Sunday, February 26, 2006

More Efficient Corporate Welfare

According to John Brummett, Democratic gubernatorial candidate Mike Beebe, like a good corporate liberal, will take corporate welfare out of the hands of good ol' boys and put it in the hands of competent professionals. Under the present system, the General Improvement Fund (the state revenue surplus) is divvied up among legislators for pet local pork-barrel projects:

One old boy will use his cut for street lights back home. Another legislator will give hers to the local rodeo. There's no accountability or pre-audit, much less any requirement for local matching money.

Beebe, in contrast, proposes this "reform":

Off the very top, meaning before money gets either to the governor's or the Legislature's half, he would set aside $40 to $50 million in a governor's largely discretionary economic development superfund. From this fund, the state could act more quickly to match other states in providing specific training programs or infrastructure projects either to keep an existing employer or lure a new one.

In other words, the state of Arkansas competes with other states to see who can pay the biggest bribes to private business concerns, offering to make those businesses more profitable at taxpayer expense, by underwriting operating expenses that those businesses should be shouldering themselves as a normal part of doing business. Please explain to me: why is it more reprehensible for a single mom to complain she can't make ends meet and support her kids without food stamps or welfare, than for a corporation to whine that it can't make a profit without sucking on the taxpayer tit?

Besides the inequity of giving a particular company a competitive advantage, special subsidies to transportation and technical training also skew the market as a whole in unnatural directions. It's a basic law of economics that when you subsidize something, more of it is consumed; and subsidies to a particular factor of production subsidizes those firms that rely most intensively on it at the expense of those who do not. Transportation subsidies promote the concentration of capital by subsidizing the companies most dependent on long-distance shipping, making them artificially competitive at the expense of small companies producing for local markets. Subsidies to technical education subsidize the cost of reproducing scientific-technical labor power, and thus skew the market toward more capital- and skill-intensive forms of production.

So for decades, we've had massive government intervention in the market, promoting economic centralization and corporate size far beyond the largest conceivable economy of scale. We've had similarly massive intervention promoting capital-intensive production, deskilling of labor, steep internal job hierarchies, and the shifting of control of production from the shop floor to white collar engineers. In short, the government has intervened in the market on a huge scale to reduce the bargaining power of labor and to promote downsizing of well-paid blue collar workers. The two-tier labor force is a creation of state capitalism.

Friday, February 24, 2006

Art Hobson, Sprawl, and the Free Market

One of my favorite local columnists is Art Hobson, whose think pieces appear regularly in the Northwest Arkansas Times. Like me, Hobson is a strident critic of suburban sprawl.

But he reminds me a little of George Monbiot: while he hates the right things, his understanding of the causes behind them is ass-backward. Like Monbiot, he fails to discern the role of existing government intervention in the market in creating these problems; like Monbiot, he instead proposes further government intervention in the economy to solve the problems created by existing government intervention, rather than first hacking at the root of the problem.

As a solution, he writes favorably of the approach of cities like Portland and Boulder, which

have established growth boundaries, limitations on the subdivision of property, and other anti-growth policies.

Locally, he's a great proponent of land-use planning.

The problem, though, is that America's cities have had land-use planning for the past fifty years--it's main effect has been to promote suburban sprawl and the car culture. For example, in the early post-WWII period, America's urban planners decreed that the old mixed-use neighborhoods--with shopping and work easily accessible from homes, by foot, bicycle, and public transportation--were an unsightly atavism. The result was zoning laws that outlawed neighborhood grocers, druggists, and other small businesses, and likewise outlawed walkup apartments over stores and other forms of affordable housing downtown.

Another way government promotes sprawl is through the practice of extending subsidized infrastructure to new outlying subdivisions and big box stores, at the expense of taxpayers and utility ratepayers in the older parts of town. Hobson himself touched on an especially vicious example of such subsidies in a couple of recent columns: the closing of old, inlying neighborhood schools in order to build new ones near Jim Lindsey's new housing developments. In November, for example, he wrote:

First Fayetteville closed Bates school, then Jefferson, and now we’re talking about Leverett. Washington school could be next. We’d best proceed cautiously. One of America’s most significant trends since 1950 has been the decay of our cities, due largely to the flight from central cities to the suburbs. A prime cause and symptom of suburban flight is the replacement of small inner city schools with mall-sized schools in the suburbs, exactly what is happening in Fayetteville. Central Fayetteville remains vibrant today, but fragile. Fayetteville’s heart will not survive without a strong base of middle- and working-class families living in the center, and they require schools in the center. I can think of no faster way to doom midtown Fayetteville than moving its schools to the suburbs.

