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Economic Development Articles

UN's Final, Final, Final, Final Wake-up Call for Humanity. November 18, 2007

Can We Learn from Europe? December 10,2006

Automobiles and America. November 26, 2006

Property Rights Good for Environment. April 23, 2006

Wetlands and the Constitution. January 15, 2006

Supreme Court & Property Rights. July 3, 2005

Sustainable and Precautionary are Dangerous Words, June 19, 2005

Are Single Family Homes Sustainable? April 17, 2005  

50th Anniversaries.  January 16, 2005

American Dream.  August 17, 2003

Fishing & Property Rights. November 16, 2003

Can We Learn from Europe?

If Europe's economic model is better than ours, shouldn’t we adopt their policies?

Here are some facts.

“Government spending exceeds 50 percent of the GDP in France and Sweden and more than 45 percent in Germany and Italy, compared to U.S. federal, state and local spending of just under 36 percent."

Average per capita output of European nations in 2003 was $28,700. This compared with U.S. per capita output of $39,700. (U.S. was almost 40 percent higher.)

In 2006, unemployment in Europe averaged 8% while unemployment in the U.S. averaged 4.7%. The percentage of Europeans out of a job for more than 12 months was 42.6% while in the U.S. it was only 12.7%.

The U.S. created 50 million new jobs since 1970 while Europe created only 4 million.

Clearly, high taxes and bureaucratic control of the European economy stifles economic growth.

“Government spending encourages people to rely on handouts rather than individual initiative, and the higher taxes to finance the handouts reduce incentives to work, save and invest."

The American model of free markets wins hands down.

To try to level their playing field the Paris-based Organization for Economic Co-operation and Development (OECD), attacks low-tax jurisdictions to try to get them to legislate higher taxes and report the income of EU citizens to keep them from avoiding paying the high EU taxes.

Some have claimed Europe’s fascination with the Kyoto Protocol is to burden America’s economy with regulations and thereby allow Europe to more easily compete with America.

Source: Article by W. Williams, Professor Economics GMU, published in the Sun News. (Note: The reference to Kyoto was not included in Professor Williams’ article.)

December 10, 2006

Automobiles and America.

New study links the automobile to America’s growth.

The automobile has been derided by many, using slurs such as “Why does a 110 pound woman need a 3,000 pound car to buy a one pound loaf of bread?"

The study demonstrates that these derogatory comments overlook how the automobile helped to make America great.

The effect of the automobile on mobility, transportation costs, availability and cost of consumer goods, land use, health and safety, and freedom are all examined in this study.

For example the study points out that while 21 million acres of farm land have been converted to housing development; 80 million have been converted from horse pasture to forests and another 20 million from pasture to high value crops. Automobiles, trucks and tractors have been behind these transformations.

The chart comparing transportation costs to other consumer costs is revealing. The cost of driving has remained remarkably constant at around 10% of income since 1930. Food and clothing have benefited from the revolution caused by the automobile. Their share of personal income have declined from taking 25% and 13% of personal income to 13% and 5% respectively.

It’s interesting to note that taxes have gone from taking 2% of personal income to 20% over the same period.

The study addresses such issues as carpooling and transit. With respect to car pooling, the study links the decline in car pooling to the decline in the size of the family.

Freedom is perhaps the most striking benefit that the automobile has bestowed on Americans. Freedom to travel and explore distant landscapes and attractions, freedom to select jobs that are higher paying and more interesting, freedom to live where one likes.

The study can be downloaded from www.americandreamcoalition.org

November 26, 2006

Property Rights Good for Environment.

Recent article by Law professors Somin and Adler demonstrates that Property Rights are good for the environment and that “the rule embodied by the Supreme Court’s Kelo decision is bad for property owners and environmental protection alike."

They say that economic development takings such as those in Kelo can damage the environment by promoting environmentally harmful development.

They go onto say that economic development takings threaten private conservation lands and open space.

These environmentally friendly properties produce little tax revenue. Using eminent domain to take these properties for economic development converts them to tax generating properties.

They elaborate on the circumstances that would allow the government to take properties for environmental purposes: Their arguments in this regard do not provide the absolute property rights that many believe are inherent in the Fifth Amendment to the constitution.

