Wednesday, September 30, 2009

Just Say No (to the Olympics)!!!

The official position of the Chicago Freedom Forum is "Just Say Not to King Richard Daley II and his bid to host the 2016 Olympics in Chicago!"

Here are but 10 reasons why liberals, conservatives and all conscientious Chicagoans must oppose the hosting of the 2016 Olympics in Chicago:

1. The Daley Machine has basically guaranteed a blank check to the Olympic Committee: this means that losses would be public, while profits would largely remain private.

2. You cannot trust Daley's financial projections: I cannot think of a single major project that was completed within the allotted budget and time frame. For example, Millennium Park was budgeted at $150 million, but ended up costing the tax payers $475 million and was nearly 4 years late! And if we cannot trust Daley to properly manage the privatization of parking meters, how the hell can we trust him to manage billions in tax payer Olympic funds?!?

3. Tremendous potential for long term losses: the city of Montreal hosted the Olympics in 1976 and it took over 30 years to pay off the $1.5 billion debt it incurred!

The 2012 London Olympics has not even started and already the budget of $4.9 billion has surged to $13.5 billion! Even the minister for the Olympics, Tessa Jowell admitted that in hindsight the city of London made a mistake by bidding for the Olympics.

4. Clout, corruption & nepotism: dominate the distribution of contracts within Chicago. We can be certain that the vast majority of the contracts and profits will go to cronies of the Daley Administration. As we see in petro-states like Nigeria and Iran, the infusion of capital into a corrupt system benefits very few people and actually worsens corruption. The only difference is that instead of oil fields, Daley will pump money from the already beleaguered tax payers.

And surprise, surprise the City Council has appointed Alderman Ed Burke (14th ward) to head the financial committee. If that's not the lion appointing the wolf to guard the chicken's coop, I don't know what is.

5. Chicago is already facing a $2 billion budget deficit: so we are clearly in no position to risk expanding that deficit with very costly projects.

6. Chicago's streets, schools & infrastructure are in dire straits: so, it would be criminal to siphon off badly needed tax revenue to fund projects of questionable benefit.

7. Affordable housing: residents of Washington Park and Woodlawn fear that this will drive up the cost of housing in their neighborhoods and spur their exodus.

8. Compromise of parks and public space: Daniel Burnham's vision of broad boulevards and open park space would be violated by the construction of stadiums and Olympic buildings in Washington Park. And the construction will surely limit the public's access to these parks.

9. Costly Olympic construction runs the risk of long term under-use: for example, China constructed a $500 million stadium for the Beijing Olympics, which has only been used once or twice and is scheduled to be demolished. Economist Huang Yasheng stated:

“They wanted to build ‘the world’s biggest this’ and ‘the world’s biggest that,’ but these buildings have almost zero long-term economic benefit."

10. When traffic gets worse because of the Olympics I will lose my f*ck*ng mind!,chicago-2016-olympics-finance-chiacgo-0908.article,chicago-2016-olympics-finance-chiacgo-0908.article,chicago-2016-olympics-finance-chiacgo-0908.article

Religious Freedom at Risk?

Many "progressives" seem genuinely concerned that the "religious right" poses a threat to religious liberty, when in fact elements of the left pose a greater threat to the free expression of religious faith. Here is another example of the anti-Christian spirit and hostility towards intellectual diversity found in some academic institutions.

Religious Freedom at Risk on Tax-funded College Campuses ADF Defends Censored Christian Student

To listen to interview click here:

Jonathan Lopez is working toward an associate of arts degree at Los Angeles City College in California. One of his required classes: Public Speaking. The additional lesson in his free speech rights was not something he anticipated.

In that class, Lopez was assigned to deliver an informative speech. Lopez chose the topic of faith and marriage. Mid-way through, his speech professor, John Matteson, interrupted, calling Lopez a "fascist bastard" in front of the class for speaking about his faith, Bible verses quoted by Lopez in his speech which included reading the dictionary definition of marriage and reciting two Bible verses. Instead of allowing Lopez to finish, Matteson told the other students they could leave if they were offended. When no one left, Matteson dismissed the class. Refusing to grade the assigned speech, Matteson wrote on Lopez's evaluation, "Ask God what your grade is." Click here to see it.

"Christian students shouldn't be penalized or discriminated against for speaking about their beliefs," said ADF Senior Counsel David French. "Public institutions of higher learning cannot selectively censor Christian speech. This student was speaking well within the confines of his professor's assignment when he was censored."

But the harassment did not stop in class. One week later, after seeing Lopez talking to the college's dean of academic affairs, Matteson told Lopez that he would make sure he'd be expelled from school.

Further, Matteson's treatment of Lopez during his speech follows an earlier incident in which the speech professor told his entire class after the November election, "If you voted yes on Proposition 8, you are a fascist bastard."

"Professor Matteson clearly violated Mr. Lopez's free speech rights by engaging in viewpoint discrimination and retaliation because he disagreed with the student's religious beliefs," said French. "When students are given open-ended assignments in a public speaking class, the First Amendment protects their ability to express their views. Moreover, the district has a speech code that has created a culture of censorship on campus. America's public universities and colleges are supposed to be a 'marketplace of ideas,' not a hotbed of intolerance."

Attorneys with the Alliance Defense Fund Center for Academic Freedom have filed a lawsuit against officials of the Los Angeles Community College District in regard to this situation. You can read the complaint filed with the U.S. District Court for the Central District of California in the lawsuit Lopez v. Candaele by clicking here.

Unfortunately, Jonathan Lopez is not alone. College students across the country are finding it difficult to stand up for their faith, to refuse assignments that contradict their conscience, or to question their instructors. The Alliance Defense Fund is committed to helping Christian students express their beliefs on campus. To date, by God s grace, we have not lost one case litigated to conclusion concerning expression of religious freedom on campus. Learn about more of our cases through the links below.

We offer legal services to Jonathan Lopez and those like him, free of charge. Donate today so we can continue winning and supporting religious liberty on our nation's campuses.

Inspirational Speech II

After living under the Obama Administration the stock I place in speeches and rhetoric have greatly declined, but man in this brief speech Netanyahu is certainly inspiring.

Tuesday, September 29, 2009

David Walker: Nobody is Going to Bailout America

Passing on a crushing national debt to the next generation is a grossly immoral example of taxation without representation. This trumps virtually every social and economic issue that we face, because when the majority of our expenditures will go towards servicing our national debt and maintaining hemorrhaging entitlement programs, our capacity to address domestic and international issues will be severely limited. Pass this on to all your friends and family who care about the United States


The former Comptroller General of the United State David Walker has crusaded to wake Americans up to the impending fiscal disaster caused by the out of control growth of entitlement spending. This is an issue that transcends the traditional conservative-liberal-paradigm, as seen by the support that David Walker has received from the liberal Brookings Institute and the conservative Heritage Foundation. The foundation of my belief in the dangers of a rapidly expanding state is based far less on conservative philosophical principles and far more on
indisputable black-and-white accounting issues.

