I live in the Central West End neighborhood of the city, and my street (to the best of my knowledge) was never plowed. For the better part of two weeks, I was not able to move my car. As of this writing, the trash in the dumpster in my alley has not been picked up since before the storm—a storm that began on January 5.

For one thing, the inability to clear the roads created much more serious problems. Some people have had to rely on friends or family just to get groceries. Mail delivery in the city has essentially ground to a halt. Most pressingly, impassable streets create difficult scenarios for emergency services. There are stories of people who need medical help and live on streets that ambulances can’t currently reach.

It is fair to point out that this was a big storm, and probably an unusually difficult storm to deal with. Freezing rain falling right before a lot of snow is a headache. But this was also not some once-in-a-century storm. We had about 10 inches of snow and some ice—Midwest cities ought to be prepared to deal with storms like that occasionally.

A KSDK story noted that $600,000 was cut from the city streets department for snow removal, but city officials have explained that this money was mostly for salt, and that the city already had stockpiles of extra salt because of recent mild winters.

This isn’t a story about resources. It’s a story about incompetence.

Predictably, we’re beginning to see finger-pointing and recriminations. The mayor blamed residents for leaving parked cars in the path of snow plows. The director of the streets department claimed she was getting “incorrect information” regarding the situation. Leaving aside the morality of throwing your staff under the bus, this claim does not pass the smell test. Figuring out street conditions is not a difficult feat of intelligence gathering—this is not like trying to gain information about a nuclear program in a rogue nation. If you step outside pretty much anywhere in the city, it’s apparent. Or you could check any of the hundreds (maybe thousands?) of posts on social media detailing the situation.

The city seems to be conceding that it screwed up, and that something needs to change. Officials have signaled that the longstanding policy of not plowing side streets might be changing. The city also resorted to hiring outside contractors to help clear the ice.

This is a great example of the wisdom in my colleague Patrick Tuohey’s pleas that Missouri cities focus on providing basic services. Instead of addressing crime or maintaining infrastructure, the City of St. Louis seems eternally fixated on shiny objects like economic development subsidies that don’t work or expanding train service that very few people use. People don’t want to live in a place that can’t provide an adequate level of essential services—and residents are voting with their feet. How long is it going to take city leaders to figure this out?

The post The Gang that Couldn’t Plow Straight appeared first on Show-Me Institute.

This stonewalling is troubling. Transparency is fundamental to good governance. As residents, we deserve to know where and how our tax dollars are spent, particularly when public funds benefit the relatives of city officials. The city’s response—offering vague explanations while withholding records—only deepens the suspicion that something is being hidden.

It’s not enough to claim there are checks and balances in place. History shows that, without public oversight, those checks can be woefully inadequate. City leaders should be proactive in clearing up any appearance of impropriety. If the grants are above board, there should be no issue with releasing detailed information.

This issue echoes the broader problem of cronyism in public spending. Whether it’s sweetheart deals to developers or insider grant allocations, we’ve seen too many instances of public resources being funneled to those with the right connections. These practices erode trust and damage the city’s credibility.

Public officials must recognize that transparency is not optional—it’s a duty.

The post STL Should Come Clean About Leadership Conflicts appeared first on Show-Me Institute.

I believe in my gut that the timing is right for the Royals to become residents of the Crossroads and neighbors to Power & Light, 18th & Vine and Hospital Hill, helping to further connect the cultural center for our great city.

What’s important to note is that Sherman plans to include an entertainment district in the construction. Mike Hendricks of The Kansas City Star adds: “The imagined $1 billion-plus ballpark would be bordered on the east by office, retail and residential development, which would be a potential source of revenue for the team.”

No one should doubt that this publicly funded stadium with all the additional accouterments would be good for John Sherman. But will it be good for his neighbors?

Remember that all sorts of research and many economists make it clear that sports stadiums “are really poor public investments.” Part of the reason that the economic impact studies released by proponents of such efforts are flawed is that they count only the new spending at the new location—not the reduction of spending elsewhere. In a 2017 report, the Federal Reserve Bank of St. Louis concluded: “economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs.”

