A checkbook goes online in Reno
Today, the City of Reno launched TransparentReno.com, which puts the city's checkbook and other public information online. It's a great site and well worth clicking around, not just for the wealth of information it contains, but also because it's a model other governments in Nevada should follow.
NPRI's Steven Miller also applauded the launch of TransparentReno.com and released the following comments.
Citizens fund government, and so they have the right to know how government spends their money. That's why transparency in government is so important.
By putting its spending checkbook online at TransparentReno.com, the City of Reno has taken a giant step forward, ensuring that its citizens can see exactly how their tax dollars are being spent and who is receiving them. This tool will allow anyone with a computer to monitor and review city finances, greatly improving public accountability for city spending.
Congratulations to the city council and City Manager Andrew Clinger for opening up city finances to the average citizen, for their commitment to transparency and for setting an example that all other government bodies in Nevada should soon follow.
Also exceedingly welcome is the commitment by Reno to place its payroll data online in June, to be kept updated thereafter in real time.
Reno's site is a model that the state government and other local governments in Nevada should follow. Accordingly, TransparentNevada.com - the open-government website that NPRI hosts as a public service - will provide links to the new City of Reno site.
Read more about this at TransparentNevada's blog or at the RGJ.
Read moreNV's government has failed in education. Let's put it in charge of the economy!
A perfect encapsulation of government logic.
It's also the thing that amazes me about all of the government officials who are so excited about Gov. Brian Sandoval's economic development plan, which would put government in charge of picking economic winners and losers.
Everyone, and I mean everyone, agrees that education in Nevada is in a sorry state and must be improved ASAP.
So who's been in charge of the education system for the last century? The private sector? Parents? Children?
Nope. The government! The same government that has nearly tripled inflation-adjusted, per-pupil education spending in the last 50 years, while results have remained stagnant.
The government has failed hundreds of thousands of children in Nevada, and now government officials want us to violate the constitution, abandon the free market and trust them to run the economy? You've got to be kidding me.
There's plenty more to say on this roadmap to crony capitalism, so stay tuned.
Sandoval's economic development plan is a roadmap for crony capitalism
Earlier today, Gov. Brian Sandoval and the Governor's Office of Economic Development released its economic development plan. Unfortunately, Sandoval's plan is based on government picking the winners and losers in the economy and an expansive and unconstitutional view of government's role.
Here is NPRI's press release on the plan.
LAS VEGAS - Responding to the release of Gov. Brian Sandoval's so-called "economic development plan," Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, released the following comments:
The Governor's Office of Economic Development has issued a three-year plan that would cartelize and collectivize the Silver State economy. It is a plan to substitute the government for private businesses and politically connected bureaucrats for entrepreneurs. It is a roadmap for crony capitalism and would lead to less productivity and less growth. It is clearly unconstitutional. In short, this plan would take Nevada 180 degrees in the wrong direction.Lawrence noted that the plan selects seven industrial sectors that would be organized and subsidized by bureaucrats called "Industry Specialists." The plan would supplement these state-directed sectors with a state-run marketing agency called Team Nevada and a state-run research and development wing under which the investment decisions would ultimately be determined by a single czar - the Technology Commercialization Director. Said Lawrence:
It was government's numerous politicized interventions in the marketplace that led to this downturn, and it is irrational to double-down on such mistakes - abandoning even further the inherent resiliency of free markets driven by the competitive visions of individual entrepreneurs. And yet, with this plan, the governor has turned from free-market principles to those of a corporatist economy directed by government insiders.
The plan calls for government officials to dole out direct state support and other subsidies in order to "incent entrepreneurship." The incentive for genuine entrepreneurship is profit from serving the public. Unfortunately, what this plan would encourage is corporatist rent-seeking.
Centuries of history have made clear that private entrepreneurship - with individuals pursuing profits, not the whims of political insiders and government bureaucrats - is what creates innovative and dynamic economies that raise living standards for all.
The investment decisions made by these planners would necessarily be politicized since the entire operation would be financed at public expense and not on the strict basis of what can be supported by consumer demand.