Some of the problems are structural. One is our subsidization of suburban sprawl. This happens at the national, state, and local levels, most notoriously in the enormous national and state subsidization of the automobile. At the local level, every city resident picks up the tab for suburban sprawl while the benefits go only to suburbanites. Those costs include tax burdens for sprawling infrastructure, traffic congestion, air pollution that causes illness, and watershed damage.

Each subsequent school closing resulted in louder expressions of public outrage than the one before. The Fayetteville school board, in the face of the growing uproar, first announced a delay of its decision on Leverett Elementary until January. Since then, faced with a likely taxpayer rebellion (i.e., the widely rumored public sentiment against any proposed millage increases in the future if Leverett were closed), the school board took Leverett off the chopping block.

Yet another form of government subsidy for sprawl is unequal lending practices by the FHA, which gives preference to loans for buying new homes in the suburbs over buying existing homes in old middle and working-class neighborhoods.

Still another: the subsidized urban freeway systems, built with federal highway pork. Of course, this is now brought home by Congressman Boozman, heir apparent to John Paul Hammershit (of the infamous Hammershit Expressway) as Grand Porkmeister of the Third District.

The cumulative effect of all these policies, as somebody (Kirk Sale?) said, is to create two separate cities for each of us: one city where we work and shop, and one city where we store our stuff and sleep at night--each with its own separate utilities, and requiring expensive transportation to shuttle us back and forth between them.

The central rule for government planning should be "Primum, non nocere." If we eliminate the government policies that are causing the problem, we may find that no further government action is needed.

If new housing additions were assessed the full cost of extending utilities and other infrastructure, urban freeway systems were funded with toll booths instead of general revenues, and mixed use development were legalized, things would look a lot different.

By the way, the single best form of "land-use planning" would be to shift taxes from human labor and its products to the site value of land. More land cannot be produced by human labor, in response to demand. So unlike labor and capital, for which higher short-term price results in higher long-term output, land is more like a "collectibles" market in antiques or rare works of art. Anything that makes society more productive and prosperous, like increased efficiency of labor, just increases the demand for the limited quantity of land; so the more productive society is, the larger share of the production disappears down the rathole of rent to absentee landlords. In fact, increases in site value result from the contributions of society at large: taxpayer-funded roads, schools, etc. Real estate value is determined by "location, location, location," and the advantages of a location are created mainly by local taxpayers. As somebody commented on a Georgist yahoogroup, we should go around putting stickers on realty signs saying "Your taxes make my property more valuable--thanks!" And we all know who owns most of those realty signs around here, don't we?

Even when buildings and improvements are taxed at a lower property tax rate than land, as is the case in several mid-sized cities in Pennsylvania where Georgist ideas were once influential, the effects on land use are dramatic. Even a differential property tax rate on buildings vs. land, not to mention removing the tax on buildings altogether, increases the cost of holding land idle for speculative purposes. The result is a strong market incentive for "infill" development of vacant lots in already developed areas, rather than leapfrogging into the suburbs. Land that is held idle, under the present system, is quickly sold when taxes to site value alone. As a result, land becomes more abundant compared to human labor, and the marginal price of labor rises in relation to land. Construction booms, and jobs are competing for workers instead of the other way around. In a nutshell, everybody is more prosperous except the real estate developers and the big land barons. As for them: TS.

More generally, the most beneficial measure local government can take is what geolibertarians and greens call "green tax shift": or "tax bads, not goods." Roy Morrison, in his Eco Civilization 2140, imagines a future utopia where all taxes on income have been replaced with an ecological tax on resource consumption and pollution. The tax is a way of internalizing externalities--that is, making sure that all the social costs of a product are included in its price.

