Wednesday, December 31, 2003
Missouri's FY2004 Budget
Every year, I get a booklet of forms in the mail (even though I always use software to do my taxes) and I always look at the back cover which has a pie chart type overview of the coming years budget. For FY2004, the budget is almost $17.9B, a drop of several hundred million from the FY2003 budget. FY2005 should see another drop as well.
In any event, the most interesting numbers are the "where the money comes from" section. 35.1% comes from the Feds, 23.3% from individual (state) income taxes, 11.1% from Sales and Use taxes, 15.4% from miscellaneous revenues (?), 10.6% from Highwya and Road Funds, 2.2% (all other sources), 1.1% Lottery/Gaming proceeds, 1.0% corporate income and franchise taxes, and 0.2% from the liquor and beer tax.
I've always been a fan of removing restrictions on businesses in order to encourage economic growth. Given that the income from corporate income and franchise taxes is between $188M and $170M (1.05%-0.95%), it seems reasonable to just drop them. Without those taxes, more businesses would be encouraged to seek Missouri as a place to setup shop. It also seems reasonable that if the corporate taxes were dropped, not only would the businesses in question have that additional money to reinvest, but also the additional revenue which currently goes to pay the additional accountants needed to manage these extra taxes. Furthermore, the state could reduce (horrors!) it's staff accordingly since there wouldn't need to be any persons responsible for corporate taxation.
Finally, corporations don't pay taxes anyway. You do. For a corporation, a tax is simply a cost to be passed along to the consumer (be it an individual or another business) which causes the cost of the product to increase to cover the cost of the tax. (Sales taxes would seem to be an exception to this general rule, however, if the sales taxes are too high, it can cause a company to consider repricing it's products so that the cost of the product and the sales tax is still in the "sweet spot" for maximum consumer penetration.)
Every year, I get a booklet of forms in the mail (even though I always use software to do my taxes) and I always look at the back cover which has a pie chart type overview of the coming years budget. For FY2004, the budget is almost $17.9B, a drop of several hundred million from the FY2003 budget. FY2005 should see another drop as well.
In any event, the most interesting numbers are the "where the money comes from" section. 35.1% comes from the Feds, 23.3% from individual (state) income taxes, 11.1% from Sales and Use taxes, 15.4% from miscellaneous revenues (?), 10.6% from Highwya and Road Funds, 2.2% (all other sources), 1.1% Lottery/Gaming proceeds, 1.0% corporate income and franchise taxes, and 0.2% from the liquor and beer tax.
I've always been a fan of removing restrictions on businesses in order to encourage economic growth. Given that the income from corporate income and franchise taxes is between $188M and $170M (1.05%-0.95%), it seems reasonable to just drop them. Without those taxes, more businesses would be encouraged to seek Missouri as a place to setup shop. It also seems reasonable that if the corporate taxes were dropped, not only would the businesses in question have that additional money to reinvest, but also the additional revenue which currently goes to pay the additional accountants needed to manage these extra taxes. Furthermore, the state could reduce (horrors!) it's staff accordingly since there wouldn't need to be any persons responsible for corporate taxation.
Finally, corporations don't pay taxes anyway. You do. For a corporation, a tax is simply a cost to be passed along to the consumer (be it an individual or another business) which causes the cost of the product to increase to cover the cost of the tax. (Sales taxes would seem to be an exception to this general rule, however, if the sales taxes are too high, it can cause a company to consider repricing it's products so that the cost of the product and the sales tax is still in the "sweet spot" for maximum consumer penetration.)
Tuesday, December 30, 2003
Cigarette Butts
Why do people who smoke in their cars believe that the world is their personal ashtray? It's nasty to think that someone else should be responsible for their habit.
This is one of the few times I've been sorely tempted on more than one occasion to request tougher enforcement of the existing anti-littering law. Unfortunately, when I see police officers in their cruisers doing it as well, I'm not likely to get any sort of reasonable response.
Why do people who smoke in their cars believe that the world is their personal ashtray? It's nasty to think that someone else should be responsible for their habit.
This is one of the few times I've been sorely tempted on more than one occasion to request tougher enforcement of the existing anti-littering law. Unfortunately, when I see police officers in their cruisers doing it as well, I'm not likely to get any sort of reasonable response.
Revenue Enhancement in Texas
Recently, Texas passed a law restricting license plate shrouds on vehicle. (Those are the decorative trim pieces which go around the license plates and generally have pithy slogans, alma mater presentations, and such.) This all derived from a desire to be able to photograph license plates of folks who run the North Dallas Tollway in the toll-pass lane but without a properly affixed toll-pass. (Many of the failures, it seems, were due to the toll-passes being not exactly installed as directed -- anything which requires such precision should be rethought, IMO.)
The problem was that when the photos were taken, it wasn't possible to tell which state the plate from from due to the shrouds obscuring parts of the lettering. (You and I could figure it out, but in court, any doubt will prevent a ticket from being successfully issued and fines paid.) Hence, the law to make illegal license plate shrouds.
Now, here in good old Missouri, there is a problem with theft of registration stickers. Thieves were cutting off the corners of the license plates. The state recommended 2 solutions. The preferred solution was to place the stickers in the middle of the license plate. The second was to use a shroud to make it more difficult to cut the corners quickly.
Thus, we have a conflict. When I travel to Texas with my truck (legal in Missouri) it is suddenly illegal in Texas. Just another revenue enhancement measure.
Recently, Texas passed a law restricting license plate shrouds on vehicle. (Those are the decorative trim pieces which go around the license plates and generally have pithy slogans, alma mater presentations, and such.) This all derived from a desire to be able to photograph license plates of folks who run the North Dallas Tollway in the toll-pass lane but without a properly affixed toll-pass. (Many of the failures, it seems, were due to the toll-passes being not exactly installed as directed -- anything which requires such precision should be rethought, IMO.)
The problem was that when the photos were taken, it wasn't possible to tell which state the plate from from due to the shrouds obscuring parts of the lettering. (You and I could figure it out, but in court, any doubt will prevent a ticket from being successfully issued and fines paid.) Hence, the law to make illegal license plate shrouds.
Now, here in good old Missouri, there is a problem with theft of registration stickers. Thieves were cutting off the corners of the license plates. The state recommended 2 solutions. The preferred solution was to place the stickers in the middle of the license plate. The second was to use a shroud to make it more difficult to cut the corners quickly.
Thus, we have a conflict. When I travel to Texas with my truck (legal in Missouri) it is suddenly illegal in Texas. Just another revenue enhancement measure.
Revenue Enhancement in Illinois
Well, it's that time of year again, the time for new "laws" to help protect the "safety" of the public. Today's example comes from Illinois where, starting on Friday, January 2, 2004, it will be illegal to drive in the left lane of the interstate. The left lane is for passing only. Driving too slowly (less than the speed limit) in the left lane will also result in a ticket.
While this is good in theory, any time an attempt it made to legislate common sense, some normally law-abiding citizen will get zapped with a ticket he or she does not deserve.
Furthermore, it's rather subjective. How far after I pass that car should I wait before merging back into the right lane? I'm sure it's in the book somewhere, but not being an Illinois resident, any non-residents will get tagged far more frequently, in all likelihood, but enforcement.
Well, it's that time of year again, the time for new "laws" to help protect the "safety" of the public. Today's example comes from Illinois where, starting on Friday, January 2, 2004, it will be illegal to drive in the left lane of the interstate. The left lane is for passing only. Driving too slowly (less than the speed limit) in the left lane will also result in a ticket.
While this is good in theory, any time an attempt it made to legislate common sense, some normally law-abiding citizen will get zapped with a ticket he or she does not deserve.
Furthermore, it's rather subjective. How far after I pass that car should I wait before merging back into the right lane? I'm sure it's in the book somewhere, but not being an Illinois resident, any non-residents will get tagged far more frequently, in all likelihood, but enforcement.
