A Periclean Solution To the Problem of Self-Pitying Greeks Demanding Gifts

First appeared in American Spectator:

Greece ill-temperedly rattles a tin cup—desperate for another handout from the European Union but feeling far more anger than gratitude toward its would-be benefactors.

Italy shares Greece’s pain—and its deeply ingrained sense of resentment and entitlement. Italy may follow Greece in bellying up to the EU’s bailout line.

Whatever happened to “the glory that was Greece and the grandeur that was Rome”?

In his famous funeral oration, delivered in 431 BC, the Greek leader Pericles sought to capture what it was that characterized Athens at the peak of its glory. In his words, the Athens of that time did not need a Homer to sing its praises, or even imperishable monuments, such as the Parthenon, completed only a few years earlier: “What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others to be eternally remembered.”

So how did the Greeks of this golden age manage to make such great and enduring contributions to Western civilization? Believe it or not (and progressives will find this especially hard to fathom), it was individual freedom, self-reliance, and an absence of class envy—combined with a powerful sense of Greek (and especially Athenian) exceptionalism.

Pericles began his speech with several observations about the nature of democracy in the city-state of Athens. As recounted by his contemporary, the historian Thucydides, Pericles said:

We are called a democracy, for the administration is in the hands of the many and not the few. Our laws afford equal justice to all in their private differences.

The freedom that we enjoy in government extends to ordinary life. Far from exercising a jealous surveillance over each other, we do not feel called upon to be angry with our neighbor for doing what he likes.

We regard wealth as something to be properly used, rather than as something to boast about. As for poverty, no one need be ashamed to admit it, but the real shame is in not taking practical measures to escape from it.

The great statesman, general, and patron of the arts went on to say how the freedom and openness of their city did not weaken but served only to redouble the valor, resourcefulness, and generosity of the citizenry:

Trusting in the native spirit of our citizens, we throw open our city to the world, and never exclude foreigners from any opportunity of learning and observing, although the eyes of an enemy may occasionally profit from our liberality.

To sum up, I say that Athens is the school of Hellas, and that the individual Athenian in his own person seems to have the power of adapting himself to most varied forms of action with the utmost versatility and grace.

As Lincoln was to do over two millennia later in the Gettysburg Address, Pericles used a eulogy for the war dead to extol the cause for which the living continued to fight.

It would be nice to think that present-day Greeks would make a real effort to liberate themselves from decades of economic mismanagement and lopsided growth in the public sector at the expense of the private sector.

But that is not going to happen. After supposedly endorsing the latest deal from the EU, Greek Prime Minister Alexis Tsipras is publicly thumbing his nose at the key spending-cut and tax-increase provision—saying, “I don’t believe the measures will benefit the economy.”

It would take a Margaret Thatcher if not a Pericles to make a case for real reform—and there is no such champion of individual freedom and self-reliance anywhere to be seen.

New Fast Facts on Government Labor Relations

The Show-Me Institute’s Fast Facts series is a great way to brush up on the basics of critical public policy issues facing our state, including, public pensions, school choice, budget and tax policy, and more. I’m proud to present our latest addition to the series, a Fast Facts on government labor relations.

What is a government union? How do government unions differ from traditional unions? Why are unions representing teachers and police subject to a different set of rules than unions representing firefighters and social workers? Who sets government policy when a government workplace is unionized? For answers, check out our latest Fast Facts.

The Egregious Antics of Edmundson

Edmundson is a small city in North Saint Louis County. It previously tried to shield its residents from having to pay for government services by issuing traffic tickets and other fines. Now that Senate Bill 5 has become law, towns like Edmundson can no longer rely on the rest of us to foot the bill for them. However, instead of being responsible and ensuring a way to either bring spending in line with revenues or disincorporate the city, it wants to raise its property tax rate.

Here’s the kicker though. It only wants to raise the property tax rate on commercial property, not residents! What’s worse is that Edmundson currently does not levy a property tax on residential property, not one cent.

The “justification” Edmundson uses for this proposal is that “the commercial businesses within the City require a greater level of service than the residential areas” and that “the Board believes that the residents should not be unfairly burdened with the cost of City services provided to the commercial areas.”