The overall approach, then, should be to tax unearned wealth (i.e., land value created by the labor of others), resource consumption, and pollution, and to take taxes off of human labor and industry.

Thursday, February 23, 2006

Community Garden Project

It's about that time again. I've been spading up my raised beds, and forking in the compost, rock dust, and so forth. I've got some onion sets, English and snap peas, turnip and spinach seed, and other cold weather crops, ready to go into the ground as soon as it's dry enough to work.

And some other local people are getting the same idea. Arkansas Indymedia reports on a community garden project on Hill Street in Fayetteville:

The Hill Street Community Garden is a project by several Fayettevillains to create a space to produce their own food, free from chemicals, environmental destruction, and exploitation of farm workers. The site is located in Hill Street resident Larry Berry's back yard in Fayetteville. The first meeting was on Sunday, January 14th, and an inspired (and inspiring) group of people came togther to start figuring out what could be done now to get started.

They discussed researching various sustainable argiculture practices such as permaculture and each one sharing what they have learned at later meetings. Also, they decided to start making lists of what to plant, and to get a cold frame together and start some cold-hearty produce.

They've also built an ingenious little greenhouse from a dismantled trampoline frame and some sheet plastic, that ought to be featured in Mother Earth News or Backwoods Home or something.

Wednesday, February 22, 2006

John Brummett: Pro-Business vs. Pro-Market

In an earlier column, John Brummett quotes Rep. Marion Berry on the Medicare prescription drug plan:

He said the Bush administration program is not based on private sector market competition. It's based instead, he said, on the very antithesis of that - on protecting the existing pharmaceutical and insurance industries from real market pressures brought about by changes in demand....

It's not unlike the way electric utilities wanted to write deregulation laws to perpetuate themselves....

Brummett sums it up well:

What voters need to begin to ponder is whether there is a difference between pro-business and pro-market, and whether modern Republicans have become so much the former that they don't qualify as the latter.

Joe Alexander: Short Take on MLK Day

I just happened on this. Since I moved out of Fayetteville, I don't get the local cable access channel, so I miss a lot of good stuff like Joe Alexander's commentary on Short Takes. Anyway, I thought this was pretty good:

Today is Tuesday, January 17th and yesterday was Dr. Martin Luther King Jr.'s birthday, and so everyone who works for the government and lives from the armed robbery and extortion euphemistically called taxation, got a holiday, and those of us who make a living in the free enterprise system and get our money from making voluntary free-will deals with other people, went to work as usual.

Tuesday, February 21, 2006

NWA Times: Publik Skools are Big Business

The Northwest Arkansas Times ran an editorial a few weeks ago on the salaries of school superintendents.

In the 2004-05 Annual Report as published by the Fayetteville School District, Superintendent Bobby C. New headed a district that educated 8,329 students and employed roughly 1,300, with a district with a total budget of $76,805,372. Make no mistake about it — this is big business. The public education system is among the most important industries in Arkansas. By comparison, Fayetteville city government’s budget in 2006 totals roughly $120 million. The labored point we’re trying to make is that businesses with operating budgets into the millions (or billions, for that matter) demand the best CEOs available to help make sure every single i is dotted and every last t gets crossed. And, in the case of the Fayetteville School District, considering the education of thousands of young people depends directly on day-to-day decision-making, it matters a great deal who runs the show.... But, the question always arises when superintendents’ salaries become the focus: Why not cut their pay and put that money toward funding better schools? Suspicions of this sort received backup on Jan. 13, when a report by the Legislative Audit Division calculating the value of superintendents’ salaries and benefits was released. All told, $24.2 million was paid to the state’s superintendents over the course of the 2004-05 school year. Average superintendent pay in the Natural State was $96,050, while the average district size was 1,786 students. Regarding specifics, Little Rock’s Roy Brooks was the highest-paid superintendent in Arkansas during the 2004-05 school year, when he received salary and benefits totaling $232,555. Springdale’s Jim Rollins was close behind, receiving a financial package totaling $215,854. In Fayetteville, the district chose to compensate New at $198,235 for his distinguished service.... Are high salaries for superintendents inherently bad? One could always argue that smalltown superintendents deserve much less pay than their peers in bigger communities — but that doesn’t change the fact that every school board wants the best and brightest leading the educational effort for their community’s children.... The demands placed on superintendents and the performance expectations demand high salaries.... Grousing about or reducing pay for superintendents would satisfy some folks who would feel good about "sticking it to the man," so to speak. But suggesting that cuts in their pay will have any benefit for Arkansas’ education system is simply laughable, while maintaining good salaries promises to attract quality candidates when openings occur and will keep skilled administrators in place.

