Government – Page 88 – artdiamondblog.com

Property Rights Would Allow American Indians to Prosper

(p. A19) President Barack Obama courted the Indian vote. During the campaign, he visited Montana’s Crow Reservation last May and was adopted into the tribe under the Crow name “One Who Helps People Throughout the Land.” There he said, “Few have been ignored by Washington for as long as Native Americans,” and vowed to improve their economic opportunities, health care and education.

Two vital steps in this direction are to strengthen property rights and the rule of law on reservations. Virtually every study of international development shows that both of these are crucial to prosperity. Indian country is no different. The effect of insecure property rights is evident on a drive through any western reservation. When you see 160 acres overgrazed and a house unfit for occupancy, you can be sure the title to the land is held by the federal government bureaucracy.
. . .

My own research, published in the Journal of Law and Economics, shows that for tribes with state jurisdiction, per capita income grew 20% faster between 1969 and 1999 than for their counterparts under tribal court jurisdiction. All Indians are less likely than whites to get home loans, but the likelihood of a loan rejection falls by 50% on reservations under state jurisdiction.
. . .

Mr. Obama’s rallying cry was “change,” and that is exactly what he needs to bring about in Indian policy. The first Americans deserve to be freed from the bureaucratic shackles that have made them victims, and allowed to establish property rights and legal systems that can make them victors.

For the full commentary, see:
TERRY L. ANDERSON. “OPINION; Native Americans Need the Rule of Law.” The Wall Street Journal (Mon., MARCH 16, 2009): A19.
(Note: ellipses in original.)

“It Is No Time to Concede”

Gary Becker. Source of caricature: online version of the WSJ interview quoted and cited below.

(p. A9) “What can we do that would be beneficial? [One thing] is lower corporate taxes and businesses taxes and maybe taxes in general. Particularly, you want to lower the tax on capital so you raise the after-tax return to investing and get more investing going on.”
. . .
What Mr. Becker has seen over a career spanning more than five decades is that free markets are good for human progress. And at a time when increasing government intervention in the economy is all the rage, he insists that economic liberals must not withdraw from the debate simply because their cause, for now, appears quixotic.
As a young academic in 1956, Mr. Becker wrote an important paper against conscription. He was discouraged from publishing it because, at the time, the popular view was that the military draft could never be abolished. Of course it was, and looking back, he says, “that taught me a lesson.” Today as Washington appears unstoppable in its quest for more power and lovers of liberty are accused of tilting at windmills, he says it is no time to concede.

For the full interview, see:
MARY ANASTASIA O’GRADY. “OPINION: THE WEEKEND INTERVIEW; Now Is No Time to Give Up on Markets.” The Wall Street Journal (Sat., MARCH 21, 2009): A9.
(Note: ellipsis added.)

Gary Becker. Source of photo: http://larryevansphotography.com/Gary%20Becker_2.jpg

“Eminent Domain as an Instrument Against the Weak”

Source of book image: http://www.dichosbooks.com/images/33353510.jpg

(p. A13) Roughly 70% of Americans own their own homes, a statistic that goes a long way toward explaining why the Supreme Court’s ruling in 2005 in Kelo v. City of New London was so widely reviled. Before Kelo, most Americans probably took it for granted that their home was their castle, protected by the Constitution from arbitrary seizure by government. The Fifth Amendment’s takings clause says: ” . . . nor shall private property be taken for public use, without just compensation.”

In Kelo, a majority of five justices came up with an extremely broad interpretation of “public use.” The high court’s four liberal members, joined by the ever-changeable Anthony Kennedy, ruled that government has the right to seize a private home for virtually any purpose — including handing it over to private developers.
. . .
“Little Pink House” is a modern morality tale. It shows how the politically powerful can use eminent domain as an instrument against the weak. Justice Sandra Day O’Connor said it best in her dissent in Kelo: “The fallout from this decision will not be random.” She predicted that “the government now has license to transfer property from those with fewer resources to those with more.” The beneficiaries, she wrote, are likely to be those citizens “with disproportionate influence and power in the political process.”
Owning property is one of Americans’ most basic constitutional rights. It’s too bad Susette Kelo didn’t get to exercise hers.

