Dental Lobby Has Sharp Fangs

     More bad news in Arizona.
     One area of the U.S. economy that has long been almost completely corporativized (regulated by the government) is dental services. Dental services in the U.S. are monopolized by an organization called the American Dental Association, which has been successful in having licensing laws passed in all the state legislatures. These laws have had the effect of restricting supply of dental services, thus boosting price.
     Recently, some legislators tried to introduce a bill to the Arizona state legislature that would have permitted dental therapists to offer some services that presently only dentists are legally allowed to offer. Their position was that the high price of dental services results in many people being unable to afford them and that the licensing of dental therapists would alleviate this problem.
     Unfortunately, the House Appropriations Committee of Reference voted 8-1 against the bill. The sole yea voter was Nancy Barto (R-Phoenix). Aside from Regina Cobb (R-Kingman), who is actually a dentist, the names of the other nay voters are unknown.
   

Caution When Boldness is Required

     The new Pinal County sheriff and county attorney are said to be "cautious" about the use of RICO funds collected by the county. While campaigning for the job, Sheriff Lamb had criticized the former sheriff's handling of the funds, which is believed to have been a factor in Lamb's victory over the former sheriff's chosen successor.
     If that's so, then it seems to me that Sheriff Lamb could afford to be a little less cautious and a little more righteous.
     RICO laws have been a scandalous infringement of Americans' property rights ever since they were first cooked up in 1970 as a tactic in the misguided War on Drugs which has been a useless and expensive policy that has been a factor in our increasing national impoverishment.
     Under the RICO laws, property may be seized by law enforcement officials if either they or an informant alleges that the owner violated a law. Nothing has to be proven in a court of law; an allegation or a suspicion is sufficient legal grounds for a RICO seizure. Since most people would agree that having your property seized is a form of punishment, it follows that RICO sanctions punishment without trial. Surely, this is a very serious regression in the quality of our justice system.
     In the interests of justice, such laws ought to be repealed, or at least not enforced.

The Only Fair Safe Space is a Private Safe Space

     Arizona has come up in the news and not in a good way. Well, what else do I blog about except bad news?
     I choose to critique the article in Reason Magazine as they usually have the best analyses and to find a flaw in a Reason writer's argument would be quite a rare thing. This time, however, I think something more needs to be said.
     A bill, HB 2120, has been introduced in the Arizona House of Representatives by Republican (are there any other kind in Arizona?) representatives Thorpe and Finchem (who I voted for). By the terms of the bill, "courses, classes, events, or activities" that
1. promote the overthrow of the U.S. government
2. promote division, resentment, or social justice toward a race, gender, religion, political affiliation
    social class, or other class of people
3. are designed primarily for pupils of a particular ethnic group
4. advocate solidarity or isolation based on ethnicity, race, gender, religion, or social class
5. violate state or federal civil rights laws
6. negatively target specific nationalities or countries
are to be prohibited in school districts and community colleges and universities subject to the authority of the state (of Arizona).
   
     The author of the Reason article opined that

". . . allowing authorities to legislate what is and what isn't acceptable speech on campus—especially public campuses which are required to respect the First Amendment—is a terrible idea and inevitably comes back to harm whichever party the speech restrictions were designed to protect. The authors of HB-2120 might think they're taking a stand against P.C. culture run amok, but all they're really doing is legitimizing the concept of hiding from challenging ideas rather than confronting them." 

     In other words, schools and universities are supposed to be arenas where competing ideas are debated, and may the best idea win! Perhaps that is what people have in mind when they assert that the state should not have control over educational content:

"The Arizona school boards association said it opposes Thorpe’s bill because the state should not have control over school content. 'It should be up to each district what kind of curriculum should be approved,' said spokeswoman Heidi Vega."

    I don't really have a dog in this fight. The two sides each have their own idea about what should happen (what content should be taught) on public property (the schools). My position is that it's impossible to decide fairly how public property should be used.
     The concept of ownership gives one a solid basis for deciding questions of how to resolve conflict over scarce resources. Ownership entails the following property rights: enjoyment, occupation, possession, rental, sale or other form of alienation, use, or even destruction of a property, and the right to exclude others from the exercise of aforesaid rights.
     All property, including "public" property, belongs to the persons who determine who gets to exercise the property rights. The theory of public property in a democracy entails the idea that public property will be used in a way determined by the majority of the voters. But what if two powerful political factions disagree about how certain public property is to be used? Then the goal of the concept of ownership---to resolve conflicts over scarce resources---is defeated. And indeed, that's what we're witnessing in the fight over what content should be taught in Arizona public schools.
     I think everyone has the right to advocate whatever ideas or theories they believe in, no matter how mistaken I think they are. However, people should not have the right to steal other peoples' money (taxation) and then use that money to erect facilities where their ideas and theories will be propounded at taxpayer expense.
     Therefore, the only just solution to the problem of what content will be taught in schools is that the schools be privatized. One can't complain about what people do on their own property!

Corporate Welfare in Casa Grande

    Lucid motors is planning to build a new electric car manufacturing plant in Casa Grande.

"The future of Casa Grande looks brighter now with Lucid developing 500 acres near Thornton and Peters roads, according to Casa Grande Mayor Bob Jackson. He sees the company’s arrival as a catalyst that will propel Casa Grande into being a leader in technology and advanced manufacturing. There will not be any delays in this development on behalf of the city, Jackson promised, as he expressed a desire to speedily move the project forward."

