A Fair Compromise on Transit

Posted on by David Stokes

Metro needs a lot of things, and one thing it is getting is a tax cut. Legislation has been sent to Governor Blunt to remove the diesal tax paid by transit agencies in Missouri, pretty much just Metro in St. Louis and ATA in Kansas City.  This is a long-overdue move.  It astounds me that Metro and ATA were ever forced to pay fuel taxes in the first place.  While the savings for Metro are small compared to what they say their overall needs are, this is a good move by the legislature. 

Now we apparently will be moving onto a debate over putting a tax increase for Metro on the ballot in St. Louis County and then passing or defeating that tax increase.  I think it should go on the ballot, where it will likely fail.  I will probably vote for it, but I live close to MetroLink and my wife and I use it with some regularity.  If I lived in an area not well served by MetroLink, which is most of the county, I don’t know how I would vote.          

Ticket Scalping Legalization: Boom, Bust, Dud or Thud?

Posted on by David Stokes

It appears that the citizens of Missouri are about to recapture the right to sell their own investments for whatever price the market will bear. No matter what the monetary effects of this change will be, this is good news, as we have discussed before on this blog. Tickets are a commodity that the owner should be able to sell (or re-sell) for any price they wish to. In researching this issue, I found a great article on scalping published by the Cato Institute. The article gives a history of the issue and discusses the practical effects of the restrictions.

I promised earlier this week to give my prediction on the pricing effect of ticket scalping legalization, leaving the theory out of it, although the economic freedom theory is why I support legalization no matter what the pricing effects will be. I should warn you that I am not a trained economist, just an enthusiastic amateur who took one college course in it. So here goes…

The legalization of an illegal item will normally lead to price reductions; that is the conventional view and is backed up by economic theory. The most talked about subject in the issue is illegal drugs, though alcohol during prohibition would apply equally as well. During prohibition, demand remained more or less constant while supply decreased, or at least became harder to provide. Prices increased, as any fool could have predicted. What are the differences between scalping tickets and selling illegal drugs?

First, selling tickets is not illegal every time, as selling cocaine is. (We’ll leave aside the de facto legalization of small amounts of marijuana in many large cities.) I can sell my Cardinals ticket to you for face value, or less, just not for more. Second, buying tickets for more than face value is not illegal, only selling them is. Buying illegal drugs is also illegal, though in some cases the penalties are less severe. If the market gave a going price of $26 for a $25 face-value ticket, there has to be some downward pressure to lower the price slightly in order to avoid breaking the law.

As for the law, I will reference it here repeatedly but in reality, the penalties for scalping are so minor, and the social stigma for doing it so minor, that most people will not be affected by whether it is legal or not. Compare this to prostitution, which some have argued should be legalized. Even though the criminal penalties for prostitution are also minor, the social stigma, and threat of violence, are enough to keep most women out of it. Insert your own joke about your ex-wife here.

So where are we? If scalping is legalized, more people will probably participate in it, not because they were afraid of the criminal costs but because corporations, such as the sports teams themselves, will now be able to offer quick and convenient ways in which to scalp your tickets. So the supply of scalped tickets for sale (or re-sale) will go up. This supply increase and competition will exert downward pressure on the price of scalped tickets — Economics 101. However, because the number of scalped tickets does have a ceiling (total number of tickets available) and the price for most scalpers has a floor (if many would-be scalpers can’t get above face value; they will just go to the game themselves), that will exert counter pressure to keep the price of scalped tickets high.

My prediction is that legalization of scalping will have no effect on prices for the vast majority of sporting events or concerts. Only the most sought-after tickets will be influenced, such as Cardinal playoff games (apparently not going to be an issue this year) or the Led Zeppelin 2008 reunion concert at the TWA Dome, or whatever the hell it is called now. For major events, I predict a slight increase in the median price for tickets, as more scalpers will sell more tickets above face value to events with tremendous demand. However, the increased supply and competition will lead to a decrease in the mean price of those same tickets. So when you go the 2009 Baseball All-Star game downtown, the average cost of scalped tickets will be lower thanks to legalization, although more people will be paying above face value for their tickets.

