Me Institute has been staying on top of this issue with recent op-eds from Steve Bernstetter and Sarah Brodsky.

Continue reading "School Choice Would Provide Incentives" »

I highly recommend Bryan Burwell’s column in today’s Post regarding the ludicrous lawsuit filed by the Hancock family over the death of their son.

The Post has a great article today in the business section on recent successes in luring businesses to locate in downtown St. Louis.  Although I type this from Clayton, I love downtown and hope it thrives.  I lived there for three years in a loft at 11th and Pine in the late ’90s. Then the whole place started to get trendy and I had to flee, ’cause that’s just how I roll. But anyway, there are two main parts to the article on why businesses are moving downtown. The first is that the convergence of highways, architecturally significant buildings, and being part of a larger business community all give downtown a lift over your suburban office-park. To this I say, hell yes! The buildings are gorgeous, it is easy to get there from anywhere, parking is affordable (except for the meter maids), and downtown is great fun — now moreso than ever (or at least the last forty years). Clayton has many of the same qualities, except the architecture, but you don’t find any of those qualities, other than parking, in your standard office park.

The second major thrust of the story states:

"However, low-interest loans, tax abatements and tax credit programs are helping owners mitigate the impact of the income tax."

I felt like Homer Simpson screaming at the TV while reading this, but instead of yelling "It means he gets results you stupid chief!" I was yelling about just getting rid of the damned earnings tax, and you don’t need all the other things to mitigate it! SMI has done a great study on a way to do just that. This is the insanity of modern government. We keep taxes high and then implement hundreds of programs, credits, deductions, earmarks, etc., to allow people and projects to get around the taxes. How can it not be economically more successful to keep tax rates broad and wide, but as low as possible for everyone?      
 

I have weighed in on my absolute hatred of red light cameras before.  Now my own hometown, University City, in which I am extremely proud to live, is considering installing them right by my house.  University City, which was the only (I think) municipality in the area to pass one of those ‘don’t-cooperate-with-the-Feds’ anti-Patriot Act ordinances, is now getting into the very same act itself, or at least considering it.  As I said previously, red-light cameras are not about safety, they are about new revenue collected under the guise of safety, and the last thing in the world that should be contracted out to private companies is law enforcement.  And I say that as someone who thinks government should contract out lots of things to private industry.

I may have to take the radical-yet-strangely-whimsical act of speaking before my city council about this at the next meeting.  By the way, the cameras at Big Bend don’t even make any sense to me as it is a T-intersection, not a 4-way, and my experience with it is that traffic goes very slowly around the intersection.  I admit there can be a problem at Hanley, but U. City should have its police enforce the intersection more closely, not hire a company to snap photos of me as I walk my dog.  I shall keep you all informed as this issue progresses…      

David Stokes has been doing a fine job covering the potential legalization of ticket scalping. There’s no question legalization is a good idea here, both for sellers and consumers. There are also some other economic points to consider.

The price of an item isn’t just what you pay for it in cash. The true price, to you, of a bag of groceries includes things like driving to the store, time spent browsing the shelves, waiting in line, effort expended pushing the cart, etc. The more difficult it is to get the thing you’re buying, the higher the real cost — regardless of what it says on the price tag.

Ticket-scalping policies are usually adopted out of a desire to keep prices down. If scalpers buy all the tickets for an event at face value, then turn around and sell them at a high markup, consumers are worse-off, right?

Not quite.

The real price of a consumer good is just a measurement — an intersection of supply and demand. If a baseball team sets the price of its tickets much lower than the real price that the market will bear, it hasn’t made the extra cost vanish. The team has simply shifted the cost in some way, perhaps by giving people an incentive to camp out all night in the rain so they can be first in line. The time and effort spent waiting in line is all part of the price of the ticket.

There was an excellent example of this sort of cost (which I linked to earlier this month) when a county in Virginia tried to sell several iBooks at $300 below market price. The result? "Mothers clutched their children for protection, people screamed as they were knocked to the ground, a stroller was demolished, cars inched through the crowd…" Economist Alex Tabarrok noted:

You can get rid of the market but you can never get rid of competition.  Goods not allocated by market prices have to be allocated somehow and so long as goods are scarce there will be competition to obtain them, if not by outbidding competing buyers with money then by outbidding them in time spent waiting in line, doing political favors or some other method.

