Economic freedom around the world remains on the rise but it has declined notably in the U.S. since the year 2000, according to the Economic Freedom of the World: 2008 Annual Report, released by the Cato Institute in conjunction with the Fraser Institute of Canada. In 2000 the U.S. was ranked the second-freest economy, but has fallen to 8th place this year. “The rule of law, government spending, and regulation are the areas where the United States saw the most troubling declines in its ratings this decade,” comments Cato scholar Ian Vasquez.
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Be Afraid — Be Very Afraid
Light rail is on the ballot this November in Kansas City and Seattle. Commuter rail is on the ballot in Sonoma and Marin counties, California. BART heavy rail is on the ballot in San Jose.
These rail plans will cost billions of dollars each (hundreds of millions in the case of Sonoma-Marin), yet take few to no cars off the roads. The energy, pollution, and greenhouse gases generated during construction will vastly outweigh any operational savings, which in some cases will be nil. The plans are supported by a baptists-and-bootleggers combination of rail nuts and companies, like Parsons Brinckerhoff, that expect to make millions during construction.
But the real ballot measure to fear is California’s proposition 1A, which would authorize the sale of nearly $10 billion in general obligation bonds to build a high-speed rail network from Sacramento and San Francisco to Anaheim and San Diego. This $10 billion, combined with $10 billion from the feds and $5 billion in private money, was supposed to pay for the $25 billion system. The plan was to turn the system over to the private investors, who would operate it and keep 100 percent of the profits.
The first problem is that even the California High Speed Rail Authority admits that the real cost will be at least $43 billion. Considering the history of similar megaprojects — and this would be the largest state-sponsored megaproject in history — the final cost will probably be at least $60 billion.
The second problem is that the Authority has probably overestimated demand. It projects the system will carry 3 to 6 times as many passengers as Amtrak carries on its Northeast Corridor trains, which serve a higher population.
If the costs are high, the benefits are minuscule even if rail attracts the projected number of riders. The environmental impact statement for the project projects that it will take, at most, 3.8% of cars off the road, reduce air pollution by about 1%, and reduce transport-related greenhouse gases by 1.4%.
Considering the underestimated costs and overestimated ridership, it seems unlikely that private investors will put up $5 billion, much less a 20 percent share of whatever the final cost turns out to be. The danger for California taxpayers is that the Rail Authority will spend its $10 billion building as far as it can and then ask for more money. How far will $10 billion go? Not much further than San Francisco to San Jose.
Nor is there any guarantee that Congress will match the state’s money. But the danger for non-California taxpayers is that it does match the money — which will lead to demands for high-speed rail support from the rest of the country. Ten other high-speed corridors have received official recognition from the Federal Railroad Administration. Then there are various ad hoc proposals, such as Albuquerque to Casper and even Fargo to Missoula.
The likely cost of a national high-speed rail network will be in the hundreds of billions of dollars. Except to the contractors that build it, the benefits will be largely imaginary. We can see that by looking at high-speed rail elsewhere.
Japan’s bullet trains were a feather in that country’s technological cap, but they sent the formerly profitable Japanese National Railways (JNR) into virtual bankruptcy. The government was forced to absorb $200 billion in high-speed debt. Meanwhile, far from attracting people out of their cars, high-speed rail accelerated the growth in driving as JNR raised fares to cope with its losses.
Europe’s record with high-speed rail hasn’t been much better. Though nations in the European Union spend an estimated $100 billion per year subsidizing intercity rail, rail has slowly but steadily lost market share since Italy opened the continent’s first high-speed line in 1978. Today, less than 6 percent of passenger travel goes by rail.
We car-crazy Americans drive for 85 percent of our travel. Europeans drive for 79 percent. Spending several hundred billion dollars to get, at best, 5 or 6 percent of people out of their cars is not worthwhile. The real impact of high-speed rail is that it replaces private air service with heavily subsidized rail service.
Rail is not just a waste of money, it is an intrusion on personal freedom. That’s because it is inevitably accompanied by restrictions on people’s property rights. Buses and airlines can follow demand by changing routes. Rails cannot, so rail agencies conspire with land-use planners to reshape society and make it more “rail friendly.” That means upzoning areas near rail stations to higher-than-marketable densities while downzoning other areas to keep developers from building the kind of low-density housing most Americans prefer.
For more information about high-speed rail, see the Antiplanner, which is blogging about it in a series of nine posts.
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Polling Presidential Power
There’s a new poll out from the Associated Press and the National Constitution Center that shows “Americans strongly oppose giving the president more power at the expense of Congress or the courts, even to enhance national security or the economy.” Which is certainly good news, but it doesn’t mean there’s deep public support for de-imperializing the presidency. As the survey itself shows, only a minority of Americans thinks our current, gargantuan presidency is “too powerful.”