Eric Mink

Posted on by David Stokes

I like Eric Mink’s columns in the Post-Dispatch.  I have praised them in the past and I am sure I will do so again.  The Post gives him plenty of column space to flesh out his ideas and his columns are usually very well researched, which forces you to give his ideas strong consideration even if you are rarely inclined to agree with him.  Today’s column is not ones of his better ones, though.  Instead of a thoroughly researched piece we have an article full of poor logic and begged questions.  It is deserving of a Fisking, or at least a partial one, as it’s a long column.

Mink starts out by misquoting a legislator.  He takes the unnamed legislator’s quote,

"that they have no responsibility to take care of themselves or their neighbors and that it’s the government’s responsibility to care for them."

and restates it, "How much nerve does it take for an elected official to accuse his poor constituents of not caring whether they or their loved ones get sick?"  There is nothing in the one sentence Mink gives us where they legislator says what Mink says he said.  I agree that people need to take more responsibility for themselves and their families, it does not logically follow that I don’t care if people get sick.  I’ll move on, and skip over the part where Mink complains about the State now acting as a bill collector for hospitals, which serves as the MacGuffin of his article and on which I share his concerns.

I will further skip over his comments on education, which I again agree with him on.  See, I told you I liked his columns!  Education is indeed its own reward and every child deserves an opportunity to receive the best education possible.  It is at this point that the heart of the article kicks in, and really gets bad at the same time.  Mink writes:

Government obligation? That seems to be a foreign concept in an age that regards government either as a treasury to be plundered for the benefit of special interests or as an inherent evil to be undermined, dismantled and laid to rest. Yet the obligation of government to serve its people is the most American of values, a concept embedded in the founding documents of the nation.

Aside from being a little hackneyed in its phrasing, nothing too bad there.  He follows with some quotes from the Constitution and then opines:

But no reasonable person could contend that we promote "the general Welfare" of American society by allowing working families to be crushed by global economic shifts well beyond their control. The pursuit of Happiness is a cruel joke to a child living in poverty who has no opportunity to learn about the forces that shape her society and the creative impulses that elevate human experience.

We can trumpet Life and Liberty as unalienable Rights, but there is no meaningful freedom and no quality of life for people suffering from physical and mental illnesses who lack access to care that can restore their health, whose families founder in the absence of income and whose inflated medical bills become oppressive debts subject to preemptive collection by the state.

Where should I begin?  "No reasonable person could contend" is a very weak form of argument.  It assumes everyone agrees with you (the writer) except for extremists, and he follows up that logical error / lazy writing with a very general line about global economic shifts and the government ‘allowing’ people to be hurt.  There are many good arguments about how globalization is good for economies and, more importantly, the people who make up economies – Mink needs to address those arguments and not assume he is on the side of everything good and nice.

Mink continues with a litany of social welfare requests stated as self-evident:

(more…)

The Midwife Legislation Strikes Back

Posted on by Sarah Brodsky

Legislation allowing midwives to practice might become law after all:

Just one day after being chastised for sneaking a midwife measure through the Legislature, Sen. John Loudon secured a peculiar victory in the Senate on Tuesday, winning Senate support for yet another midwife provision.

Through an odd turn of events, the Senate voted 23-13 to adopt a measure that would give midwives with no formal medical training the right to practice if they met certain standards.

Regulations of midwives aren’t the only licensing requirements that are too restrictive:

The latest midwife measure is now contained in a massive 214-page bill dealing with the licensing standards for a host of professions.

I hope licensed geologists and interior decorators will have their onerous licensing requirements reformed next.

The TIF-fing Point

Posted on by David Stokes

Sen. Tim Green has passed, apparently, legislation to change the ways Tax Increment Financing is managed in the St. Louis area.  In short, this change would give more power to county TIF commissions and less to individual municipalities within St. Louis, St. Charles and Jefferson Counties. 

