Goldwater Institute

With gas prices inching ever northward and warm summer air hinting at the busy forthcoming driving season, what's a motorist to do?

First, it would be useful to realize that our record-high gas prices are really not at record highs. However much anger we may feel at the gas pump, when we account for inflation, gas prices are not nearly as high as they were for an extended period during the late 1970s. However many dollars we shell out, a dollar now is not worth as much as it was in the past, and thus we pay relatively less now in real terms.

Second, for the Phoenix area anyway, a federally required summer blend, which costs more to produce, will bring our mid-year averages generally higher than the rest of the nation. Fortunately, Governor Napolitano has acknowledged this and has taken on the commendable task of getting the feds to lift that restriction, if only for this year. It's not clear how this will affect prices, since oil is bought and sold in a global market that accounts for information far into the future - changes for this summer may be too late to change the future contracts many oil companies have already procured.

But the spirit is correct. As Mark Brnovich pointed out in an opinion piece last year, this is one of three steps policymakers can take to relieve gas prices. Moreover, removing regulatory burdens will do more for consumers than adding them, as attorney general Terry Goddard promised to do when he swore to take on price gougers.

The Arizona Appeals Court heard oral argument yesterday in a case involving Winchell's Donut franchisee Edward Salib.  Mesa officials have repeatedly cited Mr. Salib for violating the city's sign ordinance.  His crime involves hanging professionally produced posters in his storefront windows. With the help of the Institute for Justice, he filed a lawsuit challenging the ordinance. 

The Mesa ordinance prohibits businesses from covering more than 30 percent of any window area.  Officials claim it is designed to promote public safety and protect neighborhood aesthetics.  The problem with the rationale is that the ordinance allows windows to be completely covered with blinds or shades and windows can be completely darkened to not allow anyone to see in or out of an establishment.

The sign ordinance is a dangerous restriction on Mr. Salib's right to free speech.  Both the Arizona and U.S. Constitutions protect his right to advertise his products in a truthful and professional manner. His shop is located on the corner of Main and Country Club drive - the same intersection where the Institute for Justice fought Mesa's attempt to seize Randy Bailey's brake shop. That case illustrated that an individual can fight city hall.  Let's hope Mr. Salib is successful and Mesa officials finally get the message:  leave small businesses alone.

Florida's A+ voucher plan is improving accountability and raising test scores, according to Harvard University researchers. Under the Florida A+ Plan, students in consistently failing public schools can use vouchers to switch to private schools. Using test scores of 900,000 students for 2002, 2003, and 2004, Harvard researchers find that "students in schools that received their first 'F' grade in the summer of 2002 scored 4 to 5 percent of a standard deviation higher the following year than did students at comparable 'D' schools not subject to the voucher threat." African-American students, low-income students, and students with the lowest initial test scores showed some of the strongest gains. Significantly,  researchers find that the choice provisions in Florida's A+ Plan are better at promoting student achievement gains than provisions in No Child Left Behind.

During a recent conversation on the use of incentives to attract development, a group of economic developers acknowledged that incentives may not be a good idea all the time. But sometimes.

For instance, certain projects, they would say, are an obviously meritorious "investment" in the community and thus require the tools of incentives to make those projects happen. So project by project, we are asked to evaluate the merits of every project, through the inherently leaky process of political decision making, backed by undoubtedly cheery "feasibility studies" commissioned by rent seekers.

So let's take an obvious example: sports stadiums. Among economic developers, it's the holy grail of development - and for dilapidated urban areas, revitalization. Who would be so audacious as to suggest cities should forgo incentivizing, say, baseball for the sake of the community? Well, as it turns out, economists, in a rare showing of near unanimity believe baseball stadiums have either no effect on wages and income in a region, or when a significant relationship does exists, is actually negative. 

And so we are asked to have faith in the process (and a tool - incentives) that produces behemoth economic ankle weights as exemplars of economic progress. As Art Rolnick described the use of incentives generally: "Such policies lead to economic bidding wars and are counterproductive. The end result is that the public return on such investments is zero. And when the subsidy goes to high-risk businesses, ones that are likely to fail, the return can even be negative."

More information:
DC Fiscal Policy Institute
Southwestern Learning
Cato Institute
Sports, Jobs and Taxes