Trends

NON-VOTER VICTORIES

Although the November election results were not available at press time, preliminary indications are that the election was a resounding vote of no-confidence in the established political parties and figures. A nationwide survey by Peter D. Hart Research Associates of Washington, DC indicated that 70 million Americans of voting age would boycott the presidential election, including about 10 million who once voted regularly but have now dropped out. The reasons seem to center on distrust of government and politicians. For example, 63 percent of those interviewed think the Federal government can be trusted to do what's right only some of the time or not at all, and nearly as many believe that quite a few of those running the government are crooked.

Another way to register this kind of dissatisfaction with the present political apparatus is to vote for "none of the above," when such a choice is available. At present the only state where it is available is Nevada. In that state's second election since adding the option, the results were dramatic. "None of These" was the winning choice in the race for Republican nomination for Congress, polling 16,022 votes to the other candidates' 9838 and 8096. (Unfortunately, Nevada law provides that when "None of These" comes in first, the second-place candidate wins.) "None of These" finished second in the Democratic primary for U.S. Senate and third in the Republican primary for that office. Clearly, saying "No" is becoming a popular option.

SOURCES:
• "10 Million Dropouts to Join Nonvoters," Gaylord Shaw, Los Angeles Times, Sept. 5, 1976.
• "'None of These' Wins But He Won't Be the Candidate," Ibid, Sept. 16, 1976.

FEDS GO PRIVATE

About $2.5 billion in Federal government operations may be transferred to private enterprise, under a plan being promoted by the Office of Management and Budget. The action stems from a joint congressional resolution introduced last year by Rep. Jack Kemp (R., NY), calling for clarification and reaffirmation of the policy that the government should rely on commercial sources as much as possible for such services as security, maintenance, data processing, food service, etc. The resolution led to the identification by OMB of about 10,000 commercial and industrial operations throughout the government which agencies must justify providing themselves rather than buying from private firms.

About 1000 of these are presently justified solely on the basis of supposedly lower cost in-house. But the figures used to calculate the government's own costs have long grossly understated overhead expenses. Now OMB has recomputed these costs, leading to such changes as increasing the cost of retirement benefits from 7 percent to 24.7 percent of direct labor cost, and increasing insurance costs from 1.4 percent to 4 percent. Using these more realistic cost figures opens up a large number of activities to the private sector. Based on a Commerce Department study showing typical savings of 30 percent when an activity is contracted out, Rep. Kemp is estimating the potential savings at $850 million.

SOURCE:
• "U.S. Spurs Use of Private Contractors," Eugene Kozicharow, Aviation Week, Sept. 20, 1976, p. 57.

CURBING BUREAUCRATS

Across the country, legislatures are reacting to the growth of bureaucracy by enacting laws aimed at periodic review (see "Trends," July 1976). Some 24 states have now passed some sort of legislation of this type. Two of the most important reforms are zero-based budgeting (requiring each agency to justify its entire budget each year, from scratch) and sunset laws (which provide for the automatic termination of each agency, unless specifically reauthorized). Alabama recently enacted both a four-year sunset law and zero-based budgeting. Other states are adopting procedures by which the legislature can review and veto new regulations issued by all state agencies. States adopting such measures include. West Virginia, South Dakota, New York, and Florida. The latter's review committee, in operation for the past year, has found that 79 percent of the rules issued by the bureaucracy had technical errors of some sort, and that 6 percent exceeded statutory authority.

Surprisingly, less than half the states even publish all the rules and regulations issued by their assorted bureaucracies. In states that don't, persons interested in learning what new restrictions are in store for them must go to the agency offices in the state capitol and inquire! Publication of a register of state agency actions (akin to the Federal Register) has thus become yet another part of the effort to reform the bureaucracy.

SOURCES:
• "State Bureaucrats Get New Watchdogs," Neal R. Pierce, Los Angeles Times, Sept. 8, 1976.
• "Accountability Bills Passed," Montgomery Advertiser, Aug. 11, 1976.

RADIO COMPETITION

The insidious threat to First Amendment rights of free speech and free press known as the Fairness Doctrine is about to face its first fadeout, if Congress goes along. The Office of Telecommunications Policy has proposed an experimental lifting of the doctrine in 10 of the country's largest cities, to test out the premise that open competition of ideas is a better protector of the public than government attempts to control fairness. Under the proposed legislation, the Federal Communications Commission would suspend enforcement of the Fairness Doctrine in the 10 cities and the results would be carefully observed. A review of the results would help determine the future of government regulation of broadcasting.