What happened in Henrico county is the same type of thing that happens when there is a price control.

Controlled prices rise above the nominal price tag, despite all efforts to keep them low. Tabarrok goes on to point out:

It’s very important to notice that that the shop owner gets your money but does not get your time. Thus, money expenditures are a transfer but time expenditures are a waste.

The best way for our hypothetical baseball team to keep real prices low is to sell tickets for what they think the market will bear. And the best way for politicians to keep real prices low is to get out of the way — let people trade, sell, give away, or destroy the tickets they’ve legally purchased.

Continue reading "You Don’t Count the Cost" »

Today’s Post-Dispatch gives extensive coverage to various eminent domain issues in St. Charles, Jefferson and St. Louis Counties.  The St. Charles’ story is a good example of what can happen when voters take this issue to heart.  A proposed project using eminent domain has been stalled because voters voted out the city councilman who was supporting the project.  That’s called democracy.  People should trust it just a little bit more. 

The Jefferson County case is a victory for the good Doctor Tourkakis.  We have been following his case closely here at the Show-Me Institute and are delighted that his decidedly-not-blighted dental practice will still be serving the people of Arnold.  Reading this story made me wonder if the elected judges in the far-suburban and rural areas of Missouri might be just a little more sensitive to the public’s anger over eminent domain abuse than the appointed (usually for life) judges in St. Louis and Kansas City?  That is not to say that the ruling in favor of Dr. T was not entirely based on the law, but it is an interesting question.

The St. Louis County case is, of course, about the Centene Project dispute, which is being heard today by the State Supreme Court.  With my luck, the court will announce its decision exactly one second after my editor reviews and posts this – making this post irrelevent, but so it goes.  I wish I knew enough about the Supreme Court to offer a prediction, but I don’t.  I know that I want the Centene Project to move forward – but I don’t want other businesses in a wonderful area such as Clayton to be closed (or at least forcibly moved) just so another company can expand. It is too bad it had to come to this point, perhaps more negotiating and less threats of eminent domain by Centene in the early stages of the project could have prevented this.  Now it is a matter of principle for the opponents to stand and fight and all costs, which is their right.  Hopefully they will win their case, prove their point, make solid case law for the rights of property owners throughout Missouri, Centene will up its offer, the opponents will accept the new offer, the project will move forward, and everyone can declare victory and go home.       

Rep. Jo Ann Emerson says she wants her plan for government-run health care to be "driven by the private sector":

"I don’t want a government health care system. What I want is a system to insure all Americans through the private sector. People can’t afford health care today, so we’ve got to make it affordable," said Emerson, a Cape Girardeau Republican.

From this very simple premise came Emerson’s fascination with a universal health care proposal by Sen. Ron Wyden, D-Ore., an unlikely ally for the typically conservative-minded Emerson.

The article continues with the gory details of Wyden’s plan–mandatory insurance, even more extensive regulation of insurance companies, taxes to subsidize insurance for large segments of the population.

There are two main problems with this idea. First, if you overwhelm an industry with regulations and rules, the private sector might just disappear. When I started writing a blog post about Amtrak a few weeks ago, I was under the impression that private companies were not allowed to compete with Amtrak. My coworkers set me straight: private passenger trains are permitted, but there are so many requirements about where they run and how they operate that no private company would want to be in the business. Emerson says she wants to involve the private sector and competition, but her plan would probably narrow the choices down to one easily derailed AmHealth.

Second, there’s no free lunch. Some people are expensive to insure because of preexisting medical conditions. A complicated system of taxes and subsidies won’t change that. But for those people, paying for health care directly might be a better idea than going through an insurance company. The purpose of insurance is to protect your property in case of unforseen expenses–not to cover expenses you already know about.

The Southeast Missourian has an article today on broadband access in rural areas. The piece reports, "Since 2002, USDA Rural Development has administered a program that gives loans to broadband Internet service providers to install service in unserved or underserved rural areas," but that misuse of these funds in non-rural communities has led some in Congress to question the program.