Interestingly, David Walker believes that the reforms that lower the cost of health care are vital to salvaging our fiscal future, but "Those who think that creating thousands of billions of dollars in new government entitlements--in a health care bill that adds tens of millions of Americans to government programs--will do anything except hasten the coming bankruptcy bear the burden of showing why."


By John David Lewis
Associate Professor in the Philosophy, Politics and Economics Program, Duke University
August 28, 2009

A person who is in the pay of the government is not always free to speak publicly about the most pressing issues he confronts. Administrators who are appointed to perform specific tasks are generally not free to contradict or even to challenge policies. They often cannot advocate for specific proposals, even if they think that such proposals will be needed to prevent catastrophe.

When Dr. Alan Carlin, a federal Environmental Protection Agency official, wrote a report in March, 2009 that criticized the EPA's process of formulating regulations, the report was squashed. Emails from EPA officials state that "a very negative impact on our office" made use of the report impossible. To protect the bureaucracy, Dr. Carlin was told to cease such criticisms.

Such officials must often make a choice: to remain silent and keep their jobs, or to resign and speak the truth. Faced with this dilemma, on March 12, 2008, David Walker chose to resign.

David Walker is the former Controller General of the United States, and former head of the Government Accountability Office. As the nation's chief accountant he was appointed by President Clinton, and resigned near the end of George W. Bush's second term. He had no authority to decide how a single penny of government funds should be collected or distributed. His job was to count those funds.

Mr. Walker's enormous range of mind reaches far beyond a single budget year. His is a long-range perspective, which allows him to project fiscal trends decades into the future, and to assess, through simulations, the impacts of policy decisions beyond their immediate effects. He truly understands the economic maxim, promoted by Henry Hazlett, to look beyond the visible effects of any given policy, and to consider its unseen effects.

When Walker plotted these trends and considered demographics among many other factors, what he found was "chilling." If fundamental reforms are not begun now, he concluded, the United States will experience a financial and political collapse comparable to the fall of Rome.

In a presentation to the National Press Foundation, January 17, 2008, Mr. Walker brought forth the following facts and projections:

1. From 1966 to 2006, the percentage of federal funds spent on Medicare rose from 1% to 19%. This trend will grow exponentially as millions of "baby boomers" enter the entitlement pool.

2. For the same period, spending for mandated government commitments rose from 26% to 53% of the total budget. The budget is increasingly out of the control of government officials.

3. As of 2007, Medicare is running in arrears. In 2017 Social Security will be in deficit. By the year 2040, Medicare and Social Security alone will be running annual deficits of nearly 900 billion dollars.

4. Medicare spending from now until 2032 will be 235% of economic growth. By 2040, Medicare will be spending about 10% of the nation's Gross Domestic Product annually, and the annual deficits of the United States will total some 20% of the total Gross Domestic Product.

The bottom line is this: the largest mandated fiscal exposures now, projected into the future, are over 52,000 billion dollars. That will amount to 90% of all household wealth in the U.S. and will place a burden of over 450 thousand dollars on every household in the land. This is almost ten times the present median household income level. Such spending will lead to national bankruptcy.

Mr. Walker concludes that "We face large and growing structural deficits largely due to known demographic trends and rising health care costs." Further, "GAO's simulations show that balancing the budget in 2040 could require actions as large as cutting total federal spending by 60 percent, or raising federal taxes to two times today's level."

To close the revenue gap through growth, the United States economy would need to expand in the double-digit range for the next seventy-five years. During the boom years of the 1990s, the economy grew at an average rate of 3.2%. Walker concludes, succinctly: "we cannot simply grow our way out of this problem."

Of course Mr. Walker's analysis is far more complex than this. Health care is certainly not all of it--but health care entitlements constitute by far the largest single piece. Those who think that creating thousands of billions of dollars in new government entitlements--in a health care bill that adds tens of millions of Americans to government programs--will do anything except hasten the coming bankruptcy bear the burden of showing why.

Mr. Walker has taken his show on the road, in an attempt to educate Americans about the nature of the financial disaster they are creating. He was accompanied by both the Brookings Institute on the left, and the Heritage Foundation on the right. He stresses that this coming financial meltdown is known by everyone in Washington--but no one wants to acknowledge it.

A Rasmussen poll shows that almost twice as many Americans think that cutting the deficit, rather than health care reform, should be the president's top priority. Twice as many think that the legislation will drive up health care costs than think it will lower costs. Perhaps these Americans grasp Mr. Walker's point better than their elected representatives do.


Dr. Alan Carlin:

EPA emails:

David Walker's Presentation:

Wake Up!!!

The former Comptroller General David Walker is correct - the gravest problem that the United States faces is a massive national debt whose rapid growth is fuelled largely by unsustainable entitlements. This is not a conservative or liberal issue, it is one of basic accounting. Obama certainly did not start this problem, but everything he has done has accelerated our collision course with financial insolvency. Click on the link below to hear a brief discussion led by Mr. Walker.

Monday, September 28, 2009

Student Loans

Recently an associate of mine received a government guaranteed and subsidized student loan.

On one hand I was very happy, because this extended an opportunity to a highly intelligent, motivated, ethical and economical individual, who will definitely pay the loan back. On a more general level, extending educational opportunities to individuals of limited economic means not only benefits them, but it socially and economically benefits the nation. So, if any activity were to merit state subsidies, it surely would be the pursuit of higher education.

On the other hand I found it troubling that they didn't check my associate's credit or seriously analyze their financial state. And needless to say, they did not analyze the potential economic costs and benefits of their educational decision.

An example of such an analysis would be: student X decides to study painting at the Art Institute, easily incurring $90,000 in debt, with a projected earnings of (let's say) $30,000 per year. At a 6% interest rate amortized over 10 years, their monthly payments would be $998.18, which would equal 39.92% of their monthly income. Without mom and dad's assistance their chances of defaulting would be quite high. Not all instances are this dramatic, but as a realtor who runs credit checks on prospective renters, I constantly encounter individuals who have amassed high levels of debt pursuing a liberal arts degree and are now employed in low wage service sector jobs. And even more worrisome are the many clients I have had who express very little concern about repaying their student loans because "it's only government money," which also leads me to believe that the federal government is relatively lax in enforcing the repayment of student loans.

Clearly a private bank would be unwilling to extend a loan to the aforementioned student without generous government guarantees and subsidies. And of course a private bank would not be so lax about collecting money owed to it.

So, the question remains why the federal government exercises such low standards in extending and collecting on loans? The answer lies in the fact that no one is as generous and careless as a politician or a bureaucrat spending the taxpayer's money on another third person without incurring any real consequences for their failure. This explains why Sallie Mae is deep in the red.

So, the problems of the government guaranteeing and subsidizing loans are:

1. Encouragement of economically unsound behavior that has lead to a higher rate of default, whose costs are bore by the public.