Air Marshalls on Foreign, Incoming Flights
This seems like a good idea, that is until you start picking apart the details. Let's begin.
First, air marshalls must be armed with a handgun of some kind. These would set off detectors and lead to some curious looks if they were simply passed on through. Thus, they most likely would enter the system through some alternate means, bypassing security. (I suppose ceramic guns might work.) Given this fact, it should be relatively easy for some group to station observers near various flights and look for folks getting on planes who did not pass through security. Those persons are most likely air marshalls. Not all airports would have to be covered either, since these groups would likely be smart enough to determine which airports would make likely targets, say Charles De Gaulle or Olry in Paris and a few others which fly directly to the US.
Second, air marshalls generally stick out. How many government employees authorized to carry guns on planes look like the average person with a variety of clothing choices, hair styles, carry-on and check bags, etc. Look hard enough, and you're likely to guess with reasonable accuracy, which persons, if any, on a flight are federal air marshalls.
Third, given the large number of flights into the US, the number of air marshalls required would be significant. Training this number of people would need a bureaucracy of it's own, such an organization being ripe for infiltration. It wouldn't be surprising if one or more of the air marshalls, trained by foreign airlines, was part of a terrorist organization.
Given the problems the US has had in instituting an air marshall program and keeping it running, success in launching that same sort of program globally will have even less success.
This seems like a good idea, that is until you start picking apart the details. Let's begin.
First, air marshalls must be armed with a handgun of some kind. These would set off detectors and lead to some curious looks if they were simply passed on through. Thus, they most likely would enter the system through some alternate means, bypassing security. (I suppose ceramic guns might work.) Given this fact, it should be relatively easy for some group to station observers near various flights and look for folks getting on planes who did not pass through security. Those persons are most likely air marshalls. Not all airports would have to be covered either, since these groups would likely be smart enough to determine which airports would make likely targets, say Charles De Gaulle or Olry in Paris and a few others which fly directly to the US.
Second, air marshalls generally stick out. How many government employees authorized to carry guns on planes look like the average person with a variety of clothing choices, hair styles, carry-on and check bags, etc. Look hard enough, and you're likely to guess with reasonable accuracy, which persons, if any, on a flight are federal air marshalls.
Third, given the large number of flights into the US, the number of air marshalls required would be significant. Training this number of people would need a bureaucracy of it's own, such an organization being ripe for infiltration. It wouldn't be surprising if one or more of the air marshalls, trained by foreign airlines, was part of a terrorist organization.
Given the problems the US has had in instituting an air marshall program and keeping it running, success in launching that same sort of program globally will have even less success.
Thursday, December 25, 2003
Explaining Things & Thinking Styles
Explaining new concepts can be a tough thing to do. What makes such a task more difficult is the fact that there are really 2 extremes of thought process which do not process data the same way.
The first, requires an abstract concept to be provided first. Without this conceptual framework, details are no different than random data points and have no meaning. In fact, offering a person who thinks this way lots of details without first providing a conceptual framework will overload them.
The second, requires lots of details from which to construct the conceptual framework. Without these details, the conceptual framework is just an amorphous cloud with no meaning or structure. This sort of thinker uses the details, like building blocks or lincoln logs, to construct the conceptual framework.
Most people fall somewhere in between, but it's a rare person who is able to communicate using both styles and can translate from one to the other.
Attempting to communicate with both of these sorts of individuals at the same time is a daunting task. Most text books provide material for both in each section by first providing the concept, then examples. You can generally tell what sort of thinker a given person is by noticing what sorts of questions that person asks. Do they want the "50000 foot view" or do they dwell on the minutia?
The worst case is when these 2 sorts have to communicate with each other. Unless they know how the other person thinks, this sort of intercommunication is nigh well impossible and takes far longer to accomplish and with far greater effort, than if someone else mediates and "translates" from one language to the other.
Explaining new concepts can be a tough thing to do. What makes such a task more difficult is the fact that there are really 2 extremes of thought process which do not process data the same way.
The first, requires an abstract concept to be provided first. Without this conceptual framework, details are no different than random data points and have no meaning. In fact, offering a person who thinks this way lots of details without first providing a conceptual framework will overload them.
The second, requires lots of details from which to construct the conceptual framework. Without these details, the conceptual framework is just an amorphous cloud with no meaning or structure. This sort of thinker uses the details, like building blocks or lincoln logs, to construct the conceptual framework.
Most people fall somewhere in between, but it's a rare person who is able to communicate using both styles and can translate from one to the other.
Attempting to communicate with both of these sorts of individuals at the same time is a daunting task. Most text books provide material for both in each section by first providing the concept, then examples. You can generally tell what sort of thinker a given person is by noticing what sorts of questions that person asks. Do they want the "50000 foot view" or do they dwell on the minutia?
The worst case is when these 2 sorts have to communicate with each other. Unless they know how the other person thinks, this sort of intercommunication is nigh well impossible and takes far longer to accomplish and with far greater effort, than if someone else mediates and "translates" from one language to the other.
Wednesday, December 24, 2003
Merry Christmas!!
The following story was sent to me via email and it touched me, so I'm offering it here in hopes that it may touch you as well.
The following story was sent to me via email and it touched me, so I'm offering it here in hopes that it may touch you as well.
The "W" in Christmas
Each December, I vowed to make Christmas a calm and peaceful experience. I had cut back on nonessential obligations - extensive card
writing, endless baking, decorating, and even overspending. Yet still, I found myself exhausted, unable to appreciate the precious family moments, and of course, the true meaning of Christmas.
My son, Nicholas, was in kindergarten that year. It was an exciting season for a six year old. For weeks, he'd been memorizing songs for his school's "Winter Pageant." I didn't have the heart to tell him I'd be working the night of the production. Unwilling to miss his shining moment, I spoke with his teacher. She assured me there'd be a dress rehearsal the morning of the presentation. All parents unable to attend that evening were welcome to come then. Fortunately, Nicholas seemed happy with the compromise.
So, the morning of the dress rehearsal, I filed in ten minutes early, found a spot on the cafeteria floor and sat down. Around the room, I saw several other parents quietly scampering to their seats. As I waited, the students were led into the room. Each class, accompanied by their teacher, sat cross-legged on the floor. Then, each group, one by one, rose to perform their song. Because the public school system had long stopped referring to the holiday as "Christmas," I didn't expect anything other than fun, commercial entertainment - songs of reindeer, Santa Claus, snowflakes and good cheer. So, when my son's class rose to sing, "Christmas Love," I was slightly taken aback by its bold title.
Nicholas was aglow, as were all of his classmates, adorned in fuzzy mittens, red sweaters, and bright snowcaps upon their heads. Those in the front row- center stage - held up large letters, one by one, to spell out the title of the song. As the class would sing "C is for Christmas," a child would hold up the letter C. Then, "H is for Happy," and on and on, until each child holding up his portion had presented the complete message, "Christmas Love."
The performance was going smoothly, until suddenly, we noticed her; a small, quiet, girl in the front row holding the letter "M" upside down totally unaware her letter "M" appeared as a "W.” The audience of 1st through 6th graders snickered at this little one's mistake. But she had no idea they were laughing at her, so she stood tall, proudly holding her "W." Although many teachers tried to shush the children, the laughter continued until the last letter was raised, and we all saw it together.
A hush came over the audience and eyes began to widen. In that instant, we understood the reason we were there, why we celebrated the holiday in the first place, why even in the chaos, there was a purpose for our festivities. For when the last letter was held high, the message read loud and clear: "C H R I S T W A S L O V E."
And, I believe, He still is.
Author unknown
St. Louis Cardinals New Stadium
This has taken a while (a couple of years), but they finally managed to get going on a new stadium. At first, they wanted the state and local governments to put up about 75% of the money and threatened to leave if that didn't happen. It didn't happen. They didn't leave.
