Proposed amendment would put limits on local taxes, tax hikes

A proposed cap on local and state taxes at 2010-11 levels and a limit on future increases tied to population growth met with quick and loud opposition in its first Senate committee hearing Tuesday.
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The High Cost of Washington’s Price Manipulation Policy

By Yaron Brook and Don Watkins

For decades Washington has been manipulating prices to encourage homeownership and “steer” the economy. To “incentivize” you to buy a house, it made mortgage payments tax deductible, largely exempted homes from capital gains taxes, and created Fannie Mae and Freddie Mac. After the stock market tumbled in 2001 and 2002, Washington established a policy of artificially low interest rates that created the illusion of cheap credit; leery of the stock market, and looking for someplace else to put all this easy money, Americans began buying homes in droves.

But eventually the drug-induced high of artificial credit wore off, and out-of-whack housing prices plummeted, sparking the financial crisis. What was Washington’s response? It ramped up its price manipulation policy, injecting us with a new round of “easy money” amphetamine:  Bush doled out “stimulus” checks, the Treasury began funneling billions into banks, and the Fed started frantically slashing interest rates. And, we are told, this is only the beginning. A new dose of bailouts, interest rate cuts, and “stimulus” giveaways is just around the corner.

Maybe it’s time for a new approach. How about we start thinking of ways to address this crisis by getting the government out of the business of price manipulation–and let prices, from home values to interest rates, be determined by people’s free choices and the law of supply and demand?

This will require some unconventional thinking–and here’s a suggestion to get us started: free up the housing market by freeing up immigration. That’s bound to be controversial, but indulge us for a moment.

Right now the housing market is in disarray. Too many homes built for our current population has sent prices spiraling downward, and millions of homeowners, stuck with mortgages they can’t afford and houses they can’t unload, are facing foreclosure. Meanwhile, there are millions of peaceful people around the globe eager to bring their wealth, talent, and ambition to this country, but can’t because Washington forcibly prevents them from immigrating.

This government-enforced cap on the number of potential home-buyers is just another instance of price manipulation. Imagine if the number of annual immigrants increased from around 650,000 a year to, say, five million. Virtually overnight we would see money pour into the American real estate market, as millions of new businessmen and workers bought and rented homes. Not only would this eliminate the oversupply of houses, we would enjoy the broader economic benefits of welcoming legions of highly skilled and motivated individuals into the American economy.

You might be thinking, “Won’t this lead to lower wages or unemployment at a time when we can least afford it?” The history of this country attests to the fact that, in the long run, immigration fosters economic growth. Even in the short run, however, the effect on wages and employment is an open question–it depends on how much capital and entrepreneurial acumen the new immigrants bring and create.

There are many other simple measures we could take to roll back the government’s manipulation of prices. For instance, we could eliminate restrictions on bank ownership, which coercively limit how much capital banks can raise.

Besides such quick, immediate steps to end government price distortions, we need a long-term strategy to eliminate all government policies that manipulate prices. We need to eliminate the countless regulatory shackles on financial institutions, which distort market forces and encourage reckless actions. We need to put an end to the government’s crusade to encourage homeownership through Fannie and Freddie, the Community Reinvestment Act, tax code manipulation, and many other avenues. Above all, we need to end the government’s ability to set interest rates and create inflationary booms–and their inevitable busts–by phasing out the Federal Reserve and allowing the United States to return to a gold standard.

These would be radical reforms, to be sure–but that’s because the government has been radically expanding its price manipulation policies for the better part of a century. We’re seeing where that path leads. It’s time to start moving in a new direction.

Yaron Brook is the president of the Ayn Rand Center for Individual Rights. Don Watkins is a writer at the Ayn Rand Center. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The Fountainhead.”

Stop Blaming Capitalism for Government Failures

By Yaron Brook and Don Watkins

Speaking of the financial crisis, French president Nicolas Sarkozy recently said, “Laissez-faire is finished. The all-powerful market that always knows best is finished.”

Sarkozy was echoing the views of many, including president-elect Obama, who assume that the financial crisis was caused by free markets–by “unbridled greed” unleashed by decades of deregulation and a “hands off” approach to the economy. And given this premise, the solution, they say, is obvious. To solve this crisis and prevent another one, we need a heavy dose of Uncle Sam’s elixir: government intervention. Whether it’s more bailouts, stricter regulation, a new round of nationalizations, or some other scheme, the only question since day one has been how, not whether, government is going to intervene.
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Palm Bay Road project on schedule

By George White
Florida Today

QUESTION: Is the project to widen Palm Bay Road on schedule, and when will it be completed?

ANSWER: The project widening Palm Bay Road from four to six lanes for 4.5 miles between Minton Road and Robert J. Conlan Boulevard is on schedule for a fall 2010 completion date, said Stephanie Evans, public involvement coordinator for the Florida Department of Transportation.
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End the FCC’s War on Free Speech

Washington, D.C.–On November 4 the Supreme Court will hear arguments in Federal Communications Commission v. Fox Television Stations. At issue is whether the FCC can declare “fleeting expletives” indecent and fine broadcasters for violations.

“The government should put an end to the non-objective ‘indecency’ laws that permit the FCC to dictate what Americans can say and hear on the airwaves,” said Don Watkins, a writer for the Ayn Rand Center for Individual Rights.
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Brevard Art Museum head steps down

From Florida Today
By Pam Harbaugh

After 13 months as president and CEO of the Brevard Art Museum, Karl Hollander resigned Monday. He handed his letter of resignation to Sue Hopkins, chairwoman of the museum’s board of trustees.
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Cocoa to increase water fees by 15%

Florida Today
COCOA — The city council voted 4-1 on Tuesday to increase water rates to its 80,000 customers starting Oct. 1. Mayor Michael Blake cast the dissenting vote.
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County may provide funds for Titusville pond project

Florida Today
TITUSVILLE — The county could provide some of the money to pay for a $1.3 million stormwater retention pond project in the central part of Titusville, as part of a proposed agreement to be discussed tonight.
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Sheehan qualifies to run for Pelosi’s seat

Anti-war activist qualifies to run as an independent against House Speaker Nancy Pelosi in November’s general election.
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Effort aims to get kids outside

A resolution called ”No Child Left Inside” could result in millions more for environmental education – and a windfall for nonprofit groups hoping for more federal help getting children outside.
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