2. An increase in the number of student burdened with unmanageable debt-to-income ratios.

3. Encouragement of economically irrational behavior in students, such as a choice in majors of schools that will contribute to the increased default rate and debt-to-income ratio.

Without guarantees or subsidies, a bank would not extend the loan to student X forcing them to entertain one or more of the following scenarios:

1. Pursuing their art education at a more reasonably priced institution, thus lowering their projected debt-to-income ratio and probability of default.

2. Picking an entirely different major or perhaps pursuing a double major: art and a more practical major, such as education, which will also lower their projected debt-to-income and probability of default.

3. Student X would determine that he could earn $30,000 (or more) without going to university, by (let's say) becoming a plumber and pursuing art as a passion and not as a career.

Another key factor that is rarely mentioned is that subsidized government loans increases the demand for a particular good and service, which increases the cost of targeted goods and services, which further increases the need to obtain loans. The best example being the housing market. Predictably as banks curbed the availability of home financing, home prices became far more affordable and the ability of the public to amass debt dropped. So, by rolling back the policies that are contributing to an unnaturally high demand for college degrees, the government may actually help stem the tide of cost inflation that is plaguing higher education. And in addition it could limit the inflation of college degrees that has continuously lowered the value of a general college education (outside of lucrative degrees like medicine and law) in the workforce.

The answer is not necessarily to abandon all student subsidies, but for politicians and bureaucrats to be more cognizant of how they spend the public's money. But why should that matter to politicians? Facing a huge deficit? No problem! Borrow more money from the Bank of China or get your buddies at the Federal Reserve to print up some more! The next generation will have to pay for it with higher taxes, higher interest rates and endemic inflation, but by then the said politician or bureaucrat will be retired and enjoying their heavily subsidized pensions, regardless of the economic and social damage they unleashed with their policies and programs.

The Death of Derrion Albert

Very sad, Derrion Albert (age 16), an honor student at Fenger High School was beaten to death during a group brawl. Based on his clean record and on the footage, it looks like he was an innocent bystander who simply was at the wrong place at the wrong time.

The question is - what can be done to address this violence?

Unfortunately, within the confines of democracy, the state can do nothing to civilize the uncivilized. And no policy or program can bring peace to communities and sub-cultures that are violent. The reason that I emphasize sub-cultures is because the behavior of this mob does not represent African-American culture, but a toxic ghetto sub-culture.

As pessimistic as this sounds, the best we can hope for is that the families that are committed to and capable of improving the lives of their children will get the hell out of Roseland and other pathology filled communities. And that the majority of the children of those who relocate to better communities will not recreate the pathologies that plagued Roseland.

You are welcome to agree or disagree with the ideas expressed in this post, but hopefully no one will utilize the puerile response of "that's racist." With few exceptions "racism" is used as a magic word to end discussions, rather than honestly explore social and economic phenomena.

Sunday, September 27, 2009

Speculation on Banking Behavior

I recently spoke with a very astute and insightful friend of mine who has successfully invested in real estate for over 20 years. The topic of discussion was the seemingly strange behavior of banks. In particular, the questions were explored were:

1. Why are so many banks (that are financially sound) so reserved about loaning money to credit worthy, collateral rich individuals? We even know of landlords with 750 credit and solid income who cannot get a moderate line of credit.

2. Why are so many banks so reserved about negotiating with property owners who are on the verge of foreclosure. In particular, an associate of mine merely required a 3 month suspension of his mortgage to repair and rent his property, thus making his investment portfolio cash flow positive. This would have allowed him to catch up with mortgage and avoid foreclosure. Rather than undertake this strategic act of goodwill, the bank foreclosed on his severely depreciated property. The end result was that the bank had foregone a $600,000 loan and gained no more that $250,000 of property, a loss of $350,000 for the bank.

My friend pointed out that in the last 5 months the Federal Reserve more than doubled the money supply, which will inevitably lead to a spike in inflation. Inflation decreases the value of money, so it's hazards are felt heaviest by those who saved money and those who issued loans. Think of it like this: a landlord takes out a line of credit for $10,000 in 2009 dollars. And let's say by 2012 inflation lowers the real value of the dollar by 50%, which the landlord uses to pay back the bank. In effect inflation has wiped out half of the debt, initially to the bank's disadvantage.

So, perhaps one of the reasons why banks are so reserved about issuing new loans is that they anticipate a spike in inflation. In regards to the foreclosures, perhaps they anticipate that the value of repossessed property will increase while the value of the loan will decrease via inflation. Of course this is purely speculative, but it is worth considering. But what is clear and indisputable is the economic, political and social hazards of inflation.

Saturday, September 26, 2009

Ahmedinejad & Chavez: Dancers Extraordinaire!

During the interview with Larry King, Ahmedinejad spent nearly 30 minutes tap dancing around Larry King's simple question of "was there or was there not a holocaust in which approximately 6,000,000 Jews were murdered..."

And Chavez twirled and danced and pranced around the clear reality that socialism is a failed economical and political system.

Friday, September 25, 2009

Beauty is Skin Deep...

Beauty is skin deep, but Qaddafi is crazy to the bone!

"We suspect he (Obama) may fear being killed by Israeli agents and meet the same fate as Kennedy when he promised to look into Israel's nuclear program," Qaddafi said.

Separation of Church & State...

Does it constitute a violation of Separation of Church & State when public school students worship the anointed one?

All joking aside, I am hoping my "progressive" compatriots will find this a disturbing example of indoctrination in public schools.

Thursday, September 24, 2009

Inspirational Speech

Pictured Above: Israeli Prime Minister, Benjamin Netanyahu.

Inspiration speech in which the Israeli Prime Minister Benjamin Netanyahu calls the UN out on the hypocrisy, cowardice and the deep danger of viciously chastising Israel for defending itself against the islamic terror of iran, hamas and hizballah. The more I follow the UN, the more overrated Obama's call for multilateralism seems.

Part I

Part II

Part III

Part IV

Tuesday, September 22, 2009

Documentary on NYC

Former Mayor of NYC Ed Koch

Very interesting 4 part BBC documentary that explores the near bankruptcy and collapse that New York City experienced in the 1970's. Some of the financial strain stemmed from issues like de-industrialization and white flight, but the lion's share of the blame lay with bloated, fiscally irresponsible city government and rapacious public unions. At it's peak the crisis coincided with a blackout that led to a wave of crime, looting and arson. What is most significant is that producers of the documentary believe that the dramatic changes in governance and fiscal policy that New York City enacted influenced political and economic changes across the globe. In particular, England's Margaret Thatcher was in NYC personally observing and drawing lessons from the reforms that were enacted to stem to the crisis, lessons which she applied to her own England.

