Everybody can recall that one teacher who made a life-changing impression on them. For some it happened in grade school; for others, college. One individual, however, managed to influence individuals not only in the halls of academe, but in magazines, newspapers, television channels, the U.S. Congress, and even the White House. And still, after his passing, he is changing the world. On July 31, people across the world are celebrating “Friedman Legacy Day” on what would have been Milton Friedman’s 101st birthday. 144 local events have been planned, including 90 in the U.S. and 54 in 25 countries.
Milton Friedman is considered by many to be the most influential economist of the 20th century. His contributions have had a lasting impact on monetary policies, taxing models, government spending, and education reforms. Yet, even with the proven effectiveness of Dr. Friedman’s ideas, public policies have moved away from them in favor of a more centralized decision-making system. The case for individual freedom must be made again―and as strongly as Dr. Friedman did.
“Many people want the government to protect the consumer,” Friedman said. “A much more urgent problem is to protect the consumer from the government….The great tragedy of the drive to centralization, as of the drive to extend the scope of government in general, is that it is mostly led by men of good will who will be the first to rue its consequences.”
Nowhere is this more on display than in the current controversies concerning the IRS and NSA. Or take last year’s historic cheating scandal in Atlanta Public Schools. Government is becoming so big it is forgetting its boundaries and failing to do what it’s meant for: serving and protecting the individual.
That is precisely why Dr. Friedman, along with his wife, Rose, devoted his legacy to education reform, specifically to school choice. The Nobel laureate saw the grave ills a centralized, government-run system was having on our nation’s children, particularly on minority families, and determined that freedom of choice in education was the best alternative. And indeed it is.
States’ experiences, empirical research, and parental satisfaction are proving that a market-based approach to education is far better than a monopolistic structure. By focusing our efforts on education, just as Dr. Friedman did, we can reignite the drive toward individual freedom that has served our country so well.
Milton Friedman said that maintaining a free society “requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to do something about them you not only may make them worse, you will spread your tentacles and get bad results elsewhere.”
That is happening far too often today, as evidenced by our high unemployment rate, surging gas prices, ballooning health care costs, high food-stamp reliance, and unacceptable educational outcomes. And still, the reaction to such ills typically focuses on government doing more.
We remember Milton Friedman for his principled stance against government overreach. And we will continue to keep his voice alive. “Milton 101” is a lesson more Americans need to learn. Its teachings are simple, but its effects are profound. Those who learn them will be today’s Milton Friedmans—advocates for freedom, teachers of liberty.
Cascade Policy Institute is participating in the 2013 “Friedman Legacy Day,” a worldwide day of remembrance for Milton Friedman on what would have been his 101st birthday.
By Kevin Sharp
Last week, a private helicopter airlifted an injured Texas woman from Mount St. Helens. In her words, the $1,300 bill was a “no-brainer” compared to the seven hours it would have taken for normal search and rescue crews to transport her down the mountain.
While some criticized her decision, it’s clear she valued her safety more than she valued money in her pocket, which is a perfectly reasonable choice. Instead of relying on government assistance, she took the situation into her own hands.
While it is important to have a public safety net to help people in potentially dangerous situations, there is no reason why people should be denied the ability to hire private assistance when they feel the need; and they certainly shouldn’t be criticized for doing so. She paid more, and she received better and more immediate service as a result. Instead of accepting the one-size-fits-all solution provided by the government, she chose the option that worked best for her.
We need to work on adopting that mentality on a broader scale in relation to government services. If we don’t like the schools, we should be free to pick better ones without penalty. If we are unhappy with the public transportation options, we should be able to hire a better contractor. Freedom of choice is an extremely important liberty; we should be able to exercise it more.
Kevin Sharp is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.
We’ve all heard the adage that government should run like a business. The problem is that it really can’t. Briefly, here are some of the reasons why:
- By its very nature, government is often a monopoly provider of whatever services it performs. Business, on the other hand, is subject to intense competition in a free marketplace.
- Government can afford to deliver sub-par service because it prohibits others from entering its market. This doesn’t mean that government employees want to deliver poor service, just that there is often no penalty when they do so.