This deal is much better. Out of the roughly $400M cost, St. Louis County is loaning $45M from their hotel/motel tax fund (actually bonds issued against future receipts), the city eliminated a ticket tax worth about $3.4M annually, and the state kicked in some roadwork through MoDOT worth about $40M or so. The rest of the funding is private financing and the Cardinals will actually own the stadium instead of just leasing it. Thus, they have an incentive to stay quite a bit longer than they otherwise might.
While I cringe to see government resources spent on these sorts of private ventures, this is likely the best deal which could be made and does minimize governmental resources to a great extent.
This has taken a while (a couple of years), but they finally managed to get going on a new stadium. At first, they wanted the state and local governments to put up about 75% of the money and threatened to leave if that didn't happen. It didn't happen. They didn't leave.
This deal is much better. Out of the roughly $400M cost, St. Louis County is loaning $45M from their hotel/motel tax fund (actually bonds issued against future receipts), the city eliminated a ticket tax worth about $3.4M annually, and the state kicked in some roadwork through MoDOT worth about $40M or so. The rest of the funding is private financing and the Cardinals will actually own the stadium instead of just leasing it. Thus, they have an incentive to stay quite a bit longer than they otherwise might.
While I cringe to see government resources spent on these sorts of private ventures, this is likely the best deal which could be made and does minimize governmental resources to a great extent.
Intermitent Blogging
Blogging will be sporadic during the holidays, but will get back on pace after the first of the year.
Blogging will be sporadic during the holidays, but will get back on pace after the first of the year.
Tuesday, December 23, 2003
Jobs Now!
Missouri Governor (One Term) Bob Holden has proposed a new state program to encourage economic growth called "Jobs Now."
The proposal is for the state to "save" money by closing off some tax credits and using that money to issue bonds so that communities can upgrade infrastructure, such as communications and water. He is proposing that roughly $200M should be available and is making this the centerpiece of the new legislative term which begins January 7. (I almost hate to go look at the list of prefiled bills, but I'm sure there will be more than a few "live ones.")
At this he's not proposing that the state act as a VC firm, something which the government does very poorly since governments really don't have much sense of accountability, a key ingredient to be a successful VC firm. (The state already has an Department of Economic Development which does sort of behave like a VC firm.) Upgrading infrastructure is a good thing, particularly public infrastructure. (Let's not delve into what should be public/private, but deal with what is.) However, while water in this state is a regulated monopoly, effectively making it public, communications infrastructure is not. I can't see why Bob wants give the telecoms operating in the state a handout (since they will ultimately be the beneficiaries of this new infrastructure, using it to bill new customers without the expense of installing the infrastructure.)
I don't believe this will have any significant impact on attracting new jobs to Missouri. It would be better if he just up and proposed the elimination of the State Corporate Income and Franchise taxes. Last year, those 2 taxes brought in only about $450M in revenue out of a budget total somewhere north of $19B, a relative pittance. Eliminating corporate income taxes would really attract business to this state, far faster than anything else, particularly when the neighboring states all (I think) have corporate income taxes. The loss wouldn't be that significant and would save the companies involved far more than the $450M they would pay in taxes. (Many companies would no longer need to employ legions of accountants to manage the items necessary to compute state taxes, thereby saving them quite a bit of extra money.)
Bob, if you really want to have an impact and avoid having yourself stuck with the label OTB (One Term Bob) you should seriously consider my proposal. It will do the job far more effectively than anything you can come up with and at a lower relative cost as well.
Missouri Governor (One Term) Bob Holden has proposed a new state program to encourage economic growth called "Jobs Now."
The proposal is for the state to "save" money by closing off some tax credits and using that money to issue bonds so that communities can upgrade infrastructure, such as communications and water. He is proposing that roughly $200M should be available and is making this the centerpiece of the new legislative term which begins January 7. (I almost hate to go look at the list of prefiled bills, but I'm sure there will be more than a few "live ones.")
At this he's not proposing that the state act as a VC firm, something which the government does very poorly since governments really don't have much sense of accountability, a key ingredient to be a successful VC firm. (The state already has an Department of Economic Development which does sort of behave like a VC firm.) Upgrading infrastructure is a good thing, particularly public infrastructure. (Let's not delve into what should be public/private, but deal with what is.) However, while water in this state is a regulated monopoly, effectively making it public, communications infrastructure is not. I can't see why Bob wants give the telecoms operating in the state a handout (since they will ultimately be the beneficiaries of this new infrastructure, using it to bill new customers without the expense of installing the infrastructure.)
I don't believe this will have any significant impact on attracting new jobs to Missouri. It would be better if he just up and proposed the elimination of the State Corporate Income and Franchise taxes. Last year, those 2 taxes brought in only about $450M in revenue out of a budget total somewhere north of $19B, a relative pittance. Eliminating corporate income taxes would really attract business to this state, far faster than anything else, particularly when the neighboring states all (I think) have corporate income taxes. The loss wouldn't be that significant and would save the companies involved far more than the $450M they would pay in taxes. (Many companies would no longer need to employ legions of accountants to manage the items necessary to compute state taxes, thereby saving them quite a bit of extra money.)
Bob, if you really want to have an impact and avoid having yourself stuck with the label OTB (One Term Bob) you should seriously consider my proposal. It will do the job far more effectively than anything you can come up with and at a lower relative cost as well.
Lead Paint and Lead Poisoning
Here in St. Louis, there are a lot of older homes, many which still have lead paint in them, although perhaps underneath layers of other paint. Nevertheless, lead paint (and the dust from long dried lead paint) still poses a risk to children.
Missouri has been if the leading producer of lead in the US, then definitely one of them. Old lead mines near Bonne Terre (just south of St. Louis) now offer cave diving to those who are interested. The old mines run for literally dozens, if not hundreds of miles underground there.
While lead paint is the primary source of lead in the area, it's not the only significant one. Before 1974, lead was a common component of automobile gasoline and as such, was also a component of the exhaust from those cars. While lead has long since been phased out from gasoline, the exhaust residue still exists. I read about a survey, some years back, which traveled along what used to be major roads in the 1950's here in Missouri and noticed that there was a lead plume (gaussian shaped curve of sorts) peaking a few feet beside what was the old highway and continuing for perhaps a hundred feet from the old roadway before petering out from detection. The old lead is still with us and anyone who still lives along or near those old highways may still have some lead in the dirt around their houses.
This doesn't mean that the EPA should get involved and declare the entire St. Louis metro area a SuperFund site, but it is something to think about when moving in or around older metropolitan areas.
Here in St. Louis, there are a lot of older homes, many which still have lead paint in them, although perhaps underneath layers of other paint. Nevertheless, lead paint (and the dust from long dried lead paint) still poses a risk to children.
Missouri has been if the leading producer of lead in the US, then definitely one of them. Old lead mines near Bonne Terre (just south of St. Louis) now offer cave diving to those who are interested. The old mines run for literally dozens, if not hundreds of miles underground there.
While lead paint is the primary source of lead in the area, it's not the only significant one. Before 1974, lead was a common component of automobile gasoline and as such, was also a component of the exhaust from those cars. While lead has long since been phased out from gasoline, the exhaust residue still exists. I read about a survey, some years back, which traveled along what used to be major roads in the 1950's here in Missouri and noticed that there was a lead plume (gaussian shaped curve of sorts) peaking a few feet beside what was the old highway and continuing for perhaps a hundred feet from the old roadway before petering out from detection. The old lead is still with us and anyone who still lives along or near those old highways may still have some lead in the dirt around their houses.
This doesn't mean that the EPA should get involved and declare the entire St. Louis metro area a SuperFund site, but it is something to think about when moving in or around older metropolitan areas.
The Precautionary Principle
The FDA (and EPA, for that matter) seem to operate at least partly, under the precautionary principle. This principle, simply stated, is that new stuff is bad and should be banned/restricted, until it can be proven to be safe.
The first fundamental failing here is that nothing can ever be proven to be safe. The second is that one must necessarily take a relative approach to the things on which the precautionary principle is applied.
