August 12, 2005

Audio Interview: Trey Jackson and Tom Blumer on 2nd District (OH) Congressional Race

Filed under: News from Other Sites,OH-02 US House — Tom @ 1:45 pm

For Your Listening Pleasure: Aaron Arnwine of Lifelike Pundits interviewed yours truly and Trey Jackson about the runup to the 2nd District Congressional election last week, including the infamous Hackett ads and Rush Limbaugh’s election-day treatment.

Thanks to Trey for letting me in on it, and to Aaron for conducting the extravaganza. Go to Lifelike Pundits for their post and their original MP3 audio file.

You can also play the MP3 audio from this link (right click to download it).

Another Country We Should NOT Imitate (the Cost of “Free” Canadian Health Care)

Here is another country with an economic policy we should not imitate, unless economic mediocrity is our goal (see previous item on the European Union).

From John Fund in The Wall Street Journal today, on Canada’s health-care system (link requires subscription; bold is mine), the one “single-payer” (meaning “nationalized”) health care advocates insist is superior:

The Fraser Institute has found it takes an average of 17.9 weeks between the time a patient makes an appointment to see a general practitioner and when he can then see a specialist. He will then be treated by a system that ranks 13th out of 22 advanced countries in access to MRI technology; 17th out of 21 in access to CT scanners and seventh out of 22 in access to radiation machines. The safety valve in the system is that nearby U.S. hospitals can provide treatment for emergency cases and patients willing to pay.

But Canada’s public care doesn’t save money. As the satirist P.J. O’Rourke once noted, “If you think health care is expensive now, wait until you see what it costs when it’s free.” When adjusted for the age of its population, Canada vies with Iceland and Switzerland as the highest spender on health care among the 28 most developed nations with universal systems. Dr. David Gratzer, a Toronto physician affiliated with the Manhattan Institute, calculates that a Canadian earning $35,000 a year pays a stunning $7,350 in health-care taxes.

And We Should Try to Be More Like Them? Uh, No Thanks

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 10:20 am

The Associated Press reports on the sizzling (NOT) economies of the European Union (HT Anchoress, who quite correctly observes that the AP article’s tone is quite forgiving in the face of such mediocrity):

Economic growth in the European Union as a whole and the euro zone nations that use the euro currency slowed to 0.3 percent in the second quarter, the EU said Thursday, but growth in the 12 nations using the common currency is expected to pick up by the end of the year.

The EU’s statistics agency Eurostat said the 0.3 percent expansion followed first-quarter growth of 0.5 percent in both the euro zone and the entire EU.

The EU head office kept its third-quarter forecast range for euro-zone growth at 0.2 percent to 0.6 percent, but forecast 0.6 percent expansion in the fourth quarter on the back of more favorable euro exchange rates and a stronger global economy.

Apparently the EU doesn’t annualize its GDP growth statistics as the US does, so to be fair, add up the four quarters above and you get a whopping 1.6%. Weak, very weak.

But things are looking up (relatively speaking):

Europe is largely reliant on exports for growth and signs of improvement there suggest a slow recovery with 0.4 percent growth for the last two quarters of 2005, paving the way for a bullish 2.25 percent or 2.5 percent growth for 2006, said Jeremy Stretch, senior market strategist at Rabobank.

2.25%-2.5% growth in the US for more than about a year would be cause for wailing and gnashing of teeth. Remember in 1992, what Bill Clinton charged was the “worst economy of the past 50 years” was growing at 2.7% annualized (fifth paragraph) in the final quarter before the presidential election.

A further look at the article shows that Germany is struggling mightily, Finland and Greece are contracting, and Spain is growing nicely. France’s numbers aren’t in yet, but that country’s growth has been limping along at 2% or so annually for some time. The correlation between greater state control of the economy in the countries that are so often held up as the so-called exemplars of “how we should be” (especially France and Germany) and slow (or no) economic growth could not be clearer.

Also, EU Rota, which looks to be the go-to destination for all EU economic analysis (or EU-PU, as Drudge would say) plots out seven actual and two projected years of German stagnation, and notes that the press coverage of the upcoming election is literally in the pits.

Finally, just in case anyone thinks France’s situation is somehow more tolerable than Germany’s, there’s this gem (HT Don Luskin) about the country’s “unprecedented” exodus of younger people:

Unemployment among the under-25s in France stands at 23.3 per cent, and 40 per cent of 18-30 year-olds describe their financial state as “difficult.”

Eurotopia? I don’t think so.

