Coyote Blog

I often see folks who are arguing for increased government regulation of some industry observe that "even those greedy corporations in this industry support this new regulation."  For example, if a power company takes a public position to support greenhouse gas emissions, then that is used as evidence that such regulation must really be necessary if even the to-be-regulated are in favor.  Greg Craven makes such an argument in his global warming video that I refuted the other day.

There are two very good reasons a company in such a position might publicly support even a bad regulation.  The first is basic politics and PR:  If the regulation appears inevitable and has public support, then it is sometimes better to get out ahead of it and try to curry favor with politicians and the public to manage the regulation's implementation.   We all know corporations give donations to political candidates, but look at how they give them.  Corporate donations correlate far better with "who is expected to win" rather than "who would create the most favorable regulatory environment for the corporation."  In fact, corporations are highly likely to give donations to both candidates in a closely-fought election, and a lot of their giving is after the election, to the winner of course.

The other good reason that companies support regulation in their industry is because a lot of regulation is either designed to, or effectively, helps incumbent companies against new entrants.   I have talked about this many times with the questioning of licensing.  Global warming regulation and carbon trading systems in particular give us another great example:

BBC News understands the industry will be allowed to increase emissions
as much as it wants by the European environment council. Aviation is
the fastest growing source of greenhouse gases. But Europe's
environment ministers look set to reject a plan for a strict cap on
emissions from planes. Instead, airlines will be given a set number of
permits to pollute.

Instead, airlines will be given a set number of permits to pollute.

If
they overshoot their limit they will be allowed to buy spare permits
from firms who have managed to cut emissions elsewhere - manufacturing
industry, for instance.

So, current airlines in Europe will be given carbon permits that presumable support their current business level.  However, any new entrant, or any current player wishing to take market share from another airline, must spend money on carbon credits to grab this market share, carbon credits the current established incumbents got for free.  This in effect becomes a tax on market share gains.  This European-style protection of large corporations is typical, and is why the 30 largest companies in Europe are nearly the same as they were in 1965, but are completely different in the US.

This is also why, though I don't think expensive action on CO2 is justified, I think that if we do so the approach must be a carbon tax rather than cap and trade.   But cap and trade has so much potential for political hijinx and giving special deals to the politically influential that my guess is that politicians will want cap and trade.

I toured a commercial seahorse farm here in Hawaii this afternoon.  It was really an interesting tale, of a couple who saw a problem with the over-catching of wild seahorses and attacked it with a private farming effort.  Not only has private seahorse farming cut the capture of wild seahorses for pets almost to zero, it also produces a better pet (their seahorses born in captivity are taught to eat dead shrimp rather than live food, they live much longer than wild seahorses, and they are easier to breed).  Kudos to these folks.  I love seeing private action solving environmental issues, and their story gets me interested again in the many proposals to allow ownership of tigers and rhinos in private farms to save those species.  Their website is here, and if you are in the market for a pet seahorse, I highly recommend their product. 

Postscript:  The biggest threat to seahorses is the same one faced by rhinos and tigers:  The huge Asian market for fertility drugs based on these animals.  Generally, any animal included in Asian folks wisdom as improving sex in some way is on the fast track to endangered status.  I am hoping that Viagra may turn out to be a savior for these species, as a substitute, in the same way John D. Rockefeller saved the whales in the 19th century with cheap kerosene.  Maybe the Sierra Club should take some of the huge funds they allocate to paying off Congressmen for more regulations and direct it to Viagra donations to China.

Today I was working on a bid for a retail concession in a county park in California.  In these bids we usually promise a set percentage of sales as rent in exchange for the concession and use of certain fixed assets.  One of our standard clauses is to exempt gasoline sales (if there are any) from this rent calculation, because gas sales are so horribly low margin.  Considering the licensing, environmental, and safety issues, gasoline is always a money loser for us that we offer either a) because it is expected, as in the case at large marinas or b) because it gets people in the door to buy other stuff.  And I sell gas in rural areas where I have less price competition than in cities.

It is for this reason that I am always flabbergasted at how much time and attention the government and media tend to pay to retail gasoline pricing.  The portion of my business that is clearly the worst, most unprofitable piece, so much so I have to make special contract provisions for it, gets all the attention for price gouging.   It's like the FEC dedicating most of its labor to investigating Mike Gravel's campaign donations.  I mean, why bother, there's nothing there.