- Government leaders have less incentive to eliminate waste in their operations because they have a captive revenue stream. Business leaders know that customers can pick up and leave, reducing the firm’s income at any time.
- Government’s “customers” have to pay for what the majority wants, while in a marketplace individual customers decide what they will pay for, no matter what others want.
None of these reasons imply that business owners are somehow nobler than government leaders. They simply must be more responsive to individual customers, and they must innovate and control costs in order to survive. Government leaders need only satisfy the majority of their “customers” because the minority, in effect, can’t easily take their business elsewhere.
Even faced with such obstacles, to their credit many government officials still try to operate in a more businesslike manner. A lecture hall full of such public servants spent a Saturday back in 1992 at Portland State University listening to an author of the book Reinventing Government try to help them out. Among other assumptions, the book postulated that government could become more efficient if it simply acted more entrepreneurial and less bureaucratic. This sounded good, until one realized that the authors may be confused about at least one key concept.
Co-author Ted Gaebler first asked his public employee audience to think more like profit-seeking capitalists so as to meet the needs of their constituents. However, later he explained that government might be able to do things more cheaply than the private sector because it doesn’t have to earn a profit.
So which is it? Is profit an indicator that you’re satisfying constituent demand, or is it a burden that raises prices on consumers?
Economists will tell you that in a competitive environment, profit is a signal that you’re meeting your customers’ needs. Profit actually can decrease prices, in part because profitable businesses can invest some of their profit into more efficient means of production.
The profit motive is often a key driving force for entrepreneurs who jump into a business because they see an unmet consumer need. They know that unless they can provide better, cheaper goods and services than their competitors, they won’t attract enough customers to cover costs, let alone earn a profit.
One clear example of the profit motive benefitting consumers is what happened when Wal-Mart launched an aggressive program in 2007 offering 30-day supplies of common generic drugs for just $4. Soon, Fred Meyer, Safeway, Walgreens, and others retailers decided to match that low price rather than risk losing customers to a competitor. Each of these big chains is a for-profit company. Yet, each realized that to make profits in health care, they needed to offer something that would attract and retain customers.
Taking the profit out of that health care segment wouldn’t have done anything to significantly reduce prices and save customers billions of dollars over the last five or six years. Who believes that government-centralized drug purchasing, or price controls, would have dropped monthly prescription prices down to just $4 each?
The “profit motive is bad” fallacy is just that―a fallacy.
While government can’t employ the profit motive directly, it can do so indirectly by contracting out some functions to profit-seeking enterprises. When done correctly, contracting out can allow profit to become a signal of citizen satisfaction in public services and can reduce the cost of those services.
Of course, contracting out public services doesn’t guarantee good service and taxpayer savings. Private firms can make mistakes just as governments do. They sometimes fail to meet customer needs, and sometimes they break the law and cheat their customers. But unlike government, most poorly run firms either go out of business as customers flee or change their ways to retain them. To flee a poorly run government, most of the time we have to pick up our family and move to another city, county, or state.
Finally, even if we agree that business should try to maximize revenue and profits, that should not be government’s primary goal. Rather than maximize revenue, government should maximize individual and economic liberty. In today’s modern world, it can only do that by reducing its size and scope.
For example, our Founding Fathers envisioned a government that would protect our lives, liberty, and property. It was not designed to provide our alcohol (OLCC), jobs (picking winners and losers in the marketplace), and entertainment (Oregon Lottery). Getting Oregon’s state, county, and local governments out of these services does not follow a business model; it follows a liberty model.
We can ask no more of our government leaders than that they protect our rights and otherwise leave us alone to pursue our own interests. That is the American way.
Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.
By William Newell
When you think of a school, you probably imagine classrooms filled with students and teachers, not employee offices. The reality is that highly compensated administrators and non-teaching support staff outnumber Oregon’s K-12 teachers.
The growth of administrative and non-teaching support staff has more than tripled that of students and teachers since 1992. In the last 21 years, the student population has grown by only 15.4 percent and teachers by only 12.7 percent. At the same time, the ranks of administrators and non-teaching support staff have grown by a staggering 47.3 percent.