Consider the Power & Light District. According to the Regulated Industries Division of Kansas City, Missouri, the number of liquor licenses (a gauge of how many restaurants and bars are operating) and employee health cards (a proxy for the number of people employed at bars and in food service) remained flat citywide for a decade after subsidies were awarded.

The Power & Light District didn’t create new jobs or businesses. It merely moved them from elsewhere in the city to downtown. And it moved them from places where the city, county, and school districts were collecting property, sales, and income tax revenue to a place where those taxes are diverted back to the developer to offset the cost of construction.

Even if you consider the Power & Light District on its own merits, it has failed to be successful. Thomas Friestad reported last year in the Kansas City Business Journal that Kansas City has had to meet multimillion-dollar debt-service obligations because the district does not generate enough revenue to pay its own debts. Those payments have ranged from $6 million to $17 million, amounting to over $160 million since 2006.

Just as with the Power & Light District, John Sherman’s entertainment district will not create new economic activity. It will only move it from elsewhere in the city. On game day, fans who now stop at grocery and liquor stores on their way to tailgate may instead go to bars at the stadium. That is not new activity—just different activity. Fans who might have gone to Power & Light, or to other places in the Crossroads District, may now go to the bars that Sherman owns. That is not new spending—just different spending. This is exactly what happened when Ballpark Village opened in St. Louis; it cannibalized other existing businesses.

The economic impact studies that will inevitably be produced to tout this new entertainment district will likely only count the new spending in the new location—not the loss of spending elsewhere.

To the degree that the Royals’ new entertainment district leeches spending away from Power & Light—which seems like it may be the intent of Sherman’s gambit—Kansas City taxpayers will face even higher annual debt obligations than now.

A publicly funded downtown stadium and entertainment district will be good for John Sherman. It won’t be good for anyone else.

The post John Sherman’s Proposed Entertainment District Is Bad for Everyone Else appeared first on Show-Me Institute.

A couple of weeks ago CNBC released its annual list of the Top States for Business 2023. Missouri was an unimpressive 32nd out of the 50 states plus the District of Columbia. Wondering what pulled us down? Well, this year CNBC decided that workforce quality would get the most weight of the 10 components of the index. And in that category, Missouri ranked 49th. We must not stack up too well against other states when it comes to the percentage of workers with college degrees or even industry credentials. Apparently, we also don’t compete well on the outmigration of educated workers, or on worker training programs, or on worker productivity.

So, imagine my surprise when the governor had a press conference just days later to announce a long list of Missouri’s “top” rankings. On some list we rank first in on-the-job-training. That would be for the number of participants, not quality or outcome, but still. There’s a list out there where we’re ranked second for apprenticeships and one where we are fourth for small-business jobs. The list of rankings is described as “incredible statistics that prove why Missouri is the Show-Me state.” Incredible indeed. Sadly, the governor’s list doesn’t include any source information, so we can’t tell who is saying all these complimentary things about our state.

As someone who follows the Missouri K-12 education system pretty closely, I’m not that surprised by the CNBC ranking. Education in the state is in a downward spiral. Last year, 70 percent of our fourth-graders scored below grade level on a nationally administered test. These children are moving on to the reading-to-learn years, and they haven’t learned to read. Middle school isn’t any more promising. Less than one-quarter of our eighth-graders can do math at grade level, according to the latest (2022) national assessments, and just 28 percent have grade-level reading skills.

When students start high school without having mastered the skills they need to succeed, the effects are predictable. Last year, just 60 percent of our 2022 high school graduates met the Missouri Department of Elementary and Secondary Education’s (DESE’s) criteria for being college or career ready. It’s hard not to feel sorry for the 40 percent who walked across the stage and were handed a diploma even though they were unprepared for the next stage of their lives. Since we’re looking at rankings, did you know that last year Missouri ranked 43rd for the percentage of high school students who took a college-level Advanced Placement (AP) test in high school? We’re not talking about passing an AP exam; only one in five high school students even took one. Also, less than 8 percent of graduating high school students completed the Career and Technical Ed (CTE) certificate program.

