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Out of Control Policy Blog Archives: 3.24.13–3.30.13

Solving the Parking Problem in DuPont Circle

One of our neighbors bought a genuine London Cab a couple of years ago. Importing such a vehicle is very challenging: the new cabs off the assembly line do not meet US emissions laws and those that qualify as antiques—and thus are exempt from such standards—are usually rusted through and unusable.  The only way for a London Cab to be legally brought over (as this one was, based on the stickers in its window) is to have a team of mechanics completely rebuild an existing one, virtually from the bottom up, while clearly documenting each step of the operation. Needless to say this cab represents a pricey investment.

However, such cabs are relatively cheap to store: Since our neighbor purchased his London Cab it has been parked on the street, in front of our building in the exact same space. The annual cost to its owner for the decal on his car that allows him to park it on our street is a mere $25.

In some places a fee that low would make perfect sense, but we happen to live on the edge of two very dense, affluent neighborhoods in Washington DC where parking is exceedingly scarce. Private parking spaces rent out for as much as $350 a month, and a parking spot in an underground garage recently sold for $60,000.  In other words, street parking is over 100 times cheaper than private parking.

As a result, street parking is extremely difficult to find in our neighborhood.  During nights and weekends, when people flock to the neighborhood to dine, a significant proportion of the traffic consists of people looking for a parking spot.  Even during the day local residents who park on the street spend a considerable amount of time looking for an open space.

The economist’s solution would be to charge something closer to the market price for the scarce resource of on-street parking, which is precisely what a local politician has suggested. The result has been predictable:  He has been bombarded with vitriol well in excess of anything he’s seen before, and he has since retreated from this stance.

I get why this cohort might be opposed, but simple opposition does not make good policy: there are all kinds of government services that some folks would rather get for free but offering such services for free doesn’t make economic sense. Our National Parks charge an entrance fee, for instance, and public high schools and colleges charge fans to come and watch football and basketball games in arenas and stadia paid for by tax money. They do so because failing to charge a fee would often result in overflow crowds and because asking those who use the facilities to defray some of the costs seems like a fair way to do things. I submit that the same logic applies to people who wish to park (or store) their cars on the street.

Those protesting the proposed parking permit increase offer a variety of arguments as to why it shouldn’t go forward: Some suddenly discovered libertarianism and wish to keep the government from amassing more tax revenue to spend on its nefarious agenda, while others have protested this plan by arguing that it will have a disproportionate impact on the poor, who cannot afford to pay more for a parking fee.

No one in my neighborhood is as worried as I am about the government amassing too much power or money (I suspect that is literally true, given that the Green Party typically fares better than Republicans in our precinct), but this isn’t a valid concern here.  The revenue that would be raised from this would be a pittance compared to how much the District generates from its ten percent sales tax and a personal income tax with rates that exceed nine percent, neither of which are apparently all that objectionable to my neighbors with automobiles. Offsetting this revenue by lowering property taxes in the neighborhood would be one trade-off that should assuage those with this complaint.

And virtually free parking for all is a terrible way to help the lower class in our neighborhood, who are much less likely to own a car than middle or upper income households. If there were a goodly number of working poor who needed inexpensive parking to maintain their cars it would not be terribly difficult to devise a program that would give low-rate permits just to them.

“Nearly free” is a terrible price for a scarce resource, even if it is one that the government owns. Setting a price that reflects the value the market places on on-street parking would greatly alleviate the irritating parking shortage and raise more money in a progressive way than nearly any tax program could hope to accomplish. 

Ike Brannon is director of research at the R Street Institute, a think tank based in Washington DC.

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Four Unintended Consequences of Misapplied Privacy Regulation

Today Reason has published my policy paper addressing privacy concerns created by search, social networking and Web-based e-commerce in general.

These web sites have been in regulatory crosshairs for some time, although Congress and the Federal Trade Commission have been hesitant to push forward with restrictive legislation such as “Do Not Track” and mandatory opt-in or top-down mandates such as the White House drafted “Privacy Bill of Rights.” An the U.S. seems unwilling to go to the lengths Europe is, contemplating such unworkable rules like demanding an “Internet eraser button”—a sort of online memory hole that would scrub any information about you that is accessible on the Web, even if it is part of the public record.

In my paper, It’s Not Personal: The Dangers of Misapplied Policies to Search, Social Media and Other Web Content, I discuss the difficulty of regulating personal disclosure because different people have different thresholds for privacy. We all know people who refuse to go on Facebook because they are wary of allowing too much information about themselves to circulate. Where it gets dicey is when authority figures take a paternalistic attitude and start deciding what information I will not be allowed to share, for what they claim is my own good.

Top down mandates really don’t work, mainly because popular attitudes are always in flux. Offer me 50 percent off on a hotel room, and I may be willing to tell you where I’m vacationing. Find me interesting books and movies, and I may be happy to let you know my favorite titles.

