Trends

TIME FOR TOLLS

You've seen the grim statistics. Our roads and bridges are steadily deteriorating. According to the Federal Highway Administration (FHWA), it will take $230 billion to repair them all over the next 13 years—far more than existing revenue sources will provide. Yet politicians continue to resist raising gasoline taxes enough to pay for the needed maintenance and repair; most recently, President Reagan turned down Transportation Secretary Drew Lewis's proposed 5-cent-a-gallon gasoline tax increase.

Increasingly, however, knowledgeable officials are admitting that there are highways that are maintained in fine shape—toll roads. A seven-nation study conducted in 1977 for the International Bridge, Tunnel, and Turnpike Association found that Europe had twice the mileage of toll roads (8,868 versus 4,416) as the United States. France, Italy, and Spain dominate the toll-road scene, with 5,296 miles of toll roads built and operated by private firms (for example, Italy's Autostrade).

Richard B. Robertson of the Federal Highway Administration has become an advocate of tolls. A 1978 study by the National Transportation Policy Study Commission concluded that "by and large toll roads are better maintained than other roads." And a 1980 FHWA study found that most US toll roads have achieved self-sufficiency, in contrast to most other roads. Robertson would like to see states charging tolls on interstate highways—but there's just one problem. Current federal law specifies that if a state imposes a toll, it must repay the federal government all the federal money used to build the road. Robertson urges that Congress repeal that portion of the Federal Highway Act (Sec. 129, Title 23 U.S.C.).

Transportation economist Fred Smith of the Council for a Competitive Economy points out another benefit of tolls: trucks would finally pay their own way. Study after study—the most recent being the Transportation Department's "Final Report on the Federal Highway Cost Allocation Study"—demonstrate that heavy trucks impose far more wear and tear on roads than their share of gas-tax and excise-tax contributions. But the tolls imposed by such roads as the Pennsylvania and Ohio Turnpikes turn out to be almost perfect analogs of the "weight-distance taxes" that economists advocate to make trucks pay their way. Only a handful of states—for example, Oregon and Arizona—have structured their user taxes in accord with weight-distance formulas, and only after fierce political battles. But the turnpikes and tollways have been doing so all along.

IS THERE A DOCTOR IN THE TOWN?

The laws of supply and demand apply to broccoli, gold bullion, laundromats, heroin—and doctors. The last few years have seen a wide array of government-sponsored plans to bring medical service to small towns and rural areas previously without doctors. But if an American Medical Association Journal article, "Where Have All the Doctors Gone?" (May 1982), is any indication, none of these schemes have worked nearly as well as the fact that more people have decided to become doctors and the supply of medical service has gone up faster than the demand.

The article, based on a study by a team of researchers from the Rand Corporation and Tufts University School of Medicine, points out that people in nearly every community in the United States with a population of 2,500 or more now have ready geographic access to a physician. Furthermore, a wider range of medical services will become increasingly available in this decade to people outside metropolitan areas as the supply of physicians continues to grow. While most doctors ordinarily prefer working in metropolitan areas, there is evidence that their choices of where to practice are "heavily influenced by competitive forces."

As the number of physicians in almost every medical and surgical specialty has increased, many have moved into smaller, previously unserved communities. Only a small percentage of towns with a population over 20,000 are now without the services of an internist, obstetrician/gynecologist, pediatrician, and radiologist. Also, although the number of practitioners who list general or family practice as their primary pursuit declined between 1970 and 1979, a large number of specialists responded to market demand in those areas and entered them on a part-time basis, so the FTE (full-time equivalent) number of family and general practitioners actually rose by 3 percent. Again, small towns and rural areas benefited.