Broadband Internet has become an indispensable part of life for me — essential to work, recreation, shopping, staying informed, paying bills, playing games, staying in touch with friends — so I can understand wanting to spread the technology to underserved areas. High-speed Internet access is simply useful, in a wide variety of ways. But it’s not a problem that requires a government solution.

The economist David D. Friedman briefly described the concept of "opportunity sets" in his book Price Theory: An Intermediate Text:

Your problem as a consumer is to choose among the various bundles of goods and services you could purchase or produce with your limited resources of time and money. There are two elements to the problem–your preferences and your opportunity set. Your preferences could be represented by a gigantic table showing all possible bundles–collections of goods and services that you could conceivably consume–and showing for every pair of bundles which one you prefer. We assume that your preferences are consistent; if you prefer A to B and B to C, you also prefer A to C. Your opportunity set can be thought of as a list containing every bundle that you have enough money to buy. Your problem as a consumer is to decide which of the bundles in your opportunity set you prefer.

When people decide where they’re going to live, they choose between a variety of opportunity sets, each of which contains some combination of positive and negative factors. A house’s low price may be seen as a positive factor, while its low quality of construction, or risky surrounding neighborhood, may be seen as a negative. A group of friendly neighbors may be mitigated by their unkempt yards or loud music at night. And the pastoral beauty, seclusion and relative safety of rural life might have other drawbacks — distance from the nearest hospital, perhaps, or a limited selection of stores and restaurants. It may also have fewer (or no) options for broadband Internet access.

It’s not clear that any of this is a problem for government to solve. I may have hundreds of great reasons to live in the country, but there are always going to be drawbacks. There’s no reason limited Internet access should be treated as more of a government concern than, say, the lack of good Thai food or multiplex movie theaters. Similarly, the fact that I choose to live in an urban area, with access to a wide range of things to do, doesn’t mean the government should try make my life a little better by tearing down a few buildings to install an artificial lake next to my apartment. Lack of immediate access to nature is one of the drawbacks of my otherwise favorable opportunity set, and it’s simply not government’s job to fix it.

I have a friend in rural Idaho who depends on broadband Internet access for his telecommuting job. None of his options were entirely reliable, so his solution was to pay multiple providers for different kinds of high-speed service — and he can always revert to dial-up in a pinch. It’s more expensive that way, but he’s taken responsibility for his choice of where to live, enjoying the many benefits of rural life and improving his technological opportunity set at his own expense.

Metro needs a lot of things, and one thing it is getting is a tax cut. Legislation has been sent to Governor Blunt to remove the diesal tax paid by transit agencies in Missouri, pretty much just Metro in St. Louis and ATA in Kansas City.  This is a long-overdue move.  It astounds me that Metro and ATA were ever forced to pay fuel taxes in the first place.  While the savings for Metro are small compared to what they say their overall needs are, this is a good move by the legislature. 

Now we apparently will be moving onto a debate over putting a tax increase for Metro on the ballot in St. Louis County and then passing or defeating that tax increase.  I think it should go on the ballot, where it will likely fail.  I will probably vote for it, but I live close to MetroLink and my wife and I use it with some regularity.  If I lived in an area not well served by MetroLink, which is most of the county, I don’t know how I would vote.          

It appears that the citizens of Missouri are about to recapture the right to sell their own investments for whatever price the market will bear. No matter what the monetary effects of this change will be, this is good news, as we have discussed before on this blog. Tickets are a commodity that the owner should be able to sell (or re-sell) for any price they wish to. In researching this issue, I found a great article on scalping published by the Cato Institute. The article gives a history of the issue and discusses the practical effects of the restrictions.

I promised earlier this week to give my prediction on the pricing effect of ticket scalping legalization, leaving the theory out of it, although the economic freedom theory is why I support legalization no matter what the pricing effects will be. I should warn you that I am not a trained economist, just an enthusiastic amateur who took one college course in it. So here goes…

The legalization of an illegal item will normally lead to price reductions, that is the conventional view and is backed up by economic theory. The most talked about subject in the issue is illegal drugs, though alcohol during prohibition would apply equally as well. During prohibition, demand remained more or less constant while supply decreased, or at least became harder to provide. Price increased, as any fool could have predicted. What are the differences between scalping tickets and selling illegal drugs?