I haven’t seen any evidence that it costs more (on a percentage basis) for Edmundson, or any city for that matter, to deliver services to a commercial property compared to a residential property. Even if that were the case, commercial properties already pay more via assessments! That’s right, commercial properties are assessed at 32 percent of their value. Residential property is assessed at 19 percent. That means if a property tax rate of let’s say $1 per $100 in assessed value is levied against two properties (one commercial and one residential) valued at $500,000 a piece, the property tax bill for the commercial property would be $1,600 while the residential property would owe $950.

Apparently, that arrangement isn’t good enough for Edmundson, which seems to have a phobia against having its residents pay for any of the services they receive. This is wrong-headed.

If this is the way cities are going to respond to not being able to rely on ticket revenues to fund government services, they might as well disincorporate. If they don’t, there needs to be a change at the state level so that property tax rates (not assessments) are the same no matter the property type.

It was bad policy for cities to rely so heavily on fines and tickets to fund services. Thankfully, SB 5 fixed that problem. However, this proposal would replace one bad policy with another. I hope it never becomes law.

MTC Making Moves to Allow Ridesharing

Recently, the St. Louis Metropolitan Taxicab Commission (MTC) has begun to seriously talk about compromising with ridesharing companies like Lyft and Uber in an effort to get these services in the area. Saint Louis is now the largest metropolitan area in the United States without cheap ridesharing options.

As of last month, the MTC demanded drug tests, specific background checks, and stringent insurance requirements before any ridesharing company could set up in Saint Louis City or County. Since that time, the MTC has backed down on drug testing and has stated that it believes it can resolve issues surrounding insurance. Background checks, including fingerprinting, is the most intransigent remaining problem. In past meetings, the MTC held that Uber’s checks were inadequate. Now the MTC says the main problem is state law:

Fingerprint-Based Criminal Background ChecksUber is adamant that its own proprietary, Internet-based criminal background checks are more thorough, detailed and reliable than those conducted by law enforcement and based on fingerprint scans of driver applicants. We [MTC] can argue back and forth as to which position is correct. But it matters little what MTC thinks, or what Uber desires. Fingerprint-based criminal background checks conducted by the Missouri Highway Patrol and the Federal Bureau of Investigation are the law of the land. And Missouri statutes governing the MTC mandate such checks.

Uber has stated that its own background checks are thorough, and the MTC’s checks may prevent UberX from entering the Saint Louis market.

This post cannot comment on whether the MTC’s interpretation of the law is correct. However, if state law governing the MTC does need to change to allow more flexible background checks, state policymakers should consider such a reform. There is no reason Saint Louis residents cannot decide for themselves whether Uber’s background checks meet their needs.

Should the state legislature decide to reform laws governing the MTC, there is no reason to stop at background check requirements. They should consider eliminating provisions that require four of nine MTC commissioners to be taxi industry representatives. They could also curtail the regulatory powers of the commission to consumer protection provisions, which is all the MTC says it wants anyway. However, given the past performance of the MTC and its recent dysfunction, perhaps the best reform state legislators could make would be to disband the body altogether. 

New Study Shows Benefits of Union Transparency

A new study from the Mackinac Center for Public Policy looks at the ways private-sector unions disclose financial information in public filings and how state and federal law fails to adequately apply these same requirements to government unions. The study concludes by arguing that Michigan should reform its transparency laws to better protect government workers. This recommendation applies with equal force to Missouri, where there are currently no financial disclosure requirements for government unions.

The study highlights several recent cases where a union executive got caught using the union’s coffers as a personal slush fund. In one case, a Service Employees International Union executive used the local he ran to procure lucrative contracts for family businesses. He also spent hundreds of thousands of dollars of union dues each year to maintain a posh Los Angeles lifestyle: using union funds to attend a Four Seasons Resort golf tournament, spend big at a Beverly Hills cigar club, and have expensive meals at steakhouses. According to the article exposing this abuse, the average employee represented by this union earns about nine dollars per hour.

In another case, a reporter for the Kansas City Star uncovered a culture of excess at the top echelons of the International Brotherhood of Boilermakers. The executives at this union, often family members of one another, typically made six-figure salaries, enjoyed first-class travel on private jets, flew to destinations like Paris, Marco Island, and Alaska, and had an executive suite at the Kansas Speedway. All on the worker’s dime.

In the cases highlighted in the study, the abuse of union funds was discovered after journalists reviewed a union’s financial disclosures. Financial transparency allowed union members to find out something was wrong and make the appropriate changes to leadership.