Monday, September 21, 2009

Changes in the Progressive Vision

While reading American Pharaoh, a fascinating book about Mayor Richard Daley I and the history of Chicago, I learned some surprising facts about the history of the Chicago Housing Authority. Elizabeth Wood was a key figure in the development of public housing in Chicago. She was a truly impressive figure; she was educated, energetic, organized, genuinely concerned about the welfare of Chicagoans of all races and cultures. In contrast the current leaders of the CHA, she aggressively promoted the upward mobility, rather than the stagnant dependency of its residents. And most impressively she continuously resisted the corruption and patronage that dominated the city government. Of course, in Daley's Chicago, this meant that she was eventually dismissed from her post.

What particularly caught my attention about Elizabeth Wood and the early years of the CHA was that not only did they screen residents for criminal records and substance abuse and basic housekeeping, but they promoted traditional two parent families, so much so that female headed households only constituted 30% of their tenants, in contrast to the current figure of 92%.
I believe that this represents more than just the inevitable devolution of the CHA from an energetic, progressive organization to a large government bureaucracy that is largely disinterested in the fate of their residents.
This also represents a change in the "progressive" narrative on the nature and causes of poverty and prosperity. Like her "progressive" contemporaries, Wood rightly acknowledged the institutional and external factors of poverty. But, she understood that personal conduct and family structure were essential aspects of the equation. And it appears as if she made a distinction between those who remained trapped in poverty through their own pathological behavior (such as substance abuse) and those who simply needed a boost to achieve upward mobility. And apparently she was reserved about having her organization subsidize the pathological behaviors and family structures that reduced social and economic mobility.

On a deeper level this surely represents a different vision of entitlements. Most contemporary "progressives" believe that all individuals are unconditionally entitled to (utilize the wealth and labor of others to fund their) food, housing, health care and higher education and few look at dependency as a major concern. In contrast, Wood appeared to view social welfare programs as positive, but not as automatic entitlements. This is far more than an impractical academic distinction, because the vision of unlimited entitlement implies an unwillingness to factor in the behaviors and values that foster social pathology. And perhaps more importantly, they imply a lack of concern over the long term dependency that these programs foster.

Sunday, September 20, 2009

Elote (Corn) War & Amnesty

I came across an interesting article in Crain's Chicago Business News, as well as the Reader which discussed the issue of the proliferation of unlicensed street vendors in Chicago. Many have dubbed the conflict as the elote (corn) war, because of the many vendors who sell corn.

There are many sides to this issue.

On one hand, I have respect for the hard working vendors who are doing their best to support their families. And of course, as someone who values economic freedom and is not a fan of Chicago's heavy handed licensing regimen, I am not particularly troubled by their activities.

On the other hand, I am troubled by the very selective enforcement of law in Chicago. Restaurants in Chicago that do not adhere to the city's and state's licensing, health and tax codes are quickly fined and shut down. And if I choose to practice real estate without a license, I too would be fined and shut down in no time. And until their is a level playing field, the restaurants and other businesses that fund the bloated city government will not be able to compete with businesses that are not burdened by high taxes and heavy regulations.

So, outside of the context of a universal de-regulation that applied to all businesses in Chicago, the only rational responses would be to immediately crack down on the vendors, or as many have suggested we should impose a regimen of licenses and regulation on the street vendors, as they have done in NYC. That is a move that I would certainly support, but until we arrive at that point, the rule of law dictates that the city has to crack down on these vendors.

So, this brings up the question - why doesn't the Daley Administration, which excels in taxing, ticketing and regulating its residents into oblivion, apply its own rules?

The ugly answer is that in Chicago (and much of the country) ethno-politics trumps the rule of law. In this case, King Richard Daley II fears the response of Latino aldermen, congressmen and community organizations, not to mention the vendors themselves.

This also represents the core of our immigration issues. I am for a rational and selective amnesty of productive immigrants who do not use welfare. But, until we arrive at that amnesty, the widespread non-enforcement of immigration laws is contrary to the rule of law.

But, what's most troubling is that both an amnesty, as well as our systematic non-enforcement, represent a phenomena that is at the core of most of the social, political and economic ailments of Latin-America: the extent to which large segments of the populace disregards the law, overwhelms the capacity of the state to enforce the law. This is seen in the tax evasion, corruption and crime that plagues Mexico from the poorest barrios to the wealthy, political elite. This is seen in the state's inability to curb dangerous construction and control the eloteros that proliferate in Mexico's major cities. And in the case of immigration, both amnesty and non-enforcement may be humane and practical options, but they are examples of law breakers, rather than law makers shaping the law; hardly a good precedent for the future.

Vendor issue rolls toward compromise

A long-running battle over the largely unregulated street vendors in Chicago's Hispanic neighborhoods is edging toward a truce.

The persistent controversy — dubbed "the elote wars," after the Spanish word for corn, a popular street-vendor item — pits pushcart entrepreneurs against business and community leaders who bemoan streets and sidewalks heavy with vendor traffic.

The conflict has resisted settlement attempts before, largely because of political and cultural influences, but now a new alderman and a new business leader in Little Village are shepherding a reconciliation effort.

Not true, says Joan Coogan, deputy director of the Mayor's Office of Intergovernmental Affairs. "The specific details of implementation have always been the big stumbling block," she says. "We're looking for consensus among the alderman."

Both pro-vendor forces and the groups who've tried to rein them in say they support the concept of cooperative kitchens, which would be opened at strategic locales where street-vendor carts are most popular.

After paying a small fee, perhaps monthly, the vendors would use the licensed kitchens as sanitary spaces to prepare the products they peddle. The kitchens would also serve as home bases, making it easier for city and state health and revenue authorities to regulate the number of vendors and where they can work.

But how many people would get vendor licenses and what those licenses would allow them to sell are sticky points that have gummed up the works in the past.

Each side blames the other for the lack of a resolution, but both finger City Hall as the largest impediment to progress, a charge Mayor Richard M. Daley's administration hotly disputes.

"The city has wanted to eliminate the vendors, but hasn't, because there would be heavy public fallout over doing that," declares Nick Valadez, an attorney who has represented street vendors and supports their views. "The mayor's unwilling to take the heat on this."

At the helm of this renewed effort at peace are George Cardenas, elected 12th Ward alderman in February, and Salvador Pedroza, new president of the 26th Street Chamber of Commerce.

Both are Mexican-American small business owners who immigrated to Chicago when they were young. While Messrs. Cardenas, 36, and Pedroza, 44, don't want to get rid of vendors, they do seek a compromise ordinance.

"We are drowning in carts out here on 26th Street," Mr. Cardenas says.

Since his election, the alderman has been pushing the idea of settling the controversy through co-op kitchens. He believes the kitchens will go a long way toward solving the health, sanitation and overcrowding problems vendors pose.

"This way they can be licensed and regulated like a restaurant kitchen and we can track sales tax and things like that," says Mr. Cardenas, an accountant.

But he's well aware of the heavy influence of the Mexican culture in sustaining the eloteros.

"I am an immigrant. I was illegal when I first came here," he notes. "No one can say I'm immigrant-bashing. It's just that the cons are heavier than the pros. We have to get the vendors into co-ops and help them do this, so they can move on. Street vending should be temporary."