First, selling tickets is not illegal every time, as selling cocaine is. (We’ll leave aside the de facto legalization of small amounts of marajuana in many large cities.) I can sell my Cardinals ticket to you for face value, or less, just not for more. Second, buying tickets for more than face value is not illegal, only selling them is. Buying illegal drugs is also illegal, though in some cases the penalties are less severe. If the market gave a going price of $26 for a $25 face-value ticket, there has to be some downward pressure to lower the price slightly in order to avoid breaking the law.

As for the law, I will reference it here repeatedly but in reality the penalties for scalping are so minor, and the social stigma for doing it so minor, that most people will not be affected by whether it is legal or not. Compare this to prostitution, which some have argued should be legalized. Even though the criminal penalties for prostitution are also minor, the social stigma, and threat of violence, are enough to keep most women out of it. Insert you own joke about your ex-wife here.

So where are we? If scalping is legalalized, more people will probably participate in it, not because they were afraid of the criminal costs but because corporations, such as the sports teams themselves, will now be able to offer quick and convenient ways in which to scalp your tickets. So the supply of scalped tickets for sale (or re-sale) will go up. This supply increase and competition will exert downward pressure on the price of scalped tickets — Economics 101. However, since the number of scalped tickets does have a ceiling (total number of tickets available) and the price for most scalpers has a floor (if many would-be scalpers can’t get above face value they will just go to the game themself), that will exert counter pressure to keep the price of scalped tickets high.

My prediction is that legalization of scalping will have no effect on prices for the vast majority of sporting events of concerts. Only the most sought-after tickets will be influenced, such as Cardinal playoff games (apparently not going to be an issue this year) or the Led Zeppelin 2008 reunion concert at the TWA Dome, or whatever the hell it is called now. For major events, I predict I slight increase in the median price for tickets, as more scalpers will sell more tickets above face value to events with tremendous demand. However, the increased supply and competition will lead to a decrease in the mean price of those same tickets. So when you go the 2009 Baseball All-Star game downtown, the average cost of scalped tickets will be lower thanks to legalization, although more people will be paying above face value for their tickets.

I like Eric Mink’s columns in the Post-Dispatch.  I have praised them in the past and I am sure I will do so again.  The Post gives him plenty of column space to flesh out his ideas and his columns are usually very well researched, which forces you to give his ideas strong consideration even if you are rarely inclined to agree with him.  Today’s column is not ones of his better ones, though.  Instead of a thoroughly researched piece we have an article full of poor logic and begged questions.  It is deserving of a Fisking, or at least a partial one, as it’s a long column.

Mink starts out by misquoting a legislator.  He takes the unnamed legislator’s quote,

"that they have no responsibility to take care of themselves or their neighbors and that it’s the government’s responsibility to care for them."

and restates it, "How much nerve does it take for an elected official to accuse his poor constituents of not caring whether they or their loved ones get sick?"  There is nothing in the one sentence Mink gives us where they legislator says what Mink says he said.  I agree that people need to take more responsibility for themselves and their families, it does not logically follow that I don’t care if people get sick.  I’ll move on, and skip over the part where Mink complains about the State now acting as a bill collector for hospitals, which serves as the MacGuffin of his article and on which I share his concerns.

I will further skip over his comments on education, which I again agree with him on.  See, I told you I liked his columns!  Education is indeed its own reward and every child deserves an opportunity to receive the best education possible.  It is at this point that the heart of the article kicks in, and really gets bad at the same time.  Mink writes:

Government obligation? That seems to be a foreign concept in an age that regards government either as a treasury to be plundered for the benefit of special interests or as an inherent evil to be undermined, dismantled and laid to rest. Yet the obligation of government to serve its people is the most American of values, a concept embedded in the founding documents of the nation.

Aside from being a little hackneyed in its phrasing, nothing too bad there.  He follows with some quotes from the Constitution and then opines:

But no reasonable person could contend that we promote "the general Welfare" of American society by allowing working families to be crushed by global economic shifts well beyond their control. The pursuit of Happiness is a cruel joke to a child living in poverty who has no opportunity to learn about the forces that shape her society and the creative impulses that elevate human experience.