To account for their findings on where physicians are now practicing, the study's authors developed a "location theory" that would have made Adam Smith proud. "Suppose that three towns with populations of 6,000, 2,000, and 1,000 are equidistant from one another," they wrote. "If there are four physicians of a given specialty available, three will be located in the town of 6,000 and one will be located in the town of 2,000. No specialist will locate in the town of 1,000 because there are 2,000 persons per specialist in the other towns.…

"Now, suppose," they continue, "the number of specialists expands from four to nine. Market areas shrink to 1,000 persons per specialist, and in equilibrium there will be six specialists in the town of 6,000, two in the town of 2,000, and one in the previously unserved town of 1,000."

While they readily acknowledge that this is a simplified model that disregards, for example, unequal consumer demand and differences in the attractiveness of towns to doctors, it does illustrate why an important problem in the delivery of medical care is approaching a solution.

And although the Rand/Tufts researchers don't say so, REASON would predict that, barring intervention in the marketplace for medical services, the increased supply of doctors will also eventually result in irresistible pressure for reduced medical prices. Trust Adam.

CHANGING CHANNELS

June turned out to be video proliferation month, as three major developments heralded the continued evolution of this exploding industry. The Federal Communications Commission unanimously gave the go-ahead to two new services: direct broadcast satellites (DBS) and subscription TV. And a New York entrepreneur made a major end-run around cable franchising regulations.

The FCC's first decision was to deregulate subscription TV. Up till now, this over-the-air pay-TV service, using a scrambled signal and decoder box, has been limited to cities with four or more conventional "free" (that is, advertiser-supported) TV stations. As of May, there were 27 pay services reaching about 1.3 million subscribers and another 16 licensed but not yet broadcasting. The new decision removes all limitations, meaning that any number of pay-TV stations can enter any market.

Actually, some observers now speculate that the subscription-TV decision, together with other recent FCC decisions legalizing low-power TV stations and multipoint distribution systems (MDS), may undercut the market for the just-authorized direct broadcast satellites. Nine applicants are seeking FCC permission to launch such satellites, each of which would supply three or four channels direct to low-cost (say $200) rooftop dish antennas by 1986. With so many other alternatives available by 1986, some observers now wonder whether the DBS operators will have a market left.

Another of these alternatives was announced in June by New York-based Orth-O-Vision, Inc. The company plans to begin installing satellite dish antennas at large apartment complexes in Queens this fall, bringing in multichannel satellite programming 24 hours a day in direct competition with the yet-to-be-installed cable TV service. New York City officials have taken more than 10 years trying to decide what sort of requirements to force a cable operator to meet for the privilege of receiving exclusive franchises in the city's outlying boroughs. Orth-O-Vision is making a clever end-run around the bureaucracy, bringing video alternatives directly to the consumers.

WATER WISDOM

As noted here in Trends last month, California voters decisively defeated the Peripheral Canal proposal on the June ballot (see "Billions Down the Drain" by William Tucker, June 1982). This was the first major California water project in history to suffer such a fate. And it was economic arguments that sank the canal.

In the wake of its defeat, one of the leading opponents of the project has issued a call for a new approach to water development: the free market. Thomas J. Graff is general counsel of the Environmental Defense Fund. In a June 13 op-ed piece in the Los Angeles Times, Graff set forth three principles that should guide future water projects:

1. Legal and institutional barriers to the voluntary sale and purchase of water rights ought to be eliminated.

2. Investment decisions should be ones that minimize total costs.

3. Subsidies to water projects must be ended, so that users pay prices reflecting the water's true costs. Specifically, the $30-million-a-year subsidy from state oil tax revenues, federal Bureau of Reclamation subsidies, and local property tax subsidies should be ended.

None of these points will be news to readers of William Tucker's REASON article. What is new is that the commitment of a leading environmentalist to these free-market principles seems to be genuine, having endured beyond election day. Indeed, Graff even quotes David Stockman approvingly on the need to "attack powerful clients with weak claims" to government money. And he goes on to call for California policymakers to "pursue a new politics of efficiency rather than return to the old politics of the pork barrel."

REVOLT OF THE REVOLUTIONARIES

The ugly truth about the Nicaraguan "revolution" is becoming plain enough for everyone to see. What began as a genuine popular movement to overthrow a dictator, with support from both peasants and the business community, has turned into a Marxist-Leninist state, beholden to Cuba and the Soviets.