Since the mid-1970s, various people have decried the growing amount of money spent on elections.  They have tried numerous approaches to limiting campaign funding, all to no avail.  In part, their lack of success has been due to off-and-on efforts of the courts to protect political speech.  However, a large reason for their failure has been that they are addressing a symptom, rather than the cause of the problem.

The real cause is the growing regulatory state.  Without regulation, there would be only limited incentive for corporations and individuals to make large political contributions.   Regulation (combined with taxation) is the fountain from which most campaign money springs.  Threaten to regulate a sector, and you automatically put politicians in the position of creating winners and losers, both of whom will spend money to try to improve their fates.

Holman Jenkins makes this point in today's WSJ($):

Being a shrewd bunch, the private equity industry
presumably has gotten the message: When vast new fountains of wealth
open up in the economy, Congress must receive its ransom in campaign
donations. Delivering the wagged finger were none other than Max Baucus
and Charles Grassley, chairman and ranking member of the Senate Finance
Committee, who've taken to musing aloud about how the tax code's
treatment of private equity's lately fabulous profits might be revised.

The bipartisan nature of the initiative should
reassure readers that there's no philosophical issue here. It's purely
bidness. You, private equity, have been remiss in your patriotic duty.
Cough up.

Anyone who recalls the junk bond wars of the 1980s
will notice a pattern. Then too, Congress was awash in proposals for
taxing the takeover industry: by eliminating the interest deduction for
junk bond interest, by imposing an excise tax on assets acquired in a
hostile takeover, etc. These ideas came to naught, not least because of
the fright the proposals put into the stock market. But the endless
debate unlimbered a delicious flow of campaign dollars from all
concerned.

It appears that everything will turn out OK for the politicians:

But the message has been received. Private equity has now set up a
Washington trade group and has opened its pockets to politicians, with
Barack Obama being a special heartthrob. Oh, happy day for members of
the House and Senate tax committees, who lived for years off the junk
bond wars and now will live for years off the private equity plutocrats.

I remember stock brokers used to say that they had the best job in the market, because whether the market went up or down, they still got their money.  The same is true of politicians -- whether the regulations help or hurt, whether they end up benefiting the incumbents or the new entrants -- the politicians will still get their money.

Readers of this blog know that I consider most campaign finance laws to in fact be carefully crafted incumbent protection acts.  Incumbents in major political offices get millions and millions of dollars in free advertising just from their day-to-day ability to get on the evening news.  This free publicity combined with strong name recognition means that upstarts often have to seriously outspend the incumbent to have a chance of defeating them.  So campaign finance laws act as a powerful protection device for these incumbents, limiting the amount upstarts can spend while in no way limiting the incumbents's ability to use their office (and taxpayer money) to shamelessly promote and publicize themselves.

And there is no one better at using elected office to shamelessly publicize himself than new NY Governor Eliot Spitzer.  So absolutely no one should be surprised at this:

Moving swiftly in his efforts to change the culture of
Albany, Governor-elect Eliot Spitzer said Thursday that he would
unilaterally stop accepting campaign contributions greater than
$10,000, which is less than a fifth of the $50,100 in individual
donations currently allowed by state law.

Mr. Spitzer also said that from now on he would refuse to take
advantage of several notorious loopholes in the state's campaign
finance laws that allow corporations and limited liability companies to
circumvent donation limits by contributing through subsidiaries and
other related entities.

Note that he only took these steps just days after he was elected governor the first time.  Spitzer knows that no one can probably offset the PR advantage he wields, but to be on the safe side, this is the opening shot to make sure that no future challenger is going to have the cash to threaten his position in office.

Generally, Eliot Spitzer irritates the hell out of me.  But I will say for one brief period in college, Spitzer, as the butt of a huge campus-wide joke, brought be great mirth.

I have written a number of times that one of the problems with the Katrina aftermath was not that the federal government did too little, but that they try to do too much.  For example:

While turning down offers to help, when everyone agrees not enough
is being done, may seem unthinkable, these are actually predictable
outcomes from a [government] bureaucracy of technocrats.  Technocrats value process
over results, order and predictability over achievement.  More
important than having problems fixed is having an ordered process,
having everything and everyone under control.  In this context, you can
imagine their revulsion at the thought of having private citizens
running around on their own in the disaster area trying to help
people.  We don't know where they are!  We don't know what they are
doing!  They are not part of our process!  Its too chaotic! Its not
under control!