Instead, ground-up guidelines that arise as users become more comfortable with the medium, and sites work to establish trust, work better. True, Google and Facebook often push the envelope in trying to determine where user boundaries are, but pull back when run into user protest. And when the FTC took up Google’s and Facebook’s practices, while the agency shook a metaphorical finger at both companies’ aggressiveness, it assessed no fines or penalties, essentially finding that no consumer harm was done.

This course has been wise. The willingness of users to exchange information about themselves in return for value is an important element of e-commerce. It is worth considering some likely consequences if the government pushes too hard to prevent sites from gathering information about users.

Free Services Go Away

Hundreds of thousands, if not millions, of sites support themselves through targeted advertising. If the federal government began to clamp down on websites’ ability to use consumer information to target ads, an immediate consequence would be a decline in the amount of free content, information and services available on the Web. A University of Toronto study of Web sites in Europe, where targeted advertising is heavily regulated, found that advertising effectiveness decreased 65 percent relative to counterparts in the rest of the world, and predicts that of European sites will see a declining share of the $8 billion in global online ad revenues decrease over time because they can’t effectively deliver an audience of interested customers.

This may explain why there are no European search of social media sites that rival Google and Facebook, and why Hyves, a Netherlands-based social networking sites, charges a fee for users access most of the benefits Facebook, LinkedIn, Google+ and Pinterest users get for free.

'Mother, May I?' trumps experimentation

Regulation forces companies to evaluate compliance issues before pursuing a potentially innovative product or service direction. As a result, innovation is slowed, or does not happen at all, not because of market considerations, but on the advice of legal counsel. This is a major risk of any regulation or legislation in technology, an area that is constantly changing and evolving, and where success and survival often hinge on out-of-the-box thinking. It is another reason why guidelines are preferable to law.

Regulations against information-sharing undermine the community-building benefit of the medium

One of the reasons people go online is to meet and interact others who share interests and passions. Individuals with unique interests—from birdwatching to Axis & Allies gaming—can connect with far more like-minded individuals than they might in their own geographic community. These communities in turn build knowledge bases that the general population of users can turn to from time to time. For example, someone planning a vacation in New York City can use Google to find a bevy of bulletin boards and forums, some quite granular, that provide information about shows, restaurants and attractions, all from people who have shared their experience. These boards thrive because search engines like Google and social networks like Facebook drive traffic to them—all based on preferences. Regulate this technology away and the Web loses its unique community-building character.

Privacy regulation won’t address information security issues

Politicians often conflate privacy and security. The two are related, but are not the same thing.

Security pertains to the protection of critical user information that, if disclosed, can result in theft or fraud. Neither Do Not Track nor the on-line privacy “bill of rights” truly addresses security issues related to on-line information.

Wire fraud laws already make it illegal to steal user information. Identity theft and identity fraud are crimes. Companies that fail to adequately protect confidential and sensitive information, such as social security numbers, banking information or specific health-related data, that in the wrong hands could be used for malicious purposes. By contrast, the information websites collect, collate and process for targeted marketing is not highly personal and confidential, but has to do with individual habits and preferences that could otherwise be easily observed—does the person prefer beer or wine? The Cubs or the White Sox? Mystery novels or biographies? For the most part, it is anonymized. True, Facebook and other sites allow users to post pictures and disclose more intimate personal details such as religion or sexual orientation, but again, users can decide whether to disclose these facts and, if they do, decide who may see them. Opt-in, Do Not Track and privacy bills of rights are all about substituting government mandates for individual discretion. They do not strengthen or expand on any current laws against online fraud or theft, which by themselves are quite strong.

Make no mistake, personal choice must be respected, and the right to confidentiality should be protected. Yet specific harms must be understood, delineated and targeted in any legislation or regulation before it goes forward. The information economy is called so for a reason. Nothing would be more counterproductive to it than clumsy government policies designed to generally inhibit the voluntary exchange and use of information. Right now, search, social media and informational websites are the most visible users of consumer information, but in the background, many of the automated, intelligent services we expect the Web to support will need to trade in user information. These include such basic applications as Web-enabled home appliances, such as refrigerators that sense when you’re low on milk to more critical services such as health care management. This is why it’s best to derive privacy policies from a strong and constantly evolving knowledge base of best practices, rather than to codify them into laws that, in their failure to foresee innovation, will discourage it.

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The Gay Marriage SCOTUS Case

On Tuesday, the Supreme Court heard oral arguments on California’s Proposition 8 and today it is hearing arguments on the Defense of Marriage Act, or DOMA. A decision on Proposition 8 could determine whether California, and possibly other states, can legally ban gay marriage. But, after attending yesterday’s arguments, Reason’s Damon Root says, "The Supreme Court seems to think that the backers of Proposition 8 don't have the standing to bring this case, which would send the case back to the district courts."