Whose judgment is that? Not just that of thoughtful Americans but also of a growing number of ex-Sandinistas. In April the most famed of them all, former guerrilla leader Eden Pastora (popularly known as Commander Zero), turned up in Costa Rica after a 10-month disappearance to denounce the Sandinista junta. Pastora, who had served as the Sandinistas' first deputy defense minister and organizer of the popular militia, denounced his former comrades for censoring the media, confiscating private property, and destroying the economy. More important, he announced that he would lead a political and military effort to topple the junta and would not rest until Nicaragua is free of foreign troops.

Nor is Pastora alone. Former revolutionary field commander Fernando Chamorro has also fled Nicaragua and organized what many consider the most important anti-Sandinista exile group. And in May former junta member and opposition party member Alfonso Robelo, a respected businessman, fled Nicaragua as well. On June 17 he held a press conference in Panama City, where he announced that he was forming a political and military alliance with Pastora to overthrow the Sandinistas.

None of these courageous men had supported the dictator Somoza. All believed in the revolution. And all have seen it betrayed by the communists they tried to work with. What remains to be seen is whether they can now succeed in rescuing Nicaragua from those who are destroying it.

CONSERVATION CAUSE

What motivates people to conserve energy? Personal virtue? Tax credits? Stirring presidential rhetoric about energy plans being the "moral equivalent of war"? Two separate research teams, one at Notre Dame University and the other in Ontario, have discovered a quite different and far more effective motivation—economic self-interest. Their findings were reported in that infamous promoter of cutthroat capitalism, Psychology Today (May 1982, p. 20).

To determine the incentive effect of energy tax credits, the researchers from Notre Dame's Business Administration College interviewed 146 middle-class homeowners who had installed insulation, storm windows, and other energy-saving goodies that made them eligible for tax credits under the 1978 Energy Tax Act. About 15 percent of those interviewed said they hadn't claimed the tax credit in the two years following the act's passage because they didn't know about it, didn't realize they were eligible, or didn't care. Of the homeowners who did claim the credit, more than half said it was an "unimportant" factor in their decision to install the energy-saving devices, and nearly 40 percent of the buyers said they had learned about the credit only after making their purchases. Moreover, all the respondents said they would have made the purchases so as to cut down on their fuel bills, even if the tax credit had not been offered. As Psychology Today says, "the credit is [evidently] an unnecessary windfall for taxpayers with knowledge to take advantage of it."

A study in Guelph, Ontario, has come up with comparable results. Researchers there examined local utility company records for 136 homes from 1973 to 1978, a period when energy costs were going up sharply. Some, but not all, homes responded to the price increases by turning down their thermostats and reducing their energy usage. Why? Questionnaires indicate that the customers who were using less did so not because of attitudes toward energy conservation and responsibility but because of "price consciousness." They wanted to save money. The energy supply had gone down, the price had gone up, so the demand went down.

Or, as the Psychology Today headline put it, "Greed, Not Gimmicks, Saves Energy."

WATCHING SUNSET

In 1976, Common Cause—a good-government reform group in the old Progressive tradition—began pushing the idea of sunset laws. These laws provide for the periodic review of state agencies under the threat of automatic termination unless they are affirmatively recreated by law.

Largely as a result of Common Cause's lobbying and a general feeling of disgust with government bureaucracy, 35 states have enacted such laws in the last six years. Common Cause has now published a survey of their successes and failures. The results may be colored by the fact that they're based mainly on questionnaires received from state officials directly involved in sunset laws, but they're still quite instructive.

The report stresses that, from the start, the "major objective of sunset [laws] has been better government performance not spectacular dollar savings." The automatic termination provision has been an "action-forcing mechanism to require state legislators to conduct serious program evaluation," rather than a device aimed at reducing government expenditures. Those who have suggested it could do the latter have, in Common Cause's view, "oversold the concept." Even so, the report does not fail to note that of the nearly 1,500 agencies that have been reviewed since 1976 under the sunset process, one in every five has been terminated, one in every five modified, and less than half recreated with little or no change.