Nearly everyone who is in government has a technocratic impulse -
after all, if they believed that bottom up efforts by private citizens
working on their own was the way to get things done, they would not be
in government trying to override those efforts.  But most emergency
organizations are off the scale in this regard.  99% of their time,
they don't actually have an emergency to deal with - they are
planning.  They are creating elaborate logistics plans and procedures
and deployment plans.  Planners, rather than people of action,
gravitate to these organizations.  So, once a disaster really hits, the
planners run around in circles, hit by the dual problem of 1) their
beautiful plans are now obsolete, since any good general can tell you
that no plan ever survives first contact with the enemy and 2) they are
by nature still planners, trying to get order and process underway and
create a new updated plan, rather than just getting every possible
resource out there fixing the dang problem.

Kerry Howley in Reason's Hit and Run discusses a similar problem in Southeast Asia in the aftermath of the deadly Tsunami:

A year and a half after the deadliest tsunami in recorded history, a
pan-Asian warning system seems about as likely as, say, competent
airport security stateside. So Sri Lankans have poured donations into
DIY monitoring stations, using the Web and volunteers to watch for quakes...

How do officials react to the exciting new world of distributed warning technology?

But the government does not want ad-hoc tsunami warning centres handing out advice to local communities.

"Only the Met Department is authorised to give tsunami warnings and
evacuation orders. They cannot do it. It is illegal. That creates
unnecessary panic," Darmaratne said.

Just as in the Katrina aftermath, the government answer is that we would rather have nothing happen than positive efforts occur that we don't control (or take credit for).

In many states like California, auto insurance rates have been subject to state price controls for years.  A recent debate over a bill called AB 2840 helps shed some light on the total idiocy of trying to have government set prices.

I have to give you a paragraph of background.  Warning -- the next paragraph is mind-numbingly dull.  Please don't give up.

Apparently, auto insurance rates are higher in California cities in part because claims rates (theft, accidents) are higher in the cities.  The cities, which have a lot of political power, argued that this was unfair that their rates were so much higher than rural folks paid.  State-approved insurance rates were discriminating against cities, they claimed.  I don't know if they made the argument, but they could also have argued that infrastructure costs (sales, claims service) was likely lower in cities per capita because of the concentrated customer base.  So the state insurance board proposed to raise rural rates and cut city rates to make prices to all Californians more even.  Rural folks then freaked, and their legislators have proposed AB 2840 to put things back the way they were before.

So who is right?  How the hell am I supposed to know?  How the hell is anyone supposed to know?  There is absolutely no objective way to settle this argument.  I read the attached article and my eyes just started to blur.  That is why in practice, for all the talk of studies and analysis, issues like this are settled in favor of whoever has more political clout or votes.  Price controls, besides wreaking havoc on supply and demand, always - yes always - result in a transfer of wealth from those without political power to groups that have the power.   That's why politicians love them -- its a great way to raise campaign donations, as groups bid to be on the receiving end of such largess rather than being the sacrificial lamb.  And it's why in a free and just society we use this thing called "markets" to determine prices in most other such complex situations.

Via Kevin Drum, perhaps the most ridiculous example yet of eminent domain abuse in our post-Kelo Amerika:

On May 24, the five-member township committee voted unanimously to authorize
the municipality to seize Segal's land through eminent domain and name its own
developer.

"They want to steal my land," Segal said. "What right do they have when I
intend to do the exact same thing they want to do with my property?"

.... Segal...signed a contract last week to sell his property to Centex Homes
for about $13 million, contingent upon local approval. Centex, a nationally
known developer with projects in Middlesex, Morris and Monmouth counties, would
then build 100 townhouses on Segal's property....

Florio and Capodice [the mayor and deputy mayor] said they preferred AMJM
because it is a local company.

"I've never heard of Centex," Capodice said. "They're not Union County
people."

Un-freaking-believable.  Who wants to bet that AMJM has Tony Soprano on the board, or that AMJM has made some nice donations to the township committee's various election funds. 

