I don't have much more to say about Proposition 100, the "Protect Our Homes Act", that I didn't already say in my Associated Content article, so I'll instead approach the topic from a different angle.
Local governments and taxpayers are often at odds. Government officials want money to do what they think is good; taxpayers want to keep it to pay for their own interests or save for the future. Reasonable people can agree that we need taxes--at least until someone figures out a better way around the free-rider problem--but that they shouldn't be as high as the officials want. Supporters of government and taxpayer interests push in opposite directions and the result is reasonable even if nobody sees it as ideal.
Governments, however, often try to make a run around this balancing process by passing many small taxes, usually ones that most taxpayers don't pay in a given year. It is much more difficult for taxpayer advocates to fight many small taxes than a few large ones. For example, the City of Chicago has its infamous "driveway tax" that businesses must pay for each cut in the curb, in addition to ordinary street maintenance levies. Since ordinary residents don't have to pay, there's never a push for repeal. Similarly, many states and municipalities levy a real estate transfer tax, over and above a paperwork processing fee, whenever property is transferred from one party to another.
Aside from having to process paperwork, the act of transferring property imposes no cost on the State, so we can't view this tax as a gas tax-like "user fee". Moreover, the costs associated with developed property: police and fire protection, roads and sidewalks, etc. are paid for by property taxes.
We can frame real estate transfer taxes as eroding home equity (as Prop. 100's backers, the Arizona Association of Realtors, do) or we can frame it as driving up the cost of housing. Both are probably true depending on market conditions. It doesn't matter which is correct. What does matter is that a real estate transfer tax is a small tax, designed to nickel-and-dime taxpayers a few at a time, thus avoiding the processes which keep more general taxes like property, sales, and income taxes in check.
Several counties and municipalities inflated their budgets during the housing boom and are now facing shortfalls. Bills (note the sponsor, Phil Lopes) that would authorize real estate transfer taxes, previously unheard of in this state, are making their way to the legislature. If they're going to increase our taxes, make them increase them the right way: transparently, and equitably. Vote "Yes" on Proposition 100.
Friday, October 31, 2008
Thursday, October 30, 2008
Stand up for your health: Vote "Yes" on Proposition 101
That I wholeheartedly support Proposition 101, the Freedom of Choice in Health Care Act, should come as no surprise. I was the first to post the text of the initiative on the Web, I wrote an early article endorsing the measure for Associated Content, I circulated petitions in support of this measure, and I recruited others to do the same. Proposition 101 is Arizona's and perhaps the entire Republic's most important ballot question in the 2008 election cycle.
We can all agree that the health care market in the USA needs serious reform. Economists studying the problem in earnest usually conclude that the root of our trouble is a tax code which ties, for most people, health care to employment, and encourages the purchase of "insurance" plans which aren't insurance at all but instead provide "comprehensive" coverage. As a result, we don't shop for either health care or health insurance the way we shop for housing, automobiles, food, eyeglasses, or dental care (I could go on, but I think you get the picture.) When B tells A what A needs and C pays B for it, B is totally insulated from competative forces and A is insulated from costs. Moreover, insurance companies which appeal to employers don't always provide good service to insurance consumers; who would purchase insurance on his own from a company known for denying to pay for treatment or dropping coverage?
There are other problems, too. In many states, mandates drive up the cost of both insurance and care. Think of a coverage mandate as equivalent to a law saying that if one purchases an automobile, one must purchase a Lexus or better. The Ford Focus is cheaper, even gets better mileage, but the state says you must have heated leather seats. These mandates also make it nearly impossible for those with pre-existing conditions to get policies with "riders".
Many of our best minds are at work on the problem, proposing ways to decouple insurance and employment and wean ourselves off of comprehensive care. (For those interested in the topic, Arnold Kling's Crisis of Abundance is as good a place to start as any.) The experiments we have seen with health savings accounts and other forms of consumer-driven healthcare are the beginnings of the effort to work out partial solutions independent of legislative reform, but it will ultimately take a few acts of Congress and state legislatures to straighten out the mess.
Getting those legislatures to straighten out the mess is more difficult than it needs to be, due to the presence of a strong contingent who'd rather smooth over the problem than fix its root causes. Some are driven by a radical ideology, a belief that all should be equal. Others simply want to do something good for the unwillingly uninsured in the short-term and don't have an eye to long-term fixes. Still others obsess too much over how much "we" spend on health care and health insurance--as though it matters--and seek to rein it in. All are violating what should be a ground-rule for the discussion, an Hippocratic Oath for legislatures: don't make those who are already well-served worse off. All support a form of rationing-by-queueing euphemistically called "Single Payer Health Care."