An interesting example of what can be accomplished by sunset laws is in Texas, where the law provides for periodic termination, in a 12-year cycle, of all agencies except the courts and institutions of higher education. As part of the review process, the state's Sunset Advisory Commission established 11 criteria for reform by state agencies, such as revising restrictive rules to allow advertising and competitive bidding practices.

While the 11 commission recommendations have been incorporated in more than 70 percent of applicable cases overall, the report notes that some regulated professional groups have fought them tenaciously. In 1979, Common Cause/Texas surveyed the amount of campaign contributions to legislators from professionals affected by that year's sunset reviews and found that "the two lowest rates of sunset implementation (i.e., commission recommendations adopted) corresponded to the largest amounts of campaign contributions." Specifically, Texas lawyers and realtors were successful in preventing serious deregulation—let alone reduction or elimination—of the State Bar and the Real Estate Commission.

As for successes, the Common Cause report cites the sunset review of the Texas Board of Pharmacy, which resulted in minor reforms such as providing for the appointment of at least two public members to the board—not earth-shaking changes, to be sure.

Joe Holley, coeditor of the respected investigative magazine Texas Observer, tells REASON that the real test of the sunset laws in Texas will come later this year when some of the most powerful agencies in the state, including the Railroad Commission that regulates oil and gas production, will be up for review.

In the meantime, it is evident that sunset laws have not yet brought a New Jerusalem of free enterprise and reduced government in Texas or anywhere else. But a few positive changes here and there, including the elimination of some 500 agencies in six years, is not to be sneezed at.

BILINGUAL RULES OVERRULED

Emigrants to a new land have to choose what of their former identity they will try to retain and what they will abandon, and the choices are complicated and occasionally painful. One of the most difficult but necessary tasks is learning the language of their new land.

In a recently published book entitled Hunger of Memory, Richard Rodriguez tells what the Spanish and English languages meant to him as a Mexican-American child growing up in Sacramento, California. "Supporters of bilingual education today imply that students like me miss a great deal by not being taught in their family's language," he writes. "What they seem not to recognize is that as a socially disadvantaged child, I considered Spanish to be a private language. What I needed to learn in school was that I had the right—and the obligation—to speak the public language of los gringos.…Without question, it would have pleased me to hear my teachers address me in Spanish when I entered the classroom. I would have felt much less afraid. I would have trusted them and responded with ease. But I would have delayed—for how long postponed?—having to learn the language of public society. I would have evaded—and for how long could I have afforded to delay?—learning the great lesson of school, that I had a public identity. Fortunately, my teachers were unsentimental about their responsibility. What they understood was that I needed to speak a public language."

Rodriguez, a sensitive and powerful writer, has since the publication of his book been the victim of political reductionists on the right and left: according to Time, he has been "quoted and courted by an array of right-wing politicians 'for whom,' he says, 'I would never vote,' and called a 'brown Uncle Tom' by minority groups." The reason is that, in speaking from his own experience, he has had the temerity to criticize bilingual education as actually harmful to the people it is purported to help. "Only when I was able to think of myself as an American," he says, "no longer an alien in gringo society, could I see the rights and opportunities necessary for full public individuality."

Since 1975 the federal government has required more than 500 school districts to put into effect for students who do not speak English a full-time bilingual education program until they are "proficient" in English. This was a result of the Supreme Court's Lau decision, involving Chinese students in San Francisco, which said that schools must take "affirmative steps" to help children who cannot speak or read English.

In March, however, the Department of Education quietly withdrew its bilingual education guidelines. Now schools can choose "any effective approach" to teaching these children, including "total immersion" in English.