A DOMA decision could determine the federal legal status of gay marriages and whether states where gay marriages aren’t recognized must recognize gay marriages granted in other states.

Proposition 8

The Prop. 8 case is Hollingsworth v. Perry. The Hollingsworth is Dennis Hollingsworth of ProtectMarriage.com. The Hollingsworth team is arguing for standing based on their dubious contention that children raised by mothers and fathers in stable homes fare better than children raised within other arrangements. Interestingly, the SCOTUS Blog's "In Plain English" column explains how this argument seems to clear the way for gay couples who cannot or do not wish to have children to marry.

If the court rejects that argument for standing, as Root and many experts now predict, the previous decision against Prop. 8 will apply in California and the issue of whether other states may ban gay marriage will remain undecided.

The Perry in the case is Kristin Perry, a mother of four with her partner Sandra Stier. The pair was denied a marriage license in Berkeley. On behalf of the Obama administration, Solicitor General Donald Verrilli Jr. argued that the court should strike down Prop. 8 on the basis that state bans on gay marriage where same-sex civil unions are allowed violate the right to equal-protection enshrined in the Constitution.

As Reason magazine’s Damon Root put it, “In other words, it’s unconstitutional for a state to recognize civil unions while not recognizing same-sex marriage. The federal government took no position on those states that offer neither civil unions nor gay marriage.”

Attorneys Theodore Olson and David Boies argued for Perry based mainly on the contention that "marriage is a fundamental right,” separate from raising children. They also argued for a more demanding test of constitutionality for Prop. 8 based on the contention that gays and lesbians have been frequent victims of discrimination. The Washington Post reports that in a previous challenge, “Stanford political scientist Gary Segura testified that no minority group has been targeted by more ballot initiatives than the LGBT community.”


At issue today is whether discriminating against gay couples at the federal level, as the Defense of Marriage Act does, violates the equal-protection clause of the Fourteenth Amendment. The Justice Department has come to believe that "classifications based on sexual orientation" violate the Constitution's guarantee of equal protection under law.

The face of the DOMA case is Edith Windsor, who had to pay $363,053 in estate taxes because the state would not recognize her marriage to her partner of more than 40 years. In marriages recognized by federal law, surviving spouses are exempt from estate taxes on property. Helen Dale tells their story in a new Reason paper, “An Argument for Equal Marriage”:

[Windsor and her partner] had enjoyed successful careers, one as a computer programmer for IBM, one as a consultant psychologist. Both had paid their taxes, obeyed the law, been model citizens. And yet, when one died, the federal government refused to recognize the marriage that was good enough for Canada and New York, levying tax on the estate of $363,053.

Dale also explains some of the difficulties in defining marriage. She argues that demonstrating that marriage has changed over time makes arguing against equal marriage more difficult:

Typically, equal marriage opponents tend to use the word ‘marriage’ as though it has always and everywhere meant something very similar to that which currently exists across the developed world in the second decade of the 21st century.

Some of the most informative analyses of the beneficial effects of marriage take marriage in its post 1990s form as a given. However, earlier studies—even famous ones like Daniel Patrick Moynihan’s The Negro Family: The Case for National Action, written as it was in 1965—have to be treated with caution. Not only was Moynihan’s study pre-Loving, it was pre Reagan’s California Family Law Act 1969.

Consistent with the constraints on divorce then common, in 1965 a number of US states still had laws against ‘harboring’ (where, if a woman fled her husband and returned to her parents, they could be charged while she might be forcibly returned to the matrimonial home). In those circumstances, many women—black and white—had an incentive not to marry, especially if the male was not a ‘good prospect’.

While many libertarians would like to see the government get out of marriage entirely, the paper points out the unfortunate unlikelihood of marriage’s privatization in the near future. In the current climate, striking down Prop. 8 and DOMA to ensure that states cannot deny people the benefits of marriage on the basis of the couple’s gender is the next best thing.

gay marriage

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Reason’s First Feature-Length Documentary: “America’s Longest War”

Reason Foundation's first feature-length documentary uncovers the extraordinary costs of the U.S. government’s 40-year war on drugs. Here’s the trailer for America’s Longest War:

America’s Longest War provides a brief history of drug prohibition, beginning with President Richard Nixon’s declaration of war in 1971 and ending with President Barack Obama’s broken promise to allow states to determine their own medical marijuana policies. America’s Longest War chronicles how the drug war has escalated from a small domestic program, mostly focused on treatment, to the multi-billion dollar international war it is today. There are many of victims of the war on drugs, and America’s Longest War tells some of their stories.

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Paul Feine Interviewing for ALW


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