Which is one reason why there’s been very little debate over presidential power in campaign over the last few months (I know, because I’ve been looking fruitlessly for op-ed news hooks). Even after the Bush years, presidential power is not a pressing electoral issue.
Last December, Charlie Savage did the electorate a service by getting all the presidential candidates to go on the record with their views on executive power. (Here are McCain, Obama, and Biden’s answers.) But the voters don’t punish candidates who break these promises like they do presidents who break a “no new taxes” pledge. If the voters did, the candidates would have worried more about flip-flopping on the wiretapping question, but both McCain and Obama felt they could do it with little difficulty.
So sure, around 2/3s of the respondents to the AP/National Constitution Center poll oppose further expansions of executive power. But how people answer broad, abstract questions about governance is one thing; what they actually demand from potential presidents is another thing entirely. If the rhetoric of this presidential campaign is any indication, voters continue to respond to the idea of the president as a combination miracle-worker-cum-national parent.
Barack Obama has, among other things, promised to hold back the oceans’ rise, “end the age of oil in our time,” and “create a Kingdom right here on Earth.”
In his acceptance speech, John McCain professed humility, only moments after a video montage that suggested God rescued him from a carrier-deck fire so he could be president someday. And, judging by Rudy Giuliani’s keynote address, McCain will bridge the Mommy Party/Daddy Party divide, becoming a all-purpose national parent: “And we can trust him to deal with anything, anything that nature throws our way, anything that terrorists do to us.… and we will be safe in his hands, and our children will be safe in his hands.” He’s got the whole world in his hands.
This expansive vision of presidential responsibility is incompatible with limited government. And so long as it prevails, we can’t take much comfort in the fact that Americans tell pollsters they’d like limits on presidential power.
More bad news here.
School Choice Pioneer Rooney Dies
J. Patrick Rooney, a pioneer of the modern school choice movement, has died. Rooney, who was 80, founded a trend-setting private scholarship fund in 1991. The Educational CHOICE Charitable Trust provides financial assistance to low income families in Indianapolis who want to send their children to private schools. The year after it was created, similar programs began to crop up all over the country, from San Antonio to Milwaukee.
This model, in which donors give money to a k‑12 scholarship organization, which then distributes it to the families who need it, became the framework for some of the school choice movement’s greatest successes. Today, school choice programs in six states offer tax credits to businesses or individuals who donate to such scholarship organizations (Arizona, Florida, Georgia, Iowa, Pennsylvania, and Rhode Island).
For every dollar donated, the donor’s tax bill is reduced by anywhere from 80 cents to a full dollar. Scholarship donation tax credit programs have grown faster than other kinds of private school choice programs, and have garnered more bi-partisan support. In Florida, the newly appointed director of the state’s largest scholarship program is a former public school teacher and union leader. A recent expansion of that state’s education tax credit program garnered the support of half of the black Democratic caucus. Two leading advocates of creating such a program in New Jersey are Newark Mayor Corey Booker and state senator Ray Lesniak, both Democrats.
Milton Friedman laid the theoretical groundwork for the modern school choice movement, and J. Patrick Rooney was one of the leading social entrepreneurs who helped bring that theory to life. His contribution will continue to be felt by many future generations of children.
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Space Privatization–from Cato to the BBC
In the premier issue of BBC Knowledge, the Cambridge University astrophysicist Martin Rees makes several provocative arguments about manned space flight. They are:
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The completion of the International Space Station (ISS) comes with a price tag of $50 billion, with the only profit being the cooperation with foreign partners.
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There is no scientific, commercial, or military value in sending people to space. -
Future expeditions to the Moon and beyond will only be politically and financially feasible if they are cut-price ventures.
He concludes that fostering good relations with other countries is insufficient justification for the expenditures, and that NASA should move aside and allow the private sector to play a role in manned space flight. The cost of these activities must lessen if they are to continue, and that will only happen with a decrease or removal of government involvement. Rees observes that only NASA deals with science, planetary exploration, and astronauts, while the private sector is allowed to exploit space commercially for things such as telecommunications. However, there is no shortage of interest in space entrepreneurship: wealthy people with a track record of commercial achievement are yearning to get involved. Rees sees space probes plastered with commercial logos in the future, just as Formula One racers are now.
Those ideas may sound radical, but not if you’ve been following the work of the Cato Institute. As long ago as 1986, Alan Pell Crawford wrote hopefully that “space commercialization … is a reality,” and looked forward to the country making progress toward a free market in space. The elimination of NASA was a recommendation in the Cato Handbook for Congress in 1999.