This is a much-needed improvement and I commend Sen. Green for his efforts to make this change.  In St. Charles, former county executive Joe Ortwerth did truly amazing work in his long-term fight to prevent cities, particularly St. Peter’s, from giving away the entire tax base just so they could get another Applebee’s.  In St. Louis, county officials have done a good job in limiting TIF use and making sure it is used in truly needy areas, but municipal officials have long had the decision-making power within their cities and they have not always used that power wisely, to say the least.

I have one concern about the amendment.  I believe it does not go far enough.  I don’t blame Sen. Green for this – it may not have been able to pass if it were more strict.  But the law in essence says local municipalities can still override the county TIF commission, and all they have to do is get a 2/3 majority vote of the local governing body for the TIF.  I say all the power should rest with the county commission and local muni’s have no say whatsoever.  Then we would see decisions truly made in the best interest of the entire area.  Some cities have people like Laura Bryant serving them who really know this issue and fight against the abuses, but many I fear will just go along with the city manager or mayor in the constant effort to bring more crappy restaurants and stupid retail stores selling various types of storage to every inch of every block in America.          

Update on the Amendment We Don’t Need

Posted on by Sarah Brodsky

This story shows why we don’t need to legislate that government affairs be conducted in English:

Senator Kevin Engler of Farmington used German to ask the senate to adopt a constitutional amendment requiring all official government actions to be done in English….

But senators Jolie Justus of Kansas City and John Smith of St. Louis have run out the clock on Engler’s bill.  They say they wonder why the legislature has to deal with what they think is a trivial issue while important legislation has gotten lost.

Speaking to the senate in German was a cute way to make a point, but it just proved why we don’t need this amendment. That must have been the first time anyone spoke to the senate in German for quite a while. It’s not a problem we encounter on a regular basis.

People usually don’t conduct legislative debates in German for the same reason I don’t write blog posts in Aramaic: they want to be understood by and convincing to English-speakers. I’m guessing Sen. Engler will use English the next time he brings a bill to the floor.

Overheard at the Post Office

Posted on by Sarah Brodsky

Concerned citizens of Clayton are calling for the privatization of the U.S. postal service. As I stood in line for passport pictures, I overheard people in the line for stamps complaining about the long wait. Some of them pointed out that service is better in the private sector, where companies have to satisfy their customers or risk losing business. The post office has no such incentive to please anyone but Congress.

As a matter of fact, the post office employee processing my passport request informed me that I’ll have to send in my paperwork with a private shipping company if I want it to arrive on time.

Real Estate Law Protects Realtors From Competition

Posted on by Sarah Brodsky

The FTC has just released a report that discusses how realtors’ associations have lobbied for regulations to keep out competition. As I wrote in an op-ed in November, Missouri’s law requires homeowners to purchase real estate services in expensive bundles. Realtors can’t offer individual services, such as listing a house or helping to negotiate the price. If the law allowed realtors to compete and provide whatever combination of services their customers wanted, consumers would enjoy lower prices.

The Missouri Association of Realtors calls the law a "Homeowner’s Bill of Rights." But as the FTC report points out, consumers would be better protected if the law simply required realtors to disclose which services they’ll provide. Consumers could then make an informed choice without being forced to buy everything a realtor sells.

One Small Step for Economic Freedom…

Posted on by David Stokes

One giant step for outrageous prices for sporting events.  This excellent development may lead to increased prices for tickets to major sporting events, like playoff games or Cubs-Cardinals games, but there is nothing wrong with that.  As previously discussed on this blog, tickets are a commodity and people should have a right to resell a commodity they have invested in.  I commend the state legislature for moving to eliminate this silly law.  I don’t like the prohibition against buying more than 20 tickets to an event, though.  Teams, or artists or stadiums, should choose, and many do, to implement rules like this on their own to fight scalping or ticket hording.  We don’t need another law dictating it, especially on a bill where we are getting rid of a worse law.

My predictions on the pricing effect of legalizing scalping will be discussed in a future post. Undoubtably, the standard liberal economic view that legalization would lead to lower prices largely applies, but there are small differences I will discuss further.

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