This collectivist industrial state can only prosper at the expense of private workers and genuine entrepreneurs, who would inevitably face a higher relative tax burden in order to provide the direct subsidies and tax credits required to prop up the collectivist enterprises.
Preventing this type of crony capitalism is exactly why Nevada's constitution declares that the "State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes." Giving subsidies to private businesses, as this plan calls for, is unconstitutional.
At least President Obama only wants to run the nation's health care system; Governor Sandoval proposes that the government direct Nevada's entire economy.
It's deja vu all over again!
So says Doug French, formerly of Las Vegas, in his Mises Institute column today. French compares the current election year to 1980 in that discussion of the gold standard has actually crept back into the Republican policy debates. 
While campaigning for the Republican nomination in 1980, Ronald Reagan promised to establish a gold commission once he got into office, just as Newt Gingrich has done in the current race. (Ron Paul has also urged a return to gold-backed monetary stability for decades.) Reagan at least nominally made good on this promise, although as the great Rothbard observed at the time: "The gold standard was the easiest pledge to dispose of. President Reagan appointed an allegedly impartial gold commission to study the problem - a commission overwhelmingly packed with lifelong opponents of gold. The commission presented its predictable report, and gold was quickly interred."
French goes on to debunk the pseudo-intellectualism of some supposed monetary scholars who were recently quoted mocking the gold standard in the New York Times. Here's my favorite retort: "A number of professors on the panel made comments to the effect that the price of gold is too volatile or unstable to back the dollar. Evidently it doesn't occur to them that it's not the price of gold that's volatile but the value of the dollar. The value of the dollar is volatile downward for the very reason that the Fed can create dollars from nowhere; evidenced by the M2 money supply increasing from $683.7 billion in August 1971 to the current $9,712.8 billion."
To be fair, I should point out that not all Austrians necessarily agree with the gold standard, even though they might all agree that a gold standard would be vastly superior to the current system of fiat monopoly currency and the attendant boom-and-bust cycle it facilitates. Hayek, for instance, simply advocated for free choice in currency, with the expectation that traders would naturally gravitate toward currencies that established a reputation for stability, whether backed by gold or not. This would imply a rejection of legal tender laws so that privately-issued currencies could compete openly on the marketplace with various government-issued currencies.
Whatever the endgame of the resurgent gold debate may be, it's certainly encouraging to see that Americans are beginning to understand they have been systematically looted by the inflation tax and that this phenomenon is also related to volatility in the business cycle.
Best of the Nevada blogosphere featuring Mitchell and Fellner
One of the best parts of blogging is reading other bloggers here in Nevada and finding out their takes on current issues.
In what I plan to make a weekly feature here at Write on Nevada, I'd like share my favorite blog posts of the week and why. Below that I'm going to post a list of all the center-right blogs in Nevada that I know of.
Without further ado, the inaugural "Best of the Nevada blogosphere" awards go to Thomas Mitchell at 4th St8 and Robert Fellner at Grim's Grumblings.
- It is not how much water, but how much it will cost, by Thomas Mitchell at 4th St8.
What it's about and why it's a great post: It's about the Southern Nevada Water Authority's attempts to take water from Northern Nevada and bring it to Southern Nevada. I don't know very much about this issue, but Mitchell includes a fact about cost that made my jaw drop.
The money line: "As the SNWA's own study admits, water rates in Las Vegas would at least triple if the groundwater is tapped and piped south."
- On monopolies and getting your fair share, by Robert Fellner at Grim's Grumblings.
What it's about and why it's a great post: In September 2011, Fellner declared that the UFC's success had made it a "monopoly" (not in a bad sense) and sarcastically predicted that "[a]ll we are waiting for now is the US anti-trust division to break up this giant consumer-hating monopoly and the story will be complete!
And though and behold, that's exactly what's happening. And it gives Fellner a chance to pen an eloquent and stirring defense of property rights and why you don't lose your property rights as you earn wealth. A great post.