Edward L. Hudgins, former editor of Regulation magazine, wrote a great deal about private options in space. In 1995, he testified before the House Committee on Appropriations that the government should move out of non-defense related space activities, noting the high costs and wastefulness incurred by NASA. In 2001, Hudgins wrote “A Plea for Private Cosmonauts,” in which he urged the United States to follow the Russians (!) in rediscovering the benefits of free markets after NASA refused to honor Dennis Tito’s request for a trip to the ISS. Hudgins testified again before the House in 2001, this time before the Subcommittee on Space and Aeronautics. He noted that since the beginning of the Space Age, NASA has actively discouraged and barred many private space endeavors. This effectively works against the advancement and expansion of technology, while pushing out talent to foreign countries who court American scientists and researches to launch from their less-regulated facilities. In “Move Aside NASA,” Hudgins reported that neither the station nor the shuttle does much important science. This makes the price tag of $100 billion for the ISS, far above its original projected cost, unjustifiable.
Michael Gough in 1997 argued that the space “shuttle is a bust scientifically and commercially” and that both successful and unsuccessful NASA programs have crowded out private explorers, eliminating the possibility of lessening those problems. Molly K. Macauley of Resources for the Future argued in the Summer 2003 issue of Regulation that legislators and regulators had failed to take into account “the ills of price regulation, government competition, or command-and-control management” in making laws for space exploration.
We welcome the BBC and the Astronomer Royal to the cause of private, entrepreneurial exploration of the cosmos.
Hat tip to Michael Gough and Diana Lopez.
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More Education Hypocrisy from Liberal Democrats
This is not a blog post about Senator Obama sending his kids to an expensive high-quality private school while opposing school choice proposals that would offer that opportunity to poor parents, even though that would be an understandable assumption given the “education-hypocrisy” title. Instead, we’re talking about the head of the Liberal Democrat Party in the United Kingdom, who just warned his members that he is probably going to send his kids to non-state schools even though the party is wedded to a throw-more-tax-money-down-a-rat-hole approach of propping up government schools. The Daily Mail reports:
Nick Clegg yesterday admitted he might send his children to a private school — as his party vowed to end ‘educational apartheid’. He said he would not rule out ‘ dipping into his pocket’ for Antonio, six, and Alberto, four, because of the poor quality of state schools. ‘I am not holding my children’s future and education hostage to a game of political football. I am a father before a politician,’ said Mr Clegg, who attended the independent Westminster School. He said he was concerned about the state secondaries close to his home in Putney, South-West London, claiming they were ‘too big and alienating’.
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McCain for FCS?
John McCain attacked Barack Obama last week for saying that he would slow development of the Army’s $160 billion modernization program, Future Combat Systems.* That is interesting, because McCain was himself recently against the program. In a budget plan released in July, the McCain campaign said FCS should be “ended.”
Because he brought it up, it’s worth noting one curious facet of McCain’s former opposition to FCS, noted recently by Gordon Adams in the Bulletin of Atomic Scientists but no major media: FCS is a Boeing-run program, as were the two other programs that McCain came out against in his July budget plan — Airborne Laser, a type of missile defense, and Globemaster, a cargo plane. These are the only three defense programs that McCain has advocated canceling during the campaign. (Obama has not mentioned any defense programs that he would cancel.)
All three programs deserve to be ended. But it may be no coincidence that McCain opposes only Boeing programs. He has been feuding with Boeing since the aborted 2002 Air Force refueling tanker lease deal. The short version of that saga (McCain gave his summation on the Senate floor in 2004) is that the Air Force tried to push a deal through Congress where they would lease tankers from Boeing without competition, adding costs for taxpayers. Authority for the deal was in a Defense Appropriations Bill and therefore would have bypassed authorizers like McCain. McCain led the opposition, in the process disgorging documents showing Pentagon and Boeing officials working together on the deal through various chicanery including corruption. McCain won — Air Force Secretary Jim Roche lost his job and Pentagon and Boeing officials were convicted of crimes — but may still be punishing his enemies. Last fall, McCain successfully pressed the Pentagon to change the requirements for the tanker deal in two ways that aided the bid of Boeing’s rival, EADS-Northrop. Some suggest that he did this because of campaign contributions from Northrop and EADS executives and the presence of their lobbyists on his campaign. It seems more likely that McCain was just out to get Boeing.
*Here’s what McCain said about Obama and FCS, according to the Army Times: “He promised them he would, quote, ‘slow our development of Future Combat Systems’. This is not a time to slow our development of Future Combat Systems.”
Maybe McCain is pretending that he thinks Obama’s comment means he is against all future combat systems in the military rather than the program of that name. But that would be a particularly naked lie. McCain obviously knows what Obama meant; he complained about the program on the Senate Armed Service Committee for years. So I’m being charitable and assuming that he just changed his mind.