More pain at the pump

Originally published in the Baltimore Sun

By Thomas A. Firey
Published on Thursday, March 13, 2008
The road to hell is paved with good intentions, says the old saw. It may soon be lined with higher-priced gas stations, too, thanks to Maryland's General Assembly. State lawmakers are considering legislation to ban motor fuel "zone pricing," under which fuel wholesalers charge higher prices to some retail gas stations than to others. Understandably, retailers oppose the practice, and legislators worry that it's unfair. But if lawmakers vote to prohibit zone pricing, consumers will end up paying higher gas prices, because low-price stations will end up charging more. Read More »

Smoking bans are dangerous to a free society's health

Originially published in the Baltimore Sun

By Thomas A. Firey
Published on Wednesday, December 06, 2006
Early next year, the Baltimore City Council and the Maryland General Assembly will likely vote on legislation to ban smoking in all bars and restaurants. If passed, these laws would end the nuisance and clothes-fouling stench of tobacco smoke in public places and reduce the health risks of secondhand smoke. And yet, the city and state would be wrong to pass them. Proponents justify a ban by arguing that secondhand smoke is a health risk. But all sorts of human activities are risky - from contact sports to rock climbing, from skiing to swimming, from riding a bike to having sex. Yet many people swim, bike and play football because they take pleasure in doing so, and that's their choice. In a liberal society, people are free to make their own risk and lifestyle choices - including whether to smoke. Ban supporters respond that smokers inflict harm on other people, including bar and restaurant employees and other patrons. But again, all sorts of activities impose risks on others, and again, those people bear those risks willingly. Rock climbers endanger rescue workers, pool owners endanger lifeguards and patrons, fishing boat captains endanger their crews, and so on. We grant people the choice to be rangers or lifeguards or commercial fishermen. Why shouldn't we allow people to choose to patronize or work in smoking bars and restaurants? Read More »

Smoking bans are dangerous to a free society's health

Originially published in the Baltimore Sun

By Thomas A. Firey
Published on Wednesday, December 06, 2006
Early next year, the Baltimore City Council and the Maryland General Assembly will likely vote on legislation to ban smoking in all bars and restaurants. If passed, these laws would end the nuisance and clothes-fouling stench of tobacco smoke in public places and reduce the health risks of secondhand smoke. And yet, the city and state would be wrong to pass them. Proponents justify a ban by arguing that secondhand smoke is a health risk. But all sorts of human activities are risky - from contact sports to rock climbing, from skiing to swimming, from riding a bike to having sex. Yet many people swim, bike and play football because they take pleasure in doing so, and that's their choice. In a liberal society, people are free to make their own risk and lifestyle choices - including whether to smoke. Ban supporters respond that smokers inflict harm on other people, including bar and restaurant employees and other patrons. But again, all sorts of activities impose risks on others, and again, those people bear those risks willingly. Rock climbers endanger rescue workers, pool owners endanger lifeguards and patrons, fishing boat captains endanger their crews, and so on. We grant people the choice to be rangers or lifeguards or commercial fishermen. Why shouldn't we allow people to choose to patronize or work in smoking bars and restaurants? Read More »

Better ways to address worthy priorities

Originally published in the Herald-Mail

By Thomas A. Firey
Published on Sunday, August 13, 2006
HAGERSTOWN - Washington County Commissioners candidate Paul Swartz is to be applauded for clearly defining two policies that he would push if elected ("Education, tax relief are priorities," July 23.) Doing this sets him apart from the too-many candidates who campaign on the haziest of ideas. Swartz vows to tackle two crucial local issues: increasing the number of county workers with higher education and easing the property tax burden. Concerning the former, workers in today's economy who want success and financial security will need the critical thinking, occupational training and adaptability skills that college and/or advanced job training can provide. Concerning the latter, soaring tax assessments are becoming increasingly onerous, especially for seniors. Read More »

Better ways to address worthy priorities

Originally published in the Herald-Mail

By Thomas A. Firey
Published on Sunday, August 13, 2006
HAGERSTOWN - Washington County Commissioners candidate Paul Swartz is to be applauded for clearly defining two policies that he would push if elected ("Education, tax relief are priorities," July 23.) Doing this sets him apart from the too-many candidates who campaign on the haziest of ideas. Swartz vows to tackle two crucial local issues: increasing the number of county workers with higher education and easing the property tax burden. Concerning the former, workers in today's economy who want success and financial security will need the critical thinking, occupational training and adaptability skills that college and/or advanced job training can provide. Concerning the latter, soaring tax assessments are becoming increasingly onerous, especially for seniors. Read More »