In Arizona, Phil Lopes is the main "Single Payer" culprit, introducing bills to establish such a program session after session. Most recently he was joined by some of the legislature's other ideologues, including, predictably, Steve Farley and Kyrsten Sinema, in proposing such a scheme that would outlaw the private purchase of health insurance (see section 36-3132) and let the State make health care decisions for patients to control its costs. The bills have, so far, gained little traction in our Republican-dominated legislature, but they may do so in the future, as public frustration with Congressional inaction begins to outweigh reports of waiting lists and denial of treatment from Canada and cost overruns from Massachusetts.
Proposition 101 does not fix health care in the State of Arizona; it would take an act of Congress to truly straighten things out. It does not inhibit Congress or the State Legislature's ability to enact health care reform. Instead, by guaranteeing that consumers can always pay directly for medical services or purchase private health insurance, it takes the most harmful "solution"--rationing--and the second-most harmful solution--"play or pay", a system of compulsory insurance purchase and fines designed to crowd out market mechanisms--off the table. It protects one of our most basic rights and sets the terms of the debate in a way that will make us all better off. AZ Republic columnist Robert Robb suggests that it may also do away with those pesky mandates that make insurance prohibitively expensive or even inaccessible to some. I can't speak to that, but if a court were to rule that that is so, I'd welcome the decision.
You can often tell a great initiative by the opponents' tactics; when they must simply tell fairy tales, the initiative's backers are on the high ground. It happened in 2006, when opponents of Prop. 207 claimed that counties and municipalities would have to bribe property owners to comply with existing regulations, and it's now happening with Prop. 101. The principal opponents claim that unnamed "experts" predict that passage of Prop 101 will cost $2 billion, a number they don't explain and seemingly made up out of thin air. They deliberately omit the text of the measure from a webpage and then claim that because the "descriptive title" lacks detail the measure itself is vague and that its meaning will be wholly made up by judges. Anthony Rodgers, director of AHCCCS, sent around memos making the bizarre claim that passage Prop 101 would require the state's subsidized indigent-care program to pay for any treatment enrollees desire. (The claim is bizarre because enrollment in AHCCCS is voluntary, not compulsory, and thus rather obviously not covered by the measure.) He possibly violated state electioneering law in the process, and Medical Choice AZ had to sue to stop him.
Eyes are on Arizona. George Will has remarked that passage of Proposition 101 may also impede federal Single Payer or Play-or-Pay.
This is the most important ballot question of the election cycle, and perhaps of our generation. Vote for Proposition 101. Vote to protect your own and your family's health care from those who would make it worse in the name of equality. Vote to take Phil Lopes's rationing scheme off the table permanently. Vote to establish Arizona as a bulwark against bad ideas at the Federal level. Vote to force the legislature and Congress to consider real reforms, not fumbling quick fixes. Vote to inspire other states to pass similar measures in 2010.
We can all agree that the health care market in the USA needs serious reform. Economists studying the problem in earnest usually conclude that the root of our trouble is a tax code which ties, for most people, health care to employment, and encourages the purchase of "insurance" plans which aren't insurance at all but instead provide "comprehensive" coverage. As a result, we don't shop for either health care or health insurance the way we shop for housing, automobiles, food, eyeglasses, or dental care (I could go on, but I think you get the picture.) When B tells A what A needs and C pays B for it, B is totally insulated from competative forces and A is insulated from costs. Moreover, insurance companies which appeal to employers don't always provide good service to insurance consumers; who would purchase insurance on his own from a company known for denying to pay for treatment or dropping coverage?
There are other problems, too. In many states, mandates drive up the cost of both insurance and care. Think of a coverage mandate as equivalent to a law saying that if one purchases an automobile, one must purchase a Lexus or better. The Ford Focus is cheaper, even gets better mileage, but the state says you must have heated leather seats. These mandates also make it nearly impossible for those with pre-existing conditions to get policies with "riders".