The growth in staff hasn’t improved student achievement. Oregon fourth and eighth grade National Assessment of Educational Progress test scores in math and reading have regressed to or fallen below the national average. In 2013, Oregon received a “C” from Education Week and a “D-” from StudentsFirst, two respected education research organizations.
Rudy Crew, Oregon’s recently departed chief education officer, abused his spending privileges and did little to improve Oregon schools, ultimately showing the top-heavy system’s main flaws. Sadly, the top education bureaucrat’s $280,000 salary and gold-plated benefits package are just the tip of the education iceberg.
If administrative and support employment had grown in line with students, Oregon could have saved more than $300 million annually or hired almost 3,782 teachers compensated at $80,000 each.* Going forward, schools must refocus their priorities back on the classroom and away from the education bureaucracy.
*Teacher compensation was calculated by taking the average Oregon K-12 teacher salary of $57,000 plus 40% for benefits.
William Newell is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.
By Brandon Loran Maxwell
What’s not to love about Oregon? It’s green. It’s hip. It’s weird. Yet, behind the cultural mystique of Oregon lies a troubling truth: Compared to similar-sized states, it has one of the fastest growing prison populations in the nation and spends 7.5 percent more per inmate than the national average—$84.81 each day.
To put $84.81 in perspective, Mississippi spends $39.56 a day—merely half of what Oregon spends. In fact, of the nation’s 14 states with populations ranging between two and five million people, ten of them spend less per inmate than Oregon. Only Iowa, Connecticut, and New Mexico spend more. So where is the money going?
Interestingly enough, of the ten states that spend less than Oregon per inmate, nine are right-to-work states. Of the four states that spend equal to or more than Oregon per inmate, three are forced-union states.
According to the Oregon Legislative Fiscal Office, entry-level correctional officers take home 24 percent more annually than surrounding states. The study also found Oregon was the only state that “did not require the employees to contribute to their health plan premiums.”
Currently, more than a dozen national and local prison employee unions operate within the United States, including Service Employees International Union (SEIU), American Federation of Government Employees (AFGE), and the American Federation of State, County and Municipal Employees (AFSCME) which boasts over 1.5 million members, 25,000 in Oregon alone.
Over the years, AFSCME has lobbied dozens of proposals with little to no regard for Oregon taxpayers, including a 25 percent pay raise which would have increased the salaries of prison health specialists to more than $80,000 a year. Likewise, AFSCME has aggressively opposed sentencing reforms aimed at reducing prison costs, and in other states even sued to keep prisons open and thriving.
In 2000, AFSCME’s international executive board condemned the privatization of prisons, saying, “Prison privatization only benefits corporations….” Newsflash: Prisons are already a business. The California Correctional Peace Officers Association spent over $1 million in 2008 to fight Proposition 5, which would have placed non-violent drug offenders in drug treatment programs instead of prisons. Why? Because it was bad for business. Union business.
Over the past decade, Oregon’s prison population has grown by more than 3,000 inmates, bringing the total number of inmates to over 14,000, spanning 14 prisons―including the $120 million Dear Ridge Correctional Institute which, despite 60 percent vacancy, still operates. On the bright side, union members still have their jobs.
Similarly, Multnomah County’s Wapato Jail has operated 100 percent vacant for almost 10 years, costing Oregon taxpayers between $300,000 and $400,000 annually.
In addition to mounting union wages and benefits, the age of the average inmate has dramatically increased over the past 15 years. Older inmates mean higher health care costs. According to a recent study by Americans for Prosperity-Oregon and Cascade Policy Institute, $21,000 in outside health care costs can be attributed annually to the average inmate older than 46. In other words, Oregon taxpayers are not only footing the health care bills for aging union members, but aging inmates as well. Who are the real prisoners?
Oregon taxpayers have a right to be upset over Oregon’s high prison costs. But until they hold the unions at least partly accountable, costs will only continue to rise.
