Trends

ABORTION RESULTS

Evidence of the beneficial consequences of legalized abortions continues to accumulate. In Washington, DC the number of maternal deaths and infections has dropped markedly since 1970 when interpretation of the 1970 DC abortion law was significantly liberalized. Prior to 1970 half of all maternal deaths in the city were due to botched abortions or their complications, but there has not been a single such death since 1970. In addition cases of infection have dropped 40% over this time period. Some 32,000 abortions per year are being performed legally in the city, many of them by privately-owned, profit-making clinics like Pre-Birth and Hillcrest.

Other effects of abortions are showing up in California. As a result of its liberalized 1967 abortion law, California's birth rate is declining, for the first time since the Depression. The number of births dropped from 362,632 in 1970 to 329,826 in 1971, an 11.5% decrease, while the number of abortions reached 65,529 in 1970, four times the 1967 level. More importantly, the number of children on welfare is also declining as a result of easily-available abortions, according to Prof. Kingsley Davis, population researcher at the University of California. Decreases have shown up in both the Aid to Families with Dependent Children program and in various foster child programs.

In addition, a Swedish research study has documented the effects of anti-abortion laws on the resulting children. Researchers Hans Forssman and Inge Thuwe compared 120 unwanted children (whose mothers had been forbidden by the State to have abortions), with a control group of 120 others, also born between 1939 and 1942, in the same hospitals. They found that the unwanted children were more likely to suffer from insecurity and instability in childhood; in adolescence they were twice as likely as the control group to have learning problems and psychiatric disorders, and to engage in criminal or delinquent behavior. Between the ages of 16 and 21, the unwanted children were six times more likely to be receiving some form of public assistance.

Such arguments are apparently having an effect, as more and more governments liberalize their anti-abortion statutes. Just last April the government of India put into effect a new abortion law comparable to California's liberal statute. Government health experts hope that a million women will take advantage of the law this year. Even that would only make a dent in India's soaring population, since there are 100 million couples of childbearing age in India's 547-million population.

SOURCES:
• "Approved Abortions in DC Cause Drastic Drop in Deaths," THE WASHINGTON POST, 27 April 1972.
• "Drop in Birth Rate Linked to Abortions," Associated Press (San Mateo), 29 July 1972.
• "Unwanted Children," PARADE, 16 July 1972.
• "India Puts Permissive Abortion Law in Effect," Associated Press (New Delhi), 1 April 1972.

THE DEATH OF SANTA CLAUS

Senator William Proxmire has aptly described the plethora of federal subsidies as follows: "These programs are like Christmas, with everyone giving subsidies to everyone else and Congress serving as Santa Claus." In recent months, however, there have been increasing signs that the role of Santa Claus is getting harder and harder to play, due to some harsh fiscal realities. As early as 1970, libertarian economic consultant Alan Greenspan set forth the ominous scenario of the federal government losing control of the budgetary process. As of mid-1971, columnists Evans and Novak reported that "…increasingly economists in the White House, the Office of Management and Budget, and the Treasury are coming around to Greenspan's concept of the runaway budget." A year later the prestigious Brookings Institution published its 468-page critique of the Administration's fiscal 1973 budget, which concluded that "even if no new federal spending programs beyond those now contemplated are enacted, and if the Treasury were receiving all the tax revenues available at full employment—it would be mid-1978 before the federal budget could possibly show a surplus."

The myth that the government could go on indefinitely creating give-away programs financed from "somewhere" has finally run its course. Historically, Congress generally managed to keep things under control by keying the expansion of subsidies and other government programs to the growth of the economy. Thus, the parasitical effects were limited, due to the continued growth of the host (the productive businesses and taxpayers). In the 1960s, however, the federal budget suddenly grew twice as fast as the rest of the economy, amounting today to a staggering 13% of the gross national product. $50 billion worth of new or expanded domestic programs were added during the past decade.