Many of our best minds are at work on the problem, proposing ways to decouple insurance and employment and wean ourselves off of comprehensive care. (For those interested in the topic, Arnold Kling's Crisis of Abundance is as good a place to start as any.) The experiments we have seen with health savings accounts and other forms of consumer-driven healthcare are the beginnings of the effort to work out partial solutions independent of legislative reform, but it will ultimately take a few acts of Congress and state legislatures to straighten out the mess.
Getting those legislatures to straighten out the mess is more difficult than it needs to be, due to the presence of a strong contingent who'd rather smooth over the problem than fix its root causes. Some are driven by a radical ideology, a belief that all should be equal. Others simply want to do something good for the unwillingly uninsured in the short-term and don't have an eye to long-term fixes. Still others obsess too much over how much "we" spend on health care and health insurance--as though it matters--and seek to rein it in. All are violating what should be a ground-rule for the discussion, an Hippocratic Oath for legislatures: don't make those who are already well-served worse off. All support a form of rationing-by-queueing euphemistically called "Single Payer Health Care."
In Arizona, Phil Lopes is the main "Single Payer" culprit, introducing bills to establish such a program session after session. Most recently he was joined by some of the legislature's other ideologues, including, predictably, Steve Farley and Kyrsten Sinema, in proposing such a scheme that would outlaw the private purchase of health insurance (see section 36-3132) and let the State make health care decisions for patients to control its costs. The bills have, so far, gained little traction in our Republican-dominated legislature, but they may do so in the future, as public frustration with Congressional inaction begins to outweigh reports of waiting lists and denial of treatment from Canada and cost overruns from Massachusetts.
Proposition 101 does not fix health care in the State of Arizona; it would take an act of Congress to truly straighten things out. It does not inhibit Congress or the State Legislature's ability to enact health care reform. Instead, by guaranteeing that consumers can always pay directly for medical services or purchase private health insurance, it takes the most harmful "solution"--rationing--and the second-most harmful solution--"play or pay", a system of compulsory insurance purchase and fines designed to crowd out market mechanisms--off the table. It protects one of our most basic rights and sets the terms of the debate in a way that will make us all better off. AZ Republic columnist Robert Robb suggests that it may also do away with those pesky mandates that make insurance prohibitively expensive or even inaccessible to some. I can't speak to that, but if a court were to rule that that is so, I'd welcome the decision.
You can often tell a great initiative by the opponents' tactics; when they must simply tell fairy tales, the initiative's backers are on the high ground. It happened in 2006, when opponents of Prop. 207 claimed that counties and municipalities would have to bribe property owners to comply with existing regulations, and it's now happening with Prop. 101. The principal opponents claim that unnamed "experts" predict that passage of Prop 101 will cost $2 billion, a number they don't explain and seemingly made up out of thin air. They deliberately omit the text of the measure from a webpage and then claim that because the "descriptive title" lacks detail the measure itself is vague and that its meaning will be wholly made up by judges. Anthony Rodgers, director of AHCCCS, sent around memos making the bizarre claim that passage Prop 101 would require the state's subsidized indigent-care program to pay for any treatment enrollees desire. (The claim is bizarre because enrollment in AHCCCS is voluntary, not compulsory, and thus rather obviously not covered by the measure.) He possibly violated state electioneering law in the process, and Medical Choice AZ had to sue to stop him.
Eyes are on Arizona. George Will has remarked that passage of Proposition 101 may also impede federal Single Payer or Play-or-Pay.
This is the most important ballot question of the election cycle, and perhaps of our generation. Vote for Proposition 101. Vote to protect your own and your family's health care from those who would make it worse in the name of equality. Vote to take Phil Lopes's rationing scheme off the table permanently. Vote to establish Arizona as a bulwark against bad ideas at the Federal level. Vote to force the legislature and Congress to consider real reforms, not fumbling quick fixes. Vote to inspire other states to pass similar measures in 2010.
Defeat the last acceptable form of gay-bashing: vote "no" on Proposition 102
It has become evident in the four years since Massachusetts began allowing same-sex couples to marry that the practice is harmless. Heterosexual couples are not splitting up because the gays are getting married. Both the institution of marriage and the nuclear family are as strong if not stronger than they were before the change.
Why, then, amend Arizona's constitution to effectively make Clause C of ARS 25-101, which prohibits marriage between persons of the same sex, a new, one-sentence Article 30? Two reasons present themselves: irrationality and confusion, or hatred. It is no longer acceptable to beat up homosexuals, call them names, or generally treat them nastily, not even in private life; prohibiting them to marry is the last way for louts and bigots to stick it to the gays. A great many of those supporting a Constitutional ban on gay marriage do it because it's the next best thing to mandating that there simply be no gays.