Mr. Pedroza, who owns Economy Roofing & Windows on West Ogden Avenue, has formed a committee and is recruiting neighborhood chambers of commerce from across the city to pressure alderman and the city to craft a workable street vendor ordinance and get it passed.

"We gotta do something, because the problem is getting out of hand," he says.

He blames the over-saturation on "vendor lords," who buy 10 to 20 carts and hire people to run them on the streets, paying them about $30 to $40 a day.

"Nobody has really wanted to take the lead," Mr. Pedroza says. "But I think it's better to face it, and try to do something now, before it gets even worse."

Exact numbers are not available, but an estimated 500 to 1,000 vendors work Chicago streets during warm weather months.

In addition to the 26th Street strip, street vendors ply their trade in many neighborhoods throughout the city, though several wards — including the 13th and 14th — ban the practice, and the carts aren't allowed downtown.

In other big cities, such as New York, vendor regulations not only exist but are strictly enforced.

Chicago requires permits and sanitation training for street vendors selling fruit, juices and corn, but enforcement is spotty. While the sale of meat and diary products is forbidden, it's a common practice.

Many vendors mistakenly assume the license allows them to prepare their offerings on-site and in their carts. It does not, Mr. Valadez says.

But while he agrees with the prohibition of preparing and selling meats and cheeses, he disagrees with the city's rules against preparing fruit, juices and corn on-site.

"Why can't they husk the corn and boil it and cut open the mango and put it on a stick?" he says.

Mr. Valadez disputes the city's contention that such practices pose serious health threats, noting, "Hey, the city does this all the time at Navy Pier."

Adelina Lara, 48, has been a street vendor for 10 years, selling corn, lemonade and rice water at 26th Street and Kedzie Boulevard. She is also president of the vendors' union, known as the Ambulant Vendors Assn.

Ms. Lara says legitimate vendors would indeed welcome regulation.

"We want a law to protect us," she says. "Right now, we get only a temporary permit that just allows us to sell at festivals. The rest of the year, we have to worry all the time."

Three hundred vendors belong to Ms. Lara's group, which is organized through the Assn. of Community Organizations for Reform Now (Acorn). The group helps members secure permits and get to sanitation school.

She's a supporter of co-op kitchens and has discussed the issue with Mr. Cardenas.

Alderman Ricardo Munoz (22nd) is another backer the co-op kitchen idea.

"The kitchens are a good idea because they'd give the small entrepreneurs the opportunity not to have to invest a lot of capital, but still produce their products in a regulated, licensed and sanitary facility," he says.

But Mr. Munoz, who has held office for nine years, also blames the mayor's office for a lack of progress in regulating vendors.

"There've been several attempts to regulate this industry, including last year, and they've always ended up meeting with resistance from the mayor's office," he says. One conundrum: who should have the authority to decide which corners vendors can work.

Ms. Coogan says logistics have been a problem, but it's not an issue limited to City Hall. She was recently in New York, where she chatted up a street vendor about how that city licenses and regulates him.

"He thought I was crazy," she says. "Obviously, this is something other cities do and we should be able to as well."

©2003 by Crain Communications Inc.

Goodbye Irving Kristol

Recently the writer and editor Irving Kristol passed away. His intellectual journey took him from Marxism to Liberalism and finally to Conservatism. Irving's journey is significant, because it mirrors that of many great thinkers who became disenchanted as they encountered the growing distance between liberal ideology and reality. Here are some excerpts from his writings:

"All bad poetry springs from genuine feeling," wrote Oscar Wilde, and I would like to suggest that the same can be said for bad politics. . . .It seems to me that the politics of liberal reform, in recent years, shows many of the same characteristics as amateur poetry. It has been more concerned with the kind of symbolic action that gratifies the passions of the reformer rather than with the efficacy of the reforms themselves. Indeed, the outstanding characteristic of what we call "the New Politics" is precisely its insistence on the overwhelming importance of revealing, in the public realm, one's intense feelings—we must "care," we must "be concerned," we must be "committed." Unsurprisingly, this goes along with an immense indifference to consequences, to positive results or the lack thereof.

Symbolic Politics and Liberal Reform, Dec. 15, 1972

Our urban experts, planners, and social scientists generally . . . are people who are convinced that, if fully employed and given adequate budgets, they can successfully practice the art of making everyone healthier, wealthier, and happier. Congress has listened to them, and has structured legislation according to their design; and we are now paying the bills. It is these activities—in education, urban revitalization, mental health, welfare, etc.—which constitute an excrescence on the welfare state, properly understood. It is these programs, which do not work and involve vast intricate bureaucracies, that are bringing the welfare state into disrepute.

Reforming the Welfare State, Oct. 25, 1976

Our economic problems are not intractable. We can bring down—are bringing down—the rate of inflation. We can afford a tax cut without creating economic chaos. Despite the follies of the past decade, our economy is not at the edge of apocalypse. Economic policies that are just a bit more sensible, especially in the areas of taxation and regulation, can make a lot of difference for the future. On the other hand, once the idea gets around that we are in a profound crisis and that only "drastic action" by Washington can save us—then it will be time to head for the storm cellars.

Two Economic Questions, June 26, 1980

One of the incontestable findings of modern social science is that fathers are Very Important People. I confess to having been astonished to discover just how important we are. Important in all sorts of unexpected ways. Thus, it turns out that almost two-thirds of rapists, three-quarters of adolescent murderers, and the same percentage of long-term prison inmates are young males who grew up without fathers in the house. I doubt that many fathers have understood that their mission in life had anything to do with the prevention of rape, murder, or long-term imprisonment among their sons.

Life Without Father, Nov. 3, 1994

The world has yet to see a successful version of "trickle-up economics," an egalitarian society in which the state ensures that the fruits of economic growth are universally and equally shared. The trouble with this idea—it is, of course, the socialist ideal—is that it does not produce those fruits in the first place. Economic growth is promoted by entrepreneurs and innovators, whose ambitions, when realized, create inequality. No one with any knowledge of human nature can expect such people not to want to be relatively rich, and if they are too long frustrated they will cease to be productive. Nor can the state substitute for them, because the state simply cannot engage in the "creative destruction" that is an essential aspect of innovation. The state cannot and should not be a risk-taking institution, since it is politically impossible for any state to cope with the inevitable bankruptcies associated with economic risk taking.

Income Inequality Without Class Conflict, Dec. 18, 1997

Wednesday, September 16, 2009

Acorn: Stranger Than Fiction (part II)

Normally NPR thrives on independent investigators exposing institutional corruption, but something tells me that they will not interview these two conservative investigators. I won't go as far as saying that NPR practices outright censorship, but it very, very rarely interviews any conservative intellectuals or reporters. When a private media outlet is biased, it's unfortunate, but when a public organization, that's partially funded by tax payer dollars is so blatantly biased, it's unforgivable.

