Vouchers, Tax Credits Coming Up
While the failings of the government school system are widely catalogued, the expansion of alternative education is severely constrained by the double-payment problem: people choosing private schools are still forced to pay for public schools. But the prospects for reforms to end double payment are looking up.
To begin with, President-elect Ronald Reagan has long supported the idea of tuition tax credits for those utilizing private schools. And with the Republican takeover of the Senate, Sen. Orrin Hatch, who favors such an approach, is the new head of the Labor and Education Committee. Moreover, the 14-member Reagan task force on educational policy, headed by W. Glenn Campbell of the Hoover Institution, is considering both tuition tax credits and a national education voucher system (first proposed nearly 25 years ago by Milton Friedman).
The voucher idea has cropped up again in California, as well. In November the administration of Gov. Jerry Brown began circulating a proposed master plan for "youth services" featuring a public school system decentralized to the neighborhood level, an end to compulsory schooling at age 14, and a statewide voucher system. Youth services such as schooling should be accessible by walking (and presumably not by crosstown busing), says the draft, and families opting out of the new public schools should receive vouchers from the state so they could choose their own schools—what the draft calls "family-managed" education.
Needless to say, the plan has already come under fire from state education officials, PTAs, and—surprisingly—"profamily" conservatives. Drafted by the state's Health and Welfare Agency, it was due to be submitted to the legislature in January.
FAA Slammed Again
How good is the computer system that handles enroute air traffic control from 23 control centers across the country? Not very, concluded the Transportation Subcommittee of the Senate Appropriations Committee in a report released in October. Although a Federal Aviation Administration spokesman claimed that computer failures had been cut in half between 1977 and 1980, the report pointed out that breakdowns are often recorded in FAA logs as shutdowns for maintenance and that shutdowns of less than a minute are not even recorded. Thus, it's hard to tell what FAA breakdown figures really mean.
In further criticisms, the report charged that the FAA does not keep adequate records of computer component failures; is unable, due to inadequate recordkeeping, to relate near-misses or crashes with computer outages; and has not adequately trained controllers in use of the backup system. The report called the present software design "an intertwined mess" with different fixes installed at different centers, depending on where problems had occurred.
The report also faulted the FAA's plan to spend $2.8 billion on a next-generation computer system, since it had not conducted a cost-benefit analysis, nor had it calculated how soon the present system will reach the point of saturation. Queried on the latter point, one FAA official told committee staff that he had a "warm feeling" that the present system would not be saturated before 1990.
This latest report raises once again the question how much longer this nation must put up with an air traffic control system run by bureaucrats instead of an efficient private corporation as in Switzerland (see "Is This Any Way to Run an Airway?" REASON, Jan. 1979). Perhaps it's time for the air traffic controllers to renew their call for privatization of the system.
Hope for Property Rights
A case that will be heard by the US Supreme Court may clarify some property rights issues badly tattered in the last year. The case, San Diego Gas & Electric Co. v. City of San Diego, arose when the city downzoned from industrial use to open space an area of land in which SDG&E owned interests. The utility is suing for money damages, and the District Court of Appeal held that SDG&E was entitled to just compensation, whereupon the city appealed to the California Supreme Court.
In the meantime, the Agins v. City of Tiburon case came before the US Supreme Court. The Court held that Tiburon's downzoning of the Aginses' land from five units per acre to one unit per acre did not constitute a "taking" of property without just compensation. Downzoning is a legitimate exercise of the police power of the State and since the Aginses had never filed for a permit to build any units, compensation was not an issue, ruled the Court. Based on Agins, the California Supreme Court reversed the San Diego decision in favor of the city.
Two groups backing SDG&E in its appeal to the US Supreme Court are the Pacific Legal Foundation and, unexpectedly, the San Diego Urban League, which is working to eliminate discrimination and to increase blacks' economic power in San Diego. Clarence Pendleton, SDUL president, explains their support: "Every time government restricts land use, that lessens housing opportunities.…Zoning holds land off the development rolls and when housing production is constrained the low- and middle-income person takes the brunt of the shortages and the limiting of opportunities." Pendleton is worried about the possibility of exclusionary zoning, especially since the SDUL is actively engaged in the construction and rehabilitation of housing. The League, he notes, does not have the money to fight legal battles in the event that any of its land were downzoned, and thus the amicus curie brief for SDG&E.
