Month: November 2014

Portland’s “F” Doesn’t Stand for “Transportation Friendly”

R Street Institute, a D.C.-based think tank, released its Ridescore website last week. The site grades 50 large U.S. cities based on taxi, limo, and transportation network friendliness. Portland received an F, making it the second-most transportation-hostile city in the survey. Why did Portland rank so poorly?

For taxis, competition is restricted through the use of a fleet cap, which limits the number of vehicles each cab company can operate. A recent study by the Portland Bureau of Transportation shows demand for taxis far exceeds supply on weekends, a direct symptom of fleet caps which prohibit even one more cab unless consumer demand for that cab can be proven before it is even put on the street.

As for limos, Portland forces customers to wait a minimum of one hour before receiving service. On top of that, fares for limos must be at least 35% more than those for taxis, keeping prices artificially high.

Finally, Portland is so hostile to transportation network companies like Uber, Lyft, and Sidecar that they have not been able to enter the market at all.

Portland is known for having one of the best public transportation systems in the country. Despite this, our misregulated private transportation system is one of the worst. Until this changes, we’ll continue to be stuck in the transportation dark ages.

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“Gainful Employment” Regulations Will Hurt Private Colleges

Ever since John Kenneth Galbraith published The Affluent Society in 1958, American liberals have been striving to build a full-fledged European welfare state in America. President Lyndon Johnson’s Great Society program was inspired by the same ambitions to socially and economically engineer the United States. Inspired in good part by the vision of an ideologically remade America, governments have expanded enormously over the half century that has passed since then. From the federal level all the way down to school boards and town councils, governments have gained new taxation, spending, and regulatory powers in almost every conceivable direction.

Despite this massive growth, there are still areas where government in America has not yet reached European size. One of them has to do with general income security. We should be thankful for that, for reasons I explain in my book Remaking America: Welcome to the Dark Side of the Welfare State. However, liberals keep pushing the ideological idea that every man and woman in America has some kind of inherent right to a certain income. Inspired by such concoctions as government being some kind of employer of last resort, and the basic income guarantee idea, liberals have made significant political and legislative gains in establishing the notion that people have the right to a certain income regardless of their own choices and efforts.

This move away from personal responsibility has accelerated under the Obama Administration. A good example is the regulatory conglomerate known as “Gainful Employment.” In a nutshell, this is an effort by the federal government to dictate to the private sector how much a person “should” make at certain points in his or her career. The implication―obviously not spelled out in the regulations―is that if a person does not make as much as the federal government thinks he or she should make, then some private entity somewhere, other than the person in question, bears responsibility for the insufficient earnings.

On March 14, 2014, the U.S. Department of Education explained how these regulations can be applied:

“The Obama Administration announced today new steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment—or risk losing access to taxpayer-funded federal student aid. The proposed regulations released by the U.S. Department of Education will help to strengthen students’ options for higher education by giving all career training programs an opportunity to improve, while stopping the flow of federal funding to the lowest-performing ones that fail to do so.”

In order to determine how much a student “should” make after having attended a so-called career college, in 2012 the federal government produced an Excel spreadsheet with more than 7,900 rows of earnings guidelines. The guidelines specify the maximum share of a person’s income that should go to paying back student loans. While this sounds like a misguided but ultimately inconsequential bureaucratic product, in reality it becomes an instrument for dictating the income trajectory for college graduates.

The loans used in the regulations are federal; and since the federal government controls the rates, repayment requirements, and all other financial aspects of the loan, it is easy to use the “Gainful Employment” regulations to establish minimum salaries for people who owe the government on such loans. All the government has to do is, again, to determine the maximum share of a person’s income that can go to paying back loans. If a person pays a larger share, then according to the regulations, she is not making enough money.

But what can the federal government really do if someone does not make what she “should” make? Well, as the quote above indicates, these regulations can be used to go after the educational institutions that a person graduated from. Andrew Quinlan, president of the Center for Freedom and Prosperity, elaborates:

“The Obama administration has consistently sought to eliminate education choices and reduce opportunities, particularly for the poor. The president has repeatedly tried to eliminate funding for the D.C. Opportunity Scholarship Program, despite the fact that the limited school-choice program costs less per pupil than public schools and has seen positive results for poor students. His Justice Department has even misused and misapplied old or irrelevant laws to assault local school-choice programs. Now, the Department of Education is targeting private-sector colleges through so-called ‘Gainful Employment’ regulations. The rules not only punish an entire business model…but by closing one of the best avenues for working class adults to improve their education and increase employability, they also threaten jobs and the economy. The proposed rules would cut off federal loan and financial-aid eligibility for programs that fail to meet certain federal standards, such as graduates with high student-loan debt relative to their earnings in the first few years after graduation. This is a deeply flawed approach for reasons both practical and philosophical.”