What are the consequences of the poor job we’re doing of preparing our students for life after high school? According to the St. Louis Federal Reserve, the percentage of Missourians with bachelor’s or master’s degrees has been declining in recent years. Not by much —just from 31.9 percent for bachelor’s to 31.7—but is that the direction we want it going? There’s a similar trend line for graduate degrees, which had been increasing every year until a couple of years ago, when they began to decline.

We seem to have a workforce problem, and it appears to be getting worse. Our K-12 enrollment has been declining since before the pandemic and will continue to decline based on the size of recent kindergarten classes. And within those smaller groups of students, the percentage of kids who are at grade level is declining. Smaller percentages of smaller high school graduating classes will be ready for the next stage in their lives. We need leaders who are ready to confront those facts and do something about them. The future of the state depends on it.

These leading indicators may signal what’s next for our work force, but it’s not too late to turn things around. States all around Missouri are letting parents pick where their children attend school—public or private—and having state education money follow them. Families in these states can tailor the education of each of their children, even when those needs differ within the same family. Neighboring states are implementing aggressive early literacy programs, with Mississippi being a standout, and rethinking high schools. Innovation and true accountability are happening . . . elsewhere. Meanwhile, Missourians are being handed a cherry-picked list of statistics that we’re supposed to get excited about.

The post Cherry-picked Data Can’t Hide the Truth about Missouri’s Workforce appeared first on Show-Me Institute.

Aaron Hedlund is chief economist at Show-Me Institute and an associate professor with tenure in the economics department at the University of Missouri-Columbia as well as a research fellow at the Federal Reserve Bank of St. Louis.

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Mind you, a new baseball stadium funded by taxpayers might be great for the owners of the Royals. But what evidence is there for any benefit to taxpayers?

The St. Louis Federal Reserve pointed out that stadiums fail to drive economic development in a 2017 report, concluding:

Building sports stadiums has an impact on local economies. For that reason, many people support the use of government subsidies to help pay for stadiums. However, economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs. Consumers who spend money on sporting events would likely spend the money on other forms of entertainment, which has a similar economic impact. Rather than subsidizing sports stadiums, governments could finance other projects such as infrastructure or education that have the potential to increase productivity and promote economic growth.

A 2019 piece in The Berkeley Economic Review, a publication of the University of California–Berkeley economic program, also failed to find any economic benefit from sports stadiums:

Over the last thirty years, building sports stadiums has served as a profitable undertaking for large sports teams, at the expense of the general public. While there are some short-term benefits, the inescapable truth is that the economic impact of these projects on their communities is minimal, while they can be an obstacle to real development in local neighborhoods.

The owners of the Royals are welcome to build a stadium wherever they like. But if they want to take tax dollars away from schools, public safety, and infrastructure to help build the stadium, they should share any evidence they have that such a plan presents a good return on investment for taxpayers—not just themselves.

The post Downtown Baseball? Show Us the Research appeared first on Show-Me Institute.

Originally, the city paid for solid waste collection from ordinary tax revenues. However due to budget constraints—maybe due to the city giving away hundreds of millions of dollars in tax subsidies—the Board of Aldermen passed a bill in 2010 to implement an $11 monthly fee per household to help cover refuse costs. Last August, the Board voted to increase the fee to $14. The additional money was for, among other things, obtaining new garbage trucks to “ensure garbage collectors won’t be forced to work overtime because they’re stuck with poorly functioning trucks.”

And what have the results been? The city’s fleet of garbage trucks continues to deteriorate. Roughly half of the 84 trucks are in disrepair, leaving the other half to cover the 55 daily routes. Even with extended hours and 12 new—leased—trucks, the city still lacks the resources to pick up the trash on time, so the dumpsters continue to overflow.

We are not suggesting that the problem here is exclusively the fault of city officials. For one thing, piles of uncollected garbage don’t make for good optics if you’re an elected official with constituents to keep happy. And the decision to lease new trucks rather than buy them looks like a reasonable response from a city that is behind on maintenance for the trucks it already owns.