Government workers deserve the same protections as members of private-sector unions. Right now state and federal law allows government union spending to remain hidden. If a union executive representing government employees—like firefighters, teachers, or state employees—is using union funds for personal gain, there is little we can do to uncover it.

Time to Reform Fine-Reliant Cities

Policing in North Saint Louis County is under the microscope. The tumultuous events of the last year have turned everyone’s attention to how the many tiny cities of North County enforce the law, and no one likes what they see:

Petty fines landing people in jail.

Budgets propped up by speed traps.

Rigged traffic lights that deceive motorists.

It’s clear that many of these cities use law enforcement more for profit than for protection. But change may finally be coming. State law is about to make it more difficult for municipalities to use police as tax collectors. Rather than double down and fight change, cities should decide how they can reduce their burden on taxpayers. Some might help everyone by going away.

Until this year, the state government failed to enforce a law—known as the Macks Creek Law—that was supposed to limited how much a city could rely on traffic fines. Reports of cities ignoring those limits date back to the late 1990s, but nothing was done. That has changed with the passage of Senate Bill 5. That bill, now signed into law, will strengthen the provisions of Macks Creek Law by lowering the amount of general revenue that can come from traffic fines to 15 percent in Saint Louis County. As for teeth, there are regular reporting requirements, and cities that do not comply will face disincorporation votes.

These changes spell trouble for many smaller cities in Saint Louis County. Twenty-seven North County municipalities have fewer than 3,000 residents, and seven have fewer than 500. Few taxpayers and increasing levels of poverty have pushed these cities to use traffic fines and other fees to stay solvent. More than a dozen of these municipalities get more than 20 percent of their total revenue from fines and court fees.

Disincorporation is a solution to the problem. There is precedent for disincorporation in Saint Louis County, most recently with scandal-ridden Saint George. Essential services, like the police, are now provided by Saint Louis County. Last year, Uplands Park held a vote on disincorporation that almost won the required supermajority.

Another solution is for cities to reduce costs by combining services. Most cities already rely on pooled services for water, power, education, and fire protection. It would not be a stretch for more cities to combine police forces or other essential services. For example, Saint Louis County already provides police for 18 municipalities. That saves money and provides localities with better-trained officers. And unlike some municipal-specific police forces, the county police do not have the same incentive to write tickets for revenue collection purposes.

Instead of turning over policing to the county, some municipalities are integrating police forces amongst themselves, with the recent example of Vinita Park and Wellston. While this in theory saves resources, residents could be stuck with the same revenue-generating practices if cities get rid of their own ticket-oriented police forces only to contract with another city that uses the same questionable practices. For example, Breckenridge expressed interest in contracting police service from Saint Ann, which has gained a reputation for using I-70 like an ATM.

Now that Senate Bill 5 is law, many municipalities are going to have to start making hard choices about whether they can continue to provide necessary services or whether they can continue at all. Residents should consider whether their towns—like Jennings, Wellston, Black Jack, and many others—can reduce spending and combine services. It may be that the best option for residents, and the region, is simply to disincorporate.

More Shell Games from Riverfront Stadium Planners

Last week, the Post-Dispatch published an article detailing yet another change to how a riverfront stadium, designed to keep the Rams in Saint Louis, will be funded. Much ink has been spilt over the last year on this issue, and despite surface changes, the plan’s main problems are the same: 1. Mystery sources of funding, and 2. A proposal to give $400 million to a billionaire.

According to the article, the stadium will now require less money from bond extensions (mostly due to Saint Louis County dropping out), but more in the form of tax credits, state infrastructure fund credits, and unnamed state and city incentives. The stadium task force also increased its expected personal seat license (PSL) revenue by $30 million. And $450 million will still have to come from a team owner, presumably Stan Kroenke, who may have a personal interest in not supporting such a plan.

 

Funding (Millions)

Funding Source

January

July

NFL Team Owner (G4 Loan + Own Funds)

$450

$450

State and Local Bonds

$350

$201

PSLs

$130

$160

State Tax Credits, Mystery Box

$55

$187

Total

$985

$998

 

Fortunately, the plan reduced the total public support that would go to the stadium. Unfortunately, that support would still total $388 million, only a $17 million reduction. What’s more, that relief is bought by an increase in estimated PSL revenue. There should be little doubt on who would be left holding the bag, the Rams or the taxpayers, if actual revenue is less than expected.

