Grassroot Perspective – July 1, 2003-Summer Seminars in Political Economy; Private Police Make a Difference; A Tale of Two Cities

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“Dick Rowland Image”

”Shoots (News, Views and Quotes)”


– Summer Seminars in Political Economy (Oakland, Calif., August 11-15)

Most Americans believe in the importance of economics, but their
economic understanding often falls far short of their ideals. A recent
nationwide survey, for example, found that two out of three high school
students (and half of all adults) surveyed failed a test on economic
literacy. If the survey had asked questions on political theory and the
history of liberty, would they have fared any better?

Fortunately, the Independent Institute’s five-day-long Summer Seminars
in Political Economy can help narrow the gap. Designed as an
introduction for high school and college-age students, the Seminars
help students learn what economics is, how it affects their lives, and
how understanding economic principles can help them achieve the things
they care about.

Led by economist Brian Gothberg, each session includes a stimulating
lecture on economic principles, their applications in history and
current affairs, and plenty of classroom discussion to help students
become more confident in communicating their ideas and values.


* Economics and Liberty: How the West grew rich and politically free

* Market Chaos or Hidden Order? How markets coordinate people’s plans

* Monopoly or Competition? How competition improves the quality of life

* Market Failure or Government Failure? Inflation, recession, the environment, and government policy


“This is a really great program! … I really enjoyed learning about all
the famous economists, their basic philosophies, and their influence on
economic reasoning. Overall, an exceptional week!”

“I enjoyed reading and hearing about different economists and seeing a
variety of views and beliefs. … I enjoyed having a small group, making
it easier to concentrate on everyone’s questions and statements, in a
more comfortable atmosphere.”

“I learned so much during the week about how our world works. The
things I learned were interesting, and I will be able to use them for
the rest of my life in all kinds of situations.”


Brian Gothberg, Department of Economics and Finance, Golden Gate University; Lecturer in the History of Western Civilization, Academy of Art College


8:30 a.m. – Noon

August 11-15

(Register early)


Room and board and one unit of college credit through Holy Names
College in Oakland, California, are also available at extra cost.


The Independent Institute

100 Swan Way

Oakland, CA 94621-1428

For more information, see or contact
Carl Close, Academic Affairs Director at the Independent Institute at or (510) 632-1366.

Above article is quoted from The Independent Institute, The Lighthouse

– Private Police Make a Difference

Residents in a crime-plagued Charlotte, North Carolina neighborhood
said they felt safer, heard fewer gunshots at night and saw fewer
people on street corners after private police began patrolling the area
this summer.

UNC-Charlotte professor James Cook conducted the study of the
neighborhood, Optimist Park, just north of uptown Charlotte. Cook
interviewed about 30 residents about their feelings about the private
patrols, which started in mid-June and lasted until mid-August.

The study showed 83 percent of residents said they felt safer and more
than 90 percent reported less loitering, while 77 percent reported
hearing fewer gunshots. Residents also said they saw the private police
patrol only twice daily. The Charlotte-Mecklenburg police couldn’t
immediately show whether crime went up or down during the two months of
private patrol.

Neighborhood leaders raised the $17,800 in donations to pay for the
patrols from Carolina Crime Prevention, a private policing agency.
Leaders noted that they raised the money after a city-appointed board
turned down their request.

Above article is quoted from Privatization Watch November 2002

”Roots (Food for Thought)”

A Tale of Two Cities

Author: Geoffrey F. Segal

Published: The Heartland Institute 04/01/2003

The city of Stockton, California just approved a 20-year, $600 million
partnership with OMI-Thames Water to operate the municipality’s water,
wastewater, and stormwater utilities. The partnership will save city
residents $175 million, greatly improve the infrastructure, and avoid a
double-digit rate increase.

Activist groups including Ralph Nader’s Public Citizen pressured city
officials to reject the contract. However, the debate ultimately boiled
down to two choices: privatize, or raise water rates significantly
while paying out huge fines. The city is not in compliance with current
environmental regulations and its permit will soon expire. One of the
components of the contract with OMI-Thames is a capital-improvement
program that guarantees the city’s infrastructure will be brought up to
current environmental standards. All of the risk and obligation will
fall on the contractor if it fails to do so.