We can trumpet Life and Liberty as unalienable Rights, but there is no meaningful freedom and no quality of life for people suffering from physical and mental illnesses who lack access to care that can restore their health, whose families founder in the absence of income and whose inflated medical bills become oppressive debts subject to preemptive collection by the state.

Where should I begin?  "No reasonable person could contend" is a very weak form of argument.  It assumes everyone agrees with you (the writer) except for extremists, and he follows up that logical error / lazy writing with a very general line about global economic shifts and the government ‘allowing’ people to be hurt.  There are many good arguments about how globalization is good for economies and, more importantly, the people who make up economies – Mink needs to address those arguments and not assume he is on the side of everything good and nice.

Mink continues with a litany of social welfare requests stated as self-evident:

Continue reading "Eric Mink" »

Legislation allowing midwives to practice might become law after all:

Just one day after being chastised for sneaking a midwife measure through the Legislature, Sen. John Loudon secured a peculiar victory in the Senate on Tuesday, winning Senate support for yet another midwife provision.

Through an odd turn of events, the Senate voted 23-13 to adopt a measure that would give midwives with no formal medical training the right to practice if they met certain standards.

Regulations of midwives aren’t the only licensing requirements that are too restrictive:

The latest midwife measure is now contained in a massive 214-page bill dealing with the licensing standards for a host of professions.

I hope licensed geologists and interior decorators will have their onerous licensing requirements reformed next.

Sen. Tim Green has passed, apparently, legislation to change the ways Tax Increment Financing is managed in the St. Louis area.  In short, this change would give more power to county TIF commissions and less to individual municipalities within St. Louis, St. Charles and Jefferson Counties. 

This is a much-needed improvement and I commend Sen. Green for his efforts to make this change.  In St. Charles, former county executive Joe Ortwerth did truly amazing work in his long-term fight to prevent cities, particularly St. Peter’s, from giving away the entire tax base just so they could get another Applebee’s.  In St. Louis, county officials have done a good job in limiting TIF use and making sure it is used in truly needy areas, but municipal officials have long had the decision-making power within their cities and they have not always used that power wisely, to say the least.

I have one concern about the amendment.  I believe it does not go far enough.  I don’t blame Sen. Green for this – it may not have been able to pass if it were more strict.  But the law in essence says local municipalities can still override the county TIF commission, and all they have to do is get a 2/3 majority vote of the local governing body for the TIF.  I say all the power should rest with the county commission and local muni’s have no say whatsoever.  Then we would see decisions truly made in the best interest of the entire area.  Some cities have people like Laura Bryant serving them who really know this issue and fight against the abuses, but many I fear will just go along with the city manager or mayor in the constant effort to bring more crappy restaurants and stupid retail stores selling various types of storage to every inch of every block in America.          

This story shows why we don’t need to legislate that government affairs be conducted in English:

Senator Kevin Engler of Farmington used German to ask the senate to adopt a constitutional amendment requiring all official government actions to be done in English….

But senators Jolie Justus of Kansas City and John Smith of St. Louis have run out the clock on Engler’s bill.  They say they wonder why the legislature has to deal with what they think is a trivial issue while important legislation has gotten lost.

Speaking to the senate in German was a cute way to make a point, but it just proved why we don’t need this amendment. That must have been the first time anyone spoke to the senate in German for quite a while. It’s not a problem we encounter on a regular basis.

People usually don’t conduct legislative debates in German for the same reason I don’t write blog posts in Aramaic: they want to be understood by and convincing to English-speakers. I’m guessing Sen. Engler will use English the next time he brings a bill to the floor.

Concerned citizens of Clayton are calling for the privatization of the U.S. postal service. As I stood in line for passport pictures, I overheard people in the line for stamps complaining about the long wait. Some of them pointed out that service is better in the private sector, where companies have to satisfy their customers or risk losing business. The post office has no such incentive to please anyone but Congress.

As a matter of fact, the post office employee processing my passport request informed me that I’ll have to send in my paperwork with a private shipping company if I want it to arrive on time.

The FTC has just released a report that discusses how realtors’ associations have lobbied for regulations to keep out competition. As I wrote in an op-ed in November, Missouri’s law requires homeowners to purchase real estate services in expensive bundles. Realtors can’t offer individual services, such as listing a house or helping to negotiate the price. If the law allowed realtors to compete and provide whatever combination of services their customers wanted, consumers would enjoy lower prices.