For pharmaceuticals, for instance, we don't know how may lives will be saved or lost by any given uninvestigated medication so it's use is restricted until we can know more. That seems reasonable in general, until one looks at the actual numbers. In many cases, the number of lives lost annually to some condition is fairly large. For any given drug which is proposed to treat that condition (or delay it in some way,) there are a number of lives which can be saved (or deaths delayed.) That's the measure which should be used, not will any lives be lost. Side effects will often claim a few more lives -- after all, individuals are unique, even if the entire process divides people into groups, those with a particular condition and those without.
The FDA, IMO, is unqualified to make these sorts of decisions for individuals. Each person, facing any sort of trial in which they are forced to confront their own mortality, should be allowed to select whatever treatment option they desire, approved or not. Granted, they may need to sign some sort of waiver, but that's an individual decision. To deny someone an option, voluntarily, unless that option is immoral, is unethical.
The FDA (and EPA, for that matter) seem to operate at least partly, under the precautionary principle. This principle, simply stated, is that new stuff is bad and should be banned/restricted, until it can be proven to be safe.
The first fundamental failing here is that nothing can ever be proven to be safe. The second is that one must necessarily take a relative approach to the things on which the precautionary principle is applied.
For pharmaceuticals, for instance, we don't know how may lives will be saved or lost by any given uninvestigated medication so it's use is restricted until we can know more. That seems reasonable in general, until one looks at the actual numbers. In many cases, the number of lives lost annually to some condition is fairly large. For any given drug which is proposed to treat that condition (or delay it in some way,) there are a number of lives which can be saved (or deaths delayed.) That's the measure which should be used, not will any lives be lost. Side effects will often claim a few more lives -- after all, individuals are unique, even if the entire process divides people into groups, those with a particular condition and those without.
The FDA, IMO, is unqualified to make these sorts of decisions for individuals. Each person, facing any sort of trial in which they are forced to confront their own mortality, should be allowed to select whatever treatment option they desire, approved or not. Granted, they may need to sign some sort of waiver, but that's an individual decision. To deny someone an option, voluntarily, unless that option is immoral, is unethical.
The Arrogant FDA
OK, I lied. There is a lot more to expose about the FDA. No, this isn't the anti-FDA blog, although it sometimes will seem that way.
Here's a link to a story about how the FDA fought viciously for 7 years against the claim that fish oil is good for you. Eventually, the FDA capitulated on this one claim, but is still fighting many others. During this trial, there were several occasions where the FDA was ordered by the judge to allow the claim, but the FDA refused to abide by the judicial edict.
This is the way ALL bureaucracies are run and we should all stop and think very carefully before creating another one, for any reason, since they are impossible to stop once they get started.
OK, I lied. There is a lot more to expose about the FDA. No, this isn't the anti-FDA blog, although it sometimes will seem that way.
Here's a link to a story about how the FDA fought viciously for 7 years against the claim that fish oil is good for you. Eventually, the FDA capitulated on this one claim, but is still fighting many others. During this trial, there were several occasions where the FDA was ordered by the judge to allow the claim, but the FDA refused to abide by the judicial edict.
This is the way ALL bureaucracies are run and we should all stop and think very carefully before creating another one, for any reason, since they are impossible to stop once they get started.
Counterfeit Pharmaceuticals
Chip Taylor links to a story about Blogajovich, governor of Illinois, being rebuffed in his state's request to violate the law and import pharmaceuticals from Canada. As Chip points out HHS told him to get stuffed, but a bit more eloquently, citing safety as the governing issue.
I used to believe that the safety issue was a red herring, but the more I've read and the more I've thought about it, the more I've come to believe that there is a real issue there.
WHO has determined that there are roughly 1 million deaths each year, worldwide, from the use of counterfeit drugs. Given the costs of production (scroll down) of even valid pills, it should come as no surprise that there would emerge a thriving black market for look alikes, if not pills with even some or all of the basic ingredients, but whatever else can be found to fill in. Without knowing how the drug reacts in the presence of other chemicals, arbitrary fillers may pose some risk.
Most counterfeit drugs, I dare say, are likely just look alikes, perhaps even sugar pills colored, coated, and shaped to look like the real thing.
Once again, the FDA, through it's regulatory processes, has created the conditions for alternate markets to appear, completely ignoring the realities of economics.
I've had enough of blasting the FDA today (of course I say that frequently, and I never seem to have said enough.)
Chip Taylor links to a story about Blogajovich, governor of Illinois, being rebuffed in his state's request to violate the law and import pharmaceuticals from Canada. As Chip points out HHS told him to get stuffed, but a bit more eloquently, citing safety as the governing issue.
I used to believe that the safety issue was a red herring, but the more I've read and the more I've thought about it, the more I've come to believe that there is a real issue there.
WHO has determined that there are roughly 1 million deaths each year, worldwide, from the use of counterfeit drugs. Given the costs of production (scroll down) of even valid pills, it should come as no surprise that there would emerge a thriving black market for look alikes, if not pills with even some or all of the basic ingredients, but whatever else can be found to fill in. Without knowing how the drug reacts in the presence of other chemicals, arbitrary fillers may pose some risk.
Most counterfeit drugs, I dare say, are likely just look alikes, perhaps even sugar pills colored, coated, and shaped to look like the real thing.
Once again, the FDA, through it's regulatory processes, has created the conditions for alternate markets to appear, completely ignoring the realities of economics.
I've had enough of blasting the FDA today (of course I say that frequently, and I never seem to have said enough.)
Abortion and Down Syndrome
A while back, I came across this story and asked Eugene Volokh to blog about it. He didn't get around to it, but I still believe the story is relevant. Here is the story:
The parents were not informed about the fact that their child had Down Syndrome, hence not giving them a chance to abort. The doctor was determined to be liable because he didn't give a test to determine if the child had any sort of medical condition, in this case Down Syndrome.
This is why doctors tend to prescribe every test known to man (well, almost) when seeing patients and hence why the cost of medicine has become so high.
The mother should have known that she's at increased risk and should have requested the test herself, even if the doctor did not.
This is a disturbing precedent.
A while back, I came across this story and asked Eugene Volokh to blog about it. He didn't get around to it, but I still believe the story is relevant. Here is the story:
Parents of Down Syndrome Baby Win "Wrongful Birth" Suit in Canada
The divorced parents of a baby born in Canada in 1997 will receive compensation for the birth of their daughter (legally termed "wrongful birth"), since the mother testified she would have had an abortion if she had known the baby had Down syndrome.
A British Columbia Supreme Court justice awarded parents Liu-Ling Zhang and Simon Fung more than $300,000 for emotional distress and the cost of raising their daughter Sherry. The money will mostly go to Fung, since Sherry lives with her father and his second wife in Los Angeles. Zhang will receive only $10,000 in damages since she has seen her daughter only eight times in her five years of life, the Vancouver Province reported.
The lawsuit was brought against Dr. Ken Kan of Richmond, British Columbia. The judge ruled that Kan should have given Zhang an amniocentesis test to determine if the baby had Down syndrome, since Zhang was 35 years old, according to the Province. The chance of conceiving a child with the syndrome increases as the mother ages.
"Because of the doctor's negligence, the mother did not have the opportunity to abort," Guy Collette, lawyer for the parents, told the National Post. Zhang testified that having a baby with Down syndrome "totally disrupted our plans," the Province reported.
Disability rights advocates condemned the decision. "I think it's a very big mistake to make that connection [between the syndrome and abortion]," Elizabeth Dolman of the Canadian Down Syndrome Society told the National Post. "Making that decision devalues people with Down syndrome and suggests their lives aren't worth living, and that just absolutely isn't true."
The parents were not informed about the fact that their child had Down Syndrome, hence not giving them a chance to abort. The doctor was determined to be liable because he didn't give a test to determine if the child had any sort of medical condition, in this case Down Syndrome.
This is why doctors tend to prescribe every test known to man (well, almost) when seeing patients and hence why the cost of medicine has become so high.
