government intervention — VOICES for REASON

In the five years since Katrina devastated New Orleans, $15 billion has been spent on rebuilding infrastructure (enough to protect against a Category 3 hurricane). But, according to a recent Wall Street Journal article, “many engineers and local politicians argue it may not be good enough.”

What would be good enough? “They say the city should be steeled for a 500-year or 1,000-year storm—roughly equivalent to a Category 5 hurricane.” Estimated cost: “at least $70 billion.”

New Orleans, most of which lies below sea level, gives new meaning to the term “money pit.” Yet the tax dollars keep flowing, partly because it’s taken for granted that no matter how risky it is to live next door to a wall of water, government must ensure everyone’s safety at public expense. “We should be looking at a much higher level of protection in New Orleans,” said one college professor. “If that thing breaks, you’ve got people who are trapped in there.”

The second sentence is true, but the first doesn’t follow logically from it. There are lots of places in America where the forces of nature threaten human safety. But it’s not government’s function to protect us from natural forces, only from human force—such as that wielded by foreign enemies or criminals. By spending billions on such measures as flood protection, government lures people into building (or rebuilding) in places where they wouldn’t otherwise dare to live.

In this way, as I’ve written elsewhere, government has a way of making natural disasters more disastrous. What is to be done?

[T]he solution is not more of the market distortions and perverse incentives that have lured so many people into harm’s way. The solution is to replace the prevailing entitlement mentality with a free market in disaster prevention, insurance, and recovery.

In a free market—without tax-paid levees, government disaster relief, or subsidized insurance—anyone who contemplates building or buying property in a high-hazard area will need to face hard facts about the local history of natural disasters, the efficacy and cost of preventive measures, and the availability of insurance.

For example, the high price—or total unavailability—of private insurance will resound like a clanging alarm bell, signaling the market’s objective view that a particular building plan is abnormally risky compared to less dangerous locales.

With their own lives and wealth at stake, people will have every incentive to evaluate risks objectively. And if hardy souls still choose to occupy and fortify New Orleans, or build on an earthquake fault, or live in a tornado alley, the risk and reward will be theirs alone. No longer will government make disasters more disastrous by pretending that citizens have a right to defy the forces of nature at others’ expense.

It’s time to start planning for the day when the money spigot that keeps New Orleans awash in federal dollars can be twisted shut.

Image: Wikimedia Commons

In their latest Forbes.com column, Don Watkins and Yaron Brook look at Washington’s longstanding policy of encouraging homeownership — and argue that it is un-American. They write:

For nearly a century it has been the policy of the U.S. government to increase American homeownership. Its efforts include (but aren’t limited to) bouts of easy money from the Fed, the mortgage-interest deduction, the exclusion of capital gains on primary residence sales, direct and indirect subsidies from the Department of Housing and Urban Development, and artificial liquidity pumped into the mortgage market via government sponsored entities Fannie and Freddie.

Policymakers assure us that the next generation of government housing programs will be “carefully designed” (bring on the next five-year plan, Comrade!). But the real question is why the government should be doing anything to promote homeownership.

Read the whole thing.

image: sxc.hu/alexkalina

Investor’s Business Daily has published an essay from ARI’s executive director Yaron Brook on  Atlas Shrugged. The piece begins:

In the years leading up to 2008—09′s financial meltdown, government control over mortgages, interest rates and America’s banking system was at an all-time high.

And yet when crisis struck, free enterprise took the blame.

The cure, therefore, was to give government even wider powers. Washington can now bail out any company, fire CEOs, override contracts and print billions of dollars to “stimulate” the economy — all in the name of the public interest. The result? Our deficits and debt continue to mount, and there’s a real possibility of a future like Greece’s.

This is the state of our world today. It’s remarkably similar to the state of the world in Ayn Rand’s “Atlas Shrugged,” a mystery story about a future America whose economy is disintegrating and whose government is accumulating power faster than anyone thought possible. This parallel is a big reason a record 500,000 people bought “Atlas Shrugged” last year.

So what can we learn from a book that foresaw in 1957 what few believed possible in 2007? We can learn a lesson the heroes of the novel learn: the cause of the government’s greater, destructive control of business. And we can learn how to oppose it.

Read the whole thing.

Most states have tax-funded film commissions that subsidize or grant tax credits to movie production companies, provided they agree to film scenes within the state’s borders. According to this article in The New York Times, some of these state agencies are getting nervous about the kind of films they are being asked to fund.

The Michigan film commissioner recently rejected a funding request from producers of a horror movie replete with “realistic cannibalism.” In Texas, a film company was told it need not apply for financing of a picture about the FBI’s Waco raid because of inaccuracies in the script. And in Florida, the legislature recently flirted with a proposal to deny tax credits to films that exhibit “nontraditional family values.”

There’s much to challenge in the notion of allowing states to lure in film production; for a start, look at how such programs violate the rights of taxpayers. These programs take money from ordinary taxpayers (a violation of their property rights) and use it to fund movies those taxpayers may well find abhorrent (a violation of their free speech rights).

The solution is not to dictate content according to some pseudo-standard such as “family values.” Rather, the solution is to end all government funding of film production. A state government’s job is to protect its citizens against criminals, not to attract moviemakers. Private individuals and companies wishing to attract film projects to their localities are free to offer whatever incentives (such as discounts on lodging, or attractive settings for filming) that they deem likely to benefit themselves.