Moreover, it has become clear even to the Liberal Establishment that most federal programs have utterly failed to accomplish their stated ends. An amazing article from the New York Times News Service points out that "only in recent months has the enormity of some of the failures, particularly in social programs, become fully known." It then goes on to describe a number of examples, including:

• An evaluation by HEW of its own $1 billion per year Title 1 program in education admitted that "the money is still not reaching those for whom it is intended in ways that will raise the level of instruction."
• The 1968 Housing Act "has produced some housing but at enormous cost," and "has benefited builders, investors, speculators, and other interests more than it has consumers."
• "Major manpower training programs costing more than $1 billion a year," are "often yielding no jobs for those enrolled."
• Model Cities "has turned out to be more of an administrative device than a program of limited welfare and employment."
• The 1968 Safe Streets Act has had little impact on crime "because the funds have been so widely dispersed and used for new layers of bureaucracy."

Not surprisingly, public hearing held by the Democratic Party's Platform Committee revealed a nationwide trend of "disappointment and cynicism about government on all levels." Yet the same study concluded that "the disenchantment has not lessened the demand that the federal government take on extensive new programs, from day care centers to guaranteed employment."

It becomes increasingly clear that the next president must work for either a major tax increase or a major cut in government services. In this light it is interesting to note a 7 August statement by Clark MacGregor, Nixon's campaign chief. "President Nixon has no intention of asking for a tax increase if he is reelected," MacGregor said, noting that "an increase in federal income taxes would be avoided in fiscal 1973 and 1974 by pruning wasteful social programs." It will be instructive to see how well this statement holds up after November 7th.

SOURCES:
• "Threat of Runaway Budget Grows," Rowland Evans and Robert Novak, syndicated column of 8 June 1971.
• "Tough Choices Face President—Whoever He Is," Vincent J. Burke and Paul E. Steiger, LOS ANGELES TIMES, 25 May 1972.
• "Deficit Out of Control," TIME, 31 July 1972.
• "Study Uncovers Voter Cynicism," John Herbers, New York Times News Service, 15 June 1972.
• "MacGregor Predicts No Tax Hike Under Nixon," Associated Press (Washington), 8 August 1972.

URBAN TRANSIT REVISIONISM

Big-city politicians are fond of invoking the specter of an urban transit crisis. The standard complaint is that the mostly government-run transit systems are going under, since fares cannot cover even operating costs, and local tax revenues are too strained to provide subsidies. It is, of course, generally ignored that local government takeover of transit companies was touted as their salvation only a few short years ago. How new is today's crisis? And how did urban transit systems (whether government or capitalist-run) get into today's mess?

According to the MIT Urban Systems Laboratory the revenue-vs.-cost problem has plagued urban transit from the beginning. In a major new contribution to revisionist urban studies, the Lab's recent special report traces the history of urban transit systems and government interventions into their operations. The report states that "U.S. revenue transit ridership has followed a slow and predictable rate of decline since well before the automobile had its major impact." Indeed, one-third of the then-existing transit companies were bankrupt in 1919, prompting President Woodrow Wilson to appoint a Federal Electric Railway Commission to investigate the situation.

Why did so many companies fail? Authors Richard Soloman and Arthur Saltzman give several reasons. Some companies just suffered from poor management, leading to overinvestment in expensive plant and equipment, and to keeping fares below the level needed to accommodate rising wage expenses. But other, more fundamental factors were at work, in addition. The existence of government-granted exclusive franchises (monopolies) prevented transit companies from reacting to changing public needs and demand patterns. Most important of all, the authors suggest that it is quite probably the case that "few, if any, operations ever made large profits from transit operations alone over sustained periods." In other words, the nature of the urban transit industry (capital requirements, demand curves, technological change, etc.) was such that it made more sense, economically, for transit to be provided by a larger, more diversified kind of business enterprise. Accordingly, in the 20s and 30s many transit lines were acquired by electric utility, petroleum, and railroad equipment manufacturing companies.