The mother should have known that she's at increased risk and should have requested the test herself, even if the doctor did not.
This is a disturbing precedent.
Proposed Change to the FDA
The FDA gets in the middle of things where it has no business being, regulating medicines, procedures, devices, and such down the smallest details most times.
The FDA should really be more like an Underwriters Laboratory combined with a Better Business Bureau. They do rudamentary testing on whatever and provide some sort of approval (but not the current all or none regulatory approval) as well as handling complaints. It should be a clearinghouse for data, side-effects, efficacy, and otherwise, regarding anything medical.
Our American system was built on the concept: if it is not explicitly illegal, it is legal. The old soviet system was just the opposite: unless something is explicitly legal, it is illegal. The FDA has adopted the old soviet maxim and it's time to get back to the American way of doing things. The soviet way costs lives, is incredibly expensive and is unsustainable.
The FDA gets in the middle of things where it has no business being, regulating medicines, procedures, devices, and such down the smallest details most times.
The FDA should really be more like an Underwriters Laboratory combined with a Better Business Bureau. They do rudamentary testing on whatever and provide some sort of approval (but not the current all or none regulatory approval) as well as handling complaints. It should be a clearinghouse for data, side-effects, efficacy, and otherwise, regarding anything medical.
Our American system was built on the concept: if it is not explicitly illegal, it is legal. The old soviet system was just the opposite: unless something is explicitly legal, it is illegal. The FDA has adopted the old soviet maxim and it's time to get back to the American way of doing things. The soviet way costs lives, is incredibly expensive and is unsustainable.
Flu Vaccine, Part II
As I was reading yesterday, I stumbled across a blog (I must remember to link or preserve those when I find them) which pointed out that the flu vaccine issue is partly driven by liability concerns and that the reduced profits are due largely to the fact that the largest single buyers of flu vaccine are public agencies.
Indeed, there is a 1986 law which specifically limits the legal liability of vaccine manufacturers when the vaccines are given to children, but has nothing to say about when it is given to adults. If you perform a google search for "flu vaccine liability" you'll see links to actually liability cases.
One of the few positive affects the FDA had when it regulated the flu vaccine is that it changed the process from being a live virus process to a dead virus process. With the live virus process, individuals could actually contract the flu from the shot, but not with the dead virus process. The dead virus is really just a long snippet of the relevant protein sequence -- enough that the body recognizes it as foreign and develops an antibody to it, but not enough to allow the virus to actually reproduce.
As I was reading yesterday, I stumbled across a blog (I must remember to link or preserve those when I find them) which pointed out that the flu vaccine issue is partly driven by liability concerns and that the reduced profits are due largely to the fact that the largest single buyers of flu vaccine are public agencies.
Indeed, there is a 1986 law which specifically limits the legal liability of vaccine manufacturers when the vaccines are given to children, but has nothing to say about when it is given to adults. If you perform a google search for "flu vaccine liability" you'll see links to actually liability cases.
One of the few positive affects the FDA had when it regulated the flu vaccine is that it changed the process from being a live virus process to a dead virus process. With the live virus process, individuals could actually contract the flu from the shot, but not with the dead virus process. The dead virus is really just a long snippet of the relevant protein sequence -- enough that the body recognizes it as foreign and develops an antibody to it, but not enough to allow the virus to actually reproduce.
Monday, December 22, 2003
This Year's Flu
Dr. Sydney Smith brings us information about this year's flu vaccine. There used to be about 20 companies producing flu vaccine, but that number is down to 2 now. Why the reduction? Well, it might have somethign to do with the fact that the FDA decided to start regulating the production process for flu vaccines. The regulations are cumbersome and most companies, who were only making marginal profits, decided that the extra cost could not be covered by those meager profits. Last year, there were 3 producers. They produced about 95 million doses, but only 83 million were actually sold. The 3rd company decided to fold it's tent as well, leaving only 2.
This year, as Dr. Smith points out, the leading expert on flu vaccines indicated that the Fujian strain should be added to the mix. Producing it, however, required using an unapproved process. Even though the leading expert was right, deference was paid to the process and as a result, many children and elderly adults were sacrificed on the alter of regulatory process again this year.
Will the FDA change to allow additional processes? Doubtful, but even if they did, the approval process required to approve any new procedures would likely not be cost effective and so would not be implemented at all.
Let's just all give the FDA a big round of applause for their efforts, shall we?
Dr. Sydney Smith brings us information about this year's flu vaccine. There used to be about 20 companies producing flu vaccine, but that number is down to 2 now. Why the reduction? Well, it might have somethign to do with the fact that the FDA decided to start regulating the production process for flu vaccines. The regulations are cumbersome and most companies, who were only making marginal profits, decided that the extra cost could not be covered by those meager profits. Last year, there were 3 producers. They produced about 95 million doses, but only 83 million were actually sold. The 3rd company decided to fold it's tent as well, leaving only 2.
This year, as Dr. Smith points out, the leading expert on flu vaccines indicated that the Fujian strain should be added to the mix. Producing it, however, required using an unapproved process. Even though the leading expert was right, deference was paid to the process and as a result, many children and elderly adults were sacrificed on the alter of regulatory process again this year.
Will the FDA change to allow additional processes? Doubtful, but even if they did, the approval process required to approve any new procedures would likely not be cost effective and so would not be implemented at all.
Let's just all give the FDA a big round of applause for their efforts, shall we?
Prescription Drug (Re)Importation
Chip Taylor discusses an article about Ill. gov. Rod Blagojovich' desire to "waive" the law and allow Illinois to reimport prescription drugsprice controls. Folks like him, and they are legion, still don't have the first clue about economics and frankly, most politicians really don't care about any sort of law, economic or otherwise.
Several years ago, when I was first diagnosed with PIN (Prostate Intraepithelial Neoplasia -- precancerous prostate cells) I joined a Prostate Cancer email list. Over the years, I've followed the lives of many prostate cancer survivors in many states of health. Most are older, in the mid 50s on up, and most are very much in the school of thought that someone else needs to buy their medicine for them because the evil drug companies are gouging the customers -- just look at all those profits. It must be ill-gotten gains andI'm My Insurance company is paying for it.
I've have tried on numerous occasions to enlighten these folks about the law of economics, but most don't want to understand. It's really quite simple. For every item, there is a cost and that cost must be compensated in some way, typically either with something tangible (money, barter, labor, etc.) or with time (waiting, delays, etc.). In the US, the long held view, up until about 1960 or so, was to minimize the cost in time, even if that maximized the cost in tangible assets, say money.
Then, the FDA started getting in the middle of everything. Medicines, procedures, devices and such which would have been available on the market within just a handful of years, now routinely take 15 years or more to get to market with laws specifying that the companies are not allowed to sell those products until they have been approved by the FDA. The FDA has increased the cost in time, but have also failed to realize another fundamental lemma in the economics of monopolies -- longer time to market equals increased costs in tangible assets. By forcing the drug companies to take longer, meet more regulatory hurdles, in the name of safety, don't you know, the FDA has increased the monetary cost of those very products it regulates. (For example, compare the cost of vitamins and minerals which use pharaceutical grade ingredients and are unregulated, with similar medications using those same ingredients, but which are regulated, admittedly hard to find, and I'd be willing to bet that the entire difference is the cost of regulation -- left as an exercise for the student, perhaps a Ph.D. level dissertation for some enterprising libertarian.)
The FDA has been spending lives ever since. Back in 1984, Dr. Kessler proudly announced that the approval of Beta-blockers would save 17,000 lives per year. What he didn't say is that the application for approval was made in the late 1970's and was already approved for use in Europe at that time. Thus, in the intervening 7 years or so, how many people died because of the FDA's fervent desire for i dotting and t crossing? You do the math.