The Los Angeles Times reports that "National education groups say they have finally found something to praise about a Reagan Administration action. At a…Senate hearing, representatives of state school chiefs, state school boards, and school principals endorse[d] the Administration's efforts to permit greater 'flexibility' under the Lau ruling and the Bilingual Education Act."

SOCIALISM VS. PROSPERITY

If devotion to socialism could somehow guarantee prosperity, Algeria would today be the resplendent economic miracle of the Third World. After winning a long and bloody war to gain independence from France 20 years ago, Algeria was considered a showplace for vigorous revolutionary socialist leadership.

As it happened, however, revolutionary socialist leadership didn't quite pull through in the crunch. By the time the current president, Chadli Benjedid, came to power in 1979, shortages and dislocations were widespread. There was inadequate housing, extensive unemployment among youths, and consumer shortages, and Algeria, once a net food exporter, needed to import 1.3 million tons of wheat that year, according to the New York Times.

In the last three years, Benjedid's regime has done an about-face. It retains much of the rhetoric of socialism (socialism is still the official doctrine of the country's only legal political party, the National Liberation Front), but it has quietly been implementing some unmistakably capitalist reforms. Benjedid is in the process of breaking up state control of almost all production and distribution of goods in Algeria; the government is selling 145,000 housing units to private renters; the country's 1980–84 plan has postponed most new state projects and streamlined existing ones; and Benjedid has said that the government is now going to encourage a "nonexploitative private sector" to expand in the retail, housing, and tourism industries.

And that's not all. In a departure from earlier promotion of state-run agricultural collectives, the government is giving individual farmers more credits and encouraging them to till small plots that they can own. Furthermore, in an effort to attract Western investment, Algeria is simplifying its investment code and considering tax holidays for investors in consumer goods industries, housing, and electronics.

Col. Slimane Hoffman, a close aide to Benjedid, told the New York Times, "We admit that, like many other people who have passionately pursued economic growth, we have made mistakes in our development. We are not rigid but flexible, and we learn from whatever mistakes we have made."

Meanwhile, in Cuba, the limited free market in consumer goods that has been grudgingly permitted by the government has prospered far beyond the expectations of state planners. The Times notes that the prices of privately sold goods are high: a woman who earns $160 monthly as an accountant gladly paid $60 for a pair of shoes and $90 for slacks, for example. But at least the products are available, which is usually more than can be said for state stores. Consequently, people prefer paying the high prices of the private market over going without the products altogether.

The government is evidently alarmed. It recognizes that the markets stimulate production and satisfy consumer demand, but they undermine socialist morality tremendously. "Without question, the free peasant market is a capitalist formula to resolve some basic needs," Fidel Castro said recently. "I have the hope it won't be eternal."

Some entrepreneurial souls have done quite well under daunting circumstances in Cuba. There are stories of private farmers creating small fortunes. One peasant, it is said, even moved into the Havana Libre Hotel, among the capital's best. The government recently cracked down on some of the more audacious entrepreneurs, and Castro blasted them in a speech.

"The people want markets, but with abundant products at low prices," he said. "But what happened? The go-betweens took over the markets and inflated the prices. Some of them would have been brilliant on the New York Stock Exchange."

APARTHEID UNDER ATTACK

Racial discrimination is generally considered so repugnant that most governments that practice it are too embarrassed to admit it publicly, but South Africa with its apartheid remains a curious and ugly exception to the rule. For decades, the government hasn't flinched from enforcement of rigid segregation, the use of pass systems, and suspensions of civil liberties. It is a durable system, and there's little reason to be sanguine about the chances for fundamental change soon. There are, however, some very interesting breezes blowing there.

First, a commission instigated by Chief Gatsha Buthelezi—the leader of South Africa's largest ethnic group, the Zulus—has proposed a single multiracial democratic government combining Natal, one of South Africa's four provinces, and Zululand, a proposed black-ruled "homeland." The 47-member commission, which was broadly representative of political parties and interest group leaders of all races (it even included two non-South Africans), said that since Natal and Zululand are already geographically and economically integrated, they should be politically integrated as well. It proposed that Natal-Zululand have a legal status similar to a Canadian province or Swiss canton.