Source: The Green Costs of Kelo: Economic Development Takings and Environmental Protection by ILYA  SOMIN  George Mason University - School of Law and JONATHAN H. ADLER Case Western Reserve University School of Law.

April 23, 2006

Wetlands and the Constitution.

In October the U.S. Supreme Court agreed to hear two cases involving Michigan landowners.

The Supreme Court could determine whether the corps of engineers, the organization assigned to enforce the Clean Waters Act, violated congressional intent: But the Court could also hold that the Clean Waters Act is unconstitutional. In the view of many, the Constitution becomes meaningless when regulating “Interstate Commerce” allows government control over private lands.

The two cases involved in the Supreme Court hearings are: (1) Rapanos v. United States, in which developer John Rapanos was found to have violated federal wetlands regulations when he moved fill material on three of his properties that were alleged to contain wetlands: (2)  Carabell v. Army Corps of Engineers, where the Army Corps of Engineers refused to permit several Macomb County landowners to fill 16 acres of a roughly 20-acre parcel in order to build condominiums.

In Carabel the wetlands are within a mile and half of Lake St Clair, but are in no way connected to a navigable waterway. In Rapanos, the land is 20 miles away from the nearest navigable waterway.

With the Corps of Engineers regulating local wetlands, non-elected officials are making decisions over which local people have no control. Voters can’t, for example, “throw out the bums” in an election. The public has no effective way of having their concerns addressed other than through costly and time consuming law suits.

Recently the Supreme Court ruled that the Corps had exceeded the law's reach when it sought to regulate development of an "abandoned sand and gravel pit" used by migratory birds.

Wetland and land use issues go beyond Michigan: For example, cranberry farms use wetlands and these are coming under attack by environmentalists.

The implications of the Michigan cases are huge. Reed Hopper, attorney with the Pacific Legal Foundation said: “We're talking about thousands of property owners nationwide," covering as much as 100 million acres of intrastate wetlands in the contiguous U.S.

The Supreme Court’s ruling could reestablish the rights of local landowners.

Sources: 

MacinacCenter

National Wetlands News Letter

Wall Street Journal

January 15, 2006

Supreme Court.

There has been abundant commentary on the Supreme Court’s decision that allows the taking of private property for public use.

The constitution says “nor shall private property be taken for public use..."

The Court has now indicated that property may be taken for the public good.

One concern voiced by some analysts is that local politicians can decide what is in the public’s interest; and with local politicians frequently aligned with local commercial interests, there will be takings where property is transferred to politically powerful people.

Another twist on this issue involves a revitalization project being proposed for Reston Virginia. The accompanying picture is the area in question.

The purpose of the revitalization is to create a more economically viable area with greater density, including new high rise units.

There is a confusing overlay of ownership that makes agreement for any such redevelopment very difficult. One proposal has been for the County to take the properties and thereby eliminate the ownership confusion. Until now, this was not considered a legal alternative.

Now, with the recent Supreme Court decision, it may be possible for the County to take the land and allow the development to proceed.

Some states expressly prohibit takings for anything other than legitimate public use. These include Arkansas, Florida, Illinois, Kentucky, Maine, Michigan, Montana, South Carolina, Utah and Washington. Six actually expressly allow takings for private economic purposes. These are Connecticut, Kansas, Maryland, Minnesota, New York and North Dakota.

There will be hundreds of instances such as the one in Reston where there will be reasons to take property to serve the public’s interest. Most observers believe that this issue has not been resolved by the latest Supreme Court decision.

July 3, 2005

Dangerous Words.

The Precautionary Principle and Sustainable Development, are two widely touted phrases being embedded in various government and international documents.

The problem is that no one, absolutely no one, knows what these terms actually mean.

Both seem to have emanated from the Earth Summit in Rio in 1992. Both have been adopted in official UN documents. Both would be ensconced in the EU Constitution if it is ever adopted.

UN Documents, treaties and other obligations are basically contracts. Treaties, for example, obligate the United States to adhere to the terms of the contract once a treaty has been ratified by the Senate.

If these terms are not defined it will be necessary to have the courts arrive at an understanding of what the terms mean. Endless litigation will ensue.