Apartheid Failure Acknowledged
For the first time in 20 years, a South African prime minister, Pieter Botha, has conceded that the separatist policy of apartheid has not worked. Prime Minister Botha declared in a speech last October that the theory of separate development for South Africa's black and white races is simply not economically viable.
Botha will therefore be presenting to parliament several measures going further than earlier reforms. The bills are designed to ease restrictions on blacks already living and working in urban areas and would repeal over 60 apartheid provisions. Partial self-government would be granted to black townships, which are presently run by white government-appointed boards. Blacks would no longer need to obtain government permission to move to a new city or to change jobs. Families of legal black workers would be allowed to live on the same urban property as that worker if "overcrowding" did not result. Black businesses would be allowed to expand in black townships without prior government approval, and blacks would be allowed to own property in perpetuity, rather than being limited to the current 99-year leases.
One of the touchiest aspects of the issue of black civil rights is the pass system under which police can stop any black person in an urban area and demand to see a passbook proving that he or she has a right to be there or is visiting for less than 72 hours. Over 700,000 blacks are arrested annually for violating the pass system. Under the new laws, the requirements for the right to move freely in urban areas would not be as stringent (continuous service with one employer for 10 years, having been born there) but would still require that the black person have a job and accommodations in that area.
The fact that the new laws will make life easier only for those blacks already living in urban areas has led to accusations from Botha's critics that he is attempting to create a privileged, complacent black middle class. The critics also point out that these laws make no effort to share political power with blacks: Although there are only about 4.5 million whites to about 22 million blacks in South Africa, whites alone are represented in the South African parliament. It is not clear yet whether the new proposals will pacify blacks or awaken them into demanding full equality before the law.
Social Security: Time for Change
As of January 1, Social Security taxes went up again. For 1981 the payroll tax is 6.65 percent of the first $29,700 of earnings, compared with 6.13 percent of the first $25,000 for 1980 (itself a hefty boost from the previous year). Despite that large increase, the system will still run out of cash by 1982 unless changes are made. And in the longer run, as the postwar baby-boom generation matures, the system faces general insolvency. By the year 2010, it is projected that there will be only two workers for every retiree, compared with 3.25 for every retiree today. Thus, if the system remains on a pay-as-you-go basis, massive troubles lie ahead.
But that's not the only problem. More fundamentally, because Social Security funds are simply transferred from present workers to present retirees, the system is economically the opposite of a private pension system. In the latter, funds from workers are invested in productive enterprises, contributing capital to the nation's industrial expansion. Economist Martin Feldstein estimated that America's capital stock is $1 trillion (50 percent) less today than it would be if people had private pensions in place of Social Security. Although he recently revised these calculations downward, he still found that Social Security has reduced private saving (and hence investment) by around 40 percent.
Seen in this light, most proposals for Social Security reform pale into insignificance. The Reagan Social Security task force, headed by the Hoover Institution's Rita Ricardo Campbell, has recommended several gradual changes—increasing the retirement age from 65 to 68, reducing benefit levels to 25 percent of a person's last paycheck instead of 41 percent, and basing inflation adjustments on wage increases rather than price increases whenever wages are rising more slowly than prices. While this would reduce the system's prospects for bankruptcy, it fails to address the capital-formation problem. A recent report by Congress's Joint Economic Committee touched briefly on this problem, noting that for the long term elimination of pay-as-you-go in favor of investment accounts would provide a more secure retirement system.
Just such a plan—phasing out the government-run, tax-based system by eliminating it for everyone under 40 and allowing such people to invest in tax-exempt individual retirement accounts—has been worked out in detail by Harvard law graduate Peter Ferrara. As set forth in his new Cato Institute book, Social Security: The Inherent Contradiction, the plan would retain present benefits for those over 40, paid out of general revenues. But it would end the system altogether for those under 40, in favor of a private investment-based system that would channel tens of billions each year into productive investments.