The Missouri Association of Realtors calls the law a "Homeowner’s Bill of Rights." But as the FTC report points out, consumers would be better protected if the law simply required realtors to disclose which services they’ll provide. Consumers could then make an informed choice without being forced to buy everything a realtor sells.

One giant step for outrageous prices for sporting events.  This excellent development may lead to increased prices for tickets to major sporting events, like playoff games or Cubs-Cardinals games, but there is nothing wrong with that.  As previously discussed on this blog, tickets are a commodity and people should have a right to resell a commodity they have invested in.  I commend the state legislature for moving to eliminate this silly law.  I don’t like the prohibition against buying more than 20 tickets to an event, though.  Teams, or artists or stadiums, should choose, and many do, to implement rules like this on their own to fight scalping or ticket hording.  We don’t need another law dictating it, especially on a bill where we are getting rid of a worse law.

My predictions on the pricing effect of legalizing scalping will be discussed in a future post. Undoubtably, the standard liberal economic view that legalization would lead to lower prices largely applies, but there are small differences I will discuss further.

The Saint Louis Board of Education is fighting the state takeover tooth and nail:

The St. Louis Board of Education will consider a resolution today urging surrounding school districts not to accept city students seeking to transfer as a result of the state takeover of the troubled district.

Meanwhile, at a special meeting, the board also may ask every school board in Missouri to adopt resolutions opposing the state takeover scheduled to begin June 15.

SLPS failed the students of Saint Louis, so now it doesn’t want any other district to help them. These resolutions suggest that SLPS doesn’t have the welfare of students at heart.

On Wednesday, the St. Louis Post-Dispatch published an article that called into question the methodology of the poll we commissioned for our recent study about school choice opinions among the Missouri population. From the article:

The critics say the Show-Me Institute’s poll by a research firm, Market Research Insight of Gulf Breeze, Fla., was a "push poll." Push polls phrase questions that steer a survey toward a predetermined, desired outcome.

Jung and others point to the phrasing mixed in to the survey’s 50 questions. They say terms such as "crisis" when discussing public schools have negative connotations.

"You have to wonder about the credibility of a poll like that, in our view," said Brent Ghan of the Missouri School Boards Association.

This first objection is odd. The pollsters didn’t assert that the public schools are in a crisis, or even suggest it. Early in the poll, they asked this question:

Which of the following statements comes closer to representing your personal opinion about public schools in Missouri?

This was followed by a few options: "A Crisis"; "Not a Crisis"; "Critics Exaggerating"; "Doing Very Well"; and "Uncertain". These options were presented in rotating order, a measure intended to help prevent predetermined responses. A poll measuring opinions about school choice policies would be incomplete without gauging respondents’ views on the current state of available schools. In any case, respondents were able to choose any of these options, and the fact that only 26 percent statewide chose "A Crisis" as their response demonstrates that, if this question were somehow a "push" ploy, the people of Missouri weren’t falling for it.

Later in the article someone presents another criticism:

Kenneth Warren, a political science professor at St. Louis University, concluded that the order in which the questions were asked — as they are presented in the "poll details" posted on the Show-Me Institute website — constituted "placement bias."

For example, he said, the survey prefaced one question with a wide range of statistics purporting to demonstrate the economic benefit of school choice. Warren noted that the next question — "Do you think Missouri should or should not have some form of school choice … ?" — was key to supporting the Show-Me Institute’s position on the issue.

"When school choice is presented the way it is in this survey, it becomes a push poll," said Warren.

This seems more plausible — until you realize that these particular questions place at #33 and #34 in a 50-question poll. Almost all of the respondents’ demonstrated support for school choice came much earlier in the poll, beginning with question #4, where 57 percent statewide say they think school choice would work better than a single public school system. This rises into the 60s for parents and minorities. At question #10, 85 percent of respondents statewide indicated they think parents should make the basic decision of which school — or kind of school — that children should attend. This rose to 88 percent for African-American and Hispanic respondents. This is a huge margin of support, early in the poll, without any sort of preparation that could be seen as a  "push."