The state’s budget woes threatened to slow the flow of funds to
Stockton, which realized it could not make the necessary improvements
and keep water rates down. Stockton ran the most open, public, and
lengthy review process that I, and the city’s privatization
consultants, have ever seen. Opponents were allowed to question every
aspect of the contract, and they could find no problems with it.

The Concerned Citizens lobbying group played an important role by
putting the city and mayor through rigorous question-and-answer
sessions. The many contract study sessions they prompted have assured
us the city has done its homework and is entering into an agreement
that will benefit taxpayers.

Unfortunately, despite its close involvement in the process, Concerned
Citizens continues to float misinformation and half-truths. It is
relying on fear, uncertainty, and doubt, not facts. Its members talk
about random rate hikes even though the city, not the contractor, is
ultimately responsible for setting the rates. They talk about selling
assets, when the city is in fact not doing that: It is simply entering
into an agreement to operate the facilities. The city will retain
ownership of all assets.

Atlanta, Georgia

Halfway across the country, the city of Atlanta recently cancelled a
contract with United Water for operation of its water system.
Ultimately citing poor performance and lower cost savings than
promised, the two parted ways in January.

A couple of important details got lost in the shuffle. United’s
performance, while far from perfect, was far superior to the city’s
track record of water supply operations before privatization. Moreover,
while the city released an audit stating cost savings were half what
they expected, that happened because “the savings were being used to
subsidize other government functions.” How is this a failure of
privatization? The city had been appropriating more than $40 million a
year before privatization, but paid United Water only $21.5
million–savings of $18.5 million a year.

The city’s plan to resume water supply operations itself will
essentially double the cost of service to consumers. The new plan calls
for expenditures of $41.1 million for the new in-house operations ($49
million if accounting for costs to other city departments).
Furthermore, the city has backed itself into more long-term obligations
by hiring back more than 300 employees, whose pensions will be paid for
years to come. The city also must now “find” the money to continue to
pay for the “subsidize[d] other government functions.” With no more
cost savings in sight, where will that money come from? Either higher
fees or additional taxes.

Of course, money wasn’t the issue in revoking the contract–quality was
the concern. But when United Water requested additional money to meet
the performance the city wanted, it was shunned … even though
United’s request was less than half of the spending the city now faces.

Will the city receive better service now that it is in-house? That
remains to be seen, but one thing is certain: Ratepayers will be paying
a lot more for it.

Let’s revisit the issue one year from now, when I suspect residents
from Atlanta will be pining for the days of United Water–reliable,
quality, efficient service–while the citizens of Stockton will be
enjoying exactly that.

Geoffrey F. Segal is director of privatization and government reform
policy at Reason Foundation and a research fellow at the Davenport
Institute at Pepperdine University’s School of Public Policy.

Above article is quoted from The Heartland Institute, Intellectual
Ammunition Spring 2003

”Evergreen (Today’s Quotes)”

[Trademark expression: “There’s no try, just do.”

Leadership tip: “When I was a teacher, I was told that a common mistake
a new teacher makes is to get invested in getting students to like you.
Same holds for leaders. You can’t take action on a popularity vote.
Instead, I make an effort to like the people I work with and serve. It
leads to better decision-making carried out well.”

“We have not laid off a single person in the history of LavaNet. How
many companies can say that?”

“If I knew more, I might have been a worse manager because I might want
to do it my way and not listen.”

“When you have a weakness, you turn it around and use it as your
strength.”] — Yuka Nagashima, President LavaNet Inc., interviewed by
David Butts, Advertiser Staff Writer 2/3/03

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii, 1314 S. King Street, Suite 1163, Honolulu, HI 96814. Phone/fax is 808-591-9193, cell phone is 808-864-1776. Send him an email at:”’ ”’See the Web site at:”’