Making People Poorer This Week
The news stories of this past week contain many examples of how supposedly good motives conceal the pernicious outcome of many public measures.
by Jerome F. Winzig
When it comes to public policy and public spending, the best of stated motives often conceal policies and expenditures that will not -- pious declarations notwithstanding -- benefit most people but instead will make them poorer or less powerful. The news stories of this past week contain numerous examples of how public policy and public spending are twisted for private gain or ill-conceived policy at the cost of impoverishing the community at large.
On Sunday, it was reported that the Minnesota Zoo is asking the Minnesota state legislature for $115 million for renovation and expansion. The zoo's management has undertaken other renovations and major additions over the last 20 years, but the zoo's attendance in fiscal year 2000 was less than it was when it opened in 1979.
On Monday, there was news that Congress is considering a new $3 billion subsidy for peanut farmers, who have already received tens of billions of dollars in subsidies over the last 70 years. One peanut "farmer" who would receive as much as $2.1 million from this legislation is the John Hancock Mutual Life Insurance Co., which is located in Boston, not exactly a great peanut-farming region. The company would be paid to give up licenses controlling 3.8 million pounds of peanuts.
On Tuesday, there were reports of demands by the big U.S. steel companies and the steelworkers union to impose tariffs of 40 percent on imported steel and to use the money to subsidize health benefits for retired steelworkers. However, a study by economists Joseph Francois and Laura Baughman indicates such tariffs would cost eight American jobs for every one steel industry job protected. In addition, those advocating the tariffs did not explain why other Americans whose retirement plans include no health benefits should subsidize such benefits for retired steelworkers.
On Wednesday, it was reported that the U.S. Senate had began debate on an energy bill that would mandate a 50 percent increase in gasoline mileage for automobiles. Supporters assert the mere passage of such a law will create engineering improvements to make this possible without reducing either vehicle size or weight. Thus, they say, this measure will not result in lighter cars that expose their occupants to greater injury in the event of an accident.
On Thursday, there was coverage of a campaign financing "reform" measure that would weaken the requirement that television stations sell time to candidates at the same rates they charge their best customers. One of the supporters of this measure is the New York Times, which owns eight network-affiliated television stations that stand to benefit handsomely from this legislation.
On Friday, there was news that a bill to provide public financing of a baseball stadium for the Minnesota Twins had been approved by the Minnesota Senate Taxes Committee. Some members of the committee opposed the idea of a referendum for the host city, even though its residents would have to pay higher local taxes to pay for the stadium.
There was also a report on Friday that the Environmental Protection Agency handed out $2 billion in foundation grants from 1993 to 2001. Interestingly, the top six non-profit recipients weren't even environmental organizations but were senior-citizen groups like the AARP, whose foundation received $99 million.
On Saturday, there was coverage that U.S. senators had agreed to an "energy-saving" measure that would require refineries to triple the amount of ethanol used in gasoline. News reports failed to mention that ethanol's use must be mandated because of its cost, which is high because it requires so much energy to process corn into ethanol.
The true effects of these proposals are masked by the following mistaken assumptions: Public agencies are not accountable for their performance. Farm subsidies benefit family farmers. Protectionist trade policies protect Americans. Legislation can mandate engineering marvels. Newspaper editors always take positions in the public interest. Public subsidies for major league sports benefit the community. Environmentalists always do what is best for the environment. The marketplace can be ignored.
Sadly, such assumptions are costly for most Americans, especially -- in spite of their avowed intent -- for the poorest and least powerful Americans.