OTP spokesman Joseph Ryan has indicated that it may be time to review the "double standard" that exists between the print and electronic media. Ryan noted that with the growth of radio in the past decade, it may "no longer" be true that diverse opinion would only be presented if government intervenes. "Particularly in an area where radio stations are many, the guy who is unresponsive to his audience is shut off or tuned out and finds his revenues dwindling," said Ryan in a speech to the National Radio Broadcasters Association.

SOURCE:
• "Equal Radio Time May Be Scrapped," AP (San Francisco), Sept. 21, 1976.

WANNA BET?

We have laws against the victimless crime of gambling because a majority of Americans have strong moral opposition to it. Right? Wrong, according to a survey carried out for the Commission on Review of National Policy Toward Gambling. In fact, there is widespread apathy toward antigambling laws, and wide support for legalization of at least some forms of gambling. Only 30 percent of those surveyed would report a bookie to the police, compared with 96 percent who would report a robber and 64 percent who would report a marijuana seller. Some 80 percent of the respondents favor the legalization of at least one of the 13 forms of gambling listed on the questionnaire, with bingo, horse racing, and state lotteries heading the list of acceptables.

Americans do more than just talk about gambling, according to other findings in the survey. Almost two-thirds of them participate, racking up an estimated $22.4 billion in bets on commercial games in 1974, about a third of it illegally.

Will these results lead to changes in the law? The Commission is not making recommendations, as yet. But the weight of the evidence clearly indicates that today's laws are strongly at variance with the values and behavior of the majority of the population.

SOURCES:
• "Gambling Primer," Parade, Sept. 26, 1976.
• "Public Offended by Gambling? Don't Bet On It." Los Angeles Times, Sept. 7, 1976.

POLAND TRIES FREE ENTERPRISE

Poland's socialist, centrally-managed economy has long resembled a Polish joke. In response to severe economic dislocations, the government has recently begun allowing free enterprise into a number of new corners of the economy. Liberalization moves include the following:

• The inefficient state housing construction program is being wiped out, leaving this field to private enterprise. Individuals will now be allowed to build their own homes or form cooperatives to build apartment buildings.
• The inadequate service sector of the economy is being expanded by allowing more individuals to open businesses in such fields as shoemaking, auto repair, appliance sales, and plumbing.
• Foreign investment in hotels, restaurants, and other tourist facilities will now be permitted.
• Joint ventures (including joint ownership and profit sharing) between Western companies and state enterprises are being studied by the government.

Poland already has a larger private sector than many of its COMECON neighbors. Many small entrepreneurs have been allowed to exist, side-by-side with state-owned industry and largely collective farming. Much of the latter is coming into question these days as the economy increasingly suffers from shortages and poor-quality services. The changes cited above, and rapidly-growing trade with the West, should produce significant improvements—and much food for thought for Poland's people.

SOURCE:
• "Poland Looks to West for Economic Solution," Murray Seeger, Los Angeles Times, Sept. 5, 1976.

LICENSING IN RETREAT

The heat will remain on state licensing boards, judging from statements made recently by the new head of the Justice Department's Antitrust Division. Assistant Attorney General Donald Baker has called for "thorough outside scrutiny" of such boards, "to assure that they are necessary." Noting that licensing bodies are usually urged on grounds of protecting the public, Baker stated that their principal effect "is often to minimize competition, stifle innovation and creativity, and control entry and output as effectively as the classic monopolist."

These views were underscored by a detailed study of occupational licensing recently completed by Dr. Douglas Mackintosh and Kent Stearns of the University of New Orleans. The study documents case after case of licensing boards protecting the licensees against competition, including the classic case of the American Medical Association's successful efforts in the 1930's to prevent medical schools from expanding or increasing enrollment, so as to ensure higher incomes for doctors by keeping their numbers limited.

Mackintosh and Stearns offer a number of possible alternative reforms:

• Represent consumers on existing boards, with 51 percent or more of the votes.
• Merge all licensing boards into one, for administrative efficiency, since "most licenses are issued in a perfunctory manner" anyway.
• Have the boards issue certificates based on actual educational or skill achievements.
• Replace licensing with a system of certification, with certificates based on actual educational or skill achievements.

The latter is the libertarian approach. With voluntary certification, consumers would be free to decide for themselves what type and degree of qualifications they are willing to pay for. The result would be increased competition and significant cost savings.

SOURCES:
• "Reexamination of State Licensing Boards Urged by New Head of Antitrust Division," Wall Street Journal, Sept. 16, 1976.
• "Licensing: Are Regulation Boards Consumers' Friends?" Marjorie Roehl, New Orleans States-Item, Sept. 8, 1976.