Maybe the larger issue is that garbage collection is a better fit for private companies than for a city government. Privatizing this service would allow residents to choose their garbage collector, unlike now, creating competition among service providers and incentivizing high-quality, efficient operations. Wichita, Kansas, a city with 80,000 more people than St. Louis, has no city-run solid waste collection system. The average household in Wichita spends $25 per month on garbage collection. (In comparing this rate to costs in Saint Louis, keep in mind that St. Louis’s current $14 per month fee is in addition to the money from the overall city budget that goes toward trash collection.) As for the quality of service provided, we can’t claim to have our fingers on the pulse of the Wichita trash-collection scene, but our internet searches yielded nothing like this or this or this in Wichita.

Maybe it is time to see if the private sector has an answer to this embarrassing—and smelly—problem.

The post Time to Take out the Trash appeared first on Show-Me Institute.

The recently released St. Louis Development Corporation (SLDC) incentive report casts doubt on those claims. Incentives, the report concludes, provide little or no economic development benefits. They may help put up shiny new buildings, but they don’t genuinely boost Saint Louis’s economic health.

This is what the research tells us:

There is little or no connection between the use of incentives and job growth. Although proponents claim TIF will help bring jobs to the area, there is almost no connection between increased employment and TIF. For every $1 million of TIF invested, there are only seven associated jobs (p. 95). And the few construction-related jobs created by TIF have huge costs. In 2015, each job created by TIF in St. Louis cost taxpayers more than $53,000.

But it gets more disturbing. According to Missouri’s annual TIF report, even when controlling for developments less than 5 years old, less than 35% of projected jobs listed in developers’ proposals have actually been created or retained by TIF projects in St. Louis. And because TIF job creation figures are self-reported and unaudited—it’s possible that even the 35% number is overstated.

TIF does not help rejuvenate neighborhoods or spark further investment. When researchers looked at neighborhoods with incentive-driven development, they found that only the parcels that receive incentives increase in value. The SLDC report found zero evidence that a statistically significant increase in property values can be attributed to the effect of TIF-spurred development. The neighborhoods surrounding TIF projects are no more likely than unincentivized areas to see other large investments without incentives. In short, so-called “anchor developments” provide no real benefit to their neighborhoods.

The researchers concluded that, “[w]hile there may be disagreement about the value of some packages, it is clear that the City gains no net benefit from an extremely costly program with no real economic development impact” (p. 6, my emphasis). Along the most important measures of success—job creation and neighborhood revitalization—incentives appear to fail, making it hard to justify continuing to spend tens of millions of dollars each year subsidizing development projects.

(Read part 1 in the series here)

The post Subsidies in St. Louis, Part 2: Economic Development Blunders appeared first on Show-Me Institute.

To see this, we can look at ridership changes on the MetroBus and MetroLink systems since the end of the recession. That recession technically ended in mid-2009, according to the Saint Louis Federal Reserve. And while 2010–2013 cannot be described as great years, total employment in the Saint Louis Metropolitan area has steadily risen since around October of 2009.

Metro ridership was anything but recession-proof. During the economic downturn, MetroLink ridership fell 37% and MetroBus ridership fell 28%. But while the employment in the Saint Louis area has slowly but steadily recovered, the same cannot be said of Metro ridership. In 2010 and 2011, MetroBus gained back much of the ridership it had lost in the recession, but in 2012 and 2013 growth stagnated. MetroLink ridership recovery was less robust. By mid-2014, five years after the recession’s end, MetroLink ridership was still 30% below its pre-recession peak.

But as the chart below also shows, 2015 saw ridership levels reverse their post-recession trend of steady (if modest) growth. From July 2014 to October 2015, MetroLink ridership fell 8% and MetroBus ridership fell 5%. Taking all this together, it means that MetroLink ridership in late 2015 is only 2% higher than the post-recession ridership lows.

There are many factors that may explain weak post-recession ridership growth for Metro. Saint Louis has had a weak jobs recovery, with total employment still below pre-recession highs; employment has only increased 4% since 2009. However, economic growth has accelerated in the last year, the same time ridership began to decline on Metro.