Brandon Loran Maxwell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
By F. Vincent Vernuccio
“We are a democracy, we operate by majority rule. Therefore, we can force you to give us your money.” Such is the message from unions justifying forced dues and opposing laws that protect worker freedom.
It is liberty, not democracy, that is the highest form of society.
Make no mistake, democracies, direct or representational, are better than any other form of government. However, they are only as good as the extent to which they protect the liberty that individuals enjoy. These liberties exist in spite, rather than because, of government institutions.
Many opponents of right-to-work laws justify their ability to force workers to financially support unions because those workers are within a group whose members at one time voted to force everyone in the group to pay.
This is different from voluntarily joining an organization that requires all members to pay dues for the use of their facilities, such as a golf club or a gym. Joining or being associated with a union is not voluntary or a matter of choice. In most cases it is a condition of employment.
Workers do not take a job at Ford because they want to join the United Auto Workers union. They join the UAW because they took a job at Ford. Michigan became the 24th Right to Work state earlier this year so that such workers can keep their jobs without being forced to pay union dues. Likewise, Oregon public employees who are now forced to pay union “fair share” dues against their will may very well support IP9, an initiative petition that would allow Oregon public employees to totally opt out of paying such dues if they wish. Once the Oregon Supreme Court approves IP9’s ballot title and slightly more than 87,000 valid voter signatures are collected, it will appear on the November 2014 General Election Ballot.
The union defense of “we can do anything we want because we have majority rule and we are a democracy like the government” fails on many fronts.
The first and most glaring inaccurate comparison is that the United States is a direct democracy. With the exception of some very small towns and state and local ballot measures, our government is a republic.
Furthermore, we are not just a republic that elects representatives to make our laws, but rather we are a constitutional republic in which certain rights of the individual are protected against laws made by the “majority.”
Pure majority rule in our country has its necessary limits.
The Founding Fathers correctly worried about tyranny of the majority and created several protections against it. James Madison warned against taking liberty out of a democracy. In The Federalist Papers No. 10 he wrote, “Liberty is to faction what air is to fire, an aliment without which it instantly expires.”
That is where defenders of forced unionism fail. When liberty is taken out of democracy and the majority is given the ability to steal from the minority, that no longer is a good and noble form of government or representation. Thankfully, that is not, for the most part, the case in America.
Even if the majority of a small community in the United States with a town hall style democracy or a state with voter initiatives and referendum voted for a law that banned people from going to church, it would not stand because of the First Amendment to the Bill of Rights in the United States Constitution.
It would not matter if a majority of the voters supported the law, majority rule would not be allowed to infringe on the rights and liberties of the minority protected by our Constitution.
Finally, unions are not government. The First Amendment’s freedom of association itself protects workers’ rights to ban together and join unions.
The special privileges granted unions include acting as the monopoly exclusive representative for workers, compelling an employer to negotiate with them, and other collective bargaining abilities that come from the laws government made such as the National Labor Relations Act, National Railway Act, and various state labor laws among others.
Unions, on the other hand, do not provide for government. If someone breaks one of the government’s laws or threatens to harm its citizens, the government, because it has a judicial system, has the ability to arrest and even to incarcerate that person.
While unions in non-right-to-work states can get a worker fired for not paying them (again a privilege granted to them by government) they do not have the ability to create their own jail and incarcerate that worker.
The reason for these limitations is simple—unions are not government. They cannot have a police force, they cannot have jails, and most of all they were never formed to govern citizens.
As unions try to use the majority rule argument to justify their ability to compel others to pay them, they must be reminded that there are rights more fundamental than giving the many carte blanche authority over the few.
Purveyors of this argument must be reminded: When there is a conflict between liberty and democracy, we must always err on the side of liberty.
F. Vincent Vernuccio is director of labor policy at the Mackinac Center for Public Policy and a guest contributor at Cascade Policy Institute. He is a graduate of the Ave Maria School of Law in Ann Arbor, Michigan. A version of this article originally appeared in Michigan Capitol Confidential.