By the way, the post title comes from this closing remark from Drum:

Still, it smells pretty bad, and it couldn't have happened if Kelo had
gone the other way. Libertarians should feel free to feel vindicated.

Missed this Gem:  Sorry, the contributions revelation is right up front:

On May 21, Albert G. Mauti Jr. and his cousin Joseph [owners of AMJM] hosted a fundraiser for
Assemblyman Joseph Cryan at the Westmount Country Club in Passaic County. The
two developers and family members picked up the $10,400 dinner tab, donated
another $8,000 and raised more than $70,000 that night for the powerful Union
County Democrat, according to state election records.

Three days later, the governing body in Cryan's hometown of Union Township --
all Democrats -- introduced an ordinance paving the way for the Mautis to build
90 or so townhouses on six acres of abandoned industrial land along the Conrail
line in town.

If you didn't see it on Instapundit, LSU professor Jeffrey Sadow has a great post on the huge corrupt porkfest that is being proposed in Louisiana:

The $250 billion [in proposed federal aid] is not far behind the $350 billion
estimated spent on the military aspects and their aftermath of the war
of terror since Sep. 11, 2001 "“ which means in reconstruction terms
(leaving out the actual war-making expenses), Louisiana actually is
asking for more than countries with 10 times its population which face
far more damage.

The $40 billion [in proposed Corps of Engineering spending for Louisiana] is ten times the annual
Corps budget, and 100 times the annual amount typically received by
Louisiana which gets more such funding than any other state.

Also, it is nearly three times the size of the entire request for coastal restoration efforts in the state.

He concludes:

So, let's get this straight. Louisiana, from some of her federal officials through some state officials all they way down to city and other local governments,
countenanced negligence from benign to irresponsible in ensuring proper
flood protection and in dealing with hurricanes. And now these same
people have formulated a plan wanting the country to pay an incredible
sum of money to the state controlled by people from the state to deal
with the aftereffects and, apparently, Louisiana's past inability to
utilize our resources efficiently in other areas?

The rest of the country is going to look at this and think we're still stuck on stupid.

Glenn Reynolds also has a long post with other good links on the topic here.  I particularly liked this bit he quotes from John Fund:

Put bluntly, the local political cultures don't engender confidence
that aid won't be diverted from the people who truly need and deserve
it. While the feds can try to ride herd on the money, here's hoping
folks in the region take the opportunity to finally demand their own
political housecleaning. Change is past due. Last year, Lou Riegel, the
agent in charge of the FBI's New Orleans office, described Louisiana's
public corruption as "epidemic, endemic, and entrenched. No branch of
government is exempt."

Louisiana ranks third in the nation in the number of elected
officials per capita convicted of crimes (Mississippi takes top prize).
In just the past generation, the Pelican State has had a governor, an
attorney general, three successive insurance commissioners, a
congressman, a federal judge, a state Senate president and a swarm of
local officials convicted. Last year, three top officials at
Louisiana's Office of Emergency Preparedness were indicted on charges
they obstructed a probe into how federal money bought out flood-prone
homes. Last March the Federal Emergency Management Agency ordered
Louisiana to repay $30 million in flood-control grants it had awarded
to 23 parishes

Update: Lots more at Porkopolis. 

Louisiana population is 4,468,976, not all of which was
affected by the hurricane. A reasonable assumption is to say that half the
population was in the path of the hurricane. That would be about 2,234,488,
but to keep calculations simple we'll round up the affected population to 2,
500,000. That 2.5 million of affected Louisiana residents will make for an easy
calculation

$250 billion divided by 2.5 million affected residents
results in a disaster relief request of.....(drum rooooooooooll)...$100,000 per person!

And these juicy details:

• $100 million for "psychological trauma response early intervention,
  prevention, and disorder treatment by culturally competent counselors and mental
  health professionals for children who are 0 to 5 years of age; see page 38, line
  1.
• $100 million for mosquito abatement; see page 39, line 12.
• $1 billion "shall be used for a program to aid the travel and tourism
  industry"; see page 45, line 17
• $5 million for Project Serv under the Safe and Drug-Free Schools and
  Communities Act; see page 49, line 13
• NOAA weather radio for every eligible person; see Sec. 526 .

Occasioning this statement:

"It's all vital," said Landrieu. "There's not
anything in here that we would consider a wish list or pie in the sky. This is
what we really believe is essential."

