Government – Page 145 – artdiamondblog.com

Mexican Federal Taxi “Charters” Increase Taxi Prices

A non-federally-chartered taxi leaves the Cancun Hilton, headed for the Cancun airport, charging $23. An identical, but federally-chartered cab, making the reverse trip, charges $40. (Photo by Art Diamond.)

When we arrived at the Cancun airport we faced a chaotic environment where many Mexicans were yelling at us to buy taxi tickets. After buying a ticket for $40, someone escorted us to a crowded, chaotic place to wait for a cab. We waited and waited in the noise and the heat. At some point, my daughter Jenny commented, "These people need to get organized."

Yes, Jenny they sure do! And you might think that what they need in order to get organized, is for the government to come in to organize them.

But it turns out that the government has already come in. Only federally charged taxis are allowed to take passengers from the airport to the hotel zone. The price is fixed at $40. On the other hand, any taxi may take passengers back to the airport, from the hotel zone. The base price for a return trip was $23 . (I added a $2 tip out of sympathy for the cabbie not driving a federally anointed cab.)

So, yes, these people need to get organized, and the best way to do that is to get their government out of their way, so that they can organize themselves through the free market.

Note: relevant guide book passage: "[Returning to the airport] the rate will be much less for the trip from the airport. (Only federally chartered taxis may take fared from the airport, but any taxi may bring passengers to the airport.)" (p. 78)

Note: italics in original; bracketed phrase added.

Source:

Baird, David, and Lynne Bairstow. Frommer’s Cancun, Cozumel & the Yucatan 2007. Hoboken, NJ: Wiley Publishing, Inc., 2006.

Most Subprime Mortgages are Paid, and Allow the Poor to Own Homes

A study conducted by Kristopher Gerardi and Paul S. Willen from the Federal Reserve Bank of Boston and Harvey S. Rosen of Princeton, Do Households Benefit from Financial Deregulation and Innovation? The Case of the Mortgage Market (National Bureau of Economic Research Working Paper 12967), shows that the three decades from 1970 to 2000 witnessed an incredible flowering of new types of home loans. These innovations mainly served to give people power to make their own decisions about housing, and they ended up being quite sensible with their newfound access to capital.

These economists followed thousands of people over their lives and examined the evidence for whether mortgage markets have become more efficient over time. Lost in the current discussion about borrowers’ income levels in the subprime market is the fact that someone with a low income now but who stands to earn much more in the future would, in a perfect market, be able to borrow from a bank to buy a house. That is how economists view the efficiency of a capital market: people’s decisions unrestricted by the amount of money they have right now.

And this study shows that measured this way, the mortgage market has become more perfect, not more irresponsible. People tend to make good decisions about their own economic prospects. As Professor Rosen said in an interview, ”Our findings suggest that people make sensible housing decisions in that the size of house they buy today relates to their future income, not just their current income and that the innovations in mortgages over 30 years gave many people the opportunity to own a home that they would not have otherwise had, just because they didn’t have enough assets in the bank at the moment they needed the house.”

Of course, basing loans on future earnings expectations is riskier than lending money to prime borrowers at 30-year fixed interest rates. That is why interest rates are higher for subprime borrowers and for big mortgages that require little money down. Sometimes the risks flop. Sometimes people even have to sell their properties because they cannot make the numbers work.

. . .

And do not forget that the vast majority of even subprime borrowers have been making their payments. Indeed, fewer than 15 percent of borrowers in this most risky group have even been delinquent on a payment, much less defaulted.

When contemplating ways to prevent excessive mortgages for the 13 percent of subprime borrowers whose loans go sour, regulators must be careful that they do not wreck the ability of the other 87 percent to obtain mortgages.

For the full commentary, see:

AUSTAN GOOLSBEE. "ECONOMIC SCENE; ‘Irresponsible’ Mortgages Have Opened Doors to Many of the Excluded." The New York Times (Thurs., March 29, 2007): C3.

(Note: ellipses added.)

The Peril of Being a Bald Economist

Source of graphic: online version of the WSJ article cited below.

