Center for Limited Government Newsletter – Nov. 10, 2011

1. Whose Money Is It, Anyway?

By Edward N. Robinson

Both the Utah discussions about a Government Spending Limit amendment and the national discussions about our federal debt bring me back to a topic that indirectly relates to last month’s piece on alternatives to government social programs, and directly relates to all government spending decisions.

Decisions about government spending are often articulated as though the government has money of its own, about which it can and should make truly independent decisions in the same way that individuals decide what to do with their own money. But the fact is that government has no money of its own; it has only what it gets/takes from its citizens through taxes and fees. Whereas a citizen is spending his or her own money, and should be able to spend it seriously or frivolously, the government is spending other people’s money, and should spend it only after a compelling analysis of necessity, efficacy and efficiency.

As I mentioned in a much earlier piece for Sutherland, any government expenditures that benefit all citizens at least have the attribute of being “fair” by the standard of equal treatment. Roads, police, fire departments and parks are available to all, are widely used, and are at least arguably beneficial to all who live within the polity. But expenditures that benefit only a subset of the citizenry, whether the poor (food stamps and Medicaid) or the better-off (professional sports stadiums), are examples of government using its power to take resources from one group in order to benefit another. Because this is unfair when judged by the equal treatment standard, we ought to insist that our politicians can prove to us that such actions are fair by some other good standard before they implement those actions.

Is it necessary that such actions be taken by someone? Is the government able to undertake such actions more effectively and efficiently than the private sector? Is there a means to test the effectiveness and efficiency as the program is implemented? If all these questions can’t be answered positively, then why are we allowing our elected officials to spend our money in such a manner? Why do they think it’s appropriate to do so?

Discussed dispassionately in an article such as this one, these issues seem both straightforward and appropriate to apply to government spending decisions. But how often do you hear these questions raised in political debates over spending programs? Shouldn’t we force our representatives to discuss these matters, and address them before creating any new program? Maybe it’s we who are falling down on the job, even more than they are.

The author, Edward N. Robinson, is director of Sutherland’s Center for Limited Government. He has been a financial adviser to corporations, a senior executive, and a management consultant. Prior to retiring in 2006, he operated Robinson Partners, consulting CEOs on corporate strategy and mergers and acquisitions. Before that, he was an executive vice president of Texas Commerce Bank (later Chase Bank of Texas and now JPMorgan Chase), where he ran the investment banking business, and then created and ran The Private Bank; was an executive director at Azurix, an international water utility business, responsible for corporate strategy and M&A; and was a managing director at First Boston (now Credit Suisse), running the firm’s Los Angeles office and the regional M&A practice. Mr. Robinson has a B.A. from the University of Michigan and a J.D. from New York University School of Law.


2. Keep All 43 State Parks Open? Here’s How

By Derek Monson

Do Utahns really want all 43 of the current state parks to stay open? Can state parks be managed better? If so, how? What happens if state parks lose some of their state subsidy?

These and other similar questions were discussed at a recent legislative hearing as a follow-up to an audit of the state park system. A major portion of the hearing was devoted to discussing what it would mean for state parks if the system lost $2.7 million from the state. …


3. Untangling the Politics of Hair Braiding

By Paul T. Mero

Hair braiding. Why would the state Legislature spend even a minute worrying about hair braiding? Representative Holly Richardson is wondering the same thing. As it stands, hair braiding is regulated by state government. It seems that it is an issue of health and safety. The truth is that hair braiding is regulated by the state, with full support of the cosmetology industry, because of crony capitalism.

You see, the industry that calls on government for regulation is an industry bent on kicking competitors to the curb. The industry becomes a special interest at that point. …

To read the rest of this post on the Sutherland Daily blog, click here.