And then there are the confused. While in California last weekend I saw "Yes on Prop 8" sign-wavers waving pieces of posterboard with the slogan "Prop 8 is Religious Freedom". Gun book publisher Alan Korwin, in a recently e-mailed newsletter, said "the correct term is Holy Matrimony." In a similar vein, a correspondent, on learning of my position on this measure, e-mailed to ask "Do you believe churches should be required by law to marry all couples if legal marriages are performed at all on their private property?" The First Amendment to the US Constitution, and the corresponding provision of the Arizona Constitution, already prohibit the state to interfere in the marriage rites of religions. No amendment to the State constitution is needed to prevent the State from mandating that any religious organization marry homosexuals, just as none is required to prevent the State from mandating that Jewish temples marry Hindu couples. (Curiously, we do not hear the opposite complaint from these people, that the failure to recognize as civil marriage the religious marriage of e.g. homosexual Unitarian Universalist couples is an interference with religion.)
Confusion runs deeper, still. Many in the Ron Paul Mouse Army believe that the matter is mere Culture War and that gays can simply draw up a contract and be married. There is no possible private contract in our current legal order that carries with it the rights and responsibilities of marriage. Still others see this as an acceptable legislatively-sponsored compromise when compared to 2006's Proposition 107 initiative. Proposition 107, which would have forbid the State or any subdivision thereof to recognize both gay marriage and civil unions or domestic partnerships, was definitively defeated by the voters.
Unlike 2006's Proposition 107, Prop 102 leaves the "civil union" option open, but "civil unions" are but a second class "civil marriage". They are not portable between the states, they often (due to inertia) do not carry the same weight with employer-based insurance plans (yet another reason to move away from employer-based insurance!), they do not put homosexual couples on equal footing with heterosexuals for income tax purposes, nor for inheritance purposes, nor for immigration purposes. Civil unions and domestic partnerships can't even reliably prevent malicious outsiders from interfering with hospital visitation.
Even if we defeat Prop. 102, homosexual couples will still not be afforded equal rights in Arizona. But the defeat of Proposition 102 leaves the option open, for the next Legislature or some future, more humane Legislature to grant equal rights to homosexual couples. I strongly encourage you to vote it down and to advertise publicly, to your friends and co-workers, on your own 'blog, or on Facebook, that you are voting it down.
While you're at it, if you live in Congressional District 8, vote for one of the opponents of Tim Bee, a co-sponsor of this legislatively-referred constitutional amendment (LRCA). Incumbent Gabrielle Giffords is alright, but has shown that she is no Jim Kolbe. Coffee-shop owner and longshot Libertarian candidate Paul Davis could, on the other hand, fill Kolbe's shoes if given the chance, and deserves even a symbolic show of support.
Why, then, amend Arizona's constitution to effectively make Clause C of ARS 25-101, which prohibits marriage between persons of the same sex, a new, one-sentence Article 30? Two reasons present themselves: irrationality and confusion, or hatred. It is no longer acceptable to beat up homosexuals, call them names, or generally treat them nastily, not even in private life; prohibiting them to marry is the last way for louts and bigots to stick it to the gays. A great many of those supporting a Constitutional ban on gay marriage do it because it's the next best thing to mandating that there simply be no gays.
And then there are the confused. While in California last weekend I saw "Yes on Prop 8" sign-wavers waving pieces of posterboard with the slogan "Prop 8 is Religious Freedom". Gun book publisher Alan Korwin, in a recently e-mailed newsletter, said "the correct term is Holy Matrimony." In a similar vein, a correspondent, on learning of my position on this measure, e-mailed to ask "Do you believe churches should be required by law to marry all couples if legal marriages are performed at all on their private property?" The First Amendment to the US Constitution, and the corresponding provision of the Arizona Constitution, already prohibit the state to interfere in the marriage rites of religions. No amendment to the State constitution is needed to prevent the State from mandating that any religious organization marry homosexuals, just as none is required to prevent the State from mandating that Jewish temples marry Hindu couples. (Curiously, we do not hear the opposite complaint from these people, that the failure to recognize as civil marriage the religious marriage of e.g. homosexual Unitarian Universalist couples is an interference with religion.)