By John Glennon
You should be able to decide what type of home you live in, but your ability to make that decision is severely limited by urban planning. Portland’s Urban Growth Boundary removes the responsibility of supplying housing from market actors who profit from producing what consumers want to buy. Instead, planners decide whether land within the Urban Growth Boundary has been sufficiently used, or whether it can accommodate growth for the next 20 years. Urban planners effectively choose what types of housing residents will have available to them.
According to the city of Portland’s Bureau of Planning and Sustainability, in Portland, “[a]pproximately 20 percent of all new housing will be in single-dwelling residential units.” Most future housing capacity allowed by planners in jurisdictions across the region is dense “mixed-use” developments. New single-family residences which are permitted are crammed together without yards. Beaverton’s comprehensive plan actually bans new low-density residences. Beaverton’s plan says: “To limit the City’s deficit in its regional share of population, expansion of the low density residential areas must be prohibited.”
Not everyone’s wants or needs are met in dense urban centers, but with the plans in place only the wealthiest residents will be able to make different choices. Let’s prevent this future and question whether compact development is always the best option.
John Glennon is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.
For Lovers of Limited Government
Lazy Fair 2013 !
¤ Refreshments ¤ B.B.Q. ¤ Camaraderie ¤
19009 SE Barton Park Rd., Boring, OR. 97009
(Barton Park is near Carver – see directions below)
Sunday, July 28th
11:00am – 4:00pm
The annual Conservative Picnic Lalapalooza for the
¤ Executive Club ¤
¤ Cascade Policy Institute ¤
¤ Taxpayer Association of Oregon ¤
¤ Ask Damascus ¤
¤ Clackastanis ¤
“A great setting for brilliant conversation and lots of laughter with fellow lovers of liberty!”
$10.00 children under 12
$25.00 adults after July 22nd or at the picnic
(Note: Prompt payment helps us with food and refreshment planning. Thanks!)
CASH RAFFLE PRIZE – A CHANCE TO WIN BIG!
Please remember to bring cash ($1, $5, $10, $20) to purchase tickets!
Tickets will be sold at the door!
Send a check made payable to “Craig Flynn” plus the RSVP form below to:
c/o Cascade Policy Institute
4850 SW Scholls Ferry Road, Suite 103
Portland, OR 97225
—————————— —————————— ——————
Directions to Barton Park
Barton Park’s physical address: 19009 SE Barton Park Rd., Boring, OR. 97009.
Covered Area #2 next to the parking lot
Barton Park is located just off of Hwy. 224, approximately 9.8 miles east of Clackamas on the Clackamas River.
Take Interstate 205 to Exit 12, Clackamas/Estacada. Turn east-bound onto Hwy. 212/224. Proceed 3.2 miles through Clackamas to the Hwy. 212/224 split (Rock Creek junction). Follow Hwy. 224 to the right, following the signs to Estacada. Proceed 6.4 miles on Hwy. 224 to Bakers Ferry Road and turn right (Barton Grocery on the right-hand side). The park is .2 miles on the left-hand side of the road.
———— Print Page, Detach here and return with payment ———-
Please complete form(include all names of those in your party)
and include your check made payable to “Craig Flynn “
Lazy Fair reservation for: ______________________________
And Guest(s) ______________________________
By Sally C. Pipes
More than 40 percent of small businesses have frozen hiring because of ObamaCare, according to a new poll from Gallup. A fifth have actually cut their workforces as a direct result of the health care reform law.
That’s not exactly the future President Obama forecast in 2009, when he told an audience of small-business owners that his health care reform package was “being written with the interests of Americans like you and your employees in mind.” He boasted that he had “no doubt [the law] would benefit millions of small businesses.”
Instead, small-business owners are learning that ObamaCare will drive the cost of insurance up without providing the choice of policies it promised. The law intended to make purchasing insurance easier for small businesses by creating exchanges, where firms could band together with their peers in one statewide risk pool—and thus leverage their buying power to secure lower premiums and access to a wide variety of plans. The Congressional Budget Office projected that two million people would get insurance through the small-business exchanges.
Insurers would compete for small businesses’ allegiance, driving down prices further. Employers would name a benefits level, and then their employees could choose from among several plan options at that level. Under the status quo, by contrast, they may be stuck with the plan their employer picks for them—if they even get insurance at all.