Things haven't changed much. The FDA now touts that they've cut the approval time in half. Umm. No, not really. After the company has completed animals studies, filed applications for a new drug, completed phase trials I, II, and III, they must submit all of the results to the FDA for final approval. This final approval used to take 2 years. It now takes 1 year. Viola, the approval time has been cut in half. The actual time required for the complete process, however, remains about the same at 14.7 years. Given that drug companies just apply for patents on these drugs about the time they begin animal studies and given the fact that they are not allowed to profit from these discoveries until finally approved by the FDA and given that the patent is only good for 17* years and given that the FDA takes almost 15 years to approve new drugs, the company is left with roughly 2 years to recover their entire development cost.
Is it any wonder that drug prices are high, that drug companies buy off generic manufactures, and that they fight price controls whenever possible? If the average cost of a new drug is $500M and the average number of prescriptions in a given year is 1 million and the company has 2 years to recover all of their costs, the cost of a prescription will be about $250. (Per pill costs may be on the order of $1-$5 per pill depending.) If the company had 5 years to recover their costs instead of just 2, say by shortening the phase trials, or allowing overlap, or by allowing limited sales during the trial period, or even by eliminated or combining some of the trial phases, the cost in the previous example drops to $100 per prescription, about 40% of the previous total.
The laws of economics don't lie and can't be broken, no matter how much folks like Gov. Blagojovich might wish otherwise.
* In 1996, Congress upped the patent term from 17 to 20 years, but given the approval times required, drugs under the new system will likely not start appearing on the market until 2009 or so. At that time, prices for new medications will start to ease downward over a period of several years as companies now have a longer period to recover their costs.
Chip Taylor discusses an article about Ill. gov. Rod Blagojovich' desire to "waive" the law and allow Illinois to reimport prescription drugs
Several years ago, when I was first diagnosed with PIN (Prostate Intraepithelial Neoplasia -- precancerous prostate cells) I joined a Prostate Cancer email list. Over the years, I've followed the lives of many prostate cancer survivors in many states of health. Most are older, in the mid 50s on up, and most are very much in the school of thought that someone else needs to buy their medicine for them because the evil drug companies are gouging the customers -- just look at all those profits. It must be ill-gotten gains and
I've have tried on numerous occasions to enlighten these folks about the law of economics, but most don't want to understand. It's really quite simple. For every item, there is a cost and that cost must be compensated in some way, typically either with something tangible (money, barter, labor, etc.) or with time (waiting, delays, etc.). In the US, the long held view, up until about 1960 or so, was to minimize the cost in time, even if that maximized the cost in tangible assets, say money.
Then, the FDA started getting in the middle of everything. Medicines, procedures, devices and such which would have been available on the market within just a handful of years, now routinely take 15 years or more to get to market with laws specifying that the companies are not allowed to sell those products until they have been approved by the FDA. The FDA has increased the cost in time, but have also failed to realize another fundamental lemma in the economics of monopolies -- longer time to market equals increased costs in tangible assets. By forcing the drug companies to take longer, meet more regulatory hurdles, in the name of safety, don't you know, the FDA has increased the monetary cost of those very products it regulates. (For example, compare the cost of vitamins and minerals which use pharaceutical grade ingredients and are unregulated, with similar medications using those same ingredients, but which are regulated, admittedly hard to find, and I'd be willing to bet that the entire difference is the cost of regulation -- left as an exercise for the student, perhaps a Ph.D. level dissertation for some enterprising libertarian.)
The FDA has been spending lives ever since. Back in 1984, Dr. Kessler proudly announced that the approval of Beta-blockers would save 17,000 lives per year. What he didn't say is that the application for approval was made in the late 1970's and was already approved for use in Europe at that time. Thus, in the intervening 7 years or so, how many people died because of the FDA's fervent desire for i dotting and t crossing? You do the math.
Things haven't changed much. The FDA now touts that they've cut the approval time in half. Umm. No, not really. After the company has completed animals studies, filed applications for a new drug, completed phase trials I, II, and III, they must submit all of the results to the FDA for final approval. This final approval used to take 2 years. It now takes 1 year. Viola, the approval time has been cut in half. The actual time required for the complete process, however, remains about the same at 14.7 years. Given that drug companies just apply for patents on these drugs about the time they begin animal studies and given the fact that they are not allowed to profit from these discoveries until finally approved by the FDA and given that the patent is only good for 17* years and given that the FDA takes almost 15 years to approve new drugs, the company is left with roughly 2 years to recover their entire development cost.
Is it any wonder that drug prices are high, that drug companies buy off generic manufactures, and that they fight price controls whenever possible? If the average cost of a new drug is $500M and the average number of prescriptions in a given year is 1 million and the company has 2 years to recover all of their costs, the cost of a prescription will be about $250. (Per pill costs may be on the order of $1-$5 per pill depending.) If the company had 5 years to recover their costs instead of just 2, say by shortening the phase trials, or allowing overlap, or by allowing limited sales during the trial period, or even by eliminated or combining some of the trial phases, the cost in the previous example drops to $100 per prescription, about 40% of the previous total.
The laws of economics don't lie and can't be broken, no matter how much folks like Gov. Blagojovich might wish otherwise.
* In 1996, Congress upped the patent term from 17 to 20 years, but given the approval times required, drugs under the new system will likely not start appearing on the market until 2009 or so. At that time, prices for new medications will start to ease downward over a period of several years as companies now have a longer period to recover their costs.
High Rent Blight
The Saint Louis Galleria is second only to the Frontenac Plaza in ritziness in the St. Louis Metro area. It contains a number of one-off high rent shops, the area's only (for now) Cheesecake Factory restaurant (with it's company preferred 2 hour wait) and many other features suited to the well-heeled in St. Louis society. It's also only a hop away from Clayton where most of the counties administrative offices and courts are located. High rent indeed.
So today, I read in the P-D about the city of Richmond Heights (located just to the south of Clayton and the city in which the Galleria is actually located) moving ahead with plans to create a TIF district for a developer to declare some property adjoining the Galleria as blighted.
I really like Virginia Postrel's view of style and substance and how aesthetics are becoming the next great innovation and driver for not just the US but the world's economy. This notion, however, that one man's slum is another man's joie de vive is a bit much, particularly when the slum is characterized by existing retail development. Got to have that $2M divided median strip, don't ya know. That's all the rage these days and we can't be left behind. I just love that the developer just can't make the $250M+ project go without a measly $31M in TIF bonds.
Here's a thought -- scale back a bit, say to about $210M so you don't need the TIF bonds. I'll bet you can do wonders for that amount of money and I'll bet the tenants will even thank you for the slight break on the rent they (might) get from you.
The Saint Louis Galleria is second only to the Frontenac Plaza in ritziness in the St. Louis Metro area. It contains a number of one-off high rent shops, the area's only (for now) Cheesecake Factory restaurant (with it's company preferred 2 hour wait) and many other features suited to the well-heeled in St. Louis society. It's also only a hop away from Clayton where most of the counties administrative offices and courts are located. High rent indeed.
So today, I read in the P-D about the city of Richmond Heights (located just to the south of Clayton and the city in which the Galleria is actually located) moving ahead with plans to create a TIF district for a developer to declare some property adjoining the Galleria as blighted.
I really like Virginia Postrel's view of style and substance and how aesthetics are becoming the next great innovation and driver for not just the US but the world's economy. This notion, however, that one man's slum is another man's joie de vive is a bit much, particularly when the slum is characterized by existing retail development. Got to have that $2M divided median strip, don't ya know. That's all the rage these days and we can't be left behind. I just love that the developer just can't make the $250M+ project go without a measly $31M in TIF bonds.
Here's a thought -- scale back a bit, say to about $210M so you don't need the TIF bonds. I'll bet you can do wonders for that amount of money and I'll bet the tenants will even thank you for the slight break on the rent they (might) get from you.
Friday, December 19, 2003
Outsourcing
Michael Williams comments on Outsourcing noting that if the resulting quality is diminished, the outsourcing has effectively failed in it's purpose of reducing costs without affecting shareholder value. This is correct.