‘The term ‘income inequality’ is a bit misleading because it suggests in a somewhat pejorative way that the rich are getting richer at the expense of the poor," Edward Lazear, a Stanford University labor economist who is now chairman of Mr. Bush’s Council of Economic Advisers, said last May. While it’s a concern that some people are being left behind, he said, "There is some good news…most of the inequality reflects an increase in returns to ‘investing in skills.’"

Mr. Lazear has nurtured his relationship with Mr. Bush. His office is decorated with photos of the two mountain biking. When he gave Mr. Bush a copy of the Economic Report of the President this year, Mr. Bush gave him a bear hug and kissed the top of his bald head, according to people who were present.

For the full story, see:

GREG IP and JOHN D. MCKINNON. "THE OUTLOOK; Bush Reorients Rhetoric, Acknowledges Income Gap." The Wall Street Journal (Mon., March 26, 2007): A2.

Source of graphic: online version of the WSJ article cited above.

Chinese Restaurant Entrepreneur: “A Citizen’s Legal Property Is Not to Be Encroached Upon”

CHONGQING, China, March 23 — For weeks the confrontation drew attention from people all across China, as a simple homeowner stared down the forces of large-scale redevelopment that are sweeping this country, blocking the preparation of a gigantic construction site by an act of sheer will.

Chinese bloggers were the first to spread the news, of a house perched atop a tall, thimble-shaped piece of land like Mont-Saint-Michel in northern France, in the middle of a vast excavation.

Newspapers dived in next, followed by national television. Then, in a way that is common in China whenever an event begins to take on hints of political overtones, the story virtually disappeared from the news media after the government, bloggers here said, decreed that the subject was suddenly out of bounds.

. . .

What drove interest in the Chongqing case was the uncanny ability of the homeowner to hold out for so long. Stories are legion in Chinese cities of the arrest or even beating of people who protest too vigorously against their eviction and relocation. In one often-heard twist, holdouts are summoned to the local police station and return home only to find their house already demolished. How did this owner, a woman no less, manage? Millions wondered.

Part of the answer, which on meeting her takes only a moment to discover, is that Wu Ping is anything but an ordinary woman. With her dramatic lock of hair precisely combed and pinned in the back, a form-flattering bright red coat, high cheekbones and wide, excited eyes, the tall, 49-year-old restaurant entrepreneur knows how to attract attention — a potent weapon in China’s new media age, in which people try to use public opinion and appeals to the national image to influence the authorities.

. . .

“I have more faith than others,” she began. “I believe that this is my legal property, and if I cannot protect my own rights, it makes a mockery of the property law just passed. In a democratic and lawful society a person has the legal right to manage one’s own property.”

Tian Yihang, a local college student, spoke glowingly of her in an interview at the monorail station. “This is a peculiar situation,” he said, with a bit of understatement. “I admire the owner for being so persistent in her principles. In China such things shock the common mind.”

. . .

With the street so choked with onlookers that traffic began to back up, Ms. Wu’s brother, Wu Jian, began waving a newspaper above the crowd, pointing to pictures of Ms. Wu’s husband, a local martial arts champion, who was scheduled to appear in a highly publicized tournament that evening. “He’s going into our building and will plant a flag there,” Mr. Wu announced.

Moments later, as the crowd began to thin, a Chinese flag appeared on the roof with a hand-painted banner that read: “A citizen’s legal property is not to be encroached on.”

Asked how his brother-in-law had managed to get inside the locked site and climb the escarpment on which the house is perched, he said with a wink, “Magic.”

For the full story, see:

HOWARD W. FRENCH. "CHONGQING JOURNAL; Homeowner Stares Down Wreckers, at Least for a While." The New York Times (Tues., March 27, 2007): A4.

(Note: ellipses added.)

On left, Wu Ping, with her tall brother in the background. On right, a map showing the location of Chongqing in China. Source of photo and map: online version of the NYT article cited above.

