New Economic Figures a Shot Across Bow for Governments
Several recently released economic indicators are far worse than expected.
A little more than a week ago, we learned that the United States’ gross domestic product (GDP) grew by only 1.8 percent in the first quarter of 2011, well below the projected 2.2 percent. In May, unemployment jumped to 9.1 percent as only 54,000 new jobs were added. Compare this with several months whereupon more than 200,000 jobs were added to payrolls. The dollar’s value is being whittled away by the scourge of inflation as the Federal Reserve continues to try and pump up our economy with printed money. International investors are scurrying away from dollars as our economic growth slows significantly, and the dollar is falling against other world currencies. To put it briefly, things are not looking up for our economy.
These downward-trending economic indicators represent a warning for local governments across the United States, including right here in the Brazos Valley.
Podcast: Councilman Fields reviews his May 26 votes
Place 2 City Council Member Jess Fields shares his viewpoints about various items the council considered at its May 26 workshop and regular meetings. This podcast also is available on his Place-2 page on the City of College Station website.
May 26, 2011: Councilman Fields reviews his meeting votes
Taxicab Ordinance: A Door to Over-Regulation
We live in a free country, with a free economy that values voluntary exchange between willing parties. Following this idea, businesses are able to operate mostly as they wish; they are free to provide the product or service that they wish to, at the price they choose. Also following this idea is the fact that individuals are free to purchase that product or service – or not. The concept of voluntary exchange, and the extraordinary importance with which it has been treated in the United States, is no accident. A free economy depends upon the idea that people shall be free – not sort of, relatively, kind of – to enter into voluntary agreements with willing others. Think for a moment what sort of country we would be if people could not choose which products or services they purchased, but that it were determined by some governmental entity which placed little value on the rational thinking of the individual and great significance upon the vague idea of the collective good. Should any of us want to live in such a country?
Yet in today’s United States, the value of free voluntary exchange is in doubt, as regulations are constantly passed to instruct the masses in how they should make their choices. For example, New York City has banned trans fats in fast food. This presumes that people cannot ask, or cannot make their own determinations as to what they are ingesting. Do not worry, ignorant average person! If you are unsure that a hamburger is less healthy than a spinach salad, the wise authorities of New York are here to guide you. Give me a break.
Podcast: Councilman Fields reviews his May 12 votes
Place 2 City Council Member Jess Fields shares his viewpoints about various items the council considered at its May 12 workshop and regular meetings. This podcast also is available on his Place-2 page on the City of College Station website.
May 12, 2011: Councilman Fields reviews his meeting votes
Podcast: Councilman Fields reviews his April 28 votes
Note: Place-2 City Councilman Jess Fields suggested that a podcast format of reviewing his votes from city council meetings might be an excellent way to further share his viewpoints about various agenda items. Immediately following the April 28, 2011 meetings, Councilman Fields recorded his thoughts, and he plans to do the same after future meetings. The podcasts will be shared through this blog, as well as be available on his Place-2 page on the City of College Station website.
Thanks for visiting the blog.
-jgs
Jay G. Socol | Director of Communications | jsocol@cstx.govApril 28, 2011: Councilman Fields reviews his meeting votes
The Four Ways to Spend Money
Nobel Laureate Milton Friedman, one of the greatest economists of the 20th century, often talked about the four ways to spend money. It is an interesting and illustrative lesson, and it has a great deal of relevance to every level of government.
Therefore, the four ways to spend money:
- You spend your money on yourself. You get what you want, and you spend carefully. You’re going to get what you actually want because you know your own preferences. Additionally, you’re going to ensure that your dollar goes farthest – that you spend carefully. You might research prices before making your purchase, or you might haggle with the salesman.
- You spend your own money on someone else. You spend carefully, but the other person’s preferences are likely not met (or you may not care). Even if you know someone very well, buying them a gift that they really want is quite difficult! However, you will still economize and make your dollar go as far as it can.
- You spend someone else’s money on yourself. You get what you want, but you do not spend as carefully. If you take a date to lunch, they will most certainly get what they want off of the menu, but they may not be too careful with regards to the cost!
- You spend someone else’s money on someone else. You do not spend as carefully, and you are not concerned about preferences. This point speaks for our governments at all levels. When tax dollars are being spent, an elected official has little incentive to spend the money too carefully, because it isn’t their money. They’re also not terribly concerned about meeting the preferences of the people they serve. Even if they are, how is it really possible to know what thousands – or millions – of people actually want their tax dollars spent on? Some may want one thing, and some another. Most might just rather have it themselves.
It’s a memorable, if simple lesson in how people are incentivized to spend money. The fourth point is particularly true. How is it that governments can spend money better than individuals themselves can?
We should always guard against doing things with tax dollars just because we think it’s “a good idea.” It is rather unlikely that we are spending that money in the most efficient way, or in a way that actually suits the preferences of every one our citizens.
We Can Lead in Fiscal Transparency
All levels of government owe it to the people they represent to be as transparent as possible in their proceedings, regardless of the subject matter. In particular, however, people seem to care the most what happens when their money – their tax dollars – are spent. The City of College Station may soon take an important step towards true transparency with regards to expenditures. (more…)
Government by Whim
Without a firm understanding of what our government is supposed to be doing, we cannot know the appropriateness of its actions. Then, we must have a definition, which most should accept without issue: governments exist chiefly to protect our rights, not to infringe upon them. (more…)