MORE POSTAL COMPETITION

Another entrepreneur has arisen to challenge the legal monopoly of the U.S. Postal Service in delivery of letters. The new heroes are Paul and Patricia Brennan of Rochester, NY. Their Brennan Hand Delivery service was started last March and has so far escaped prosecution. The Brennans pick up letters from lawyers and small businesses in Rochester's business district and offer same-day delivery within the city. The price is only 10c per letter. So far, the Brennans have amassed a volume of 500-600 letters per day, and have never lost a customer.

The Postal Service has them under observation, and is likely to bring charges under the monopoly-granting private express statutes. When that day arrives, the Brennans will be ready. The Rochester legal community, their principal client, has offered them time, knowledge, and money to fight the case in court. Also among their valued customers are the County Bar Association and the Appellate Division of the State Supreme Court. "Under the law I can have an abortion or open a massage parlor, but I cannot deliver letters," states Mrs. Brennan. "Someone is going to beat that statute. I may wind up in the can, but maybe I'm young enough and stupid enough to win."

SOURCE:
• "Private Mail Delivery v. the Letter of the Law," Fred Ferretti, New York Times, Sept. 25, 1976.

NEW JERSEY PROTESTS

The New Jersey legislature appears to have misgauged the public mood when it imposed a state income tax last July. In September a crowd of 10,000 turned out to protest this latest rip-off of people's hard-earned money. Organized by attorney Ralph Fucetola and the New Jersey chapter of the National Taxpayers Union, the three-hour rally was described in the press as both festive and angry. Placard-carrying demonstrators from all over the state convened at the State House in Trenton to lambaste and hang in effigy Governor Brendan Byrne (who had led the drive for the income tax). Many people brought teabags, symbolizing the Boston Tea Party, and a collection of them was gathered to be sent to the governor.

Rally organizers hope to duplicate the success of protestors in Connecticut, who managed to overturn a newly-passed state income tax in less than two months in 1971. A two-percent New Jersey sales tax was repealed in 1935 after voters removed many of its backers from office in the subsequent primary election.

SOURCE:
• "Thousands Protest Against Income Tax, New York Daily News, Sept. 21, 1976.

MILESTONES

• End of Emergencies. Two years from last September, the four national emergencies declared by presidents dating back to FDR will finally be terminated. This is the happy result of the signing into law of a landmark bill by Sen. Charles Mathias (R., MD). Unfortunately, the laws which permit the president to declare another emergency have not been repealed, nor have the laws granting dictatorial powers once such an emergency has been declared. But at least we can get out from under the present emergency status. (Source: "Ford Signs Bill to Give Up Broad Emergency Powers," Los Angeles Times, Sept. 15, 1976.)

• Reduced Bite. The Federal government's incentive program to keep people out of the labor market is about to be reduced, and with it the bite on employees and companies. The Senate and House have passed similar bills reducing the period of unemployment benefits from 65 to 39 weeks. The change will affect some 600,000 people in 20 states classed as having high unemployment. (Source: "Senate Bill Limits Unemployment Pay," UPI (Washington), Sept. 30, 1976.)

• Loosening Airline Controls. Yet another airline deregulation bill has been tossed in the hopper, this one by Sen. Howard Cannon (D., NE). It is more far-reaching than the CAB's reform proposal, but not as free-market oriented as the Kennedy bill introduced earlier in the year. Like the latter it would liberalize entry, increase pricing freedom, and strip the CAB of power to exempt airlines from the antitrust laws. The fact that Sen. Cannon, chairman of the Senate subcommittee that deals with aviation, has introduced such a bill is a good indication that some form of airline deregulation will be enacted in the next year. (Source: "Senate Offered New Reform Measure," Aviation Week, Sept. 27, 1976.)

• No to Reverse Discrimination. In a 6-1 decision, the California Supreme Court has ruled that special admission programs giving preference to minority students are unconstitutional. The decision upheld lower court rulings in favor of a white student who had been turned down for admission to the medical school of the University of California at Davis. (Source: "Tribunal Rules for Student in Reverse Discrimination Suit," AP (San Francisco), Sept. 16, 1976.)

• First Lawyer Ad. Thanks to a loophole in California's ban on lawyer advertising, an attorney in that state has begun advertising on TV. The law exempts nonprofit organizations representing 1000 or more attorneys—such as Stuart Baron's National Legal Services Corp. The 30 and 60-second spots describe the company's services: unlimited telephone access to staff attorneys, plus letter writing and phone calls on behalf of clients, for a $60 annual fee. So far, the state Bar Association has neither made nor received any complaints. (Source: "Lawyer Makes Legal History with TV Ads," Los Angeles Times, Sept. 17, 1976.)