Interestingly, a system much like this has just been introduced—in Chile. On November 6 the Pinochet government announced the privatization of that country's social security system. The old system, created in the 1920s, was much like ours—costly, inefficient, and fiscally unsound. Under the new system, each person will have his own account in a private retirement fund, to be invested in accordance with guidelines spelled out in the tax laws. Although participation in the system will be voluntary when it goes into effect on May 1, the plan is to make it compulsory after five years. Workers will then be required to contribute at least 10 percent of their gross salaries to their retirement accounts. While the compulsory feature is questionable, the thrust of the change is a major step in the right direction—one the Reagan administration would do well to emulate.
A Moving Reform
The household moving industry joins the ranks of the partially deregulated, thanks to a new federal law giving movers more leeway in offering different rates and service options. It further allows shipper disputes to be settled, according to new minimum standards and procedures, by arbitration. The moving industry has already been affected by the recent trucking deregulation measure, signed in July, which made entry into the industry easier and thus upped competition. The new law also allows movers to step out of the industry's collective rate-setting mechanism (a formula multiplying weight by distance) and to offer competitive binding estimates.
Sagebrush Rebels Press On
Some 400 supporters of the Sagebrush Rebellion assembled in Salt Lake City in late November to hear speeches and plan strategy. The objective? To gain control of federal lands in the West. Speakers included Montana State University's John Baden, University of California at Santa Barbara's (and Reason Foundation trustee) Bruce Johnson, and University of Washington's Barney Dowdle, together with several western senators. Opinions were divided as to whether the land should revert to private hands or simply to state governments. The economists generally favor privatization; the politicians, transfer to other politicians.
The conference, called "Agenda for the '80s: A New Federal Land Policy," was sponsored by LASER—the League for the Advancement of States' Equal Rights, a nonprofit group set up last year in Salt Lake City. Attendees were delighted by a telegram from President-elect Reagan, in which he said he was renewing his "pledge to work for a sagebrush rebellion" so that "the states will have an equitable share of the land and their natural resources." With the changed composition of Congress, rebellion supporters have new hopes of achieving their objectives.
Deregulation Still Working
Airline deregulation continues to confound the skeptics who said it couldn't be done or, if done, would never work. Real competition in pricing and service, and free entry and exit, are here to stay, and consumers are the winners.
A good example was November's transcontinental fare increases. When chief price-cutter Eastern announced a doubling of super-saver fares in mid-November, American and United eagerly followed suit. After waiting a week, however, TWA announced much smaller increases in its super-saver fares. The other three had no choice but to back down or risk losing the market to TWA.
Also indicative is the growth of new regional airlines (besides the expansion of commuter lines). Scheduled to start up December 14 was New York Air, competing aggressively with Eastern's Air Shuttle in the New York-Washington market. The line is a subsidiary of highly successful Texas Air Corporation, a parent of Texas International. New York Air plans a quick expansion to 15 northeast and midwest cities. Next to start up will be Air International, beginning a nine-city route system between Chicago and the east coast (Newark, Philadelphia, Pittsburgh, etc.) on March 1. The line plans to focus on providing faster and more direct service to cities that have been losing big-jet service. By summer a third new line, Muse Air, expects to be airborne. Headed by Lamar Muse, the founder of highly successful Southwest Airlines, the carrier will serve about 20 cities in the Midwest and South from its base in Houston. Given Muse's competitive nature, the new airline should be an aggressive marketer.
In Europe, meanwhile, Sir Freddie Laker is appealing a British government denial of his plan for a network of 630 cut-rate air routes across Europe. Laker's proposal was turned down by British Trade Minister John Nott, on grounds that other European governments were unlikely to grant the necessary approvals and that his doing so would only antagonize them. Laker is taking the case to the Common Market court system.
Problems the Draft Won't Solve
In May 1980, Ronald Reagan wrote to Sen. Mark Hatfield (R-Ore.) in support of Hatfield's stance against registration for the draft. "Perhaps the most fundamental objection to the draft is moral," Reagan wrote. This and other remarks made by Reagan during his campaign have raised hopes that he will end the registration program begun under Jimmy Carter.