Confusion runs deeper, still. Many in the Ron Paul Mouse Army believe that the matter is mere Culture War and that gays can simply draw up a contract and be married. There is no possible private contract in our current legal order that carries with it the rights and responsibilities of marriage. Still others see this as an acceptable legislatively-sponsored compromise when compared to 2006's Proposition 107 initiative. Proposition 107, which would have forbid the State or any subdivision thereof to recognize both gay marriage and civil unions or domestic partnerships, was definitively defeated by the voters.
Unlike 2006's Proposition 107, Prop 102 leaves the "civil union" option open, but "civil unions" are but a second class "civil marriage". They are not portable between the states, they often (due to inertia) do not carry the same weight with employer-based insurance plans (yet another reason to move away from employer-based insurance!), they do not put homosexual couples on equal footing with heterosexuals for income tax purposes, nor for inheritance purposes, nor for immigration purposes. Civil unions and domestic partnerships can't even reliably prevent malicious outsiders from interfering with hospital visitation.
Even if we defeat Prop. 102, homosexual couples will still not be afforded equal rights in Arizona. But the defeat of Proposition 102 leaves the option open, for the next Legislature or some future, more humane Legislature to grant equal rights to homosexual couples. I strongly encourage you to vote it down and to advertise publicly, to your friends and co-workers, on your own 'blog, or on Facebook, that you are voting it down.
While you're at it, if you live in Congressional District 8, vote for one of the opponents of Tim Bee, a co-sponsor of this legislatively-referred constitutional amendment (LRCA). Incumbent Gabrielle Giffords is alright, but has shown that she is no Jim Kolbe. Coffee-shop owner and longshot Libertarian candidate Paul Davis could, on the other hand, fill Kolbe's shoes if given the chance, and deserves even a symbolic show of support.
Preserve initiatives as a means to reform: vote No on Prop 105!
Proposition 105 is this year's shortest ballot question and far and away its most poorly worded. Judge for yourself:
Reading that as written, it would appear that it only restricts initiatives which either raise taxes or force private persons, labor organizations, or other private legal entities to spend. Its proponents, however, claim that the effect is to restrict initiatives which mandate government spending obligations. I'll take their word for it and consequently recommend a "No" vote.
If you vote "Yes", you won't be in bad company: among individuals and organizations supporting this measure are the Arizona Federation of Taxpayers, Clint Bolick, and Tom Jenney. Similarly, many of those opposed are opposed for stupid reasons. Representative of these is the Arizona Republic and the organized opposition, No on 105, both of which frets about assigning a vote to non-voters. Nonsense!--they and others taking this view have been dazzled by the number 0.5.
Proposition 105, albeit sloppily, imposes (according to its supporters) a supermajority requirement to pass any ballot initiative that either mandates spending or imposes a tax. The new supermajority criterion, if it passes, would be fifty percent of registered voters, plus one. This is somewhat arbitrary: an initiative mandating forty percent of registered voters plus one vote "yes" to pass future initiatives is almost equivalent, yet cannot be shoehorned into a "you're letting nonvoters vote!" framework.
Under ordinary circumstances, majoritarian voting on individual questions is (perhaps paradoxically) the best way to prevent "tyranny of the majority". In legislatures, however, matters are different, and (among others) James Buchanan has made a convincing case for requiring a supermajority to approve tax increases. The same Public Choice arguments do not transfer neatly to ballot questions, but I would support requiring a supermajority to raise taxes to make it more difficult to pass initiatives which to many people appear only to tax others and not themselves.
The supermajority imposed by Proposition 105, however, would be far too strict. Consider that in an election with 51% turnout, an affected measure would need to pass almost unanimously. When there is 50% turnout or less, no affected measure could possibly pass. It would be better to simply mandate traditional two-thirds supermajority.
Moreover, even from a small-government, market-liberal perspective, many if not most initiatives carry with them some spending obligation, even if only for administration or enforcement. Supporters of this initiative have attempted to convince me that such spending obligations aren't really spending obligations, but only new programs are spending obligations. That's an insult to my intelligence, to expect me to believe that the courts would find that some spending is not spending. It's bad enough that the spending restriction itself isn't clearly worded; if supporters wanted to impose a supermajority requirement on only some spending measures but not others, they should have had someone with an IQ greater than 80 write the text of their initiative.