Career colleges help millions of Americans advance or reinvent their careers. They are a private-sector invention, responding to a need by others in the private sector, and they operate entirely at the mercy of the free market. If a school provides inadequate education, its graduates make less money than graduates from other schools. Prospective students quickly pick up on such differences and make a free-market, independent choice to avoid low-performing schools.

It seems, however, that this application of the “Gainful Employment” regulations has created a perfect storm of statist intentions: The desire to regulate people’s incomes has merged with a deeply held negativism toward private education.

America has a proud, centuries-old private education tradition. We also have a centuries-old, well-working free-market economy where people can both fail and succeed. The very pursuit of happiness, prosperity and a satisfying career is often as rewarding as reaching the goal. The “Gainful Employment” regulations, and all other regulations aimed at socially and economically engineering our society, rob people of that very reward. Fewer people become productive, independent citizens and more people become dependent on government for their progress through life. The welfare state wins.

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Press Release: Legal Analysis Finds Land Board in Breach of Trust over Elliott State Forest

November 25, 2014

FOR IMMEDIATE RELEASE

Media Contacts:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

Kathryn Walter
617-519-6168
kwalter@altuslaw.com

 

PORTLAND, Ore. ― A detailed legal analysis released today by Cascade Policy Institute concludes that the State Land Board, which has responsibility for the Elliott State Forest, has not prudently managed this asset and likely has breached its fiduciary trust to generate maximum net revenue over the long term for K-12 schools, as required by the Oregon Constitution.

The Elliott is a 93,000-acre forest on the south coast. It is part of a portfolio of lands known as “Common School Trust Lands” (CSTL), and these lands must be managed as endowment assets for public schools. The State Land Board, comprised of the Governor, the Secretary of State, and the Treasurer, manages all Trust Lands.

For over 30 years, the net revenue from the Elliott has been steadily declining. In 1994 a consultant to the Oregon Department of Forestry recommended that the Board divest itself of the Elliott entirely, stating that, “Selling the Elliott is the only marketing alternative likely to significantly increase net annual income to the CSF.”

In 1995, the Division of State Lands (as it was then known) recommended that the Board sell all 3.4 million acres of Trust Lands for the same reason. Both recommendations were rejected by the Board.

In 2013, the Elliott actually lost $3 million, prompting the Board to sell 2,800 acres. On December 9, 2014, the Board will consider recommendations from the Department of State Lands for a “new business model” for the Elliott.

Trust law requires that trustees exercise reasonable care and skill in managing a trust and make trust property productive. Trustees must also preserve trust property and defend actions that may result in loss to the trust and must act with absolute loyalty to the beneficiaries. Failure to carry out these duties is a breach of the trustee’s fiduciary duties.

The Cascade legal analysis, undertaken by Portland attorney Kathryn Walter, concludes that:

  1. The Board is not prudently managing the trust land assets. Although a trustee is not charged with 20/20 hindsight, the trustee must be able to explain the reasoning behind an investment strategy. Only recently has the State Land Board attempted to understand the value of the Elliott State Forest. Further, the Board has ignored recommendations to divest all trust land holdings.
  1. The Board should have known that doing nothing was imprudent. The Board, by its inaction, has breached its duty by failing to dispose of the Elliott State Forest when the opportunity presented itself and, by waiting too long, has left the trust with devalued property.
  1. The Board must protect the trust from loss, including insuring trust property against loss and when facing litigation or other claims implicating the trust. A trustee is also obligated to defend the trust against claims, to avoid claims of liens and other losses, and to pay taxes. The Board failed to fulfill its duties by not negotiating a Habitat Conservation Plan (“HCP”), which would have alleviated the impact of the federal Endangered Species Act (ESA) on the Elliott.
  1. The appointment of the State Land Board as trustee in Oregon’s constitution likely violated trust principles from the trust’s beginning. A trustee has a duty to act honestly and with undivided loyalty to the interests of the trust and its beneficiaries. By virtue of the Board members’ political roles, the Board members cannot offer undivided loyalty to the beneficiaries because they are beholden to so many competing interests.

Cascade Policy Institute President John A. Charles, Jr. stated, “During 2013, the Land Board managed to lose $3 million on a timber asset worth some $500 million, while the S&P 500 Index was enjoying total returns of 32%. When the Land Board meets on December 9, it must take action to ensure that the Elliott State Forest begins generating income for public schools.” Cascade has recommended that the Board either sell the Elliott, or explore a land exchange with the federal government.