Harvard professor of economics Martin Feldstein and economist Kathleen Feldstein recently proposed three steps that would give Reagan both the professional military service he wants and justification for ending the registration and the draft:
• raising the level of military pay high enough to attract qualified recruits;
• structuring military pay to give higher pay to technically skilled personnel who are most susceptible to being lured away by competitive private industry rates;
• revamping the mixture of pay and retirement benefits to strengthen reenlistment incentives and dampen incentives for early retirement. These reforms will cost, the Feldsteins acknowledge, but they argue that motivated, skilled volunteer personnel are worth it. "The draft doesn't reduce the real cost of armed services," they note, "but only transfers it from the taxpayers to the draftees." Conscription is, the Feldsteins add, a hidden form of taxation.
Rockets In Libya
The private rocket launch vehicle development company that was kicked out of Zaire amidst political controversy has turned up in Libya. According to Aviation Week, the firm, OTRAG, has set up a launch and test site there, from which it made at least three and possibly four test launches last year. OTRAG's facility is located in the Sahara Desert 600 miles south of Tripoli. The firm is paying no rent and is receiving no financial support from the Libyan government, according to the article.
Plans call for the first two-stage launch in early 1981, a three-stage launch in 1982, and orbital launches by 1984. An OTRAG official told Aviation Week that the firm has signed up six options on future launches, totaling $6 million. He said the firm expects to launch an average of 12 vehicles per year between 1984 and 1990, ranging up to 10 tons in payload weight.
OTRAG was forced to leave Zaire after a propaganda campaign orchestrated by the East German and Soviet governments. The campaign charged that OTRAG was developing cruise missiles and was really a front for the West German government (see "African Deception," REASON, July 1978). Although these charges were apparently quite false, the new arrangement with Libya has disturbed many of the company's fans.
Need More Housing? Dump Controls!
Three national study groups have concluded that the way to solve our nation's housing problems is to get rid of the plethora of regulations restricting what can be built and how it can be marketed.
The first was the 37-member Council on Development Choices for the '80s, set up last March by the Urban Land Institute with funds from the Department of Housing and Urban Development (HUD). Unless regulation is reduced, the group concluded, we're in for a housing shortage so severe as to be "the Vietnam of the 1980s." Among the panel's recommendations were to abolish both rent controls and prohibitions against condominium conversions and to cut back on zoning laws so as to (1) allow homeowners to rent out rooms, (2) permit mobile and manufactured homes in single-family neighborhoods, and (3) permit increased density and reduced setbacks so that more units can be built per acre.
The same day the Council's recommendations were released, President-elect Reagan's urban affairs task force suggested a way to implement the anti-rent control recommendation: deny federal aid to any city with a rent control law. Task force chairman Pete Wilson, mayor of San Diego, called rent control such an "egregious failure from the South Bronx to Santa Monica" that firms steps need to be taken to abolish it.
The third group consisted of 18 scholars assembled by the Pacific Institute for a conference last November in Los Angeles. Reviewing the entire housing crisis, the group recommended at least a two-year moratorium on all rent controls and other housing controls and on all zoning and land-use controls. Repeal of these interventions, they predict, would significantly increase housing supply and work to keep housing costs down. It is controls that are the source of the problem.
Outgoing HUD Secretary Moon Landrieu agrees with this assessment. In a recent talk he stated that "rent control and condominium conversion regulations not only are an intrusion on property rights, but have a chilling effect on the development of multifamily housing. The record shows that rent control discourages the production of rental units at all income levels.…The marketplace, not the government, should set rents." We couldn't have said it better.
Privatizing City Parks
City parks have been especially hard hit by the fiscal crisis brought on in part by the tax revolt. Across the country, however, a growing movement to privatize parks offers cities a whole new approach to dealing with the problem.
The idea of private organizations assisting the city in keeping the parks maintained is not really new: friends-of-the-park and friends-of-the-zoo societies have been around for decades. What is new is the scope of such activities, the involvement of large corporations, and the turning over of entire park facilities to private operation.
In Oakland, California, for example, several major firms (Kaiser Aluminum, Clorox Corp.) got involved in "adopt-a-park" programs after Proposition 13. And now the zoo society has contracted with the city to take over operation of the Oakland zoo. Recently, the New York City parks department reached a similar agreement with the New York Zoological Society. The precedent for that move was the department's success in contracting out the skating rink in Central Park. Under the department's management, the rink had been losing customers and money; in just the first year of contract operation, patronage increased and the operation showed a profit.