Already the EU is embroiled in a discussion of what is meant by sustainable development as it tries to imbed the idea in its budget. “The principle of sustainable development must be reflected in the financial perspective 2007-2013. This is the main request of the European Economic and Social Committee’s (EESC’s) draft exploratory opinion, drawn up at the request of the Luxembourg Presidency.”

When asked, any reasonable person could agree with the concept:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

But what does this mean when deciding whether to use oil for gasoline? Or to use trees to build houses? Or any other of millions of issues and decisions. Also, who is to define needs? Are Americans exceeding their needs? And how does it reflect the ability of science to find substitutes and to develop better technologies?

And what do these two principles of the Rio Declaration mean? Who can hazard a guess as to the meaning of “appropriate demographic policies”?

Principle 7

States shall cooperate in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth's ecosystem.  In view of the different contributions to global environmental degradation, States have common but differentiated responsibilities. The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command.

Principle 8

To achieve sustainable development and a higher quality of life for all people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies.

(Emphasis added.)

In 1993 President Clinton issued Executive Order 12852 establishing the Council on Sustainable Development that issued a We Believe Statement echoing the Rio Declaration. Senator Jeffords, together with other Senators, published a Sense of the Senate statement supporting the Rio Declaration. EPA Administrator Whitman issued a statement supporting the Precautionary Principle.

A search of Lexis-Nexis revealed that the term Sustainable Development had been incorporated in 43 State statutes and 34 Federal statutes. There were no examples of where the term Precautionary Principle had been incorporated into any State or Federal legislation.

The terms are dangerous unless defined so that everyone can understand what they mean and what their impact will be on our economy. To use them without definition invites litigation and assaults on economic development.

June 19, 2005

Are Single Family Homes Sustainable?  

The European Commission plans to identify all products harmful to the environment and then take steps to control them during their life cycle.

Anticipating the EU Commission’s plan to identify all harmful products and industries by 2007, Denmark’s EPA has just published a report on the consumer sectors that cause the most harm to the environment. They have done the same for industry.

The following are the ten most egregious products; per Denmark’s EPA.

• Dwellings and heating

• Meat

• Tourist spending by Danes

• Clothing (purchase and washing)

• Catering (Restaurants)

• Public order and safety

• Personal hygiene

• Education and research

•  Automobiles

• Bread and cereals

These ten groups account for 57% of total environmental impact from Danish consumption.

The following are the ten worse Danish products by industry.

• Pork and pork products

• Dwellings

• Transport by ship

• Cattle and dairy products

• Wholesale trade

• Restaurants and catering

• Electricity and district heat

• Beef and beef products

• Public order and safety

• Industrial cooling equipment

These ten groups account for 45% of total environmental impact from Danish production.

The EU has the Institute for Prospective Technological Studies (IPTS) performing the studies which should be completed shortly. The EU Integrated Product Policy (IPP) will seek to control these products through their life cycle.

Article 1-2 (3) of the proposed European Constitution establishes sustainability as a legal prerequisite for economic activity. This is driving the EU’s implementation of the Integrated Product Policy.

In essence, the EU will control nearly every aspect of its citizens lives; housing, food, clothing and transportation.

The United Nations established its Commission on Sustainable Development in 1992. It also has a Division for Sustainable Development.

The World Summit on Sustainable Development (WSSD), under the aegis of the UN, was held in Johannesburg, South Africa from 26 August to 4 September 2002.

There is no common definition of sustainability, which means that it will be defined through legal action and international agreements.

April 17, 2005

50th Anniversaries. 

Fifty years ago, on January 15 1955, President Eisenhower issued Bureau of the Budget Bulletin 55-4 to declare it is in the public interest that the Federal Government establish a consistent policy to rely on the private sector to provide goods and services to the Federal Government and avoid Federal Government competition with the private sector.

This policy has been upheld by every succeeding administration and is still the foundation to Office of Management and Budget Circular A-76..

This has been an important contributor to economic growth and still ranks high on the agenda of each meeting of the White House Conference of Small Business.

Private sector enterprises are the most productive, efficient, and effective sources of goods and services. This policy recognizes that when the government competes with the private sector it not only inhibits economic growth but diverts the government from focusing on its core mission.