Not only that, but 11 of the 16 questions that follow the ostensibly objectionable questions, #33 and #34, are entirely demographic in nature. If the poll was meant to "push" people toward desired responses, why would it follow the single question someone hopes to identify as a "push" question with a string of queries entirely unrelated to school choice — questions about age, occupation, income, education level, gender, etc.?

This really seems to be a case of naysayers grasping at straws. They don’t like school choice policies, so they hope to discredit a poll that reveals a strong level of support for school choice. The Post-Dispatch may have fallen for these critics enough to take their tenuous claims seriously in their article, but anybody who takes a substantive look at the actual poll can tell the methodology was sound.

The article also quotes Verne Kennedy, president of Market Research, the firm that conducted the poll, with an astute observation:

"The basic response anyone gives today when they disagree with survey results is to label it a push poll," he said. "That’s the classic response."

After years of status quo, "throw money at it" solutions to difficulties in public education, Missouri is finally moving forward with some more constructive politicies. The Saint Louis Post-Dispatch has an article discussing the changes, as well as some proposed ideas that were ultimately left out of the final legislation. We have already written pretty extensively about methods for improving the schools, so I won’t rehash old arguments too much. However, I would like to suggest a few more systematic changes that might help as well.

First, open enrollment within and between the city and county districts could increase competition for students between schools and districts. The prospect of losing students, and the funding that comes with them, should spur schools to rethink failed programs and develop new ones to better meet student demand. This does not mean dismantling public schooling as we know it, only dismantling some of the artificial boundaries we’ve created between schools and districts. Our loyalty should be with the students, not the institutions.

To further encourage innovation and creativity amongst teachers and administrators we might consider "Chartering" all public schools. "chartering" does not mean removing public oversight of schools, only giving more power to individual schools to set their own direction. Eliminating some of the bureaucratic red tape inherent in public institutions will make it easier for schools to specialize to meet particular student needs. At this point, all options with any potential for success should be on the table. The steps taken by MO legislators in HB265 are a good start. Hopefully they are but the tip of a very large education reform iceberg.

There’s good news and bad news in a bill that just passed the Legislature:

A key change is notifying physicians sooner of newborn screening results. In the past, parents had to sign a form before physicians could learn if babies had tested positive for metabolic disorders. Many of the disorders keep the children’s bodies from breaking down proteins and require strict, meatless diets.

"It created a delay that meant the child might be exposed to (regular baby) formula or breast milk," Dr. Schaaf said.

The law requiring signatures resulted in a delay of one or two days, which for children with this rare condition could mean irreversible brain damage. Getting rid of that requirement is a positive step.

Unfortunately, the bill also expands the number of children with this disorder whose special diet is paid for by the state. It would be better if assistance to poor people with health problems went through Medicaid or a general health care voucher program. There are tens of thousands of human genes, and we don’t want a unique law for each harmful mutation. Besides, disorder-specific legislation is unfair to people with other orphan conditions who are less effective at lobbying.

Missouri’s non-partisan court plan, which may not be as non-partisan as we would all like, is under attack.  In the KC Star today, one lawyer does a so-so job of defending the plan.  I am oppposed to the dramatic changes propsed by the legislature and discussed in the op-ed, but I agree there are problems with the system.  I have two (maybe three), simple suggestions for keeping the non-partisan court plan that will, in my opinion, address the legitimate concerns of the legislators seeking to change it. 

For one, make the terms of the governor’s appointments to all the judicial commissions run concurrent with the governor’s term of office.  Staggerd, six-year terms make no sense, and just serve to allow defeated parties to keep putting their supporters up for judgeships.  Second, add one more gubanatorial appointment to each commission so that the number of lawyers either serving automatically or elected by the bar association is equal to the number of governor’s appointees.  Finally, allow one of the governor’s appointees to be an attorney themself.  At present, they cannot be attorneys and it is easy for them, as non-lawyers, to be intimidated or dominated by the majority lawyers on the commission.  For the record, that last line is a supposition – I have no evidence that the non-lawyers have been intimidated by not being as knowledgable about the issues or applicatns as the lawyers, but I don’t see it as far-fetched for it to happen. 

There it is.  Basic changes to improve an already good plan.  Now let’s go get some ice cream frozen custard.