Private park support groups are booming in New York City. Urban Park Plazas, for example, has secured corporate support from the insurance companies fronting Madison Square Park to permit hiring a private maintenance crew to supplement the city's hopelessly inadequate efforts. As a result, the park has been restored to its former beauty after having been an eyesore for years. Several such groups are actively aiding Central Park, and Brooklyn's Prospect Park also boasts its own support group. Altogether these private organizations gave over $6 million to the city's parks over the past year (compared with a $97 million city parks budget).
For the future, a 10-year park recovery plan, drawn up for the city by outside consultants, recommends a major shift toward privatization—which the report terms "load-shedding." According to the New York Times (Oct. 15, 1980), if all the report's "radical changes" were carried out, "the department would eventually consist almost entirely of managers coordinating and overseeing thousands of projects run by private groups and concessionaires."
If Jerry Brown is a good indication of wind direction, immigration policy is due to change. The governor of California recently responded to a question about the illegal aliens by saying that some California industries couldn't exist without them. And support for a change in policy comes from Prof. Julian L. Simon, an economist at the University of Illinois, and T. Paul Schultz, who have prepared reports at the request of the Select Commission on Immigration and Refugee Policy, a blue-ribbon panel created by Congress. The Simon study concludes that "immigrants take substantially less funds from public service…than do native families from the time of entry until about 12 years later when their usage becomes roughly equal to natives." Simon adds that after two to six years immigrant families end up paying more than native families in taxes, sometimes substantially more. In addition, both studies found that immigrant children are better educated on the average and tend to earn higher than average incomes. Besides being net payers of taxes, the reports say that immigrants have very little effect on Americans in the long run.
Dr. Thomas Szasz must have been proud of the American Psychiatric Association when it filed a friend-of-the-court brief late last year advising the Supreme Court to prohibit the courts' use of psychiatrists as experts in predicting future criminal behavior. (Szasz has long railed against such use of psychiatrists and the legitimization of the "insanity" defense, temporary or otherwise.) The psychiatrists are caught in a bind: if they protest that they can indeed predict future violence, they are leaving themselves open to civil liability suits for failing to warn intended victims; if such prediction is impossible, though, then they have no business giving "expert" testimony in court predicting future criminal behavior.
The brief was sparked by outrage over the case of one Ernest Smith in Texas and the testimony given by psychiatrist James P. Grigson. Grigson is an independent consultant who has been paid as much as $67,000 in one year by Dallas County for testifying for the prosecution in death penalty cases. Some 20 persons presently on death row in that state received death sentences following testimony given by Grigson.
Grigson told a jury that Smith, an accomplice in the hold-up and murder (although he himself did not kill the victim) of a grocery store clerk, was certain to commit future acts of violence, based on a 90-minute conversation he held with Smith. This led the APA, representing 26,000 of the 33,000 psychiatrists in the United States, to file its brief. Smith, who was sentenced to death, is appealing the sentence.
Energy: Decontrol on the Way
One way or the other, America's energy industry is moving toward faster decontrol. To begin with, the Department of Energy released a study in November calling for greater reliance on market forces as the key to reducing dependence on oil imports. In particular, said the study, we should not wait until 1985 to end price controls on natural gas, subsidizing its use at artificially low prices. Instead, it should be decontrolled now and electric utilities encouraged—not discouraged—to use it in place of oil. Moreover, said the study, the "windfall profits" tax should be cut back, and more exploration should be allowed on federal lands.
It looked as if the DOE was simply reading the handwriting on the wall, for those were essentially the same recommendations being urged by the Reagan energy task force in its 41-page report. The task force also came out for a speedup of licensing procedures for nuclear power plants. But it failed to call for abolishing the DOE or even for abolishing the Synthetic Fuels Corporation boondoggle.