The money line: "The tens of thousands of current or prospective UFC fighters are a tangible example of the increase in the quality of life and available opportunities that the UFC has created. Let us not punish such a feat! Let us certainly not pretend there is anything moral or just about using the inherently unfair method of government force to do so."
- It's a center-right blog on policy or political issues.
- It's active. It's not a blog if you haven't written on it in several months.
- I know about it. If I'm not including your blog, please let me know about it in the comments or shoot me an email, vj@npri.org.
4th St8
Bruce Feher
The Complete Las Vegan
Cranky Hermit
Dullard Mush
First Principles
Grim's Grumblings
Kickin' Up Dust (Nevada Farm Bureau blog)
The Libertarian Popinjay
Local So-and-So
Muth's Truths
Nevada News and Views
Reno Hayek Symposium
TransparentNevada blog
The Western Wrangler
VIDEO: Newt Gingrich, Ron Paul and Rick Santorum talk about the feds owning 85 percent of Nevada
NPRI's Nevada Journal asked:
85 percent of Nevada's land is federally owned. If elected president, what actions, if any, would you take to return some of this land to the state?And GOP Presidential candidates, Newt Gingrich, Ron Paul and Rick Santorum, answered:
Mitt Romney did not respond to Nevada Journal's request for an answer.
What did you think of their answers? Should Nevada own its own land or should the federal government? Let us know in the comments below.
And the next time President Barack Obama comes to town - assuming he does more than just drive by NPRI's office in a motorcade of 22 fossil-fueled vehicles - we'll try to ask him as well.
Good news: Sandoval to seek the repeal of 654 regulations
And yes, this is actually good news. The AP reports:
Gov. Brian Sandoval wants to repeal 654 regulations that the administration says are unneeded and a hindrance to economic growth.Sandoval also said he wants to condense or update about 1,000 other regulations.
Now without any details, it's impossible to give a definite answer on how good this is, but there are certainly many regulations that strangle businesses and harm individuals. Taking a step to actually reduce the scope of government, as this appears to be, is a great thing.
Government has failed to solve Nevada's housing problems
Last night, GOP Presidential hopeful Sen. Rick Santorum appeared on Face to Face with Jon Ralston. The first question Ralston asked was about housing, saying:
The market has not worked so far [in fixing Nevada's housing problems]. What are you going to do? (21:18 mark)After Santorum talked about his proposal to let people write off mortgage losses, Ralston returned to his assertion that the market has failed.
I know you're a free-market guy, and I understand that. But the market did not work for a variety of different reasons. Maybe you agree with that, maybe not. (20:00 mark)Note the assertion in both of Ralston's statements - "the market did not work."
This is a false assertion that must be vigorously disputed and rejected, because it isn't true. If a defender of the free market answers a question that contains that faulty assumption, he or she is sunk. (It's like answering a "when did you stop beating your wife" question.)
This is especially important, because it's actually government's attempts to solve Nevada's housing problems that have failed, not the free market.
Let's examine the evidence.
Government interventions in the housing market led to the housing bubble. We had Keynesians like Paul Krugman actually calling for a housing bubble to boost the economy in 2002. Then we had "the government's distortion of mortgage finance through the Community Reinvestment Act and the government-sponsored enterprises Fannie Mae and Freddie Mac." And, of course, we had the Federal Reserve's manipulation of interest rates.
The free market didn't create the housing bubble. Government created the housing bubble.
After the housing bubble burst in 2007, has the market failed to fix the housing problems government created or has government prolonged the housing crash by its repeated interferences with the market process?
Let's go back to the evidence.
First, pain was inevitable. After government created the housing bubble, the bubble had to burst and financially hurt many homeowners. That's the fault of the government, not the market.
Second, government has repeatedly interfered with the housing market. The Federal Reserve has continued to manipulate interest rates. Congress passed an $8,000 tax credit for new home buyers. Nevada passed an unconstitutional Foreclosure Mediation Program. The feds are subsidizing those who can't make their mortgage payments. And the Nevada legislature passed AB 284, which has brought the foreclosure process to a standstill.