Passport Fiasco Would Bankrupt a Private Company, But Government Lumbers On

Here is an email that I sent to Congressman Lee Terry’s office on Sat., March 24, 2007:

I applied for a passport renewal on January 20, 2007. The web form said that it would take about six weeks. Later, on the web site they increased that to eight weeks. Then 10 weeks. The trip was scheduled for April 3rd, and as the weeks passed, my stress increased enormously. I would have been willing (not happy, but willing) to pay the extra $60 for "expedited" service, if I had known they were going to lengthen the time for routine handling by a month. But they only passed out that information after it was too late to do anything about it. Insult was added to injury when the State Department passport office was unwilling to answer their phone after many tries at times ranging from early in the morning until a few minutes before midnight (eastern time). Each time, a recorded voice would say: visit the web site, or try to call later. (But the web site did not have the answers to my questions, and calling "later" never worked.)

There is no excuse for the State Department not anticipating that there would be a huge increase in demand for passports when they put into effect the new mandate that passports be used to re-enter the U.S. from Mexico. If a private business operated with the inefficiency of the passport office, they would justly go bankrupt.

The only ray of sunlight in this dark vista was "Susie" of Lee Terry’s office. When I called the Omaha office they put her on the line, and she asked me relevant questions, and proceeded to get back to me the same day with what I needed to know. She got through to an actual human being at the State Department, and learned that I would receive my passport in a few days. (I received it yesterday.) "Thank you" to Susie, and thank you to Lee Terry, for having an office staffed with competent people, who care.

Sincerely,

Art Diamond

Beautiful Downtown Burbank, Runs Amok

Cultural history background for the young: at the beginning of every installment of the "Rowan and Martin Laugh-In" TV comedy review (circa 1968-1973), someone would sarcastically intone that the show was being broadcast from "beautiful downtown Burbank."

Excerpted below is Daniel Pink’s incredible conversation with a Burbank city clerk:

(p. 199) What led me to this 100,000-person city in California’s San Fernando Valley—past the fish fountains, to the steps of City Hall—was a rumor I’d heard that Burbank puts free agents in jail.

. . .

(p. 200) After fifteen minutes of probing, here’s the gist of what he tells me: If I want to write from a home office in Burbank, I first must apply for a home occupation license. The city would examine my application, and then come to my house to inspect the office from which I intended to work. Once the inspector deemed my home office safe for writing and unthreatening to my neighbors, I could begin earning a living, my workplace now officially blessed by the city.

But that was only the beginning. I’d have to pay a special tax. And I’d have to abide by the strictures of Burbank Municipal Code Section 31-672—which, among other things, said: My office couldn’t be larger than four hundred square feet or 20 percent of my home’s square footage. I couldn’t put my home office in a "garage, carport, or any other area required or designated for the parking of vehicles." The only "materials, equipment, and/or tools" I could use to do my work were things used by "a normal household." I couldn’t use my home office to repair cars, sell guns, or operate a kennel. And the only folks who could ever work with me in the office were people who lived with me.

That last provision alarmed me.

Pointing to Section 31-672(c), I ask, "Does this mean I can’t have a meeting at my house?"

"Yep," says the clerk. "You’d have to somewhere else."

"Let me get this straight," I say. "Let’s say I’m a writer collaborating on a screenplay. If my collaborator comes over and we work on the screenplay together, that’s against the law? It’s a misdemeanor to have a meeting at your house?"

"Yep," says the clerk.

"Isn’t California a ‘three strikes and you’re out’ state?"

"Yep."

Burbank, we we have a problem. I hope it’s unlikely that a free agent who has three meetings at her house, and gets caught, prosecuted, and convicted each time, goes to jail for the rest of her life. But the mere possibility reflects a wider problem with America’s legal, policy, and tax regimes. They were built for a (p. 201) work world that has largely disappeared, and are ill equipped for the new world that has arrived.

Source:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

(Note: italics in original; ellipsis added.)

Chambers of Commerce Dump Commerce and Embrace Big Government

The Chamber of Commerce, long a supporter of limited government and low taxes, was part of the coalition backing the Reagan revolution in the 1980s. On the national level, the organization still follows a pro-growth agenda — but thanks to an astonishing political transformation, many chambers of commerce on the state and local level have been abandoning these goals. They’re becoming, in effect, lobbyists for big government.

. . .