Nevertheless, a blueprint for wiping out the DOE has been prepared and submitted to the incoming administration. Drafted by Heritage Foundation researcher Milton Copulos, the 112-page plan proceeds from the premise that the DOE is "an impediment to energy development" and contrary to the national interest. The three-phase plan would begin by dumping four of the eight assistant secretaries. Next, Congress would be asked to approve a shift of functions, killing off DOE's Economic Regulatory Administration and reconstituting the former Energy Research and Development Administration. Programs to commercialize new energy sources would get the axe, while the DOE's information-gathering functions would be shifted to other departments. The third step would be for Congress to eliminate the cabinet post of DOE secretary.
Affirmative Action in Trouble
Among the issues being looked at with the fresh eye of an administration less enchanted with the idea of Big Brother is mandatory government affirmative action programs. Several different groups have raised the issue, including the Heritage Foundation, Sen. Orrin Hatch, and an assortment of leading black thinkers and activists.
Senator Hatch introduced a constitutional amendment last September that would prohibit the federal government's affirmative action programs. A member of his staff, Steve Martin, explains this as an attempt to reaffirm the Fourteenth Amendment, to reintroduce the ideal of color blindness in hiring decisions and policies. The measure, Senate Joint Resolution 200, will probably receive attention, since Senator Hatch has become the chairman of the Constitutional Subcommittee this year.
The Heritage Foundation recently urged President-elect Reagan to consider ending those same affirmative action programs, arguing that the civil rights division of the Justice Department has become the "most radicalized" element of that department. Heritage proposes that the government further cease from advocating school busing for integration and from collecting job data by race, ethnic origin, or sex. Reagan himself said during his campaign that he opposes school busing and numerical quotas.
Reagan would find support for his stands from an increasingly vocal coalition of blacks who are disillusioned (or never believed in) the paternalistic liberal orthodoxy. Reagan aide Gloria Toote explains: "We talk in terms of entrepreneurship and reducing welfare roles simultaneously with increasing work opportunities and full employment. [But] Democrats, blacks as well as whites, still think in terms of social benefit programs from government, the handout, the dole." Economist Walter Williams questions the assumptions that proponents of government handout programs must be making about the mental competence of blacks—"saying they need the paternalism of the state when other ethnic groups did not." What do blacks need? "For government to get off our backs," says Williams. Fellow economist Thomas Sowell makes many of the same arguments (see REASON interview, Dec.). Author Dr. Nathan Wrights, Jr., may well sum up this point of view when he argues that "black people cannot be subsidized into self-sufficiency."
Competition Not Illegal
In a major antitrust ruling, the Federal Trade Commission has decided that competitive practices leading to a large share of the market for a product does not violate the antitrust laws. The FTC made this ruling in finding that the DuPont Company had done nothing wrong in fighting hard to become the leading firm producing titanium dioxide. "The essence of the competitive process is to induce firms to become more efficient and to pass the benefits of the efficiency along to consumers," says the ruling. "That process would be ill-serviced by using antitrust to block hard, aggressive competition that is solidly based on efficiency and growth opportunities, even if monopoly is a possible result."
What's so strange about that? Only that it represents a stunning reversal of government policy. Ever since 1944 when Judge Learned Hand wrote the Supreme Court majority opinion in the Alcoa case, market domination per se has been taken as a measure of monopoly power and therefore considered illegitimate—even if obtained, as in Alcoa's case, purely by continuing technological innovation. The DuPont decision seems to be "an almost outright rejection of the Alcoa case," concedes Donald Baker, former head of the Antitrust Division of the Justice Department. All of which should be good news to America's leading technology firms—and their customers.
Stevens Jailed. New Hebrides revolt leader Jimmy Stevens (see our Sept. 1980 cover story) was sentenced to fourteen and a half years in jail and fined $30,000 for the crime of insurgency against the new Vanuatu government led by socialist Walter Lini.
Heroin Crimes. Two recent studies show that drug addicts, particularly those on heroin, account for an astonishing number of street crimes annually. Some 239 heroin addicts were known to be responsible for about 80,000 criminal offenses in Miami, for instance. The addicts need to support their costly habits (about $150 a day) through such crimes. (And why is the habit so costly? Because it's illegal: by restricting supply, the government substantially raises drug prices.)