Fixing Maryland's electricity problem

Originally published in the Baltimore Examiner

By Thomas A. Firey
Published on Thursday, June 15, 2006
BALTIMORE - How many Maryland lawmakers does it take to fix a light bulb? Far more than it takes to break it, unfortunately. The message to state lawmakers who are trying to “fix” Maryland’s supposedly failed electricity deregulation: It’s far easier to make matters worse than to get things right. Press accounts of Maryland’s 1999 deregulation illuminate two important facts: » A handful of lawmakers, working in relative seclusion, crafted the 73-page bill that the leadership pushed through the General Assembly at the speed of light. » Though the bill passed by a 95-34 margin in the House and 34-13 in the Senate, its contents left most lawmakers in the dark. Many lawmakers who voted for the bill did so to guarantee low prices. But more competitive markets do not guarantee low prices — they only guarantee that prices more accurately reflect costs. Over time and all things equal, that should push prices down as suppliers compete over price, consumers moderate their usage and innovators offer alternatives. But, if all things are not equal and there is some problem with supply or demand, markets will signal the problem with higher prices. For the past several years, there have been several problems with electricity markets, nationally and in Maryland. Natural gas-fueled electricity, the once (and probably future) most cost-effective source of new power, has skyrocketed in price as North American gas supplies have been stretched to their limits and the U.S. has failed to tap into cheaper global supplies. Clean air regulations have raised the price on new sources of coal generation, benefiting human health and the environment but hurting wallets. Nuclear power continues to be an economically and environmentally questionable source of electricity. And the alternative power sources that were once idealistically envisioned have largely turned out to be alternatives to having electricity. Yet those problems, and market signals, were hidden under rate caps implemented by the General Assembly and Public Service Commission in 1999. With the caps now about to expire, those signals will soon shine out before the public — unless lawmakers find some way to shade us from reality. Should they do this? Market signals can be painful, but they also provide the right incentives to suppliers, consumers and innovators. That’s preferable to when regulators have been required to protect monopoly utilities’ bottom lines in Maryland and other states. They encouraged producers to over-build their generation and consumers to over-consume electricity. The result was high Maryland electricity prices under regulation and the threat of industrial consumer flight to cheaper states. None of this is to say that Maryland’s electricity deregulation was well designed. PSC rules governing the new market structure’s auction process are utterly indefensible — mandating a short, limited auction for lengthy contracts. The state requirement that power companies sell off their generators was unnecessary and created the market-artificial entity of a power company that doesn’t generate power. The state’s decision to award Baltimore Gas and Electric Co. “stranded cost recovery” by surcharging all consumers to pay off the Calvert Cliffs nuclear plant may have been politically necessary to get BGE’s support for deregulation, but it proved financially unjustified. Worst of all, the rate caps, coupled with the stranded cost surcharge, discouraged would-be competitors from entering Maryland. How should lawmakers fix those problems? Should they revise the current market structure or return to the old, regulated structure and try to fix its perverse incentives? Lawmakers could start with the following: Master the complexities of electricity markets. Recognize that many of the issues in electricity markets don’t have clear solutions, but instead involve tradeoffs between different costs and benefits. And finally, strive to communicate this information to constituents. Doing all this won’t magically produce low electricity prices, but it can lead to policy that consumers can live with.Thomas A. Firey is a Cato Institute regulatory policy scholar and a Maryland Public Policy Institute senior fellow. He can be reached at tfirey@mdpolicy.org. Examiner     Read More »

Funeral services industry making a killing in Annapolis

Originally published in the Baltimore Sun

By Thomas A. Firey, David Harrington
Published on Wednesday, February 01, 2006
Funeral services are expensive, as any Marylander who has laid a loved one to rest can affirm. The average funeral cost in the Old Line State was $5,682 in 2002, the last year for which federal data are available. Funerals also are expensive in other states, but Maryland's costs are much higher than they need to be. Read More »

Too Much Fire About Smoking

Originally published in the Washington Post

By Thomas A. Firey
Published on Sunday, January 08, 2006
With Prince George's County's ban on smoking in bars and restaurants in effect and the D.C. Council having voted 11 to 1 last week to enact a ban -- an action that could be vetoed by the mayor [front page, Jan. 5] -- supporters and opponents of smoking prohibitions are shifting their focus to new battlegrounds. Both sides also had been pressuring members of the Howard County Council, which just approved a smoking ban but is battling County Executive James N. Robey over a grandfather clause in the legislation. Now both sides are setting their sights on Annapolis, where a bill mandating a statewide ban is likely to be introduced this session. Read More »

‘Smart Growth’ Isn’t Always Smart Growth

Orignially Published in the Herald-Mail

By Thomas A. Firey
Published on Sunday, September 25, 2005
In early 2001, as the stock market bubble was collapsing and companieslike Pets.com, e-Toys and Webvan were fading into oblivion, a moneymanagement firm launched an ad campaign about “the new New Economy.” Inthe new New Economy, the ads said, investors won’t be charmed by20-somethings on scooters who put made-up words in front of “.com.”Investors won’t smile favorably on proposals that lack well-developedbusiness plans. In the new New Economy, investors will make decisionsbased on serious analysis of market conditions and the likelihood ofsuccess. Read More »

Why Gas Costs So Much in Maryland

Originally Published in The Washington Post

By Thomas A. Firey
Published on Sunday, May 01, 2005
Maryland motorists who suffer from sticker shock every time they fill their tanks routinely look for the cheapest fuel they can find. But they don't find much difference in prices from one station to the next -- or at least not as much difference as they found a few years ago. The reason lies in a fascinating tale of Annapolis favoritism. Read More »