But the exchanges aren’t unfolding as planned.
For starters, it’s not clear that the exchanges will be ready by the October 1 deadline set by ObamaCare. Creating these government-directed insurance marketplaces in all 50 states plus the District of Columbia has proved far more complicated than bureaucrats anticipated.
Maryland, which was one of the first states to embrace ObamaCare, announced in April that it would delay the launch of its small-business exchange by at least three months. A recent Government Accountability Office report said that all 16 states and the District of Columbia building their own exchanges are behind schedule—missing deadlines on 44 percent of the key activities needed to get them up and running. In Oregon, the state’s largest health insurer and three others are steering clear of the state exchange designed to serve small employers.*
In the mad dash to get the exchanges built, officials are cutting corners. The promised choice of plans has been the first casualty. This June, the federal government announced that every business owner shopping in the 33 federally run exchanges will have to pick one plan for all his full-time employees.
In some states, there may only be one choice for every single small business in the state—as insurers have been reluctant to participate. Just one insurer signed up to provide small-business coverage in Washington’s exchange. Ditto for New Hampshire and North Carolina. In Mississippi, not a single insurance company has signed up for the federally run exchange. That lack of competition will no doubt yield higher premiums. ObamaCare’s many mandates will exacerbate their upward march.
The health care reform law requires all policies to cover preventive care free of charge—along with a host of other “essential” benefits. Policies cannot cap annual or lifetime health care spending, and annual deductibles cannot exceed $2,000 for an individual or $4,000 for a family in the small-group market.
Businesses are starting to see the result of all these mandates and regulations. An analysis of 11 states by the insurer WellPoint projects that small-group premiums will jump an average of 13-23 percent.
In Rhode Island, insurers want to boost small business premiums by 14 percent, on average. Maryland’s biggest insurer, CareFirst BlueCross BlueShield, is pushing for an average small-business rate hike of 15 percent. And a survey by the American Action Forum earlier this year found that major insurers in five big cities were expecting small-business premiums to more than double for small firms with healthier employees. So rather than freeing small businesses from the burden of having to manage their own health benefits, ObamaCare has raised the prices they’ll pay and limited their options.
It’s no wonder that small businesses are cutting benefits, putting off hiring—or even firing workers. A quarter of small firms say they’re considering whether to drop insurance coverage, and 18 percent have reduced their employees’ hours to part-time. Thirty-eight percent say that ObamaCare has caused them to pull “back on their plans to grow their business.” So much for writing the law with the “interests” of small businesses and their employees in mind.
The Obama Administration just announced that they’d delay the implementation of the employer mandate, which would require all businesses with more than 50 full-time employees to offer health insurance. Hopefully, ObamaCare’s small-business exchanges will be the next component of the law to be delayed.
* “Insurers skip Oregon’s small employer insurance exchange—for now,” Business Journal, May 3, 2013 (http://www.bizjournals.com/portland/blog/2013/05/insurers-steer-clear-of-oregons-small.html?page=all).
Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.
By Kevin Sharp
With the recent suspension of the Columbia River Crossing project, people are already asking, “What should replace it?” The answer, at least for right now, is, “Nothing.” While it is frustrating that the government spent $170 million to not build a bridge, the cost of a poorly conceived bridge would be much greater.
Before Portland and Vancouver do anything else, they need to look seriously into the root of the transportation problems facing each city and plan accordingly. They also need to understand that just replacing the I-5 Bridge with a different bridge is not a lasting solution to the traffic problems. A new bridge needs to be a supplement to the existing Columbia River bridges.
To make the project viable, Portland also needs to abandon its inherently political goal of spreading light rail anywhere and everywhere. A simple bridge to ease traffic congestion is all that is necessary; but Portland transportation planners continually insist on expanding the MAX line to Washington―while Washington residents obviously do not want that. Any attempt to send light rail to Vancouver will only waste more time, taxpayer dollars, and resources that could go to more productive and valuable projects. A bridge should connect the cities; it doesn’t need to drive them apart.
Kevin Sharp is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.