For the full review, see:
MELANIE KIRKPATRICK. “Bookshelf; Evicted, But Not Without a Fight; The government took her home. The Supreme Court approved.” Wall Street Journal (Mon., Jan. 26, 2009): A13.
(Note: ellipsis in first paragraph quote was in original; ellipsis between paragraphs was added.)

The book being reviewed, is:
Benedict, Jeff. Little Pink House. New York: Grand Central Publishing, 2009.

Obama EPA Censors Global Warming Skeptic

“Alan Carlin, 35-year Environmental Protection Agency veteran.” Source of caricature and caption: online version of the WSJ article quoted and cited below.

(p. A11) In March, the Obama EPA prepared to engage the global-warming debate in an astounding new way, by issuing an “endangerment” finding on carbon. It establishes that carbon is a pollutant, and thereby gives the EPA the authority to regulate it — even if Congress doesn’t act.

Around this time, Mr. Carlin and a colleague presented a 98-page analysis arguing the agency should take another look, as the science behind man-made global warming is inconclusive at best. The analysis noted that global temperatures were on a downward trend. It pointed out problems with climate models. It highlighted new research that contradicts apocalyptic scenarios. “We believe our concerns and reservations are sufficiently important to warrant a serious review of the science by EPA,” the report read.
The response to Mr. Carlin was an email from his boss, Al McGartland, forbidding him from “any direct communication” with anyone outside of his office with regard to his analysis. When Mr. Carlin tried again to disseminate his analysis, Mr. McGartland decreed: “The administrator and the administration have decided to move forward on endangerment, and your comments do not help the legal or policy case for this decision. . . . I can only see one impact of your comments given where we are in the process, and that would be a very negative impact on our office.” (Emphasis added.)
Mr. McGartland blasted yet another email: “With the endangerment finding nearly final, you need to move on to other issues and subjects. I don’t want you to spend any additional EPA time on climate change. No papers, no research etc, at least until we see what EPA is going to do with Climate.” Ideology? Nope, not here. Just us science folk. Honest.

For the full commentary, see:

KIMBERLEY A. STRASSEL. “OPINION: POTOMAC WATCH; The EPA Silences a Climate Skeptic.” The Wall Street Journal (Fri., JULY 3, 2009): A11.
(Note: ellipsis in original; italics added by Strassel.)

Government Regulatory Costs Impede Energy Innovation

Robert Metcalfe receiving the National Medal of Technology in 2003. Source of photo: http://en.wikipedia.org/wiki/Robert_Metcalfe

The author of the commentary quoted below is famous in the history of information technology. His Harvard dissertation draft on packet switching was rejected as unrealistic. So he left the academy and became the main innovator responsible for making packet switching a reality, through the ethernet.
(He is also the “Metcalfe” behind “Metcalfe’s Law” about the value of a network increasing at a faster rate than the increase in the network’s size.)

(p. A15) . . . new small reactors meet important criteria for nuclear power plants. With no control rods to jam, they are far safer than the old models — you might well call them nuclear batteries. By not using weapons-grade enriched fuels, they are nonproliferating. They minimize nuclear waste. And they’re economical.
. . .
As venture capitalists, we at Polaris might have invested in one or two of these fission-energy start-ups. Alas, we had to pass. The problem with their business plans weren’t their designs, but the high costs and astronomical risks of designing nuclear reactors for certification in Washington.
The start-ups estimate that it will cost each of them roughly $100 million and five years to get their small reactor designs certified by the Nuclear Regulatory Commission. About $50 million of each $100 million would go to the commission itself. That’s a lot of risk capital for any venture-backed start-up, especially considering that not one new commercial nuclear reactor design has been approved and built in the United States for 30 years.
. . .