Hollywood is quite capable of finding investors to fully finance its ventures. Producers who cannot attract private financing have no right to draw from the public treasury—whether their films depict cannibals eating human flesh, or Bible-toting families gathered for a Sunday picnic.

[Update: Thanks to Steve Simpson at the Institute for Justice for linking here. Welcome, readers of Congress Shall Make No Law, IJ's free speech blog.]

Image: WikiMedia Commons

Once again, an episode from Ayn Rand’s Atlas Shrugged leaps to life from behind closed doors in Washington, D.C. According to a recent report from The Washington Post, President Obama is angry about the British Petroleum oil leak in the Gulf of Mexico:

Since the oil rig exploded, the White House has tried to project a posture that is unflappable and in command.

But to those tasked with keeping the president apprised of the disaster, Obama’s clenched jaw is becoming an increasingly familiar sight. During one of those sessions in the Oval Office the first week after the spill, a president who rarely vents his frustration cut his aides short, according to one who was there.

“Plug the damn hole,” Obama told them.

That’s the politician’s answer to every intractable problem: give orders, issue threats, and wait for obedience. But the creative human mind cannot take orders like that. Notice I didn’t say, “refuses to take orders.” I said, “cannot take orders.” Read the rest of this entry »

In today’s Washington Examiner, ARC’s Yaron Brook and I discuss the continuing political war over Toyota.

How many congressmen does it take to identify the cause of a runaway Toyota Prius? No, it’s not a trick question. A congressional panel issued a draft report recently on a case of supposed runaway acceleration in San Diego.

Why wasn’t that left to the objective assessment of the police and courts? The answer to that question was made clear during last month’s congressional hearings on the Toyota recalls.

You can read the whole article here.

Image: flickr

We’re told that ObamaCare aims to make health care more affordable to more people, but in fact it threatens the rights of everyone involved in health care—doctors, patients, and health insurers—and thus the future of the industry.

Before Congress greases up yet another ramp on the already slippery slope toward socialized medicine, let’s pause to identify those endangered rights and some of the destructive consequences.

• Insurance companies are profit-making businesses, not social welfare agencies. They have the right to charge premiums that reflect actual risk. But ObamaCare would force them to cover almost every American—no matter how sick they already are, no matter how bad their health habits, no matter how high the cost of their exotic treatments–and to raise everyone’s premiums accordingly.

• Doctors are morally entitled to regard themselves as profit-making professionals, not public servants. They have the right to charge fees that reflect the value received by all parties to the transaction. But ObamaCare, by driving down permissible fees, will force physicians into a deadly conflict of interest: Either lose money by doing everything necessary to meet patients’ needs, or make money by satisfying some minimum bureaucratic standard.

• Patients are sovereign individuals, not particles in a social organism. They have the right to buy all the health care they deem necessary and can afford, without apologizing to those who can’t afford it. But under ObamaCare, patients will have the moral status of beggars at a soup kitchen who must uncomplainingly accept whatever gruel from the health-care pot happens to land in their dish.

Let ObamaCare be seen for what it is: yet another offensive in the long-running assault on individual rights in medicine.

Image: WikiMedia Commons

In the Christian Science Monitor, Don Watkins and Yaron Brook draw on Atlas Shrugged to illuminate a crucial difference between two opposite kinds of businessmen in our economy:

The producers, such as Hank Rearden [a character in Atlas Shrugged], inventor of a new metal stronger and cheaper than steel, work tirelessly to create products that improve human life. The looters are basically pseudobusinessmen, like the incompetent steel executive Orren Boyle, who get unearned riches by getting special favors from politicians. Their business isn’t business, but political pull.

The CSM titled the piece “Apple vs. GM: Ayn Rand knew the difference. Do you?” It’s a good oped that sheds light on how government intervention in the economy distorts the behavior of businessmen.

Read the whole thing.

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Last week I spoke at the 13th annual Energy & Environment Conference and Expo in Phoenix. This is one the largest events in the U.S. devoted to energy and environmental issues, with over 650 speakers and more than 2300 attendees.

Marketing slogan: “650 speakers tackle solutions for USA’s energy independence and reducing carbon emissions.” Well, make that 649, because the gist of my presentation was to argue against the “solutions” that every other speaker had to offer.

As I told the audience attending my panel session, I was there to make the case for not doing anything about climate change—or, more specifically, for not imposing a massive regime of government controls, regulations, or market interventions aimed at restricting greenhouse gases in the name of allegedly fighting climate change.

Mine was definitely the most controversial talk on my panel session. I was even attacked as a “denier” by one of my co-panelists, the executive director of the American Solar Energy Society. But there were a number of people in the audience who came up afterwards to thank me for presenting a contrarian view that they felt was badly needed at this conference.

Read the rest of this entry »

He increased government spending to historic highs. He poured vast amounts of money into a half-baked scheme to “stimulate” the economy. He bailed out failed companies. He expanded government control over medicine. He denounced “corporate greed” and saddled businessmen with crippling regulations and controls.

No, I’m not talking about President Obama. Read the rest of this entry »