Charles also noted, “Since the Land Board is a highly political entity, the state legislature in 2015 should consider establishing a new, non-political board to assume management responsibilities for all Common School Trust Lands.”

The full report by Cascade Policy Institute may be viewed here.

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Let’s Talk Turkey – with Uncle Sam

On this Thanksgiving I have to give credit to The Blaze for alerting me to a serious issue of public concern. Apparently the U.S. government, in its collective wisdom, believes that Americans need its help to purchase, prepare, and eat the traditional holiday turkey.

The United States Department of Agriculture is devoting resources (read, your tax dollars and/or some of the nearly $17 trillion federal debt) to maintain a website called Let’s Talk Turkey—A Consumer Guide to Safely Roasting a Turkey. On it, you’ll find some helpful, and some less than helpful, tips that apparently your government doesn’t think you can find on any of the thousands of sites a quick Google search on turkey preparation will reveal before your eyes.

Sites hosted privately by the likes of Safeway, Butterball, and even the Mayo Clinic apparently aren’t sufficient to give you the reliable information you need on this significant national holiday.

But wait, there’s more. If you need more personal turkey help, there’s a federal Meat and Poultry Hotline you can call and speak with a live government employee. Just think of the last time you sought “help” with your taxes from an IRS phone line. Of course, the government turkey hotline is only live from 5am to 11am Pacific time on Thanksgiving Day. After 11am you may have to rely on that for-profit turkey purveyor Butterball, which answers its Turkey Talk-Line until 4pm and even answers the phone starting at 4am on Thanksgiving.

Please understand I’m not suggesting that you use any but an official government, taxpayer/debt funded website or phone line to get your turkey tip information. But if you’re going to ignore my advice and feel particularly rebellious this Thanksgiving, you might want to watch this State Farm video featuring “Duck Dynasty” turkey safety tips.

No matter how you glean your turkey safety and cooking tips, let’s be careful out there. After all, who could know more about turkeys than the federal government?

Steve Buckstein is Founder, Senior Policy Analyst, and Satirist-in-Residence at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Scare Tactics Not Working in Road Tax Debates

The Oregon Department of Transportation (ODOT) recently issued a report describing the deteriorating condition of Oregon highways. The authors estimate that the cumulative cost to the state economy from poor roads will be $94 billion by 2035.

At the same time, the Portland City Council is considering a new local income tax to pay for road maintenance and safety, citing a lack of adequate funding.

While road maintenance is indeed a problem throughout Oregon, the public is unlikely to approve new road taxes. The primary reason is a lack of trust. During the past 15 years, Portland has squandered vast amounts of money on fads like streetcars, light rail, bioswales, and “road diets.” At the state level, ODOT spent nearly two decades and $180 million on a silly bridge-with-light-rail proposal to Vancouver, Washington that is now dead.

These projects were mostly aimed at getting people “out of their cars.” Yet the reality is, regardless of how people travel, more than 99% of all trips take place on a road. So road maintenance needs to be the top priority with existing transportation dollars.

New methods to pay for transportation infrastructure will eventually be needed, but politicians need to re-earn the public’s trust before that can happen.

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Scare Tactics Not Working in Road Tax Debates

The Oregon Department of Transportation (ODOT) recently issued a report describing the deteriorating condition of Oregon highways. The authors estimate that the cumulative cost to the state economy from poor roads will be $94 billion by 2035.

At the same time, the Portland City Council is considering a new local income tax to pay for road maintenance and safety, citing a lack of adequate funding.

While road maintenance is indeed a problem throughout Oregon, the public is unlikely to approve new road taxes. The primary reason is a lack of trust. During the past 15 years, Portland has squandered vast amounts of money on fads like streetcars, light rail, bioswales, and “road diets.” At the state level, ODOT spent nearly two decades and $180 million on a silly bridge-with-light-rail proposal to Vancouver, Washington that is now dead.

These projects were mostly aimed at getting people “out of their cars.” Yet the reality is, regardless of how people travel, more than 99% of all trips take place on a road. So road maintenance needs to be the top priority with existing transportation dollars.

New methods to pay for transportation infrastructure will eventually be needed, but politicians need to re-earn the public’s trust before that can happen.

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Tear Down Oregon’s (Self-Created) Berlin Walls!

The Berlin Wall came down twenty-five years ago this week. The Wall, which separated East and West Berlin, was one of the most powerful visible symbols of the metaphoric “Iron Curtain” which divided the Soviet Bloc nations from the free countries of Europe during the Cold War.