More than anything else, the new funding plan is just another hand motion in a drawn-out shell game. Lower the amount coming from the Saint Louis area, increase the amount coming from the state. Decrease bond revenue, increase tax credits. Throw in undisclosed funding sources to cover the difference. Keep everything in motion and hope no one notices that none of the important questions have been answered:

  1. Who pays for the $100 million-plus refurbishment of the Edward Jones Dome, along with its continued maintenance needs, when state and local bonds are repurposed? (I’m looking at you, Saint Louis County, whose bond payments will “retire.”)
  2. What are the “additional state and local incentives” that will fund the dome?
  3. Will a team owner actually pay $450 million for a stadium in Saint Louis? And finally,
  4. Should Saint Louis City and the state of Missouri pay hundreds of millions for a billionaire’s stadium, even when economists agree that these stadiums do not create development or increase tax revenue?

Washington Legislature Defunds Lobbying Group Paid for With Tax Dollars

Washington State just defunded the controversial Labor Education Research Center (LERC) after the Freedom Foundation discovered that the taxpayer-subsidized group, based at South Seattle Community College, is heavily involved in lobbying, strategy, and political activism. This is good news for Washington taxpayers who would rather their taxes be used to provide government services than to provide support for a political interest group.

Here in the Show-Me State, we have a similar taxpayer-subsidized labor studies program associated with UMKC, the Institute for Labor Studies. According to the Institute’s mission statement, “the aim of The Institute for Labor Studies is to serve the educational needs of organized labor.” This mission may seem relatively innocuous; however, events put on by the Institute include symposia with slogans like “Revolutionary Organizing” and “Agitate! Educate! Organize!”

Moreover, there’s this story about an activist-led class at UMSL where instructors were recorded advocating violence, physical intimidation, and industrial sabotage as legitimate tactics to be used during labor negotiations. The instructors at the UMSL class are the same folks behind the Institute for Labor Studies at UMKC.

While I do not know whether UMKC’s Institute for Labor Studies engages in overt political activity, the events and speakers listed on their website suggest an ideologically driven mission. Ideology and political activism are fine, but the public should not be forced to pay for it.

The Metropolitan Taxicab Commission and the Myth of Effective Regulation

We’ve written before about the benefits of ridesharing businesses like Uber and Lyft. However, these companies have been met with resistance from taxicab regulatory bodies around the world. Few have been as intractable as the St. Louis Metropolitan Taxicab Commission (MTC), which has blocked cheap ridesharing from entering the city. The MTC even prevented Uber from offering free rides on the Fourth of July weekend.

MTC representatives, along with other opponents of ridesharing, criticize Uber and Lyft as being unsafe, unprofessional, and discriminatory. They argue that these companies need to be regulated so these problems can be addressed. But is the MTC really effective at protecting the consumer? Let’s ask some questions:

  1. The MTC, unlike Uber or Lyft, specially requires cabs to pick up any customer and take them wherever they want to go. So taxis never refuse fares or avoid going to certain neighborhoods?   
  2. The MTC has rules on insurance that they claim are more comprehensive than Uber and Lyft’s policies. So cabs never operate without proper insurance?
  3. The MTC has a myriad of rules to ensure cab drivers dress and act professionally. So all cab drivers provide good service?

The answer to all these is an emphatic no. Cabs have ways to refuse fares and avoid certain neighborhoods. Drivers sometimes act unprofessionally and, as an editorial in the Post-Dispatch claims, even operate without proper insurance.

The presumption that creating a regulatory commission and writing regulations will result in intended outcomes, and only intended outcomes, is an example of the “Unicorn Governance” fallacy; it’s magical thinking. In reality, even when regulators are competent, impartial, and have the public interest in mind, regulation can fail to be effective or even make matters worse. But with a regulatory body like the MTC, which has taxi company representatives as commissioners, impartiality is an unreasonable assumption. And after recent outbursts from the MTC’s chairman, competence is in question as well. Given the incentives at play, it should not come as a surprise the MTC is more effective at blocking competition than protecting consumer safety.

Market competition and open information, not regulation, are the best ways to ensure customers get a safe, comfortable ride when they want. Unfortunately, the MTC still wants to prevent that competition from coming to Saint Louis, to the continued embarrassment of the city. Saint Louisans should consider whether the MTC now does more harm than good. 

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