Acorn: Stranger Than Fiction...(part I)

Adam Smith on Chicago

Implicit in the "progressive" narrative is the belief that the public needs to be protected from hostile free markets by a benevolent state. We are told that without rent controls and subsidies "affordable housing" will be beyond the reach of most Chicagoans. The great economist Adam Smith, author of the Wealth of Nations, would have sharply disagreed with this. A brief analysis of recent changes in rents and taxes in Chicago will validate Mr. Smith's belief that competitive markets as usually more benign that coercive state intervention.

In the last year, rents have significantly fallen in Chicago. In some cases apartments that rented for $1,500 last year have fallen by 20% to $1,200. It's important to note that this "increase in affordable housing" occurred without a single government mandate or pressure from a community organization. Rather, acting independently via a free market, individual landlords responded to market signals that indicated a drop in demand by lowering the cost of their goods and services. Or, to put it simply, landlords lowered rents as a response to the declining capacity of consumers to pay high(er) rents via the current economic downturn.

On the other hand, Cook County has decided to raise property taxes, even as many families face grave economic difficulties, which will certainly increase the number of foreclosures.

We see here that the main differences between the state and competitive markets, is that providers of goods and services have to respond to the needs of the public or they will quickly go out of business. In this case, if a landlord chooses to not lower his rent to meet the capacity of consumers, they will surely choose a landlord or location with more affordable apartments. Or, they could choose a more affordable option like a smaller and / or less updated apartment or they could take advantage of the economy of scale by pairing up with roommates or additional family members and renting a larger apartment.

In contrast, most governments are far less responsive to the needs of the public. Cook County can get away with raising taxes beyond the capacity of its residents, because it is impervious to dynamic market signals that indicate the financial capacity of the public. And relative to free markets, governments face little competitive pressure that force them to lower costs and raise the quality of their services. But, increasingly that is changing with the exodus of residents from Cook County to neighboring counties and states that offer lower levels of taxation.

After contemplating this example, the following quotes of Adam Smith should make sense, even to die hard "progressives."

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." and "I have never known much good done by those who affected to trade for the public good."

The Jimmy Carter Prize Goes To...

The Jimmy Carter Prize For The Advancement of Douchebagery goes to...Jimmy Carter!

During a recent interview with NBC Nightly news Mr. Carter stated:

"I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he's African-American."

Thus we see that Mr. Cater is using the cheapest, most puerile trick in the liberal book - attempting to silence a debate by reducing it to one of race and racism.

In this case, Mr. Cater sought to reduce the legitimate opposition to Obama policies to racism.

In addition Mr. Cater has earned this award for his advancement of international douchebagery for his outspoken support of the terrorist organization Hamas and his unceasing attacks against Israel. From his headquarters in bizzaro world, Mr. Carter claimed that Hamas never deviated from their commitments to the terms of the ceasefire agreement with Israel, in spite of the fact that Hamas has been implicated in countless terrorist attacks against civilians. And more importantly for the future, Hamas has incited hatred in palestinian children via anti-semitic television programs in which a character dressed as Mickey Mouse urges children to jihad and martyrdom.,7340,L-3662189,00.html

Monday, September 14, 2009

Has Democracy Grown Timid?

As you're probably aware, leading democrats are seeking to discipline
Representative Wilson (R - SC) for yelling out "liar" during Obama's speech on health care.

My first instinct was to label Representative Wilson's action's outburst as rude and meriting the apology, which he quickly issued to President Obama . But, after viewing a session of the British House of Commons, I believe that Congress should apologize to the public for being so timid and complacent relative to their English counterparts. During the parliamentary debates, I did not encounter the mindless cheerleaders and clapping zombies that fill Congress. Rather, I witnessed legislators who aggressively debated and challenged their Prime Minister, directly calling him out for his dishonesty and demanding direct responses to their questions. I strongly encourage you to click on the link below to view this lively session:

Thursday, September 10, 2009

Residential Landlord And Tenant Ordinance (part II)

Another good landlord that I work with informed me that an ex-tenant is suing him for $26,000 because of clerical oversites like (allegedly) returning the security deposit 3 days late. Presumably they realize that they will not receive this amount and they are simply seeking to frighten the landlord into a settlement for $5,000 - $10,000.

Based on prior conversations I realize that all socialists and most "progressives" see no problem in a regulatory regimen that harshly punishes landlords for clerical oversites. And of course I have never heard them express concern that increases in the tax and regulatory burdens has made it increasingly less profitable to be a landlord. Implicit in their vision is the idea that the landlord-tenant relationship is a zero-sum-game in which every burden that a landlord faces is a benefit for tenants.

This vision is deeply flawed, because to a large degree the well being of tenants and landlords are intrinsically connected. And the increased burden that landlords face engenders negative, unintended consequences that are most felt by tenants. In other words, tenants and their so called advocates are shooting themselves in the foot with every anti-landlord ordinance that they pass. Here are a few of the negative effects:

1. The diminishing returns and the increase in liability that landlords face were two (of several) factors that encouraged so many landlords to convert their properties into condos, contributing to what many "progressives" refer to as a "shortage of affordable housing."

2. The race to beat rising operational costs (via higher taxes and regulatory expenses), encouraged landlords to rehab their rental units and (of course) increase rents, which also contributed to the "shortage of affordable housing."

3. The increasingly lengthy and costly eviction process that landlords face has naturally increased their credit requirements, which greatly limits the housing options that poor (and most minority) apartment seekers face. Or to put it simply: the harder it is for landlords to evict tenants, the harder it will be for tenants to rent apartments.

4. In the south and west side of Chicago there is now an abundance of extremely cheap, foreclosed homes. The rock bottom prices (single family homes that go for as low as $2,500) make it extremely tempting for investors to purchase and rent them out to local families. At that cost a rental property can simultaneously be "affordable" for tenants and profitable for landlords.

But, the increasing liabilities that landlords face via city ordinances has dissuaded many an investor from purchasing these homes. The end result is a decrease in the supply of well maintained rental homes for poor and working class families. And as any economist will tell you, when you lower the supply of a commodity, you increase its cost, i.e. "less affordable housing." And needless to say vacant homes do not breed economic and social stability, least of all in already marginal neighborhoods.

Martin Henriksen: The Bizarro Obama?

Can you imagine Obama or any other guilt ridden, politically correct apologists in the United States or England standing up to the moslem world like this?!? Truly, Mr. Henriksen is the Bizarro Obama!

Danish Peoples’ Party: Muslims must apologize!

September 8th 2009
By Troels Mylenberg

The Danish Member of Parliament Martin Henriksen suggests that Denmark demand of Islamic countries that they issue an apology for oppression of women, stoning and assaults on civil liberties.

As response to the frequent Islamic demands for apologies and withdrawals, the latest being from the Saudi lawyer Faisal A.Z. Yamani towards Danish newspapers reprinting the Muhammad cartoons, the Danish Peoples’ Party now takes aim in the opposite direction.