Whatever the underlying reasons, this much is clear: there is no evidence that Saint Louis residents are flocking to public transportation or the MetroLink, despite significant investments made in the 1990s and early 2000s.

The post Metro Ridership Trending Down in 2015 appeared first on Show-Me Institute.

Fast forward to today. One might think that due to the drought, farm incomes would be seriously hurt. However, that is not what happened. According to a recent survey (hat tip: St. Louis Post-Dispatch) that the St. Louis Federal Reserve released, farm income for the last quarter of 2012 was either on pace to match that of the previous year or even increase. A Kansas City Federal Reserve report had similar findings. The reason incomes did not fall: “Many bankers cited the effect of crop insurance in alleviating the expected negative impact of the drought.”

So, these farmers did not really need all that extra help last year. Their insurance was enough to cover their losses. I am glad that was the case. However, if many farmers are making more money after the drought than before it hit, couldn’t they afford to pay a bit more for their insurance premiums? Currently, taxpayers heavily subsidize crop insurance premiums.

I am not advocating eliminating crop insurance. However, cutting back on public support for crop insurance is a good idea. According to one Government Accountability Office report, a 10 percent reduction in government subsidies would have saved the taxpayers $1.2 billion in 2011. Buying insurance is meant to help prevent catastrophic losses, it is not meant to make you money. The government should reduce its commitment to paying for insurance subsidies; it seems the farmers can afford it.

The post No Need To Throw Taxpayer Money Down The Well appeared first on Show-Me Institute.

Nicklaus cites an economic study conducted by Robert A. Baade and Victor A. Matheson which found that “Researchers who have gone back and looked at economic data for localities that have hosted mega-events, attracted new franchises, or built new sports facilities have almost invariably found little or no economic benefits from spectator sports.” This echoes the conclusions of the St. Louis Federal Reserve study that I cited. The economic case for upgrading the Dome simply is not there.

I also have to concur with Nicklaus regarding the public officials who are making the case for the Dome. If these officials are for the Dome, make the case in terms of civic pride or boosting the city’s image. Take that case to the people and let the chips fall where they may, but do not try to sell the plan to the public stating that upgrading the Dome will be an economic boost to the area, because it is not true.

The post I Am Not Alone On The Dome appeared first on Show-Me Institute.

Before even discussing the merits of such a proposal, it is imperative to ask, where would the city, county, and state find the money to pay for this, even if they wanted to? The state had enough trouble balancing the budget for its current obligations. Saint Louis City is looking to reduce the size of the police force and Saint Louis County is laying off workers to balance its budget.

Also, would the public be better off with an investment of this sort? I already pointed out the conclusions of a St. Louis Federal Reserve study showing that the impact of public investments into sports stadiums was negligible, or in the case of Saint Louis, negative. In a book written by Roger G. Noll and Andrew Zimbalist, “Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums,” the authors conclude: “the economic case for publicly financed stadiums cannot credibly rest on the benefits to local business, as measured by jobs, income, and investment.”

If the Rams want a first-tier stadium, they should be free to build one with private funds, like the Carolina Panthers did. However, if they want the taxpayers to pay for most of it . . . then that is a problem. It is time to choose between what the city, county, and state need and what they would like to have.

The post Episode IV: A New Dome (They Might As Well)? appeared first on Show-Me Institute.

Does it strike anyone as worrisome that in economic times such as these, public officials are scrambling to work out a way to funnel public money into a sports stadium housing a team that a billionaire owns and is in the process of trying to acquire another sports team? When the Dallas Cowboys built their $1.15 billion stadium, the Jones family (the owner of the Cowboys) contributed $261 million to building the stadium. In fact, less than 30 percent of the new stadium was financed with public money. The CVC’s first proposal did not indicate how the non-Rams portion (close to $60 million) of the plan would be financed, but it seems that the CVC will turn to the state of Missouri, Saint Louis County, and Saint Louis City, who put forth the original financing for the Dome’s construction. The Rams rejected this proposal. It seems disquieting to think about how much the Rams will ask from the public for the upgrades they want.