As we learned by building the Internet, fiercely competitive teams of research professors, graduate students, engineers, entrepreneurs and venture capitalists are the best drivers of technological innovation — not big corporations, and certainly not government bureaucracies. So, if it’s cheap and clean energy we want, we should clear the way for fission energy start-ups. We should lower the barriers at the Nuclear Regulatory Commission for the approval of new nuclear reactors, especially the new small ones. In particular, we should drop the requirement that the commission be reimbursed for reconsidering new fission reactor designs.

For the full commentary, see:
BOB METCALFE. “The New Nuclear Revolution; Safe fission power is our future — if regulators allow it..” Wall Street Journal (Weds., JUNE 24, 2009): A15.
(Note: ellipses added.)

“Build a Wall Around the Welfare State”

For a long time, I’ve been meaning to post a pithy comment on immigration policy from the Cato Institutes’s Bill Niskanen.
The comment was related to the proposal to erect a wall between the United States and Mexico, in order to reduce illegal immigration. Some libertarians favor open immigration. Others believe that so long as we have a large welfare state, open immigration would impose high costs on the taxpayer, and thereby reduce economic growth. (I believe that I read Milton Friedman supporting this latter position, in the year or two before he died in 2006.)
In this context, Niskanen’s pithy comment has appeal:

“Build a wall around the welfare state, not around the country.”

Source:
William A. Niskanen on 11/19/07 at the meetings of the Southern Economic Association in New Orleans.

The Case for Patent System Reform

(p. A13) The Patent Office now gets some 500 million applications a year, leading to litigation costs of over $10 billion a year to define who has what rights. As Judge Richard Posner has written, patents for ideas create the risk of “enormous monopoly power (imagine if the first person to think up the auction had been able to patent it).” Studies indicate that aside from the chemical and pharmaceutical industries, the cost of litigation now exceeds the profits companies generate from licensing patents.

For the full commentary, see:

L. GORDON CROVITZ. “OPINION: INFORMATION AGE; Why Technologists Want Fewer Patents.” The Wall Street Journal (Mon., JUNE 15, 2009): A13.

Justice Department is Creating Barriers to Companies Trying to Create New Technologies

Intel CEO Craig Barrett. Source of caricature: online version of the WSJ article quoted and cited below.

(p. A9) Craig Barrett is spending the last days of his tenure as Intel chairman the same way he spent his previous 35 years at the corporation: moving at a superhuman pace that leaves exhausted subordinates in his wake.

Mr. Barrett has maintained this lifestyle since he replaced Andrew Grove as CEO of Intel in 1998. “Was it hard to follow a legend?” he asks himself in his typical blunt way, adding, “What do you think?” Mr. Barrett barely broke pace when he became chairman in 2005, and shows no sign of slowing even now, at age 69, as he faces retirement.
. . .
The latest thing that has him animated is the record $1.45 billion antitrust fine levied against Intel by the European Union this week. Mr. Barrett shakes his head and says, “The antitrust rules and regulations seem designed for a different era. When you look at high-tech companies, with the high R&D budgets, specialization and market creation they need to hold their big market shares, it’s so very different from the old world of oil companies and auto makers that the antitrust regulations were designed for. They are out of sync with reality.
“And how do you reconcile European regulators, who don’t believe that any company should have more than 50% market share — even a market that company created — with the way we operate here? Of course, now it seems as if our Justice Department is preparing to march in lock-step behind Europe. In the end, all they are going to do is create barriers to companies growing, entering into new markets, and bringing new technologies into those markets. And when we stop being the land of opportunity, all of those smart immigrant kids getting their Ph.D.s here are going to start heading home after they graduate. Then watch what happens to our competitiveness.”

