Saturday, March 31, 2007

Springtime in Kansas City

The main thing that I’m thinking about this week is opening day at Kauffman Stadium. Okay, let’s be honest. The Royals are no place close to contending for the playoffs. Think about this for a moment. The Royals could improve their wins by 34% (or 20 more wins) and would STILL just be pushing a .500 winning percentage.

Now, with that said, I have listened to a couple of innings of spring training games. They Royals sound like they can play. But will they win more than their share against the Indians (my favorite in the AL Central) or the last two AL champions (Chicago and Detroit)? It doesn’t seem likely, to me. Of course, this could just mean that whatever doesn’t kill the Royals in 2007 will only make them stronger in 2008 and 2009.

Sounds like a plan to me.

Sunday, March 25, 2007

You don't know what you don't know

I’ve lived in the heartland the vast majority of my life and I fully understand the importance of agribusiness to my home. Growing up when I did, I vividly remember the OPEC embargo of the 1973 and when the United States first became aware how dependent we had become on foreign oil. I fully understand why a decrease in the dependence on imported oil is important (whether through economy or increased production). In my neck of the woods, a lot of hope is being placed in ethanol since it has the potential to address both issues in one program. However, like anything else, I think it is important to consider the impact when you change direction.

As I was driving to Columbia last week, I was listening to Audible Technology Review. One article from February suggested that ethanol production could have significant negative impact on other areas. In other words, we may decrease our gas prices, but we could increase costs elsewhere. One example that they mentioned in the article is that corn tortillas have doubled in price in Mexico City. The article suggests that increase in corn prices (up from $1.84 to $4.00 per bushel) combined with a decrease in exports (since corn is worth more in the domestic market) it is driving up the price of tortillas in Mexico. I think everyone understands how ethanol could increase corn prices. However, affecting the balance of trade with Mexico is not on most people’s radar.

Another example is the price ripple corn has on other foodstuffs. Since corn is a primary ingredient in livestock feed, some have reported a 15 percent increase in beef, chicken and egg prices. So, increased use of ethanol may cost us less to fill up at the pump, but all savings may be absorbed by increased food costs, or an increase in the price of imported goods since we have a growing trade imbalance.

Just to backtrack for a second, I don’t know that anyone is saying that ethanol will decrease fuel costs. Now that I think about it, all anyone has said is that the use of ethanol will decrease our dependence on foreign oil. So, even though people expect “cheap gas” to result from ethanol production, that may not be an actual benefit.

About a year ago, someone told me that it was important to know what you know, to know what you don’t know, but also to understand that frequently, don’t know what you don’t know. My concern about jumping head first into ethanol production is that we really don’t know how this will affect food costs, increases in feed costs, effects on soil nutrition and crop rotation, for instance. Personally, I think those points may all be manageable. However, not knowing how ethanol production will affect unknown issues is my greater concern.

Saturday, March 17, 2007


Hypocrisy has always been something that would upset me more quickly than just about anything else. However, as I age, I become more aware that hypocrisy is everywhere. No one political system or political party has cornered the market on hypocrisy. In reality, hypocrisy is more about the lies we tell so we can get through our own self made inconsistencies.

What’s set me off about hypocrisy recently is the recent passing of a law by the Missouri House of Representatives that revokes Missouri’s motorcycle helmet law. Several people contend that this is merely about personal freedom. Anyone should be able to choose whether to wear a motorcycle helmet. And if that person chooses not to wear a helmet and that person is injured while riding a motorcycle, then that person is responsible for making that decision and living with the consequences. Some beg to differ. See this tear sheet on the true fiscal impact on a motorcycle rider's "personal" choice.

I think that is an interesting argument. Frankly, it is one that I agree with. However, this same body, the Missouri House of Representatives in recent years has passed or is currently considering legislation that dictates individual behavior modification to increase safety. The argument is that when someone is injured, it drives up the costs of health care, increases lawsuits because injuries are greater and ultimately could cost taxpayers. This last part comes because a personal choice may result in increased injury, resulting in police, fire and ambulance visits to what would otherwise be a routine accident. Or, compounded injuries eventually work their way through private insurance, and a person’s choice results in that individual’s medical treatments being covered by Medicaid.