If a multiracial democratic government would work anywhere in South Africa, it would probably work in Natal. The Zulus are politically cohesive and have a leadership considered effective and relatively moderate. Most of the whites in Natal are English-speaking and are generally less intransigent and intolerant than the Afrikaners, the majority of South Africa's white population.

Perhaps the most encouraging response to the Buthelezi Commission report is that it has been widely debated in South Africa, and the government has not rejected its proposals outright. Arend Lijphart, an American political scientist who served on the commission, has suggested in a New York Times oped article that the United States and other Western democracies could plausibly say to the South African government, "Here is a reasonable concrete plan for a first step; this is the minimum we expect you to do—without delay."

Another development is that 123 ministers of the Dutch Reformed Church, a major force in the Afrikaners' cultural life and a bastion of apartheid, have signed a public letter to a religious journal saying that apartheid "cannot be defended scripturally" and calling for racial equality. They said that laws forcing relocation of blacks and allowing them to be paid lower wages and given inadequate housing and education "cannot be reconciled with biblical demands for justice and human dignity." The Rand Daily Mail, an English-language newspaper, called the letter "the most important development in the Afrikaans [language] churches in more than 20 years."

More quietly, there are important social and economic dynamics tending toward change in South Africa, and it is harder and harder for the government to brush them off. The Economist observes that "the growth of trade unions, divided but increasingly potent Zulu tribalism, the continuing dull ache of Namibia, partial rapprochement with at least some of South Africa's northern neighbors—all these things are compelling the Nationalists [the ruling party] to acknowledge that blacks not only exist but are developing de facto rights."

South Africa remains a country to watch closely.

BANKING ACROSS THE BORDERS

The once-formidable barriers to extensive interstate banking are beginning to crumble.

In the past, the federal government has looked askance at the idea of interstate banking. Federal law absolutely prohibits banks from branching across state lines, but it does allow bank holding companies to do so if the state into which they are moving approves enabling legislation. Until recently, only South Dakota and Delaware permitted interstate banking, and then only for limited purposes. But in June both Alaska and New York enacted laws permitting interstate banking.

The New York law allows holding companies in other states to purchase subsidiary banks in New York if their home states provide the same opportunity to New York banks. The Alaska law, the most liberal bank-entry regulation in the country, permits out-of-state holding companies to purchase Alaskan financial institutions regardless of banking regulations in their home states.

Advocates of liberalized banking regulations contend that banks are currently at a serious disadvantage compared to such financial institutions as American Express Co. These new regulations, they say, will enable banks to compete in offering the same services on a regional or national basis.

Perhaps the most ambitious interstate banking project is an effort by Citicorp of New York to acquire the Fidelity Savings and Loan Association chain of San Francisco, which one analyst called a "basket case." The New York Times reports that Citicorp has been trying for years to compete for consumer deposit business in California, but it has been continually frustrated by the California banking lobby.

Now, Citicorp seems to be making headway. It has won support from the chiefs of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation and has reportedly spent millions of dollars for lobbying in the California legislature.

California's chief thrift-unit regulator, Linda Tsao Yang, is adamantly opposed to Citicorp's bid. "This would present a very drastic change in the whole infrastructure of financial institutions across the country," she told the Times. "I would oppose it with my last ounce of energy." She contends that perfectly adequate bids for Fidelity have been already made by two California financial institutions.

Still, Citicorp hasn't given up. If it wins the battle, it would mark the first time a commercial bank holding company had crossed state lines to link up with a savings and loan. As the Times says, it would have the result of rewriting, de facto, the nation's banking laws.