Many years ago, I read an astute analysis of various capabilities by nationality. Today, this sort of thing is probably not PC, but I'll speak anyway. Americans, it was said, are excellent at product creation and innovation. The Japanese were exceptional at taking existing products and shrinking them. The Germans were masters of ergonomics, both for product functionality and for product production. The Asians (non-Japanese) were exceptional at production.
From what I can tell, these same views largely still hold. Thinking about Americans as primarily innovators and less as producers, packagers, or manufacturers seems to mesh well with the outsourcing we're seeing in recent years.
Michael Williams comments on Outsourcing noting that if the resulting quality is diminished, the outsourcing has effectively failed in it's purpose of reducing costs without affecting shareholder value. This is correct.
Many years ago, I read an astute analysis of various capabilities by nationality. Today, this sort of thing is probably not PC, but I'll speak anyway. Americans, it was said, are excellent at product creation and innovation. The Japanese were exceptional at taking existing products and shrinking them. The Germans were masters of ergonomics, both for product functionality and for product production. The Asians (non-Japanese) were exceptional at production.
From what I can tell, these same views largely still hold. Thinking about Americans as primarily innovators and less as producers, packagers, or manufacturers seems to mesh well with the outsourcing we're seeing in recent years.
Ghadafi Folds
Well, it seems that Libya has started to come around in the War on Terror. Good old Ghadafi has decided to give up his WMD programs, such as they are. I wonder if we just wore him out over the past 20-30 years and he's just gotten tired of playing the game and remaining marginalized.
Only time will tell.
Well, it seems that Libya has started to come around in the War on Terror. Good old Ghadafi has decided to give up his WMD programs, such as they are. I wonder if we just wore him out over the past 20-30 years and he's just gotten tired of playing the game and remaining marginalized.
Only time will tell.
Eminent Domain Abuse
A bit over a year ago, while I was still chairman of the St. Louis County Libertarian Party, a position I have since resigned, I had the opportunity to speak to a local city council regarding a proposed redevelopment effort within that city. I chose not to actually take sides, but rather to speak to the Constitutional principles of taking from one private party and giving to another private party, as was being proposed in this case.
The existing neighborhood was about 50 years old. The homes were smaller 2 bedroom models with no driveways and typically no garages. The streets were narrower than is currently platted and in general, the neighborhood was far poorer, by a factor of about 10, than the average development in this particular city. Many nearby areas had become commercial over time, so perhaps it was time for this neighborhood as well. A local development company approached the residents about buying out their property. In a true egalitarian spirit, they offered each homeowner the same deal -- regardless of their property size or state of repair. You can imagine who was eager to accept and who declined.
The city council at this point, had not decided whether to pursue development and if so, would likely have had to invoke eminent domain to force out the residents who didn't want to accept the developers deal. This was also a TIF deal, so there would need to be a blight commission set up (as required by Missouri law) to declare the neighborhood blighted before any eminent domain proceedings could take place.
Fortunately, in this case, the city looked at the deal, looked at the amount of tax base which would be withheld from them in order to cover the TIF bonds and decided that it wasn't a good deal. They let the developer try to go it alone, but knowing that the developer couldn't go it alone. At the meeting to announce the results, I was present, but chose not to speak. Many residents viewed this development like they would winning the lottery -- $50K home for which they were offered $125K. Whoo-hoo! They lamented the "fact" that a few disgruntled souls had scuttled their chance at a better life.
This city is now at it again, but not in the same neighborhood. This time, they are going after a trailer park (well hidden I might add since I've never seen it) with a far lower cost $4M instead of $151M and will likely succeed in running out those few residents on that land. This time, there are fewer owners and more tenants, who have no such property rights. This is likely to succeed and perhaps this is a good thing as long as the city stays out of any eminent domain battle.
As an aside, the most ridiculous eminent domain attempt locally occurred about 1.5 years ago in the city of Normandy when that city attempted to acquire some property via eminent domain from a local convent. Needless to say, the city eventually relented, but only after the issue became public.
The moral of the story is that eminent domain does affect you, no matter where it occurs and making it harder for cities and other municipalities to step in is always a good thing.
UPDATE: After speaking to the city council, I was approached by one of the city aldermen to talk about eminent domain. He asked me in essence, how many holdout residents should there be before the city decides to use eminent domain? He was looking for 10% or some other threshold at which point the rights of the majority would overrule the rights of the minority. I should have responded with a question back to him "How many banks is it OK to rob? 10? 5?" That's the same principle, but cast in different terms.
A bit over a year ago, while I was still chairman of the St. Louis County Libertarian Party, a position I have since resigned, I had the opportunity to speak to a local city council regarding a proposed redevelopment effort within that city. I chose not to actually take sides, but rather to speak to the Constitutional principles of taking from one private party and giving to another private party, as was being proposed in this case.
The existing neighborhood was about 50 years old. The homes were smaller 2 bedroom models with no driveways and typically no garages. The streets were narrower than is currently platted and in general, the neighborhood was far poorer, by a factor of about 10, than the average development in this particular city. Many nearby areas had become commercial over time, so perhaps it was time for this neighborhood as well. A local development company approached the residents about buying out their property. In a true egalitarian spirit, they offered each homeowner the same deal -- regardless of their property size or state of repair. You can imagine who was eager to accept and who declined.
The city council at this point, had not decided whether to pursue development and if so, would likely have had to invoke eminent domain to force out the residents who didn't want to accept the developers deal. This was also a TIF deal, so there would need to be a blight commission set up (as required by Missouri law) to declare the neighborhood blighted before any eminent domain proceedings could take place.
Fortunately, in this case, the city looked at the deal, looked at the amount of tax base which would be withheld from them in order to cover the TIF bonds and decided that it wasn't a good deal. They let the developer try to go it alone, but knowing that the developer couldn't go it alone. At the meeting to announce the results, I was present, but chose not to speak. Many residents viewed this development like they would winning the lottery -- $50K home for which they were offered $125K. Whoo-hoo! They lamented the "fact" that a few disgruntled souls had scuttled their chance at a better life.
This city is now at it again, but not in the same neighborhood. This time, they are going after a trailer park (well hidden I might add since I've never seen it) with a far lower cost $4M instead of $151M and will likely succeed in running out those few residents on that land. This time, there are fewer owners and more tenants, who have no such property rights. This is likely to succeed and perhaps this is a good thing as long as the city stays out of any eminent domain battle.
As an aside, the most ridiculous eminent domain attempt locally occurred about 1.5 years ago in the city of Normandy when that city attempted to acquire some property via eminent domain from a local convent. Needless to say, the city eventually relented, but only after the issue became public.
The moral of the story is that eminent domain does affect you, no matter where it occurs and making it harder for cities and other municipalities to step in is always a good thing.
UPDATE: After speaking to the city council, I was approached by one of the city aldermen to talk about eminent domain. He asked me in essence, how many holdout residents should there be before the city decides to use eminent domain? He was looking for 10% or some other threshold at which point the rights of the majority would overrule the rights of the minority. I should have responded with a question back to him "How many banks is it OK to rob? 10? 5?" That's the same principle, but cast in different terms.
Trash Transfer Stations
Over the past several months, I have been witness to one of the most bitter, local political fights I have ever seen. However said "All politics is local" surely wasn't kidding.
Fred Weber, a local construction firm, already has a rock quarry along Baumgartner road in South St. Louis County. This property abuts the Meramec river. They have a vacant lot nearby on which they wanted to build a trash transfer station. This area is zoned industrial, but is near residential neighborhoods, which is what one would want for a trash transfer station. The object is to have smaller local trucks pick up the residential trash, then deposit it with the transfer station. From there, larger 12-18 yard trucks (true 18 wheelers) would take the trash to a dump site somewhere else. This reduces fees for the smaller carriers, minimizes their collection times, and is generally viewed as a good thing by the trash pickup companies (who are in competition here in St. Louis County.)