“I demand an apology for oppression of women, stoning, intimidation of adherents of other beliefs, violation of civil liberties, and not least the extensive contempt for Danish culture and democracy, Danes and Westerners, says social issues spokesman Martin Henriksen, who is seriously weary of Islamic countries and organisations repeatedly demanding Denmark and the Danes to apologize.

“I would like to simply return the ball to their court and demand some apologies from them. We could issue a form letter every time a new incident appears,” says Martin Henriksen, who has already drafted such a letter:

We thank you for your inquiry concerning a possible apology for a cartoon issued in Danish newspapers some years ago. We have considered the issue, also from a historical perspective, and conclude that we are not in a position to process your request before the Western world has received the following:

1. An apology for the massive repression of women.

2. A full stop of stoning, whipping and hanging for violation of Sharia law.

3. An apology for and full abandonment of: Persecution of adherents of other faiths, extensive riots and destruction in Western countries having received refugees and immigrants.

Martin Henriksen further proposes that a series of qualified historians list “the extensive number of assaults, ethnic cleansings etc. which throughout history have been committed in the name of Islam.”

Such an apology would seem fitting. When our demands have been met, obviously without reservations or conditions, we shall consider not to republish the cartoons in question, proposes Martin Henriksen.

Wednesday, September 9, 2009

I'm No Friend of Ronald...

When I lived in Santiago, Chile a group of left wing students through stones through the window of the local Mcdonalds, which of course encouraged the many customers to flee. I am certainly no friend of Ronald and his chain of restaurants. But, the one thing I find more distasteful than his greasy, homogeneous hamburgers is the lack of respect for individual choice and the coercive impulse that drive all socialists and many "progressives."

I agree with these students that Mcdonalds lacks nutritional and cultural value, for that reason I never eat there. But, this is a decision that should be made by each Chilean, not be an "enlightened" student or politician. And if Mcdonalds doesn't meet a demand, it will quickly go out of business or be forced to adjust to meet local tastes, as it did in India.

There are positive aspects of the "progressive" camp, but unfortunately the coercive impulse often lurks beneath the surface. And far too often the "expanded choice" that "progressives" sell to the public rapidly contracts when there are insufficient checks and balances on their power, as seen in Canada when a man literally had to sue the state to allow him the right to use private medical insurance.

Monday, September 7, 2009

A Bit Forgetful...

Lately I've heard a lot of complaints about how conservatives are vilifying obama, specifically of how a small minority of tea party attendees have utilized pictures depicting obama as a nazi.

It would seem as if these critics are a bit forgetful, not recalling the countless depictions of bush as a nazi, monkey or blood sucking vampire.

Mayor Daley Discusses Uptown Riots

Thursday, September 3, 2009

Don't Kill The Goose...

I will never understand the general antipathy that most "progressives" hold towards commerce and capitalism. So many things that they revere are only possible through the surplus of wealth created by productive individuals and "evil" corporations.

To start off with, history shows that there is an undeniable connection between commerce and the culture. Those familiar with Greek, Arab, Ottoman and Venetian history will know that their greatest periods of artistic and cultural production occurred when these societies prospered through an expansion of trade and commerce.

And throughout history most of mankind suffered from scarcity (poverty & hunger). But, through the continuous revolutions in production that occur in free markets, has the creation of wealth in the United States reached such a point where the basic needs of the majority are met and surpluses of wealth can be redistributed (freely through civil society or coercively through the state) towards:

1. Charities and non-for-profit organizations: only through our incredible prosperity are so many individuals able and willing to direct their surplus income towards these organizations.

2. The diffusion of diverse artistic and cultural endeavors: only though our unparalleled prosperity created by capitalism is their sufficient wealth to privately and publicly fund the arts.

3. Scientific and academic research on an unparalleled level. Universities and research institutions are heavily subsidized by public funds which are from taxes levied on productive enterprises.

4. Maintain costly government safety nets (social security, Medicare, etc.) and welfare. The billions and billions of dollars redistributed towards the recipients and (even more significantly) the endless bureaucrats that administer these programs originate from the individuals and businesses that fund them.

5. Enacting costly health, safety and environmental regulations: only through the incredible productivity made possible through capitalism can businesses bear the regulatory burden and fund the bureaucracies that impose them.

6. Expanding educational and professional opportunities for handicapped individuals.

7. Furthering the humane treatment of animals. Only in capitalist nations that generate a high living standard are people sufficiently prosperous to dedicate their time, energy and money towards the betterment of living standards of animals.

So, we must take heed and not "kill the capitalist goose who laid all of these progressive eggs."

Chocoholics, Alcoholics & Hygiene Enthusiasts Unite!

Chocoholics, Alcoholics and Hygiene Enthusiasts unite against Governor Quinn's obscene tax increase on items as basic as shampoo, tooth paste, beer and candy! These highly regressive taxes will be especially felt by residents of Chicago who already face crushing city and county taxes. And of course this will further cement Illinois's exodus of businesses and the jobs and revenue that they create.

Stock up: Illinois Sales Taxes on Grooming Products, Candy and Alcohol Going up Tuesday

August 31, 2009

Today is a good day to schedule a shopping trip to Wal-Mart. Or Target. Or any local convenience store, for that matter.

Why? Illinois taxes on everyday items like shampoo, candy, and alcohol are going up Tuesday, September 1. Now is a good time to stock up on Pantene, peanut butter cups and pinot grigio.

Earlier this year, the Illinois general assembly approved a series of revenue increases to help pay for a $31 billion capital spending program. Illinois Governor Pat Quinn signed the public works deal into law in July.

Here’s a rundown of how your shopping list could be impacted.

Starting Tuesday, soft drinks and candy will be taxed at the 6.25 state sales tax rate (plus any local tax add-ons). Until now, they fell under the 1 percent food sales tax. Soda, flavored water, sports drinks, gum, breath mints, and chocolate bars are some of the items that will be hit with higher taxes

Alcohol excise taxes are in line for a hike as well, even though Illinois’s rates are already high for the region. The excise tax on a gallon of beer is now 23 cents, up 24 percent from 18.5 cents a gallon. A gallon of wine will now be taxed at $1.39, up 90 percent from $0.73. The new tax on a gallon of spirits is $8.55, up 90 percent from $4.50. That’s equal to a 2.6-cent increase on a six-pack of beer, a 13-cent increase on a bottle of wine, and an 81-cent increase on a fifth of liquor.

Personal grooming items like shampoo, deodorant, and toothpaste have traditionally been taxed under a 1 percent medication sales tax. They’ll now be taxed at the 6.25 state sales tax rate (local add-ons apply here, as well).

Consumers won’t be the only ones feeling the pain from higher taxes – producers of the targeted products are also concerned. The Distilled Spirits Council of the United States estimates that the alcohol tax hikes will cause Illinois to lose $225 million in retail sales and 4,500 hospitality sector jobs statewide.