Based on the argument above, in 1988 the Missouri General Assembly has passed a mandatory seat belt law and are now considering a bill to require all people to wear seat belts at all times. Failure to wear a seat belt would be breaking the law…even if you are obeying all other traffic rules and regulations.

So let me see if I have this right? Driving 25 miles per hour down a residential street in a crash tested automobile with six airbags, steel reinforcements on all sides of the passenger cabin is just too dangerous without also wearing a seat belt. In fact, doing so is so dangerous that you have no choice BUT to wear a seat belt. But, driving 75 miles an hour on I-70 with nothing between you and pavement is just fine and completely safe and just a matter of personal choice?

Hypocrisy…thy name is the Missouri House of Representatives.

Saturday, March 10, 2007

Master of the "Domain"

Since the U.S. Supreme Court upheld the practice of eminent domain as an economic development tool, people have been simultaneously outraged and confused. Eminent domain is an important process governments can use to assure that the public good is pursued.

In its basic way, eminent domain is what allows a city to purchase the needed land for a new and needed freeway. Instead of a landowner holding the city hostage by refusing to sell the final piece of land, the city can purchase the property owner’s property at fair market value. There are lots of advantages to this system. It saves taxpayer’s money in assuring that the city acquires land at a fair price. Fair market value is frequently reflected in the taxes the property owner paid. In other words, the property was assessed and valued at $50,000. Property taxes to support the schools, county, and other governments, were paid based on the property being worth $50,000. So, now that the city needs to acquire the land, why shouldn’t it be purchased for $50,000? Isn’t that fair?

The problem with eminent domain is that its use has been distorted. Cities frequently invoke eminent domain to put together pieces of land that will then be turned over to a private developer. The logic is that certain economic activities will generate more taxes and will be a greater benefit to the whole. Frankly, if the purpose of an eminent domain action is to provide property to a private developer, it should not be allowed. Eminent domain should only be used as a direct public good (like a school, a road or a park).

I agree that eminent domain should not be used as an economic development tool. It is wrong and people should not stand for it. Of course, as conservatives are prone to do, they have framed the eminent domain issue as one of government “taking” people’s property. This is a gross overstatement. Government cannot take a person’s property without compensation. The Constitution assures this point.

My plea to my conservative friends is to stop overstating your case. Abuse of eminent domain is wrong. However government CANNOT take property without compensating the property owner. Eminent domain is a vital process in the acquisition of land to create a public good and must be maintained. Do we really want a school district to NOT be able to acquire the needed property for a new school? Or do we only want a system that would require the district to acquire the land if it pays well above market value? That’s not a wise use of taxpayer money.

Friday, March 02, 2007

A Truman Liberal

I’ve always viewed myself as a “Truman Liberal.” I really don’t know that there is such a thing, but I believe that Harry Truman was fiscally conservative but socially progressive or liberal. The Truman Committee identified war profiteers was not only patriotic, but a fiscally conservative – assuring that taxes were properly spent. Likewise, Truman was very socially progressive, with programs like integration of the armed forces.

Sometimes I wonder about the political spectrum today. It seems to me that if Truman were here today, he would not be very popular. First, it seems that the best qualification to be a "hawk" these days is having NOT served in the military. Strike one against Truman. Questioning the government in today’s climate has become tantamount to treason. Merely asking whether defense expenditures were appropriate, whether the funding levels are right, is considered unpatriotic. Strike two. I was really surprised recently when I heard conservative commentators suggesting during the debate on a non-binding resolution concerning Iraq that the “Commander in Chief” should have the right to run any war, any way he wants, and Congress should step aside.

Actually, these entertainers who masquerade as journalists need to read the Constitution that they so reverently defend. The constitution says, while the President is the commander in chief of the armed forces, congress has the authority to declare war and to fund government programs, including that little skirmish in Iraq.

Considering his common sense approach to things, I feel confident that Senator Truman would ask the President for a measurable, objective military strategy for Iraq and without one, he likely wouldn’t want to increase funding for the war.

Of course, that’s just my opinion, I could be wrong.