Consider that if we wanted to put aquifier-by-aquifier cap-and-trade, or school vouchers, or, were it not already law, concealed carry into place, all of these would, were Prop 105 enacted, have to pass with steep supermajorities. Preserve the initiative process as a means to reform: vote No on proposition 105. If, like me, you'd entertain requiring a supermajority to pass tax increases, let 105's supporters come back in two years with something more intelligent and better written.
Be it enacted by the People of the State of Arizona:
The Constitution of Arizona is proposed to be amended by adding Section 1.1 to Article IV, Part 1 as follows, if approved by a majority of the votes cast thereon and on proclamation of the Governor:
Section 1. Article IV, Part 1, Constitution of Arizona, is amended by adding Section 1.1, as follows:
§1.1. FISCAL RESPONSIBILITY THROUGH TRUE MAJORITY RULE
SECTION 1.1. TO PRESERVE AND PROTECT THE RIGHT OF THE PEOPLE TO FISCAL RESPONSIBILITY THROUGH TRUE MAJORITY RULE, AN INITIATIVE MEASURE THAT ESTABLISHES, IMPOSES OR RAISES A TAX, FEE, OR OTHER REVENUE, OR MANDATES A SPENDING OBLIGATION, WHETHER ON A PRIVATE PERSON, LABOR ORGANIZATION, OTHER PRIVATE LEGAL ENTITY OR THIS STATE, SHALL NOT BECOME LAW UNLESS THE MEASURE IS APPROVED BY A MAJORITY OF QUALIFIED ELECTORS THEN REGISTERED TO VOTE IN THIS STATE.
Section 2. Short Title: This Constitutional Amendment shall be known as the "Majority Rule--Let the People Decide Act."
Reading that as written, it would appear that it only restricts initiatives which either raise taxes or force private persons, labor organizations, or other private legal entities to spend. Its proponents, however, claim that the effect is to restrict initiatives which mandate government spending obligations. I'll take their word for it and consequently recommend a "No" vote.
If you vote "Yes", you won't be in bad company: among individuals and organizations supporting this measure are the Arizona Federation of Taxpayers, Clint Bolick, and Tom Jenney. Similarly, many of those opposed are opposed for stupid reasons. Representative of these is the Arizona Republic and the organized opposition, No on 105, both of which frets about assigning a vote to non-voters. Nonsense!--they and others taking this view have been dazzled by the number 0.5.
Proposition 105, albeit sloppily, imposes (according to its supporters) a supermajority requirement to pass any ballot initiative that either mandates spending or imposes a tax. The new supermajority criterion, if it passes, would be fifty percent of registered voters, plus one. This is somewhat arbitrary: an initiative mandating forty percent of registered voters plus one vote "yes" to pass future initiatives is almost equivalent, yet cannot be shoehorned into a "you're letting nonvoters vote!" framework.
Under ordinary circumstances, majoritarian voting on individual questions is (perhaps paradoxically) the best way to prevent "tyranny of the majority". In legislatures, however, matters are different, and (among others) James Buchanan has made a convincing case for requiring a supermajority to approve tax increases. The same Public Choice arguments do not transfer neatly to ballot questions, but I would support requiring a supermajority to raise taxes to make it more difficult to pass initiatives which to many people appear only to tax others and not themselves.
The supermajority imposed by Proposition 105, however, would be far too strict. Consider that in an election with 51% turnout, an affected measure would need to pass almost unanimously. When there is 50% turnout or less, no affected measure could possibly pass. It would be better to simply mandate traditional two-thirds supermajority.
Moreover, even from a small-government, market-liberal perspective, many if not most initiatives carry with them some spending obligation, even if only for administration or enforcement. Supporters of this initiative have attempted to convince me that such spending obligations aren't really spending obligations, but only new programs are spending obligations. That's an insult to my intelligence, to expect me to believe that the courts would find that some spending is not spending. It's bad enough that the spending restriction itself isn't clearly worded; if supporters wanted to impose a supermajority requirement on only some spending measures but not others, they should have had someone with an IQ greater than 80 write the text of their initiative.
Consider that if we wanted to put aquifier-by-aquifier cap-and-trade, or school vouchers, or, were it not already law, concealed carry into place, all of these would, were Prop 105 enacted, have to pass with steep supermajorities. Preserve the initiative process as a means to reform: vote No on proposition 105. If, like me, you'd entertain requiring a supermajority to pass tax increases, let 105's supporters come back in two years with something more intelligent and better written.