“People react to higher prices. These tax increases are going to put Illinois retailers at a huge competitive disadvantage vis-à-vis surrounding states,” notes David Ozgo, chief economist with the Distilled Spirits Council. “In nearby Indiana spirits are taxed at only $2.68 per gallon.”

“It’s even worse when you throw in the fact that unlike most localities, both Cook County and Chicago have their own separate taxes on spirits. It will come to $13.23 a gallon, which is highest rate of any major metropolitan city outside of states with a government monopoly on alcohol.

Rockwell Wirtz, president of a large beer, wine, and spirits distributor company, filed a lawsuit in the Cook County Circuit Court arguing that the capital plan was unconstitutional because the sweeping bill violated the “single subject” legislative requirement. The suit also focuses on the disproportionately higher tax increases on wine and hard liquor as compared to beer. An initial hearing is scheduled for Tuesday, September 1.

Beyond lawsuits, what other recourse options do consumers have?

“Illinoisans can always contact their state legislators to let them know that they’re tired of paying these taxes, they’re tired of being discriminated against,” said Ozgo. “There is no public policy reason for singling out beverage alcohol for special taxation.”

If you do make your way to the store on August 31 to stock up, be sure to check out before the stroke of midnight. That’s when Illinois turns into a more expensive place for consumers to shop.
Kristina Rasmussen is the Executive Vice President of the Illinois Policy Institute.

Wednesday, September 2, 2009

The Hazards of (Sperm) Banking Regulation!

I came across a story that perfectly demonstrates the hazards of excessive state intervention in the market place. The Canadian Government enacted regulation that made it illegal for sperm banks to compensate donors. Predictably, infertile couples now face a shortage of sperm and eggs, which (I kid you not) has resulted in the importation of sperm from the United States! In fact, it is now estimated that up to 80% of artificial inseminations in Canada now involve imported American sperm! This incident highlights but a few of the hazards that occur when "progressives" seek to control marketplaces:

1. Excessive state intervention, especially price controls creates artificial shortages, even of seemingly endless commodities like semen!

2. When the state curtails compensations (that are determined by market forces), the incentives of producing and providing goods and services are substantially lowered, which predictably lowers the quantity and quality of those goods and services. Keep this in mind during the debate on expanding government control of the medical sector.

3. When state intervention makes it unprofitable to produce or provide goods and services in any given locality, production will shift to a less regulated location, hurting local producers, as well as consumers.

4. Far too many "progressives" feel it is their right or mandate to control the exchange of goods and services between consenting adults.

5. Far too few "progressives" understand the basic function of prices in marketplaces.

Couples face shortage of Canadian sperm

Mon. Aug. 10 2009 News Staff

Why is it that Canada, a country of 12 million adult men, has only 33 sperm donors to supply its thousands of infertile couples? That's the question being asked by some fertility doctors as many couples look elsewhere for help growing their families.

Canada once had about two dozen sperm banks. But in 2004, the federal government passed the Assisted Human Reproduction Act, which outlawed payment to sperm or egg donors. The only money that has been allowed to change hands is for expenses incurred in the donation process, such as the costs of traveling to the clinic.

Five years later, there are very few Canadian sperm donors willing to donate for free, says Dr. Tom Hannam of the Hannam Fertility Centre in Toronto. That's left many couples, especially those among visible minorities, without many choices.

"Today, there is one South Asian donor for all of Canada," he says, noting that couples are often shocked at the limited choices.

"There is a significant shortage of donor semen in this country, yes."

Contrary to popular thought, becoming a sperm donor is not a simple as filling out an application, filling a cup and then leaving, cheque in hand. In fact, of every 100 men who apply to donate, only five qualify.

Donors have to be screened through several appointments, filling out questionnaires on their family history, providing sperm samples, and undergoing blood work and physical exams. They also have to commit to providing samples once a week on an ongoing basis.

Egg donors have to undergo the same screenings as well as many more doctors' visits. They have to inject themselves with fertility medications and undergo uncomfortable procedures to extract the eggs.

For this, they are only compensated for expenses they can prove with receipts. With compensation so restricted, few Canadians have been willing to donate to help couples achieve their dreams of a family. So doctors and patients have had little choice but to use sperm and eggs from south of the border.

One of the biggest suppliers of donor sperm is Outreach Health Services which imports and distributes semen for assisted reproduction clinics across Canada. The company imports sperm from an agency that collects primarily from men in Georgia and northern Florida, where donors are paid about $100 per visit.

With so much sperm coming from the States, some estimate that up to 80 per cent of babies conceived in Canada through donor sperm have American DNA.

Some scratch their heads at Canada's seeming hypocrisy. On the one hand, Canada is okay with clinics importing sperm from paid foreign donors in the States, yet won't allow clinics in Canada to compensate potential Canadian donors.

"We are importing sperm that is paid out, outright. This makes absolutely no sense to me," says Dr. Alfonso De Valle of ReproMed, one of a handful of sperm banks in Canada.

De Valle thinks a better solution would be to offer donors "a reasonable reimbursement" that covers their expenses but doesn't turn sperm into a commodity.

Dr. Cliff Librach of the CReATe Fertility Centre in Toronto says when the AHR Act passed, the government promised regulations on reimbursing "reasonable expenses," but so far none have come.

"The legislation said donors could only be compensated for expenses that could be receipted. There was a grace period where people could be compensated for non-receipted period and we've been in that grace period ever since," he tells, explaining how they've managed to keep the Canadian donors they have.

Those non-receipted expenses include such thing as compensation for time off work and costs of attending appointments. He says for the amount of energy and discomfort donors undergo, the compensation is very modest.

In Britain, the ban on paying donors has created such a critical shortage, officials are considering reinstituting compensation. Lisa Jardine, the head of the Human Fertilisation and Embryology Authority, suggested that setting compensation standards and regulating them would help stem the flow of British couples who travel for fertility treatment abroad, where facilities may not be monitored and where donors may be exploited.

Here in Canada, clearer regulations on compensation could be a long time coming. That's because in April 2008, the Quebec Court of Appeal struck down dozens of provisions of the Reproductive Act. It deemed the sections unconstitutional because they encroached on the province's jurisdiction over health legislation.

In response, the federal government appealed the decision to the Supreme Court of Canada. It heard arguments this past spring, but it's unclear when the Supreme Court will issue a decision.

Librach says the hope is that if the Supreme Court strikes down the sections of the AHR Act that banned donor payment, the provinces will take over compensation regulation.

"A lot of us in the field are hoping the provinces will prevail so that they can then regulate this better so there will be allowance for sperm banks to open up," he told Canada AM.

If the compensation sections are upheld, the federal government's planned regulations will impose such tight restrictions on paying sperm and egg donors, he says, it could result in even fewer donors willing to offer their sperm and eggs to those who need them.

"What they're proposing is an amount so low, it would actually cost the donor money to donate their sperm," says Librach.

With a report from CTV medical specialist Avis Favaro and producer Elizabeth St. Philip