In as many as half the states, state taxpayer organizations, free market think tanks and small business leaders now complain bitterly that, on a wide range of issues, chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government. This behavior, they note, erodes the very pro-growth climate necessary for businesses — at least those not connected at the hip with government — to prosper. Journalist Tim Carney agrees: All too often, he notes in his recent book, "Rip-Off," "state and local chambers have become corrupted by the lure of big dollar corporate welfare schemes."

. . .

The U.S. Chamber of Commerce boasts that the organization’s "core mission is to fight for business and free enterprise before Congress, the White House, regulatory agencies . . . and governments around the world." The national chamber has done just that, pushing tort reform and free trade — but in the states, chambers have come to believe their primary function is to secure tax financing for sports stadiums, convention centers, high-tech research institutes and transit boondoggles. Some local chambers have reportedly asked local utilities, school administrators and even politicians to join; others have opened membership to arts councils, museums, civic associations and other "tax eater" entities.

. . .

"I used to think that public employee unions like the NEA were the main enemy in the struggle for limited government, competition and private sector solutions," says Mr. Caldera of the Independence Institute. "I was wrong. Our biggest adversary is the special interest business cartel that labels itself ‘the business community’ and its political machine run by chambers and other industry associations."

For the full commentary, see:

STEPHEN MOORE. "Tax Chambers." The Wall Street Journal (Sat., February 10, 2007): A8.

(Note: ellipses added, except the one in the quote following the word "agencies.")

Private Money Can Top Government Money in Space, as in IT

Lots of people are building new IT companies. You can start a company and sell it to Yahoo! or Google in a couple of years. But so can anyone else. Aerospace is different. To paraphrase John F. Kennedy in 1962: We choose to go to the moon not because it’s easy, but because it’s hard.

That’s why, as a long-time investor in IT and Internet start-ups, I’m now spending more and more time on private aviation and commercial space start-ups. I’m trailing an illustrius crew of IT pioneers: Elon Musk (Space-X, rockets, formerly with PayPal), Vern Raburn (Eclipse Aviation, very light jets, formerly at Microsoft, Symantec and Lotus), Jeff Bezos (Blue Origin, rockets, and still at Amazon, too!), Jeff Greason (XCOR, rockets and formerly with Intel) and Ed Iacobucci (DayJet, air taxi operator, and founder of Citrix).

. . .

On the space side, there’s a . . . strong parallel with the world of IT. The establishment in "space" is the government and especially the military, just as it once was (along with academia) for the Internet. I remember the days when commerce on the Internet was considered sleazy—but look at the innovations and productivity it unleashed.

In the same way, the current priests of space are dismayed by the privately funded space start-ups—unsafe, sleazy, frivolous. Imagine: Ads on the side of a rocket ship! Well, why not, if it helps pay for the fuel… and the R&D that designed the thing?

For the full commentary, see:

ESTHER DYSON "New Horizons for the Intrepid VC." The Wall Street Journal (Tues., March 20, 2007): A19.

(Note: ellipses added, except for the ellipsis following the word "fuel" which was in the original.)

Internet Transmits and Applies Libertarian Ideas

Source of book image: http://ec1.images-amazon.com/images/P/1586483501.01._SS500_SCLZZZZZZZ_.jpg

Today the Internet has become, Mr. Doherty notes, an efficient way to transmit libertarian ideas and show their practical application. (With its decentralized, free-wheeling ethos, the Internet is itself libertarian without even trying to be.) Jimmy Wales, the man who started the interactive online encyclopedia Wikipedia, believes that "facts can help set the world free." The largest retail market in the world is eBay, which allows anyone to buy and sell without a government license.

Louis Rosetto, the "radical capitalist" who founded Wired magazine, notes that, even if libertarian ideas must now push against a statist status quo, "contrarians end up being the drivers of change." Among the most ornery contrarians, he says, are the libertarians "laboring in obscurity, if not in derision." They have managed "to keep a pretty pure idea going, adapting it to circumstances and watching it be validated by the march of history." Mr. Doherty has rescued libertarianism from its own obscurity, eloquently capturing the appeal of the "pure idea," its origins in great minds and the feistiness of its many current champions.

For the full review, see:

JOHN H. FUND. "BOOKSHELF; Free to Choose, and a Good Thing, Too." The Wall Street Journal (Thurs., February 15, 2007): D7.

