Un-enforceable laws

I'm about to go to a tailgate on the dry campus of the University of Kentucky. Nearly everyone that I know (including people underage) will be consuming alcohol on the campus and not doing so conspicuously. What is the point of having a dry campus 6 out of 7 days during the fall? Is the police department that easily bought? Surely if they cracked down on drinking, the enthusiasm for UK football would fall as would revenues.

So are the laws not being enforced because it is impossible to do so or is the revenue from fans spending money locally too much to turn down?

Coffee Capitalism

I'm sitting in the coffee shop I work at (Coffea Island) getting ready to go to work. It amazes me the amount of economic discussion that goes on here. It also amazes me that such a small business can continue expanding its customer base in the face of such harsh economic times, even though the owners don't seem to be looking forward at all.

We also use fair trade coffee, which is certified not by a government agency, but a for-profit business that is meeting the demand of concerned coffee drinkers as well as making money.

King Coal

There has always been a debate raging in Kentucky about coal. It provides about 90% of the electricity to our state, but the negatives are quite well known... mountaintop removal reclamation usually only includes the stabilization of rock formations, with resultant decreases in biodiversity in nearby streams as well as polluting and diverting streams; burning coal releases mercury and sulfates (which cause acid rain) into the atmosphere; burning coal produces 130 million tons of coal ash (waste) per year... the list goes on much further...

It seems as though "free marketeers" would have a tough time with this problem. But digging a bit deeper (pun intended) into this problem seems to show that a market with less restrictions could solve the situation.

Mountaintop removal was implemented to mine lower sulfur coal as well as provide a safer alternative to underground mining. And mountaintop removal only accounts for about 5% of coal for power plants. Government agencies such as the EPA made it EASIER for coal companies to fill in valleys and hollers by allowing for permits to be obtained to create gently rolling surface topography.

From Environmental Law Resource

"A permit is required under section 404 of the Clean Water Act (CWA) in order to discharge dredged or fill material into the waters of the United States. The permit is issued by the USACE using the guidelines developed by the Environmental Protection Agency (EPA)"

If the government is the one allowing for coal companies to pollute our streams and rivers and watersheds, why should we think that giving them more authority to make rules and govern would create a solution? An Austrian view would be to eliminate the Surface Mining Control and Reclamation Act and allow for citizens and property owners to file civil suits against big coal for any infringements. Having a smaller government would mean that coal companies would have a tougher time flexing their large budgets to scare away these suits and influence politicians.

On a final note, coal companies have invested more than $50 billion in clean coal technologies, and the first truly clean coal plant went online in Germany with facilities to clean the emitted gasses and convert the produced carbon dioxide into liquid form to be stored.

Midterms

I'm swamped with school right now, engineering midterms... but it reminds me of why I'm working so hard in school. Engineers do a very difficult job and hold millions of lives in their hands and therefore have to sacrifice quite a bit to learn the trade. Would there be as many engineers if our government taxed away a much higher proportion of our income for redistribution? Why would I work so hard in school to learn a trade that is difficult and filled with liability to pay for a welfare state? Why would doctors risk even more and work even harder for longer to practice medicine in a socialized healthcare state? Where would the extra incentive to be the best in your field come from? Don't we want our engineers and doctors and professionals of all sorts have incentives to continue their education and become the best and most innovative in their fields? Isn't that where progress comes from?

Meanwhile, my favorite source for new economic developments.

More On Student Housing

So I'm back on the student housing issue yet again. Today, Lexington-Fayette Urban County Government (LFUCG) released news titled "Inspections reveal high incidence of fire safety violations in neighborhoods surrounding university" detailing a crack-down on "congregated living facilities" around the university.

I find much of this article to be disturbing, but the biggest problem that I have with the crackdown is "inspectors moving down selected streets" which all happened to be around the university.

“So far we have inspected only a limited number of these facilities, but the results were alarming,” Newberry said. “These are life safety issues that must be addressed before there is a tragedy. In the last two years, we have encouraged Code Enforcement to ramp up inspections to improve housing conditions, and now we’re encouraging the Fire Marshal to ramp up inspections to make housing safer.”

It just so happens that this is occurring soon after students marched on a city hall meeting in opposition to the proposed housing plan set forth by LFUCG. It doesn't take a degree to understand what is going on here. The absolute and unchanging line from both UK and LFUCG is troubling. Instead of engaging in a legitimate debate with students, searching for solutions (even if this solution is not in line with how the city/university would like to proceed), the powers that be are pushing policy, coming up with new reasons why students are to blame.

Why would the university risk enraging students to get something? I have two answers here. Either whatever the university intends to do has benefits that outweigh the risks of an angry student population or the administration thinks that students will be apathetic or become frustrated by the myriad of methods employed by the university and city.

Branham said this is the first time in his 23-year career with the city that a Mayor has asked the Fire Marshal’s Office to inspect congregate living facilities in single-family homes, and the first time there has been a comprehensive approach by the fire marshal.

This is the worst part. I think the city needs to have such inspections, but the Mayor asking the Fire Marshal to do this stinks to high heaven.

Freedom Kentucky

If you're interested in some cool things going on in Kentucky, check out Freedom Kentucky at the Bluegrass Policy Blog. These guys do a great job keeping up with exactly where Kentucky tax money is going and how it is being spent inefficiently. With a major focus on education spending, its something that you can't skip if you care about the children at all.