The Times editorial makes a lot of implicit assumptions that don't bear much looking into. Is there any reason that local education has to be "big business," organized like an "industry"? Is any inherent efficiency achieved by present degrees of centralism and hierarchy? Perhaps the problem is that education is so bureaucratic and centralized, in the first place, as to require the services of such professional administrators. Maybe it should be decentralized to the point where their services are no longer required. Maybe, as Peter Drucker put it, they're doing efficiently what shouldn't be done at all.

As I've written elsewhere, I often do a mental exercise of trying to imagine how much a frugal, small-scale schooling cooperative would cost if a group of twenty or thirty parents got together to set up a venture.

Taking into account things like renting a house for class space, and hiring teacher(s), the annual expense wouldn't be over $1500 per pupil. Existing "public" schools, on the other hand, spend upwards of $6000. Most of the difference lies in the proliferation of parasitic bureaucrats with prestige salaries, and the fact that the state's aura of majesty requires specially designed Stalinist architecture on the most expensive real estate in town.

This is a common pattern. When you try to figure out how much it would cost to organize a service for yourself, from the bottom up, and compare it to what you're paying now, it's stunning. Where does all the money go? It goes to support parasitic centralized bureaucracies with no incentive to economize. It's amazing how creative and thrifty ordinary people can be when they're spending their own money, instead of stolen loot.

Of course, the figure I came up with is only for bare bones service--extra-curricular activities and electives would be extra. But it seems to me that the cost of things like music lessons and amateur sports, in themselves, would be relatively modest. The main cost of extra-curricular activities today is the prestige aspects of organized competition with other schools. But believe it or not, there was a time when kids organized sports for themselves, and the main expense was a ball.

And considering that information is the cheapest thing in the world to move, and the proliferation of things like open-source textbooks and course notes, it's amazing that we've still got an educational model geared toward transporting people to a central "brain factory" for processing into "human resources." On second thought, it's not that amazing, considering that the original purpose of the government school system was to manufacture obedient drones for the corporate state.

As Paul Goodman described it in People or Personnel, even non-profits and cooperatives are infected with the pathologies of corporate-bureaucratic organizational culture: multiple layers of status-salared management, the "professionalization of job functions, high overhead, and corporate gobbledygook like mission statements. This hegemonic form of organization preempts alternative models of bottom-up organization:

[The] genius of our centralized bureaucracies has been..., as they interlock, to form a mutually accrediting establishment of decision-makers, with common interests and a common style....

In brief, ...the inevitability of centralism will be self-proving. A system destroys its competitors by pre-empting the means and channels, and then proves that it is the only conceivable mode of operating.

In "public" education, the roots of the problem lie in the so-called "progressive" era. The Progressive movement in this country, like Fabianism in the UK, reflected the will to power of the managerial New Class. City-wide school boards were of a piece with at-large representation, city manager governments, and other "good government" reforms at the local level.

The replacement of ward representation with at-large election resulted (in Pittsburg's 1911 "reform," for example) in transformation of a council made up of two-thirds common workmen, tradesmen, clerks and shop-keepers, into one composed entirely of "professionals" and "prominent businessmen" [Joel Spring, Education and the Rise of the Corporate State (Boston: Beacon Press, 1972) p. 86]. The replacement of neighborhood control with city-wide school boards and superintendents was similarly designed to remove education from parental influence and give it over to the care of properly trained "professionals." The intergovernmental "authority," pioneered in America by the New York Port Authority and Robert Moses' Long Island highway system, like many methods of authoritarian government, was resurrected from British law and adopted near-universally as a form of "professional" government beyond the control of the electorate.
The central theme of New Class "good government" reforms was the superiority of disinterested expertise, and the need to take politics out of policy. The only way to do this was to protect professional managers from interference.