FREEDOM FIGHTERS TAKE TO THE AIRWAVES

Recently, some Western supporters of the beleaguered Afghan guerrilla forces, including French philosopher Bernard-Henri Levy and Soviet exile Vladimir Bukovsky, have organized Radio Free Kabul, an underground radio network operating within Afghanistan. Using seven Italian-made transmitters that are about as large as a suitcase and cost only about $2,000 each, the guerrilla forces are broadcasting news and information in local Afghan languages, communicating with their own forces, and even broadcasting Russian-language programs aimed at the troops at the Soviet airbase at Baghram.

The transmitters themselves are operated by the five major Afghan guerrilla groups. They have formed a joint committee to decide the content of the broadcasts and make sure that the messages of each group are heard. The guerrillas were trained by Levy, French painter and journalist Marek Halter, Italian film maker Renzo Rossellini, and two French technicians. In a daring exploit, they smuggled themselves and the transmitters into Afghanistan and spent six weeks showing Afghan guerrillas how to operate the equipment.

The Afghan government has been less than pleased with the underground broadcasts. But because of the rugged Afghan terrain, it is tremendously difficult for the government and its Soviet mentors to ferret out the transmitters, so the government has offered a reward of 10,000 afghans (the local currency) to anyone who can provide information leading to the capture of a Radio Free Kabul transmitter. They nearly bombed a transmitter some months ago, but luckily, only the antenna was hit and the transmitter was reportedly broadcasting again the next day.

It's all "a Jewish radio station on Pakistani territory," Radio Kabul snarled, and it is run by "elements belonging to Western and Israeli espionage organizations." But according to the New York-based human-rights magazine Freedom at Issue, the funding for Radio Free Kabul has come from private French and British donations and is handled by an organization made up mainly of French intellectuals called the Human Rights Committee.

Bukovsky, who has been active with Radio Free Kabul from the start, is now seeking funds from the United States for the project. Donations, earmarked "Radio Free Kabul," may be sent to the Committee for Free Afghanistan, 1237 Pennsylvania Ave., SE, Washington, DC 20003.

INSANITY REFORM

In the wake of the verdict in the trial of John Hinckley for shooting the president and two other men, considerable attention is being devoted to reform of the insanity plea in criminal cases. In the last few years five states—Michigan, Illinois, New Mexico, Indiana, and Georgia—have been experimenting with one such reform, a plea called "guilty but mentally ill" (GBMI). The day after the Hinckley verdict, Delaware's legislature approved introduction of the GBMI plea in that state.

The Wall Street Journal reports that in GBMI cases, the mentally troubled person convicted of a crime is required to serve the same jail sentence as if he were judged mentally stable and must serve the full term behind bars. Theoretically, however, the prisoner also receives psychiatric treatment while serving the sentence.

Michigan pioneered the GBMI plea in 1975. Assessments of its success are mixed so far. Len Rubinstein, a Mental Health Law Project attorney in Washington, calls the plea "prosecutorial sleight of hand under the guise of addressing the problems of the insanity defense." Elissa Benedek of Michigan's Center for Forensic Psychiatry in Ann Arbor is less critical. She says that GBMI "makes everyone feel better.…Attorneys feel they've achieved something for their clients, juries feel better, even defendants may feel better for a while."

Benedek suggests, however, that GBMI is not a panacea for the thorny problem of the insanity plea (which, incidentally, is still in effect in Michigan) and says that legislatures should try to change the standards of commitment for people found guilty of violent acts but judged to be mentally ill.

COST IN SPACE

While the fourth space shuttle orbited the earth, politicians, accountants, and financiers struggled with a more mundane problem: Who's going to pay the bills? The furor was touched off by a General Accounting Office report (Feb. 23, 1982), urging that NASA reconsider its pricing policy for shuttle customers—including the Defense Department.

NASA's present fees were established in 1977, based on 1975 dollars adjusted upward for inflation. Since then, not only have the shuttle's actual costs exceeded projections, but its own budget problems have led to procurement of only four, rather than five, vehicles. That has cut the total projected flights over the next decade from 487 to 312. Hence, many of the operating costs will now have to be spread over 175 fewer missions.