The current Federal “Competitive Sourcing Initiative” furthers this objective.

Another anniversary is ahead in 2006; the 50th anniversary of the Eisenhower Interstate Highway System which was inaugurated with the Federal-Aid Highway Act of 1956. This was a major contributor to the economic growth of the past fifty years.

After fifty years the system is being strained. Texas is undertaking a new Trans Texas Corridor with separate lanes for trucks, space for freight railways and high speed commuter rail as well as infrastructure for utilities including water lines, oil and gas pipelines, and transmission lines for electricity, broadband and other telecommunications services.

This Texas vision for the next fifty years could be the beginning of a new nationwide highway system, a tribute to Eisenhower’s original vision.

Recognizing the importance of the private sector, the Trans Texas Highway will be built using public/private partnerships to ensure Texas benefits from the efficiencies of the private sector so as to minimize costs to tax payers.

 January 16, 2005

American Dream. 

A new report focuses on seven key aspects of economic growth affecting the American Dream; Automobility, Congestion, Transit, Housing, Air Pollution, Land Use and Open Space. The Journalists Guide to the American Dream was published by The American Dream Coalition.Org This report addresses the current status of these seven key areas and describes the actions that help and hinder growth in each area.

The report underscores one of the most important benefits of economic growth: Growth makes it possible for poor people to get richer without making middle-class and rich people poor. Creating the infrastructure to support the 120 million additional Americans by 2050 will require economic growth so that future Americans can also participate in the American Dream.

Sunday August 17, 2003

Fishing & Property Rights. 

Legislation establishing individual fishing quotas, or IFQs, has been proposed in the Senate and House. These quotas give each fisherman a “right” to a specified amount of the total allowable catch in a Fishery. 

Where used, IFQ’s have led to conservation and better catches.

In aggregate the IFQ’s limit the total amount of fish of different species that can be caught in the area covered by a Fishery.

Each area along the U.S. coast (North East, Mid Atlantic, Paciffic etc.) is covered by a Fishery that would administer the IFQ’s and set the total allowable catch.

As proposed, the IFQ’s are property rights that can be traded or sold with a limit as to the total amount of IFQ’s that any single fisherman or boat can own.

IFQ’s have been proposed because years of governmental restrictions on gear, catch, and seasons, have still resulted in fishermen overexploiting the once-productive resource their livelihoods depend on.

American waters have been over fished, depleting the stock of fish and lowering the income of fisherman. Traditional quotas or season restrictions have led to abuses that have been counterproductive. When the season is shortened the fishermen buy more boats, race to catch as many fish as possible with resultant mayhem on the high seas. When the size of the catch is limited the fishermen throw back the small fish and keep only the larger more valuable fish; with many of the discarded fish dying. And, by limiting the season more fish are caught at the same time, creating an overabundance of fish with lower prices for the fisherman.

Under current conditions no individual has responsibility for ensuring the viability of the fishery; each fisherman catches what he can without concern for the effect that his catch has on the condition of the fishery.

In an influential 1968 article, "The Tragedy of the Commons," biologist Garrett Hardin (1968) explained why a scarce resource "open to all" is subject to overexploitation. He used as an example a pasture open to all herdsmen for cattle grazing (a "commons"). Eventually the pasture becomes overgrazed as each herdsman can capture all the benefits of adding more cows, while facing only a fraction of the costs--the harm caused by excessive grazing--since all users share the costs. The tragedy, notes Hardin, is that each individual is "locked into a system" of competition for grass that leads to ruin.

IFQ’s would give fishermen property rights and an interest in the long term viability of the fishery. Catches would be spread more evenly through the year maintaining higher prices for fishermen and a steady supply of fresh fish for the consumer.

IFQ’s have worked in Alaska and New Zealand so the idea has been tried and proven successful.

The latest version of the House and Senate Bills are referred to as the “Fishing Quota Act of 2003” which amends the Magnuson-Stevens Fishery Conservation  and Management Act (16 U.S.C. 1853).

Some environmental groups have supported IFQ’s while Greenpeace organized an email campaign against the proposed legislation

November 16, 2003

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