Verdict? Government has failed. After causing the housing bubble, government is now delaying a housing recovery. The free market hasn't failed in housing; it hasn't been given a chance to work.
Every defender of the free market, especially political candidates, must examine questions relating to housing and make sure the question doesn't contain a faulty assertion.
An accurate question on Nevada's housing woes, like "Why has government failed to solve Nevada's housing problems, and how are you going to stop government from interfering in the market process?" is easy to answer.
As a bonus, the answers that would follow that question would actually improve Nevada's housing market.
RGJ: AB 284 will "postpone" a housing recovery by "two to three years"
There's a great article by Jason Hidalgo in the Reno Gazette-Journal that details exactly how AB 284 is delaying a recovery in the housing market. It's also a great example of how ideas have consequences and bad ideas - even with the best of intentions - have bad consequences.
Like a bogeyman lurking just behind the corner, shadow inventory has been a nagging concern for the Washoe County housing market since the real estate bubble's collapse.You can't solve Nevada's housing problems by slowing down the foreclosure process. In fact, as this article shows, slowing down the foreclosure process is making things much worse by prolonging the pain.
Now a delay in processing distressed properties is bringing shadow inventory back to the forefront, which experts say could postpone a housing recovery in the area by two to three years. ...
Back in October, a fraud law took effect that required stricter record keeping for foreclosure filings, including actual proof of ownership of the distressed property's mortgage note. Designed to combat robo-signings, the law was created through Assembly Bill 284 and threatened offenders with a felony charge. Before the housing collapse, however, many lenders bundled their mortgages into investment instruments known as mortgage-backed securities and resold them to investors, making it difficult to track ownership in some cases.
As a result, the new law dramatically reduced notices of default - the first step in the foreclosure process - as major banks stopped filing them for fear of running afoul of the stricter requirements. After averaging 506 default notices per month from January to September, the area posted 13 notices in October, 15 notices in November and 28 default notices in December, according to the Washoe County Recorder's office.
With banks hesitating to file default notices on nearly 500 distressed properties per month, experts estimate that nearly 1,500 distressed properties were added to Washoe's shadow inventory in the past three months of 2011 from delayed default notices alone.
The amount is significant, especially if banks are unable to find a way to comply with the law for several months, said Kevin Wiseman, broker-owner of Reno Rancho Realty.
"Maybe they can deal with it via short sales and take 50 to 100 homes off that list per month," Wiseman said. "But that still leaves you with 400 homes a month just sitting there until someone untangles the web of ownership (of these mortgage notes). Unless something changes, I don't see them clearing up this backlog for two to three years." (Emphasis added.)
Remember all the grief that Gov. Mitt Romney took for saying foreclosure process needs to "run its course and hit the bottom"? Politicians on both sides of the aisle criticized him, but as the above RGJ article shows, he was exactly right. Government intervention has prolonged and expanded Nevada's housing problems.
The housing bubble burst in 2007, so even if it took four years for the market to run its course and hit bottom, we'd be into the second year of a housing recovery.
Instead, we've had the Federal Reserve's continued manipulations of interest rates, the $8,000 tax credit for new home buyers, Nevada's own unconstitutional Foreclosure Mediation Program, federal subsidies to those who can't make their mortgage payments, and now, AB 284 which is delaying the foreclosure process.
And where are we at? Heading into Year Six of a distressed housing market with even hopes of a recovery years away.
The saddest things here are the scores of homeowners who could have withstood a four-year downturn but are now losing their homes, because government's interventions prolonged and deepened Nevada's housing problems. Those individuals are the real victims of laws like AB 284, but because they are unseen in the political process, short-sighted politicians pass laws that contribute to harming their lives.
Without government interference in the housing market, we'd likely be two years into a housing recovery. With multiple instances of government interference, we're six years and still years away from a rebound.
NPRI's Nevada Journal makes Drudge
Sweet! Drudge linked to our video of President Obama leaving an event promoting clean energy in a motorcade of 22 fossil-fueled vehicles.
Here's the video Drudge links to.