My friend John Fund, the former Wall Street Journal editorial writer, has often shared a human story from when the Berlin Wall fell in 1989. He once met four teenage girls while visiting East Berlin in 1984. As he prepared to board the train that would take him back to the West, John asked them what they wanted to be when they grew up:

“A schoolteacher, said one. A hairdresser, said another. A nurse, said the third. Only Monika, the oldest and clearly the wisest, hesitated. Finally, she sighed and said, ‘It doesn’t make any difference what we become when we grow up. We will still always be treated like children.’”

That statement made a profound impact on John. He noted how he could go anywhere in the world from that street corner, but these teenagers could not go 500 yards to see the bright lights of West Berlin.

They had to remain in “a semi-comfortable, but drab existence, in which any independent thoughts they might have would be hidden within themselves from the government.”

John and Monika kept in touch over the next few years. Then, two days after the Berlin Wall fell on November 9, 1989, John’s phone rang.

There was the unmistakable sound of an overseas call. “This is Monika!” she shouted in halting English. “I am calling from Berlin West! I am over the Wall!”

Monika did not plan to flee East Germany. But now that the Wall was down, she could leave if the people who ran that government reneged on their promises of free elections and economic reforms.

John reminded Monika of their first meeting and asked if she felt she was finally being treated like a grownup.

“Yes,” she said. “I think everyone in my country decided for themselves to grow up overnight.”

Monika knew what it was like to be finally treated like an adult by her government; but Americans are now being treated more like children, as the limited government our Founders gave us morphs into a behemoth. It’s up to us to “tear down the Walls” of national programs like ObamaCare and the myriad regulatory barriers that impede freedom and opportunity here in Oregon.

Cascade Policy Institute has helped educate Oregonians since 1991 about the benefits of freedom and liberty. We look forward to working even more closely with everyone who is committed to keeping our communities and our state from being encircled by our own, self-created Berlin Walls.

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Arizonans Gain the “Right to Try” to Save Their Lives

Amid last week’s election excitement, Arizonans overwhelmingly approved their “Right to Try” referendum, allowing terminally ill patients access to experimental drugs that have completed basic FDA safety testing but are still awaiting further approval. With seventy-eight percent of the vote, Arizona becomes the fifth state to pass Right to Try legislation this year. Momentum is building with wide bipartisan support. Is there any reason for opposition?

Opponents worry that Right to Try may harm the drug development process by pushing patients away from clinical trials. One way to deal with this concern is the Colorado approach, which requires patients be ineligible for trials in order to participate in Right to Try.

More troubling, critics fear that Right to Try takes advantage of vulnerable patients. They worry the terminally ill may choose options that are not in their best interest and that may ultimately lead to an early death.

Right to Try isn’t a magic bullet, though. It doesn’t guarantee a cure, nor is it free from risk. What it offers is a choice when all other options have failed. Oregon already offers terminally ill patients the choice to end their lives under the Death with Dignity Act. If you can choose to die, shouldn’t you be able to choose to fight to live?

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A Time for Choosing

Did you choose between a left or right in yesterday’s election? If that phrase sounds familiar, perhaps you watched an emerging leader utter it 50 years ago last week.

In 1964 an actor named Ronald Reagan gave what has become known simply as “The Speech” on behalf of his ill-fated Presidential candidate, Barry Goldwater.

The half-hour TV address, “A Time for Choosing,” wasn’t able to propel Goldwater to the Presidency, but it is credited with launching Reagan’s political career and his eventual landslide victory in 1980 against a sitting president, Jimmy Carter.

You can watch The Speech online. Here are two of my favorite lines:

“This is the issue of this election: Whether we believe in our capacity for self-government, or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves.”

And…

“You and I are told increasingly we have to choose between a left or right. Well I’d like to suggest there is no such thing as a left or right. There’s only an up or down: [Up to] man’s age-old dream—the ultimate individual freedom consistent with law and order—or down to the ant heap of totalitarianism.”

I didn’t fully appreciate these concepts then; I do now.

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Policy Picnic – November 19, 2014

Please join us for our monthly Policy Picnic led by Cascade President & CEO John A. Charles, Jr.

Topic: Alternatives to the Proposed Portland Street Tax

Description: The Portland City Council seems determined to enact a new tax to pay for basic road maintenance. In this seminar, we will discuss why such a tax is unnecessary, and what the city should do to maintain and improve the road system.

Admission is free. Please feel free to bring your own lunch. Coffee and cookies will be served.

Space is limited, so sign up early!

 
Sponsored by:
Dumas Law Group

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