Wednesday, October 29, 2008
You can't help the poor by eliminating options: vote yes on Proposition 200
From my desk, or that of Rep. Marian McClure (R-Tucson), it is difficult to conceive of circumstances in which a deferred presentment transaction (commonly known as a "Payday Loan") would be a better option than a bank loan, a credit card, or an IOU from a family member or a close friend. McClure and I, however, approach this differently: I seek to understand the role this service plays in the poorer segments of society, whereas she would ban the practice as though the transaction involved a villain and a victim.
2008's Proposition 200 got its start as an industry-sponsored alternative to McClure's Stop Payday Loans. If 2006's Proposition 206 is indicative, such initiatives do not usually fare well. Mistaking self-interest for malfeasance, the press turns them into punching bags: how dare those who would be harmed by an initiative offer a counter-proposal! "Stop Payday Loans"'s backers failed to collect enough signatures to put it on the ballot--they did not even submit their petitions--making Proposition 200, the Payday Loan Reform Act, a viable means to nearly permanently counter the efforts of McClure and company to put deferred presentment services out of business and take an often-used financial option away from the State's poor.
The enabling law allowing these services ("payday lenders") to operate in the state is set to expire in 2010. The legislature could effectively ban payday loans without a vote. Since Arizona House Speaker Jim Weiers is in the payday loan business, this is unlikely, but neither Weiers's re-election nor his retention of his position are certain. Passing Prop 200 would make the enabling law permanent and require an initiative to pass to ban payday loans in Arizona.
Is this a good thing? Consider the alternatives those who use the deferred presentment service would have were it banned. (They're not using credit cards, personal IOUs, or bank loans because such things are not available.) They could bounce checks, or borrow from loan sharks. Bouncing checks incurs fees higher than those charged for deferred presentment and doing so repeatedly can land offenders in court, subjecting them to fines and possible jail time; running afoul of a gangster loan shark is even worse.
Some have described payday loan providers as "legal loan sharks". That's an oxymoron. Others are confused by the nature of the service. Loans of any kind induce in many a sort of moral confusion: instincts left over from days as hunter-gatherers have some thinking of the lender as villain and the borrower as victim. It took us millenia to understand the purpose of interest. Payday lenders do not charge interest, and attempts to describe their service as though it was an interest-charging bank loan make it sound outrageous. What payday lenders do charge is a fee for providing cash in exchange for a post-dated check. The check is presented (cashed) at the end of the loan's term. It is a short-term loan for a fee, not a long-term loan for which interest is charged.
That having been said, Proposition 200, in addition to extending the enabling law and cleaning up and modernizing some language in ARS 6-1521, imposes a few reforms on the payday loan industry, namely:
I know a few individuals who speak of these reforms as though they are an unconscionable and unacceptable interference by government in the marketplace. (One, who is running for US Congress, has also said that driving the poor to loan sharks would be a good thing, as it would teach the likes of Marian McClure a lesson. I don't see that as being compatible with treating people as ends in themselves, and cannot support letting things go to seed merely to prove a point.) There is not a peep to that effect from those in the payday loan business; the industry is nearly unanimously supporting this measure. The rollover process is what causes many to see payday loans as exploitative (and to associate with them extremely high "interest rates") even though the vast majority of borrowers do not get stuck in a never-ending rollover cycle. There's a lot to be said for protecting business and customers by replacing a practice that, rightly or wrongly, the voting public finds repugnant with something more acceptable.
Proposition 200 is a fair compromise. A "yes" vote keeps this valuable service available, nearly permanently, to poor people or others between jobs or otherwise in temporary hard times and at the same time forbids some of the more exploitative or seemingly exploitative practices, reducing the temptation of those with a misplaced sense of justice to ban the service altogether. Vote "yes" on Prop. 200.
2008's Proposition 200 got its start as an industry-sponsored alternative to McClure's Stop Payday Loans. If 2006's Proposition 206 is indicative, such initiatives do not usually fare well. Mistaking self-interest for malfeasance, the press turns them into punching bags: how dare those who would be harmed by an initiative offer a counter-proposal! "Stop Payday Loans"'s backers failed to collect enough signatures to put it on the ballot--they did not even submit their petitions--making Proposition 200, the Payday Loan Reform Act, a viable means to nearly permanently counter the efforts of McClure and company to put deferred presentment services out of business and take an often-used financial option away from the State's poor.