What justification do the state, Saint Louis County, and Saint Louis City have for spending public money to help a private sports franchise, beyond civic pride? I previously cited a study that the St. Louis Federal Reserve conducted showing that in most cases, building or refurbishing a sports stadium has NO impact on that city’s real per-capita personal income growth and in the case of Saint Louis, the impact was a NEGATIVE one.  Here is the exact quote:

Moreover, Baade found that of the 30 metro areas where the stadium or arena was built or refurbished in the previous 10 years, only three areas showed a significant relationship between the presence of a stadium and real per-capita personal income growth. And in all three cases — St. Louis, San Francisco/Oakland and Washington, D.C. — the relationship was negative.

Given this finding, it is hard to find a compelling reason as to why the state, Saint Louis County, and/or Saint Louis City should provide ANY public funding to the Edward Jones Dome and so far, it seems that public officials have yet to provide one.

The post Episode II: Attack Of The Dome appeared first on Show-Me Institute.

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The city is cracking down on the long tradition of pretzel vendors along Jamieson Avenue in south St. Louis. Because of complaints, city officials say, they must enforce an ordinance that prohibits the vendors.

Kunkel began selling pretzels in 1980 after retiring from the U.S. Postal Service. He first worked at Grand Avenue near Carondelet Park, but later moved to the Lindenwood Park neighborhood, where he had more success.

He became a fixture on Saturday mornings. Until a couple of years ago, he was the lone vendor in the median at Jamieson and Fyler avenues. He sold pretzels for 50 cents.

Then brothers John and Reuben Galvin set up shop five blocks south in Jamieson’s median at Pernod Avenue.
[…]
John Galvin insists he wasn’t trying to run Kunkel out of business. He was always careful to not sell at his spot. The median was just too good a place to pass up.

“You can hit people on both sides,” Galvin said, adding that the city has few similar medians remaining at stop signs.
[…]
Kunkel says his customers called the city complaining about the Galvins. They thought they were doing Kunkel a favor by targeting his competition.

But it turns out both parties had been operating outside the law. The city forbids street vending outside of downtown.

“You can’t get rid of them without getting rid of me,” Kunkel said.

Todd Waelterman, director of streets, said city inspectors don’t typically enforce the rule without complaints. During the past month, some residents said the vendors blocked their view of traffic, and the city had to act.

Although it is always unfortunate to see a successful entrepreneur shut down by the government, if there are legitimate safety concerns, this move could be for the best. After all, major thoroughfares like Jamieson are primarily for driving, not selling goods and services. However, if the the city could institute some minimal safety rules, there should be nothing to stop these successful businessmen from serving hungry drivers. If that proves impossible, there are other, less busy, intersections where I have encountered pretzel vendors plying their trade without impeding traffic or endangering anyone — some of the intersections around Tower Grove Park, for instance. Hopefully, the city can ensure public safety with a few simple rules and go back to leaving the pretzel vendors in benign neglect.

The post City of Saint Louis Twisting Pretzel Vendors out of Business appeared first on Show-Me Institute.

Well, that’s sad, but my interest was in whether that had any special meaning for the people of Missouri. When I examined the issue, I found that it is difficult to perform a similar data analysis within this state. Nevertheless, for those interested in this subject, there are other links that can be used to learn about the local situation. At the Federal Reserve Bank of St. Louis, people have been concerned about local bankruptcy problems for many years. Interestingly, as far back as in 1998, research performed at the Federal Reserve Bank of St. Louis found that the medical expenses of the health care uninsured were a leading cause of bankruptcy in this region. More recently, such bankruptcy problems were re-examined and a relationship to medical expenses was found to continue to exist. Then, another study discovered an additional relevant factor: The average national personal bankruptcy filing rate in the United States in 2004 was 380 out of every 100,000 people. If one examines each individual state, Missouri wins again. In Missouri, in the year 2004, there were 700 personal bankruptcies for every 100,000 people. That was found to be the highest rate of personal bankruptcy in the United States that year.