For the full story, see:
MICHAEL S. MALONE. “OPINION: THE WEEKEND INTERVIEW with Craig Barrett; From Moore’s Law to Barrett’s Rules; Intel’s chairman on antitrust silliness and the secrets of high-tech success.” Wall Street Journal (Sat., MARCH 16, 2009): A9.
(Note: ellipsis added.)

Lomborg Warns of “Climate-Industrial Complex”

(p. A19) Some business leaders are cozying up with politicians and scientists to demand swift, drastic action on global warming. This is a new twist on a very old practice: companies using public policy to line their own pockets.

The tight relationship between the groups echoes the relationship among weapons makers, researchers and the U.S. military during the Cold War. President Dwight Eisenhower famously warned about the might of the “military-industrial complex,” cautioning that “the potential for the disastrous rise of misplaced power exists and will persist.” He worried that “there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties.”
This is certainly true of climate change. We are told that very expensive carbon regulations are the only way to respond to global warming, despite ample evidence that this approach does not pass a basic cost-benefit test. We must ask whether a “climate-industrial complex” is emerging, pressing taxpayers to fork over money to please those who stand to gain.

For the full commentary, see:
BJORN LOMBORG. “OPINION: The Climate-Industrial Complex; Some businesses see nothing but profits in the green movement.” Wall Street Journal (Thurs., MAY 22, 2009): A19.

Government Regulators Again Suppress Entrepreneurial Innovation

Source of photo: http://images.quickblogcast.com/82086-71861/pedicurex_large.jpg

(p. A1) Until Mr. Ho brought his skin-eating fish here from China last year, no salon in the U.S. had been publicly known to employ a live animal in the exfoliation of feet. The novelty factor was such that Mr. Ho became a minor celebrity. On “Good Morning America” in July, Diane Sawyer placed her feet in a tank supplied by Mr. Ho and compared the fish nibbles to “tiny little delicate kisses.”

Since then, cosmetology regulators have taken a less flattering view, insisting fish pedicures are unsanitary. At least 14 states, including Texas and Florida, have outlawed them. Virginia doesn’t see a problem. Ohio permitted fish pedicures after a review, and other states haven’t yet made up their minds. The world of foot care, meanwhile, has been plunged into a piscine uproar. Salon owners who (p. A12) bought fish and tanks before the bans were imposed in their states are fuming.
The issue: cosmetology regulations generally mandate that tools need to be discarded or sanitized after each use. But epidermis-eating fish are too expensive to throw away. “And there’s no way to sanitize them unless you bake them for 20 minutes at 350 degrees,” says Lynda Elliott, an official with the New Hampshire Board of Barbering, Cosmetology and Esthetics. The board outlawed fish pedicures in November.
In Ohio, ophthalmologist Marilyn Huheey, who sits on the Ohio State Board of Cosmetology, decided to try it out for herself in a Columbus salon last fall. After watching the fish lazily munch on her skin, she recommended approval to the board. “It seemed to me it was very sanitary, not sterile of course,” Dr. Huheey says. “Sanitation is what we’ve got to live with in this world, not sterility.”
. . .
State bans have disrupted Mr. Ho’s plans to build a nationwide franchise network. Currently, he has four active franchises, in Virginia, Delaware, Maryland and Missouri. But others have terminated franchise agreements. In Calhoun, Ga., Tran Lam, owner of Sky Nails, says she paid Mr. Ho $17,500 in exchange for fish and custom-made pedicure tanks. A few weeks later, in October, the Georgia Board of Cosmetology deemed fish pedicures illegal. “I’m very mad,” says Ms. Lam. “I lost a lot of money and the economy is so bad.”

For the full story, see:
JOHN SCHWARTZ. “Ban on Feet-Nibbling Fish Leaves Nail Salons on the Hook; Mr. Ho’s Import From China Caught On, But Some State Pedicure Inspectors Object.” Wall Street Journal (Mon., MARCH 23, 2009): A1 & A12.
(Note: ellipsis added.)