     I'm so glad to hear the the municpal government won't stand in the way of honest and potentially lucrative economic development. Governments don't always behave rationally or morally.

"Pinal County offered performance-based incentives to attract Lucid to build in Arizona."

     Now, why does Pinal County have to pay Lucid to bu ild a factory in Casa Grande? Is there something wrong with Pinal County that companies have to be paid to build factories here?

"County Manager Greg Stanley said he could not discuss what types of incentives were offered, except to say they were tied to Lucid pledging to create a certain number of jobs."

     Ok, so jobs will be created. All other things being equal, that's a good thing, I think.

The county will be assembling and buying the land, parts of it owned by Saint Holdings LLC, then selling it to Lucid."

     Now, why doesn't Lucid just buy or lease it themselves? Why does the county have to get involved in the deal?

"There is only one problem with the deal — the taxpayers of Arizona are expected to pay for the purchase of the land and contribute a significant amount of money to help it get the factory built and operational. When and if everything goes as planned, the factory is expected to create 2,000 jobs in an area where many are unemployed or underemployed."

 "The land itself will cost $31.8 million. Financing the purchase over 30 years will add another $41.6 million, but Pinal County spokesperson Joe Pyritz says the plan is to lease the land after it is purchased (presumably to Lucid Motors, although the county is not allowed to say so for the record) and then sell it at the end of 5 years. That arrangement would cap the total cost of the deal at $35 million. The sale price is expected to equal the total outlay made by the county for principal and interest."

"However, first someone has to actually buy the land. County supervisors will meet in January to consider how to do that. The leading proposal is to finance the purchase by raising property taxes or imposing a countywide sales tax surcharge. Pyritz says if the supervisors decide on a tax increase, the new tax would only cover the land deal and would end once the tax funding reimburses the county for the purchase cost."

     Oh-oh. Governments don't have any money of their own. The only way they can get money is by taxation. It's their only business plan!

 "Lucid Motors will be eligible for up to $46.5 million in various subsidies offered by the state through the Arizona Commerce Authority over the next five years. Those subsidies will be coupled with certain performance targets" 

"Susan Marie, spokeswoman for the Arizona Commerce Authority is quick to point out that the total amount is far less than the $335 million in tax credits promised to Faraday Future or the $1.3 billion in similar credits promised to Tesla Motors by the state of Nevada."

     Oh-oh. If we don't hurry up and jump on this deal, some other state (or some other county) will steal it away from us! Taxpayers in other locales aren't as dull as I am, probably.
     However, there are always two sides to every story. Could it be possible that paying Lucid to build a factory in Casa Grande with state and county taxpayers' money has a downside?
     First of all, let's sum up the upside. Cui bono? Lucid shareholders will certainly gain from this deal. Lucid management and workers will become employed, which is nothing but an upside for them. The county increases its tax base. No downside for them. Casa Grande businesses may or may not benefit, depending on where and how the Lucid employees spend their money. For sure, the economy will grow, there would logically be an effect on property prices (more taxes for the county), but it's impossible to predict who specifically will benefit and to what degree.
     On the other hand, it's doubtful, for example, that residents of areas far removed from Casa Grande (as many parts of Pinal County are) would benefit much, if at all.
     The downside of what should otherwise be a win-win situation is that taxpayers, both in Pinal County in particular and Arizona in general, will be forced to subsidize the establishment of the Lucid plant.

     "The project involves a significant amount of corporate welfare. Besides the Pinal land deal, Lucid Motors will attempt to collect up to $46.5 million over the next five years in various subsidies offered by the state through the Arizona Commerce Authority."

"The five Pinal County supervisors will discuss the possible land purchase and how it will be funded on January 4 at their regular meeting in Florence. The goal is to a produce a resolution of intent for the agreement, to be voted on no later than January 19."

"'The supervisors will likely consider either a property- or sales-tax hike to pay for the land,' Pyritz says. If they decide on a tax increase, he says, the new tax would only cover the land deal and would end once the tax funding reimburses the county for the purchase cost."

"'We won't make or lose money' on the deal, Pyritz says."

     No, the county will make money, in the long run, if tax revenues increase. And by the way, is the county planning to reimburse the taxpayers for their interest-free loan to the county and Lucid after the five years are up? Nothing has been said about that! Could it be that the county will end up keeping the money? Could it be the tax will remain in place, even after the deal with Lucid has been settled?

Summary:
The new factory will create 2,000 new jobs, which means the economy will grow.
    1. But capital extracted from state and county taxpayers will mean decreased purchases of the products of other producers.
    2. The jobs created will be in Casa Grande. Benefits for Western Pinal residents and property owners? Probably, some (we can't be sure who) will be net gainers. For other parts of the county? Doubtful.
     3. Economic stimulus created by the participation of government constitutes malinvestment (defined as investment that would not have occurred in a free market) and all other things being equal, has to be liquidated in the long run. If government wants to do something to improve the economy, they can remove legal barriers to development by repealing laws that discourage business.
     4. No mention is made of paying back taxpayers for their interest-free loan to the county (and indirectly to Lucid) or of abolishing the tax after the loan to Lucid is repaid.

     Government/business alliances are not a just way to foster development. If Lucid can't obtain the necessary funds to build their factory by consensual means, that is a good indicator that it shouldn't be built.
     The involvement of the county as an economic actor is troubling. Governments, if they serve any purpose at all, are meant to provide a very limited range of functions. A government is not a business and can't be run like one. Financing economic development is for capitalists and entrepreneurs, not county supervisors who have no capital except what they can squeeze out of the taxpayer.