Our task today is to undo the "achievements" of the Progressive Era. The new paradigm for schools and other social services should be what Larry Gambone calls "mutualization." That is, they should be decentralized to the smallest possible unit of control, and then made directly responsible to their clientele. In the case of government schools, that means city-wide school boards should be abolished. The principal and the top management of each school should be the equivalent of a board of selectmen, directly responsible to the parents of the kids attending there. The neighborhood school, in effect, should be transformed into a consumers' co-op.

Monday, February 20, 2006

With Enemies like Boozman, Who Needs Friends?

Don Elkins takes Congressman John Boozman to task for voting in favor of a budget that, among other things,

...would cut just about all federal funding for fighting the meth problem in the Natural State....

Please don't fling me in that briar patch, Br'er Fox! I'm trying to figure out exactly how that's a bad thing. The war on drugs has probably been the single greatest pressure toward police statism over the past thirty years--turning our constitutional guarantees of civil liberty into toilet paper, militarizing local police forces, and utterly corrupting both police and society at large. Drug prohibition is not only the most powerful contributing factor to organized crime, it turns the police themselves into organized crime gangs, looking for ways to profit from lawless behavior like planting evidence, obtaining false accusations from jailhouse snitches, and looting property through civil forfeiture.

There's a reason that vice laws promote the surveillance state. In the case of a traditional crime (as Joe Alexander said, anything really criminal was already illegal a hundred years ago), there's an injured party to report it to the authorities. A drug sale, on the other hand, is a free market transaction between two willing parties. The only way for the government to find out about it is to keep the general population under surveillance through wiretaps, random searches, "know your customer" laws, and the like.

And the drug war would be a moot issue if the government were restrained by the traditional understanding of due process. We could have the substantive drug laws of Singapore or Turkey, and without civil forfeiture and egregious violations of search and seizure restrictions, they would be unenforceable. Without a police state, the drug war would be lost. In fact, I don't think it's going too far to say that creating a police state is the real objective of the drug war.

As Noam Chomsky wrote somewhere (in Manufacturing Consent, I think, but I'm too damn lazy to look it up), in the late '80s opinion polls found that the public put the drug "epidemic" way down on the list of concerns, far below economic issues that genuinely affected them. But after a prolonged softening-up campaign by the first Bush administration's drug war agitprop, the issue moved to the top of the list. In other words, it's a manufactured issue. In the words of H. L. Mencken,

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

And I say that, by the way, as somebody who's worked on a VA psych ward and seen some of the worst tweaker dregs of humanity you can imagine. Don't cut them any slack, don't enable their habits, and prosecute them mercilessly for any genuine acts of aggression or negligence that result from being crankheads. Just don't create a Gestapo to go after people for private, consensual behavior.

Better to Die on Your Knees Than, Uh... Live on Your Belly?

From a recent John Brummett column:

For the record: The New York Times stood up for America at its best, a country that mandates freedom of the press and freedom from illegal search and seizure.

Uh, not exactly; the NYT was crawling for America at its best--and it took it a year to even get to its knees.

In fairness, though, Brummett is sometimes (perhaps inadvertently) a bit tougher on the spineless "opposition." For example, Alan Colmes got his knickers in a twist last month over Brummett's "offhand reference" to him as "pitiable." In fact, the poodle got so mad he stood up on his hind legs for once, and sent an angry email about Brummett's "cheap shot":

He said he neither wanted nor deserved my pity, that he had a good life, that he served a noble purpose providing an attempt at balance on Fox and that liberals' main problem with him seemed to be that he was entirely too civil, unwilling to engage in a "Crossfire" kind of shoutfest.

I backtracked, saying that if he didn't want my pity, there was no need in my extending it. He certainly was not pitiable in his behavior toward me.

Indeed. If he was capable of that kind of backbone in dealing with (say) Sean Hannity, he wouldn't have earned that "pitiable" epithet in the first place.

Personally, I like Al Franken's habit of writing his name in extra-small characters--like this: Hannity and Colmes.

Sunday, February 19, 2006


I decided to start a second blog for local, Northwest Arkansas issues. I don't know how frequently I'll post, or how much relevant material I'll come across. But I'll manage to come up with something, I hope.