But it was precisely at this point that government, specifically the federal government, struck the fatal blow. As the authors point out, "The Securities and Exchange Commission interpreted the Public Utilities Holding Company Act of 1935 as prohibiting most electric power and petroleum trusts from keeping their wide-ranging financial interests in transit operations. This denied to the transit industry not only capital but also management aid just when they were most needed to support modernization." The coup-de-grace was later provided by the Justice Department, which prohibited railroad equipment manufacturers from owning stock in transit companies. With a direct financial stake in the transit companies, the manufacturers had underwritten street-railway equipment replacement since about 1936.

Interestingly, the report notes that the only kind of transit operations to have survived successfully are jitneys, operated largely by independent entrepreneurs. The authors note that in their heyday, jitneys succeeded in diverting 50% of the peak-hour streetcar passengers, which led to legislation (authored and supported by transit companies) to regulate the jitneys out of existence. Still, where jitney-type service is allowed, it continues to offer a viable, profitable alternative to capital-intensive transit systems (see "Taxis and Jitneys: The Case for Deregulation," REASON, February 1972).

SOURCE:
• "Urban Transit: In a Jam Yesterday," Michael Chiusano, TECHNOLOGY REVIEW, February 1972.

GOVERNMENT BY DECREE: A NATIONAL EMERGENCY

When Richard Nixon cut the dollar loose from gold and decreed a 10% import surcharge last year, he first declared a state of national emergency. This practice has become almost commonplace over the last 40 years, ever since Franklin D. Roosevelt pushed through Congress the Emergency Banking Act of 1933. One provision of that act gave the president the first peacetime powers to regulate vast areas of the economy, as well as foreign trade. (Similar powers during a declared war were first granted to the president in 1917.) To invoke those powers, the president need only decree a national emergency.

Today, uttering such words gives the president over 200 dictatorial powers otherwise forbidden to him. Unbeknownst to most people, these states of emergency do not expire unless or until the president so decrees. Thus the United States is still in Roosevelt's 1933 state of emergency, Truman's 1950 Korean War state of emergency, and many others. The Korean War decree, in particular, enables the president to deploy U.S. military forces anywhere in the world that he chooses, keep enlisted troops beyond the expiration date of their contracts, control consumer credit, regulate trade with foreign nations, revoke leases on real estate and personal property, and suspend rules and regulations regarding radio and television.

Senator Charles Mathias (R, MD) has been alarmed over the implications of these provisions; for the past three years he has led the fight to change things. This summer he was finally rewarded with the chairmanship of a special eight-member committee and a $100,000 budget to look into means of terminating the existing national emergencies. Mathias thinks it would be impossible to repeal the national emergency legislation outright, but he hopes to institute requirements for Congressional ratification and a built-in termination date. He also wants provisions for an annual review by Congress of any existing national emergencies.

Already the State Department has mobilized to fight Mathias, contending that conduct of foreign policy would be impossible without many of the statutes authorized by national emergency decrees. The House of Representatives has so far shown total apathy. Hopefully, publicity by advocates of liberty will help Mathias in his assault on domestic fascism.

SOURCE:
• "Mathias Leads Fight to Reduce President's Emergency Powers," John Averill, LOS ANGELES TIMES, 23 July 1972.

BRIEFLY NOTED

The Nixon administration is apparently still serious in its announced intention to sell Dulles and Washington National airports at auction to private enterprise. A recent AVIATION WEEK news item (1 May 1972) noted that the plan has aroused bureaucratic fears in the Virginia government. State and county officials are claiming that a private entity "may not necessarily be qualified to operate the airports efficiently," and are talking about setting up an "authority" to bid for and run the airports.

West Germany, like France and many other European countries, has a government TV broadcasting monopoly. According to BUSINESS WEEK (22 April 1972) there is now a strong move afoot to break the monopoly. "Right-wing" politician Franz-Josef Strauss is supporting the idea, so as to provide an alternative to the left-wing bias of Bavaria's state TV system. Swiss entrepreneur Willi Maurer and German newspaperman Axel Springer are reported to be among those challenging the monopoly.