As soon as local residents saw this, they organized. The initial complaints were about noise, smells, runoff, etc. Scouring of EPA regulations (yech!) was also done to try and find anything to prevent this operation from going forward.
They got a county council member on board and at this point, I decided to offer what I considered to be helpful proposal -- pollution easements. I had never received hate-mail before this time, but man some of that stuff was just vitriolic. I simply proposed taking noise, odor, vermin, and pollution reading before introducing the station, then monitoring afterwards and if any subsequent reading exceeded the ambient threshold defined by the initial readings, the company would owe the residents a fine. Furthermore, residents could sell (negotiate) with Fred Weber for pollution easements on their property.
Nope. Wasn't going to happen. Wasn't even a consideration. I was obviously a corporate stooge even though the requirements would likely be so stringent that no facility could ever meet them.
The county council eventually passed an ordinance restricting trash transfer stations to a number of requirements including sites no smaller than 9 acres, setback requirements of 500 feet, and minimum distances from property lines of 1000 feet from residences, churchs, daycare centers, and the like.
Needless to say, this didn't sit well with Fred Weber and they, after proposing a number of different sites and getting rebuffed by the St. Louis County Health department, sued the county.
When they did this, I wondered if this wouldn't be like the old 1st amendment suits regarding adult businesses. Many counties and municipalities tried to "ban" adult businesses by introducing regulations in such a way that no such business had any location, based on the regulations, on which they could possibly locate. The SCOTUS eventually threw out such regulations. I wonder if these regulations made by St. Louis County for trash transfer don't fall under similar guidelines -- there are no such locations on which such a trash transfer station could be built and so, that business has effectively been banned from existence.
Meanwhile, south St. Louis County is booming with lots of construction going on. With that growth, the demand for trash removal will also grow. The problem will not go away, as much as the residents want it to. If they really wanted to be helpful, they would try to find an alternate location where such a facility could possibly locate. The problem is, based on the new regulations, no such location seems to be possible in south county. Once this has been tossed into the courts, all bets are off and the residents, instead of working with Fred Weber to find such a locaiton and be helpful, may end up with what they don't want shoved right back in their faces.
I hope not, but when the courts get involved, there is no telling -- it's a crap shoot at best.
Over the past several months, I have been witness to one of the most bitter, local political fights I have ever seen. However said "All politics is local" surely wasn't kidding.
Fred Weber, a local construction firm, already has a rock quarry along Baumgartner road in South St. Louis County. This property abuts the Meramec river. They have a vacant lot nearby on which they wanted to build a trash transfer station. This area is zoned industrial, but is near residential neighborhoods, which is what one would want for a trash transfer station. The object is to have smaller local trucks pick up the residential trash, then deposit it with the transfer station. From there, larger 12-18 yard trucks (true 18 wheelers) would take the trash to a dump site somewhere else. This reduces fees for the smaller carriers, minimizes their collection times, and is generally viewed as a good thing by the trash pickup companies (who are in competition here in St. Louis County.)
As soon as local residents saw this, they organized. The initial complaints were about noise, smells, runoff, etc. Scouring of EPA regulations (yech!) was also done to try and find anything to prevent this operation from going forward.
They got a county council member on board and at this point, I decided to offer what I considered to be helpful proposal -- pollution easements. I had never received hate-mail before this time, but man some of that stuff was just vitriolic. I simply proposed taking noise, odor, vermin, and pollution reading before introducing the station, then monitoring afterwards and if any subsequent reading exceeded the ambient threshold defined by the initial readings, the company would owe the residents a fine. Furthermore, residents could sell (negotiate) with Fred Weber for pollution easements on their property.
Nope. Wasn't going to happen. Wasn't even a consideration. I was obviously a corporate stooge even though the requirements would likely be so stringent that no facility could ever meet them.
The county council eventually passed an ordinance restricting trash transfer stations to a number of requirements including sites no smaller than 9 acres, setback requirements of 500 feet, and minimum distances from property lines of 1000 feet from residences, churchs, daycare centers, and the like.
Needless to say, this didn't sit well with Fred Weber and they, after proposing a number of different sites and getting rebuffed by the St. Louis County Health department, sued the county.
When they did this, I wondered if this wouldn't be like the old 1st amendment suits regarding adult businesses. Many counties and municipalities tried to "ban" adult businesses by introducing regulations in such a way that no such business had any location, based on the regulations, on which they could possibly locate. The SCOTUS eventually threw out such regulations. I wonder if these regulations made by St. Louis County for trash transfer don't fall under similar guidelines -- there are no such locations on which such a trash transfer station could be built and so, that business has effectively been banned from existence.
Meanwhile, south St. Louis County is booming with lots of construction going on. With that growth, the demand for trash removal will also grow. The problem will not go away, as much as the residents want it to. If they really wanted to be helpful, they would try to find an alternate location where such a facility could possibly locate. The problem is, based on the new regulations, no such location seems to be possible in south county. Once this has been tossed into the courts, all bets are off and the residents, instead of working with Fred Weber to find such a locaiton and be helpful, may end up with what they don't want shoved right back in their faces.
I hope not, but when the courts get involved, there is no telling -- it's a crap shoot at best.
Thursday, December 18, 2003
I have been searching for a while now and believe that I've finally found a really good church home. First Evangelical Free Church seems to be a place where Christianity is not just taught, but also practiced. When I was growing up, the churches we attended all seemed to focus on hellfire and damnation and how not following the rules would land you there. This church, while noting that possibility, focuses on GOD's love for us. Thus, following the rules is not an obligation, but rather something we do out of love. There is an indescribable resonance there, something which seems to really seep into my soul and offer it something that I've been seeking for most of my life.
This desire to pursue GOD and experience the joy he has for us is largely what has lead me away from politics (at least in terms of my active participation.)
This desire to pursue GOD and experience the joy he has for us is largely what has lead me away from politics (at least in terms of my active participation.)
There is a new proposal running around St. Louis County to examine and possibly sell off some of the counties parks. It seems that about 2/3rds of the land in the county is incorporated as one or another municipality and several of the county owned parks are within the boundaries of these municipalities.
The county is hurting for money again this year, not having taken the opportunity to tighten it's belt in each of the previous years, but rather simply relying on a rainy day fund to draw against. In 2005, that fund won't be available any more, so during the current fiscal year, the county needs to examine whether they can make up budgetary ground by selling off not just some of these parks, but perhaps office space it owns as well.
Good move for the county, IMO.
See this article in the Post-Dispatch for more details.
The county is hurting for money again this year, not having taken the opportunity to tighten it's belt in each of the previous years, but rather simply relying on a rainy day fund to draw against. In 2005, that fund won't be available any more, so during the current fiscal year, the county needs to examine whether they can make up budgetary ground by selling off not just some of these parks, but perhaps office space it owns as well.
Good move for the county, IMO.
See this article in the Post-Dispatch for more details.
Chip Taylor has on several occasions noted that I really should have my own blog, so here it is.
Yesterday, I noted an article in the St. Louis (Com)Post-Dispatch regarding a tax initiative, the language of which has been approved by the Missouri Secretary of State. This proposal now goes out for signature collection. In essense, it would put tax increases on auto-pilot. If the spending exceeds the revenue, an automatic tax increase would kick in to compensate. See the article here. This would be humorous, if it weren't so potentiall destructive.
Frankly, I prefer the current system of automated spending cuts (the governor makes some of the decisions about what and where to cut.)
Yesterday, I noted an article in the St. Louis (Com)Post-Dispatch regarding a tax initiative, the language of which has been approved by the Missouri Secretary of State. This proposal now goes out for signature collection. In essense, it would put tax increases on auto-pilot. If the spending exceeds the revenue, an automatic tax increase would kick in to compensate. See the article here. This would be humorous, if it weren't so potentiall destructive.
Frankly, I prefer the current system of automated spending cuts (the governor makes some of the decisions about what and where to cut.)