UPDATE: EU Rota proves the point about its indispensability by referring me (and now you) to a May post that compares the economic worlds young people in the “Anglo-Saxon model” (the US and UK) and “the Socialist-Humanist model” (France and Germany) face. Guess which one looks preferable?

UPDATE 2, August 12, 9 PM: Cross France off the “okay but not great” list. EU Rota, which has yet another great post today, this time on how much longer the unemployed stay unemployed in the heavily regulated EU labor markets, just tipped me to the latest GDP news from France: “French economy grinds to a halt.” Actually, it was a whopping 0.1%–the BBC can be so unfair to its neighbor across The Channel sometimes (/sarcasm). Germany, which I didn’t specify earlier, came in at a big fat 0.0%. Now THAT’S a “halt.”

End the Realtor Racket

Filed under: Consumer Outrage,Corporate Outrage,Taxes & Government — Tom @ 5:40 am

The Wall Street Journal’s editorial page and op-eds are a lot like certain baseball sluggers: You either get home runs (in the Journal’s case, mostly) or strikeouts (usually on immigration and national sovreignty).

Today they hit a home run with “The Realtor Racket,” which exposes the industry for the national disgrace that it is (requires subscription; bolds are mine):

Why are Governors and state legislatures enacting regulations to make buying and selling homes as expensive as possible?

We ask this question because in recent weeks three normally level-headed Republican Governors — Matt Blunt of Missouri, Rick Perry of Texas and Bob Riley of Alabama — have signed into law legislation that protects Realtors from discount competitors.

About a dozen other states have also buckled to the National Association of Realtors lobby. They’ve effectively become partners in what looks suspiciously like a price-fixing scheme, whereby discounters are prevented by law from charging fees below the industry norm of 5% to 6% of the home sales price. The financial victims of this cartel are middle-income home buyers and sellers who are required to pay brokerage fees that can easily be several thousand dollars above a competitive market price.

Real estate brokers are under increasing price pressure from Web-based home-buying services and other discount brokers. With state lawmakers so often bellyaching about the decline in “affordable housing,” one would expect politicians to salute these low-fee entrants to the market.

Instead, state legislatures and real estate commissions — which happen to be populated by Realtors — are enacting laws that make price competition illegal and thus treat Realtors as if they are members of a closed shop union.

The Realtors argue with a straight face that their political efforts are somehow in the interests of the home-buying public. Maybe we’re missing something here, but in almost every other consumer industry — booksellers, retailers, home appliances, insurance, banking, stock brokers — the introduction of Internet and discount sellers has been a phenomenal financial benefit to customers. Discount airlines have cut airfares by 60% or more, to the economic benefit of everyone with the exception of the incumbent competitors.

…. In some states, real estate agents collude to boycott homes that are being sold by agents who provide commission discounts. This practice is a clear breach of the fiduciary duty of the agent to find the best home at the lowest price for clients.

…. How large is the restraint of trade rents in this industry? One back-of-the-envelope way to quantify the costs to consumers is to compare the 5.1% standard fee in the U.S. to the industry average in other countries, which is estimated at about 3.6%. This means Americans are paying about $20 billion a year more for real estate services — or about $3,000 on an average priced home — than are home buyers in other nations.

As you might expect with any industry that needs government protection to keep its racket going, it’s all about the money–the political contributions money:

In its own internal documents, the Realtors association acknowledges that the purpose of its state lobbying is to keep competition out and fees high. In an April 22 memo to its state affiliates, the national office urged members to keep agitating for “state laws that are designed to replace competition with regulation.” The memo added that “Realtors have the right to lobby for legislative and regulatory action — even if the effect of such action would be anti-competitive.”

There’s no reason why a realtor deserves twice as much income simply because the price of what they sell has in some markets doubled in the past 5 years. In a competitive market for real-estate services, it would not happen.

If BizzyBlog were in charge:

  • State lawmakers with active real-estate licenses would recuse themselves from any votes on measures affecting the industry.
  • Any lawyer still in practice with real estate clients would do likewise.
  • The 10% of so of legislators that remain (not far from the truth in some states) would be the only ones who get to vote on such measures.

Since this will never happen, the next-best thing is to legally challenge and throw out any laws that prevent price discounting and access (for a reasonable fee) to widely-distributed listings.

State attorney generals and The Justice Department should also consider actions against individual realtors and realtor groups who breach their fiduciary duty by failing to make available for buyer consideration all houses meeting the buyer’s criteria, whether they are listed by “full-service” firms, discounters, or owners. Elliot Spitzer, where are you when we need you?