So, what does this mean to you? Some may recall my October 2009 post. There, I showed that Missouri spends a larger portion of the state GDP per person for health care than most other states. Compared to the U.S. average, that is about $500 more per person in this state. At the same time, average life expectancy in Missouri is two years less than the U.S. average. That means we are spending more and getting less. Now, the personal bankruptcy data implies that some of those who are surviving this health care dilemma are being driven into poverty. As the original report showed, these are hardworking, educated people trying to support their families.

Previous reports from the Show-Me Institute revealed that certain types of insurance programs, like Health Savings Accounts, can be used to prevent such health care–related financial catastrophes. Because this has become a greater problem now than it was when those reports were written, one would expect the insurance market to respond to this need. Some of the brightest people work in the insurance industry, and they need to create a product that addresses this issue. An additional problem is that most of the people that need this type of insurance are not aware of their danger, so some public education is needed. Now that there is a bit of a breather in the rush to health care reform, perhaps there is time to look at this situation, and the other free-market ways that can be developed to help the people of Missouri.

The post Poverty and Health Care in Missouri appeared first on Show-Me Institute.

While speeding tickets, and citations for other violations, should only be issued to enforce traffic and safety rules, everyone knows that they are used for other purposes. Generally, in small cities, towns, and suburbs, they are used for enhancing local revenue, as the study proves. However, we all know that they are also used to keep some people out of certain areas, such as the well-known “DWB” violation.

My dearly departed friend Sherman Parker relayed a few stories about how he would attempt to tell his bosses — senators and congressmen — about the problems his white friends would have with the cops when they would try to visit his house in North St. Louis. Of course, Sherman would be crying, he was laughing so hard, when he would relay these issues to them — as we all basically found it hysterical. (“Get rid of those fireworks” was a parting line I remember from a cop, after a team of them had searched my car up and down for drugs after I dropped Sherman off one night. Although, in that particular case, I had accidentally made an illegal turn, so the pull-over was completely legit.)

Sure, it’s funny when it’s white kids from the suburbs who don’t have drugs on them getting hassled a few times for a few minutes, and then being let go when the officers realize the car is clean and the person (me) really is just visiting a friend. But it’s not funny when it happens to people often, or when there is absolutely no legitimacy to the pull-over, or when the ticket is issued solely to raise money for the city, as is the case with red light cameras.

Missouri should lower the maximum percentage that any one government can receive from traffic violations, down from the current 50 percent (I think that’s the number, and it is a good thing we have that cap there at all) to about 10 percent. There is no excuse for filling budget deficits with traffic fines, no matter how many times you amend the tickets to muffler violations.

The post Budget Deficits and Speeding Tickets appeared first on Show-Me Institute.

Dr. Pakko’s research on smoking bans has played an influential role in the Michigan legislature as the state considers a statewide smoking ban. We applaud his research and the impact it has had in demonstrating how government interference adversely affects economic growth and public welfare.

The Michigan Messenger does a disservice to its readers and to the public debate in general by attempting to defraud the merits of the study by attacking the author’s "affiliations." (The Michigan Messenger argues that Dr. Pakko’s findings are driven by ties to "big tobacco" donors.)

Because Dr. Pakko is (marginally) affiliated with the Show-Me Institute, and because we received a grant from the Cato Institute, which has itself received donations from tobacco companies, the author argues that somehow these six degrees of separation are biasing Dr. Pakko’s results.

First of all, the Show-Me Institute stands behind Dr. Pakko and his research on public smoking bans throughout the state. As a former employee of the Federal Reserve Bank of St. Louis, I can personally attest to the quality and objectivity of his research.

But, more importantly, the accusation is completely baseless. Dr. Pakko has never received any funding from the Show-Me Institute for any current or previous research (or any other service). The articles in question were published by the Federal Reserve Bank of St. Louis completely independently from the Show-Me Institute. Neither the Federal Reserve nor the Show-Me Institute accept "contract work," and any donation the Show-Me Institute has received that could somehow be connected indirectly to tobacco firms has no bearing on our research topics or their conclusions. In fact, our non-profit charter as a "public charity" explicitly prevents us from engaging in any policy work with a specific donor-driven agenda.

Again, I just want to reiterate that the Show-Me Institute is a "free-market think tank" — not a "libertarian think tank" or a "conservative think tank" — and that we do not support, endorse, or promote any political party or specific public policy agenda or legislation.