The Best Case for Supporting a Tariff

I doubt the veracity of George Pendle’s humorous, but unkind, comment about Millard Fillmore’s views:

“His firm support for tariffs, . . . , seems to have been based on a misapprehension that a tariff was a long-legged marsh bird.”

Pendle is quoted in:

THOMAS VINCIGUERRA. "Why He Gets the Laughs." The New York Times, Section 4 (Sun., March 18, 2007): 5.

(Note: ellipsis added.)

Pendle’s forthcoming book, is:

Pendle, George. The Remarkable Millard Fillmore: The Unbelievable Life of a Forgotten President. Three Rivers Press, 2007.

Somaliland Works, Without Foreign Aid or Recognition: More on Why Much of Africa is Poor

In Hargeysa, the capital of Somaliland, there is sufficient public safety (in contrast to southern Somalia) for a money exchange to operate with large amounts of money on display. Source of photo: online version of the NYT article cited below.

HARGEYSA, Somalia, March 1 — When the sun rises over the craggy hills of Hargeysa, it sheds light on a different kind of Somalia.

Ice cream trucks selling bona fide soft serve hit the streets. Money changers, unarmed and unguarded, push cash through the market in wheelbarrows. Politicians from three distinct parties get ready for another day of debate, which recently included an animated discussion on registering nomadic voters.

It’s all part of a Somali puzzle: how one area of the country, the northwest, also known as Somaliland, can seem so peaceful and functional — so normal, in fact — while the rest continues to be such a violent, chaotic mess.

This tale of two Somalias is especially striking now, as thousands of African Union peacekeepers prepare to rescue Mogadishu, the nation’s bloodstained capital, from itself. The internationally backed transitional government that seized Mogadishu in late December with Ethiopia’s help says it cannot survive without foreign aid and foreign peacekeepers to quell clan fighting and an escalating insurgency.

Somalilanders, who have wrestled with their own clan conflicts, find this ridiculous.

“You can’t be donated power,” said Dahir Rayale Kahin, the president of the Republic of Somaliland, which has long declared itself independent from the rest of Somalia. “We built this state because we saw the problems here as our problems. Our brothers in the south are still waiting — till now — for others.”

But Somalilanders are waiting, too: waiting to be recognized. In 1991, as Somalia’s government disintegrated and clan fighting in the south spun out of control, Somaliland, traditionally one of the poorest parts of Somalia, claimed its independence. But no country acknowledges it as a separate state and very few even contribute aid — which makes Somaliland’s success all the more intriguing.

. . .

“It all goes back to the Brits,” according to Hajji Abdi Waraabe, an 89-year-old member of Somaliland’s upper house of Parliament.

When the colonial powers sliced up the Horn of Africa in the 19th century, the British got Somaliland and the Italians got Somalia. While the British relied mostly on clan chiefs to govern, the Italians created an entire Italian-speaking administration and imported thousands of people from Italy to farm bananas, build cathedrals and teach the people how to pour espresso.

One result was that Mogadishu, along the southern coast, became a major commercial hub and one of the most beautiful cities in Africa, but its traditional systems of authority were weakened. That is partly why, many Somalia analysts say, warlords were able to outmuscle clan elders and dominate Mogadishu in the vacuum that formed after the central government fell.

The British, on the other hand, never invested much in Somaliland, leaving it poor and dusty but with its traditions more or less intact. . . .

. . .

But the one issue that unites most Somalilanders is recognition. Somaliland has its own money, its own flag, its own national anthem and even its own passport.

“And we have peace, a peace owned by the community,” said Zamzam Adan, a women’s rights activist. “You’d think in this part of the world, that would count for something.”

For the full story, see:

JEFFREY GETTLEMAN. "The Other Somalia: An Island of Stability in a Sea of Armed Chaos." The New York Times (Weds., March 7, 2007): A11.

(Note: ellipses added.)

Top photo shows women selling jewelry. Middle photo shows a traffic cop performing a defensible function of government. At bottom, the map shows Somaliland relative to the rest of Somalia. Source of photos and map: online version of the NYT article cited above.