Where I'm Coming From

Here's a little bit about me and why I started this blog:

I recently (within a year or two) have started following various Austrian economics blogs (Cafe Hayek and Austrian Economists are my favorites, starting to get into Think Markets) and wanted to try it out myself, but with more of a local viewpoint. I'm also attempting to enroll in graduate school in economics (hopefully at George Mason) and think that this would be a good way to begin to do more than just using the "Economic Way of Thinking".

I am also pretty furious (as a "youth") that the government is spending my money to bail out failed companies that have no business being in business. They need to fail, be liquidated, and have their resources reallocated to areas that will create wealth more efficiently. Being a young person, I will no doubt have to pay for this either through massive inflation or through massive taxes. I'm just amazed that we keep on listening to the same economists that didn't see this coming and doing exactly the opposite of what those who did predict the burst are prescribing.

In response to Austin Hill

The Kentucky Kernel published an opinion article about the student housing situation entitled, "Students must mature, accept new housing plan" that detailed a "defense" of the ordinance being considered by the prestigious Lexington Student Housing Task Force. Below is an response sent to the Kernel along with a link to the article:

Dear Mr. Hill,

In response to the opinion article you wrote on September 24, 2009, I feel that I must agree. Students must mature. College is a time to grow and learn, not party and throw away brain cells like confetti. Burning couches are unacceptable. “Sleeping on pizza boxes” is a terrible way to live. It is not cool to hang “a plastic beer sign across your porch that you stole from the campus bar the night before”. I think such activities are morally reprehensible. On these points we completely agree.

Where I must disagree with you sir is the rest of the article. Your solution for this problem involves creation of legislation that imposes restrictions on the density of students in an area. It’s an elementary way of dealing with such a matter, separating two unruly children from each other in a classroom. This works well in such a simplistic model comparing the city of Lexington to a grade school classroom, but the city is much more complex than your typical middle school. Not only would such legislation conflict with the common law that has developed (see Hayek’s Law, Legislation, and Liberty Vol. 1), it also imposes on individual property rights of the owners of the properties, as well as the rights of the students attempting to secure shelter. But each of these defenses warrant long essays and I will attempt to keep this letter somewhat brief. So in this case, I will talk about the unintended consequences of such an action.

Looking at the economics of the problem, I can find many reasons why this is a poor reaction. Many of the students who live in such areas that you call slums do so because of the cheap rent that they find in such areas. Forcing students to look for better living condition (a noble idea) causes them to undoubtedly pay higher rates, be it either for rent or for transportation to campus. I am fortunate enough to be able to afford the transportation rates, but many other students cannot afford this luxury. You say that students should not live this way “to save $50 per month on rent” but does it not cross your mind that some of these students could not afford to live in Lexington and attend this university if they did not institute themselves on such stringent monetary restrictions. The fine city of Lexington is doing them no favors by requiring them to pay more money to live further apart from each other.

Other proponents of this legislation say that property values in these areas are terrible because students populate these areas. They are right, but we as a society cannot go changing the law every time someone loses money. Property values rise and fall based on many factors, risk is involved in investment. And I can guarantee you that property values will be almost nil in these areas if this legislation is enacted. But there is definitely not a chance that our fine university, which has an interest in property values surrounding its campus that is expanding, would be attracted to the prospect of being able to buy cheap land. Not our university.

When students live in houses that are not fit for humans to inhabit, they should be condemned. When someone lights a couch on fire in the street to celebrate a big upset for a football game, they should be arrested. If a landlord is cheating their tenants, the tenants should report theses violations. These living conditions give you neither the right nor the obligation to force these students to live in a way that applies to your standards. That is morally presumptuous on your part sir and as reprehensible as the conditions in which these students live.

Sincerely,
Campbell Fritschner

Capitalism: A True Love Story

Capitalism at work right here in Lexington, KY:

1. Big Blue Madness tickets (which cost no money but cost three nights in a tent on UK's campus) are going for more than three hundred dollars for a pair on eBay and craigslist. I would never pay this much to watch a "practice" which is more like a run out and introduction of players. I would probably not pay more than $10 for a lower level ticket. But that means that someone who truly values seeing the Cats play together the earliest that is allowed by the NCAA, someone who values these tickets more than I do, can see his or her beloved team take the court.

2. A service providing delivery of male contraceptive devices has sprung up in Lexington and will deliver 2 of these products for the measly cost of $6. When you think about the monetary cost to raise a child and the social cost to raise a child that is unplanned and finally the fact the the University of Kentucky provides free male contraceptives in it's hospital and student health complex. Not to mention the prevention of sexually transmitted disease.

3. Capitalism: A Love Story opened in theaters last weekend (September 24th). The movie has already grossed $4,849,067 in one week. His past three films grossed $24,540,079 (Sicko), $119,194,771 (Fahrenheit 9/11), and $21,576,018 (Bowling for Columbine).

Lexington Housing Ordinance

I'm pretty enraged about the proposed ordinance to limit the number of students that can live in the same off campus residence to 2 (unless specifically designated as student housing) and to not allow for unmarked residences to be located within 250 feet of each other (basically every other house). Much much much more to come on this...

Here are some links:
WKYT
National Student News Service
Kentucky Kernel

Welcome

Welcome to the Austro-Kentuckian. I am your host Campbell Fritschner and I will be posting on current events that effect Kentucky, the United States, and the World with a main focus on and Austrian economics style approach to analysis.

Enjoy!