But you guys already knew that.

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Pakko’s conclusion supports a crucial insight about smoking bans — they’re not just a matter of public health. Any general health benefits that may be gained from blanket anti-smoking laws have to be weighed against other measures of human welfare and happiness.

I’ve never smoked, but during the course of my life there have been many occasions that I’ve decided it’s worth the small health risks of some amount of exposure to secondhand smoke in order to, say, see live music (or, when I was much younger, earn money by working at fast food restaurants). In every one of those instances, I would have preferred a non-smoking environment, and I’m sure some other people shared my preference. But all the smokers, had they been forced by a blanket law to cease puffing away, would have enjoyed themselves less, to varying degrees.

Economists have a broadly-defined word for happiness, or satisfaction: utility. Although a mandated non-smoking environment increases my own utility, it simultaneously decreases utility for those who are barred from smoking. I can probably estimate my own utility in general terms, by using thought experiments: For instance, I would put up with a smoke-heavy environment to see King Crimson, but the smoke would probably edge out my desire to see Ben Harper, a performer I enjoy to a significantly lesser extent; so if I consider the amounts I’d be willing to pay for tickets to see each band under ordinary non-smoking conditions, I can roughly calculate the amount of utility I’d lose if a smoky environment made me miss out on music I’d otherwise enjoy.

But I can’t calculate the aggregate utility that all the smokers at an event would lose if a law prevented them from smoking, because they would each have a different marginal utility for the value of smoking at a given concert. Absent the actual observation of each smoker’s preferences over time, there’s no way to measure that aggregate utility — and, so, no way to measure the amount of happiness or satisfaction they lose after a smoking ban is passed, or weigh it against the increased happiness of non-smokers.

This is one reason economists tend to be suspicious of regulation — because centralized authorities have no mechanism to measure the aggregate utility of the people their laws will impact. The economic effect of a regulation on specific businesses is an important subsidiary measurement, but it’s only the tip of the full utility iceberg. Markets, though still far from perfect, ultimately do a better job of maximizing aggregate utility because each individual market participant is able to estimate his or her own utility in a way that no legislator can, and then act accordingly — either buying a product, attending a concert, patronizing a bar, or not.

If a large enough number of other people enjoy smoking, and accept its long-term health risks, I have no place denying them the opportunity to do so. If a privately-owned "public" establishment decides it wants to cater to smokers, I can choose to patronize a different business — or put up with the smoke, if the other aspects of a given opportunity set outweigh my loss of utility from the smoke itself.

At the very least, if the public-health mavens are resolute in their insistence that a regulatory solution is necessary, there are options other than blanket prohibition that at least acknowledge the existence of varying individual preferences, such as proposals to provide incentives for businesses to go smoke-free, or allowing some establishments to opt out of a ban, if they and their customer base want it badly enough. Markets don’t provide results that are good for all people, all the time, but at least markets aim to please large segments of the population, most of the time, by catering to decentralized, individual needs and wants.

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Dave Roland joins us as an education policy analyst, bringing with him three years of experience as an attorney with the Institute for Justice, litigating school choice, economic liberty, and property rights cases in state and federal courts. He has undergraduate degrees in political science and Biblical studies from Abilene Christian University, and both a law degree and a master’s in theology from Vanderbilt University. Dave’s wife, Jennifer, will also be joining us as a policy analyst in a couple of weeks. She’s the former legislative affairs attorney for IJ’s Castle Coalition — but more about her later.

Also joining us as a research assistant is Justin Hauke, a graduate student at Washington University’s Olin Business School who until recently worked as a senior research associate for the St. Louis Federal Reserve. He has an undergraduate degree in economics and math from the University of Texas at Austin. Justin has been blogging here for a few days now, and we’ve already released his first op-ed. (Actually, he co-wrote an op-ed for us almost a year ago, so technically that would be his first.)

We hope to hear much more from our new staff members as they get settled in!

The post Welcome, Dave Roland and Justin Hauke! appeared first on Show-Me Institute.