Although Claire McCaskill has been a stellar example of fiscal responsibility so far in her battle against the congressional earmark process, a recent statement from the freshman senator about gas prices is worrying:

Missouri Sen. Claire McCaskill has joined with 12 other senators to propose bipartisan legislation to ban price gouging at the gas pump.” Gas prices in Missouri are nearly $3.00 a gallon, so people are already feeling the pinch on the pocketbook,” McCaskill, a Democrat, said in a statement. “Without strong laws banning price gouging, we will remain vulnerable to market manipulation and consumer exploitation in times of national emergencies, as we learned in the cases of 9-11 and Hurricane Katrina.”

Every time gas prices rise, we hear the same litany of cries for protection from high prices — presumably stemming from the notion that a price is just an arbitrary number, set by whim, or the greed of the seller. Sure, it’s possible that any one seller can set prices higher than found on the general market, but these sellers don’t move much of their product. Patrons notice lower prices elsewhere, and take their business with them. When a commodity is as widely provided as gasoline, by many, many competing sellers, the prices we see at the pump are simply measurements of intersecting supply and demand. It’s a measurement in the same sense that inches can measure height, or pounds can measure weight. In a competitive market, prices are not arbitrary — and the word "gouging" is misleading jargon.

There are plenty of people in Missouri who were driving during the 1970s, in the days of gasoline price controls — which led to corresponding shortages, sales caps, and interminably long lines at the pump (and those lines are a form of price increase in themselves). There’s no economic mystery here; if gasoline prices are set below market level by legislative fiat, people who value the gas less buy more of it, so the people who value it highly — who would be willing to pay a higher price — end up less likely to get what they need.

More importantly, prices act as a signal to producers as well as consumers. When prices rise, entrepreneurs rush to produce more, so they can sell more and make more money. This is exactly what’s needed in times of emergency or crisis, as columnist Jeff Jacoby pointed out:

Imagine a system that could instantly respond to a calamity like Hurricane Charley by mobilizing suppliers to speed urgently needed resources to the victims. Imagine that such a system could quickly attract the out-of-town manpower needed for cleanup and repairs, while seeing to it that existing supplies were neither recklessly squandered nor hoarded. Imagine that it could prompt thousands of men and women to act in the public interest, yet not force anyone to do anything against his will.

Actually, there’s no need to imagine. The system already exists. Economists refer to it as the law of supply and demand. Unfortunately, too many journalists and politicians call it by a more pejorative and destructive name: "price-gouging."

A steep rise in the price of gasoline doesn’t reach the level of crisis that’s caused by a particularly destructive hurricane, earthquake, or wildfire, but it’s important all the same to recognize that setting legislative caps on prices leads to shortages in almost any situation — and shortages are bad for people of every social class. Economist Don Boudreaux pointed out that the alternatives to market prices can be just as much a problem for the poor and desperately needy as for the rich:

One alternative method of rationing is queuing.  But surely first-come, first-served is quite arbitrary.  Perhaps the father with starving children will get to the front of the line, but who’s to say that the drug dealer won’t beat him to the front of the queue? Indeed, the father with starving children likely has lots of important tasks to carry out at home in the immediate aftermath of a natural disaster. These tasks might well keep him at home too long to get a favorable spot in the queue, or, if he does get a favorable spot, he’ll waste lots of time queuing rather than being at home with his family during an especially dire time of need.

An even more likely alternative to rationing by price is rationing by personal connections – family ties or political ties. The poor family with starving children is unlikely to have as many personal and political connections as are wealthier people in town. The outcome of rationing by connections will almost certainly be biased in favor of wealthier, more-prominent citizens.

One great advantage of rationing by market prices is that they reduce to a minimum the role of arbitrariness. Price are, in other words, a great equalizer. Anyone who is willing to pay the market price for a good or service is just as likely to get that good or service as is the seller’s mother, neighbor, or bowling buddy.

Ultimately, market prices allow people to plan and prioritize their needs in a rational way. If the price of gas is too high, it may mean you decide to carpool more or ride a bike for short trips — and, when you really need to, you can fill up and drive to important destinations or appointments. But if the gas is simply unavailable because "gouging" legislation has spurred shortages, everybody’s needs and priorities are undermined. Except for the politicians — the real gougers — who can pretend they’re helping you.