The enabling law allowing these services ("payday lenders") to operate in the state is set to expire in 2010. The legislature could effectively ban payday loans without a vote. Since Arizona House Speaker Jim Weiers is in the payday loan business, this is unlikely, but neither Weiers's re-election nor his retention of his position are certain. Passing Prop 200 would make the enabling law permanent and require an initiative to pass to ban payday loans in Arizona.
Is this a good thing? Consider the alternatives those who use the deferred presentment service would have were it banned. (They're not using credit cards, personal IOUs, or bank loans because such things are not available.) They could bounce checks, or borrow from loan sharks. Bouncing checks incurs fees higher than those charged for deferred presentment and doing so repeatedly can land offenders in court, subjecting them to fines and possible jail time; running afoul of a gangster loan shark is even worse.
Some have described payday loan providers as "legal loan sharks". That's an oxymoron. Others are confused by the nature of the service. Loans of any kind induce in many a sort of moral confusion: instincts left over from days as hunter-gatherers have some thinking of the lender as villain and the borrower as victim. It took us millenia to understand the purpose of interest. Payday lenders do not charge interest, and attempts to describe their service as though it was an interest-charging bank loan make it sound outrageous. What payday lenders do charge is a fee for providing cash in exchange for a post-dated check. The check is presented (cashed) at the end of the loan's term. It is a short-term loan for a fee, not a long-term loan for which interest is charged.
That having been said, Proposition 200, in addition to extending the enabling law and cleaning up and modernizing some language in ARS 6-1521, imposes a few reforms on the payday loan industry, namely:
- Requiring that the lender present the terms of the loan in Spanish if requested by the borrower. Informal translations of English-language terms can cause detail to be obscured. It is not clear that this commonly resulted in borrower misunderstanding, but it is a somewhat abusive practice, and Prop 200 would forbid it.
- Requiring a one-day waiting period between the completion of one deferred-presentment transaction and entering into another. There would be no more rolling over of one payday loan into another.
- Mandating that payday-loan businesses offer a four pay-period payment plan. This would replace the rollover.
- Forbidding customers to enter into a deferred presentment transaction with another lender during the period of the payment plan.
- Capping the transaction fee at fifteen percent of the amount borrowed.
I know a few individuals who speak of these reforms as though they are an unconscionable and unacceptable interference by government in the marketplace. (One, who is running for US Congress, has also said that driving the poor to loan sharks would be a good thing, as it would teach the likes of Marian McClure a lesson. I don't see that as being compatible with treating people as ends in themselves, and cannot support letting things go to seed merely to prove a point.) There is not a peep to that effect from those in the payday loan business; the industry is nearly unanimously supporting this measure. The rollover process is what causes many to see payday loans as exploitative (and to associate with them extremely high "interest rates") even though the vast majority of borrowers do not get stuck in a never-ending rollover cycle. There's a lot to be said for protecting business and customers by replacing a practice that, rightly or wrongly, the voting public finds repugnant with something more acceptable.
Proposition 200 is a fair compromise. A "yes" vote keeps this valuable service available, nearly permanently, to poor people or others between jobs or otherwise in temporary hard times and at the same time forbids some of the more exploitative or seemingly exploitative practices, reducing the temptation of those with a misplaced sense of justice to ban the service altogether. Vote "yes" on Prop. 200.
Tuesday, October 28, 2008
A deficiency in police training.
Reportedly, in police training, the targets are all clearly "good guys" and "bad guys", and the bad guys are the ones with firearms.
The inevitable result: an armed homeowner who subdues a home invader is shot multiple times by Phoenix police.
It's high time our police are given training (or re-training) appropriate for a state in which concealed carry and open carry are both legal and in which citizens can thus be expected to defend themselves and others with arms when necessary. "Shoot the man with the gun" is sloppy, unprofessional, and downright dangerous to life and liberty.
The inevitable result: an armed homeowner who subdues a home invader is shot multiple times by Phoenix police.
It's high time our police are given training (or re-training) appropriate for a state in which concealed carry and open carry are both legal and in which citizens can thus be expected to defend themselves and others with arms when necessary. "Shoot the man with the gun" is sloppy, unprofessional, and downright dangerous to life and liberty.
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