GAO argued that NASA should void the existing price structure (except where commercial contracts had already been signed) and set new prices that would cover all operating costs. NASA didn't go quite that far. In June it announced new rates for civilian users, increased by 85 percent over the old ones, effective October 1985. It also announced that it was negotiating new rates with the Department of Defense, which would still be cheaper than civilian rates. The Senate Commerce, Science, and Transportation Committee had approved a bill in May requiring Defense to start paying the full cost immediately.

One way to ease the dilemma would be for NASA to agree to the Space Transportation Company's offer to pay for production of a fifth shuttle (see Trends, Apr. 1982). Prudential Insurance has offered to buy 40 percent of STC and has hired a Washington lobbyist to promote the firm's shuttle proposal. A study by the American Institute of Aeronautics and Astronautics recently concluded that four shuttles would "be unable to meet projected user demand" by 1990.

Other private entrepreneurs continue to show interest in commercial space flights. A group of United Airlines pilots has formed the American Society of Aerospace Pilots (ASAP). United's pilot training department is developing a two-year training course on space flight, based on NASA astronaut training materials. ASAP plans to use the material to operate the world's first commercial space flight ground school. United also has a team at the Kennedy Space Center studying shuttle maintenance and turnaround procedures. It is expected to be among the bidders when NASA issues a request for proposals this fall to privatize shuttle refurbishing operations at Cape Canaveral.

Meanwhile, another private launch service continues to make progress. Space Services, Inc., has obtained two Minuteman I second-stage motors for its launch vehicle from NASA, after being turned down by the Air Force. SSI plans to launch a 600-pound payload over the Gulf of Mexico in September, using a single-stage rocket. If that test succeeds, the next step will be a three-stage orbital mission to be launched from Hawaii.

MILESTONES

Fitzgerald victorious. A. Ernest Fitzgerald, the Air Force civilian analyst who was dismissed 13 years ago for telling Congress about multi-billion-dollar cost overruns, has won a promotion and $200,000 in legal fees as part of a settlement of one of his suits against the federal government. The Air Force hadn't complied with a Civil Service Commission order to reinstate him in his old job equivalent and give him back pay.

Social insecurity. According to a Gallup Poll, about 63 percent of working people fear they might not receive any social security benefits by the time they retire. The poll also found that a whopping 26 percent of those now employed think that current social security benefits are "just about right."

Free market tampering. The Wall Street Journal in a detailed report has pointed out that the United States is almost alone in using trade restraints as a foreign policy weapon, and we're paying an enormous price. One such self-righteous escapade, Washington's 1980 embargo on grain sales to the Soviet Union, is estimated to have cost the nation $11.5 billion in lost output, almost 310,000 jobs, and $3.1 billion in personal income.

Hi-tech Jeffersonianism. Sen. Robert Packwood (R–Oreg.) has proposed a new constitutional amendment that would extend to telecommunications the First Amendment rights currently enjoyed by the printed press. Packwood suggests that the government shouldn't be regulating freedom of expression of any kind. Besides, there's the danger that since newspapers are increasingly using satellite transmissions that are already subject to government regulation, the government could use its power to censor (or, more euphemistically, regulate) newspaper content.

Take-over law struck down. In June the Supreme Court ruled that the Illinois corporate take-over law, which permitted state government to block tender offers if it found them "unfair" or insufficiently detailed, is an unconstitutional interference with interstate commerce. The decision is expected to affect all 37 states that have adopted corporate take-over laws in the last 14 years.

Accountants can advertise. The West Virginia Board of Accountancy has suspended a regulation barring accountants from competitive bidding, advertising, and solicitation of business, and it intends to do away with the regulation altogether. The board took this action after learning that the Justice Department was going to file a civil antitrust suit against them if they didn't mend their ways.

PURPA wins. The Supreme Court ruled in June that the 1978 Public Utility Regulatory Policies Act (PURPA), which exempts small electric power producers from regulation and paves the way for regulated utilities to purchase power from the smaller producers, is a constitutional exercise of congressional authority.