Judge Backs Disneyland. Judge John K. Trotter, Orange County Superior Court judge, upheld Disneyland's right to prohibit couples of the same sex from dancing together on the park's dance floor. Two gay men had been stopped from joining the dancing couples and subsequently sued Disneyland, charging that their civil rights had been violated. Trotter ruled that the private park could set and enforce its own regulations, set up to protect the interests of other patrons. The Trotter decision will be appealed.
Vatican to Resurrect Galileo. In 1633, Galileo Galilei was forced by the Dominican-led Inquisition to recant—under threat of death—his mathematical proof of Copernicus's thesis that the earth revolves around the sun, instead of vice versa. Since the early 1960s, Rev. Dominique Dubarle, a Dominican, has been attempting to get the Galileo trial reopened, and Pope John Paul II has finally agreed to do so. It is expected that the Catholic Church will officially concede that the earth does, indeed, revolve around the sun.
British Cable-TV. The British government has given tentative permission for 12 cable-TV stations to operate for a period of two years in Britain—on certain conditions, naturally: that advertising is not allowed, that program schedules be submitted to the Home Office in advance, that strict limits be placed on the movies that can be shown, that exclusive rights to major events be barred, and that audience research and viewer complaints be forwarded to the Home Office. Censorship was never so delicately put.
3-D on Cable-TV. SelecTV, a subscription television service in California with about 75,000 subscribers, is currently showing one 3-D movie a month to test subscriber response. Glasses are distributed through Sears, Roebuck & Co. with coupons that subscribers receive with their billing each month. SelecTV is not worried about commercial television competition, because federal regulations require networks to broadcast a clear picture, and the 3-D process involves sending out a split picture that becomes focused only when wearing the special glasses.
Laser Defenses. The Defense Department is seriously looking into the technology for space-based, high-energy laser battle stations, as well as laser, particle-beam, and plasma weapons. Two firms, TRW and Hughes Aircraft, have submitted proposals saying a fully operational laser battle station could be developed and deployed by the end of the decade. The Advanced Research Projects Agency is responsible for making any recommendations to the Senate Armed Services Committee for funding to develop such systems.
NRC on TMI. A Nuclear Regulatory Commission study of reported animal deformities, stillbirths, and "glowing" fish around Three Mile Island concluded that nuclear radiation did not cause the problems. Nutritional deficiencies and infectious diseases were the culprits of such problems, the NRC said.
Afghanistan Unity. Former government minister Shamsuddin Majrooh, a respected 71-year-old elder, is leading an attempt to unite Afghanistan's 28 provinces and different tribes into a unified front to battle the Soviet invasion. Majrooh is trying to convene a loya jirga, a national council of representatives from all Afghan tribes, that would elect a president and a military commander and possibly form the basis of a new government.
French Minimum Wage Problems. French economist Andre Fourcans recently wrote in the Wall Street Journal that his econometric analysis for the period 1969-77 clearly shows that "everything else being equal, the minimum wage increase appears to explain from 60% to 85% of the jump we [France] experienced in the unemployment rates for young males and females between 1973 and 1977." The minimum wage floor was raised by 285 percent during those years, while the consumer price index increased by 141 percent.
Car Quotas and Competition. A recent Washington Post editorial dittoed the US International Trade Commission's recommendation not to protect the American auto industry from car imports. The Post blamed the US car companies' economic woes on their failure to produce smaller cars as quickly as foreign markets did, and opined that "Economic growth in a competitive, open market offers the American automobile makers far more than any import quotas can."
Banking Protectionism. A Senate Banking Committee staff report criticized the Office of the Comptroller of the Currency for being "more interested in protecting existing banks during [the 1970s] than in promoting competition and meeting the banking needs of the public." Sen. William Proxmire said he plans to hold hearings this year on legislation to alter federal bank-chartering statutes. The report was based on a review of nearly 1,000 chartering decisions between 1970 and 1977.
Intermodal Ownership Okayed. Sen. George McGovern (D-S.D.), of all people, added a provision to the recently passed rail deregulation bill allowing railroads to acquire trucking subsidiaries to haul freight between main rail lines. A small catch though: affected shippers must approve.
This article originally appeared in print under the headline "Trends".