This is just the macro-scale version of this, business as usual in Louisiana:

Police found cases of food, clothes and tools intended for hurricane
victims in the backyard, shed and rooms throughout the home of a chief
administrative officer of a New Orleans suburb, officials said
Wednesday.

Police in Kenner searched Cedric Floyd's home Tuesday because of
complaints that city workers were helping themselves to donations for
hurricane victims. Floyd, who runs the day-to-day operations in Kenner,
was in charge of distributing the donations.

The donations, including lanterns, vacuums and clothes with price
tags attached, had to be removed in four loads in a big pickup truck,
Kenner police Capt. Steve Caraway said.

"It was an awful lot of stuff," he said.

Technorati Tags:  Katrina, Porkbusters

Whether it is the French influence or the long shadow of Huey Long's patronage driven socialist experiment, Louisiana has a tradition of bad government.  I remember several years ago the governor's race featured a Nazi running against a convicted felon (convicted in office of bribery and influence peddling, if I remember right).

So one of the problems with the management of Katrina problems is that Katrina hit Louisiana, the US's own version of Haiti.  Don't believe me?  This is already coming out, and you can be sure there is more:

Police found cases of food, clothes and tools intended for hurricane
victims in the backyard, shed and rooms throughout the home of a chief
administrative officer of a New Orleans suburb, officials said
Wednesday.

Police in Kenner searched Cedric Floyd's home Tuesday because of
complaints that city workers were helping themselves to donations for
hurricane victims. Floyd, who runs the day-to-day operations in Kenner,
was in charge of distributing the donations.

The donations, including lanterns, vacuums and clothes with price
tags attached, had to be removed in four loads in a big pickup truck,
Kenner police Capt. Steve Caraway said.

"It was an awful lot of stuff," he said.

Technorati Tags:  Katrina

If you thought the idiots who ran Orange County's finances into the ground were bad, wait until you meet these jokers:

Two months ago, reports emerged that $300,000 in rare coins was missing from a
collection in which the state Bureau of Workers' Compensation (BWC) began
investing in 1998 as a peculiar form of stock hedge. That was bad enough. But
last week, word came that between $10 million and $12 million in coins had
disappeared. That caused BWC director Jim Conrad to announce his resignation,
and launched a flurry of accusations and calls for legal action.

As if my workers comp. rates weren't already too high.  There goes my idea to invest Social Security funds in beanie babies and 60's lunch boxes.  Apparently most of the major lawmakers in the state got large campaign donations from several large coin dealers, and they returned the favor by investing public funds in coins through these dealers.  I often make the argument not to let the government have control of large equity investment funds -- I did not even occur to me to include coins.  One of the things about coins - you have to hold them for a long, long time to make money, in part because commissions markups are so high vis a vis other investments (which explains why coin dealers so readily donated large sums of money for government business).

Reason has a good roundup.  Unfortunately, I am sure this will all lead to more restrictions on spending and speech in campaigns, though it appears the system is working fine - full disclosure of funding sources certainly has everyone running for their lives.

The real solution is to make elected officials take a real fiduciary interest in the state's investment funds (pensions probably being the largest).  What they would prefer to do is to legislate a set of rules and then leave managers to follow these rules, giving them plausible deniability.  What they should do is sit down once a quarter and review portfolio investment performance and asset allocations.

There is a tendency in politics, once you have an enemy, to attack that enemy no matter what position they take.  Conservatives of late have (rightly) attacked Liberals for being un-supportive of Iraqi democracy, just so they can embarrass their arch-enemy GW Bush.  However, conservatives can be guilty of the same thing. 

Ed Morrissey of Captains Quarters has been on Governor (of Wisconsin) Jim Doyle's case for historically opposing and promising to continue to oppose reforms in election controls, despite very suspicious voting numbers in Milwaukee.  In this case, Captain Ed has done a great job bringing focus to election fraud and "over-vote" issues in Milwaukee, E. St. Louis, and Washington State, especially since the MSM has preferred to focus on potential "under-vote" issues in Ohio and Florida.

However, in piling on Mr. Doyle, I fear that Morrissey has put aside his political and/or philosophical beliefs in favor of giving his enemy another good bludgeon.  His post points out that:

executives involved in a controversial health-care merger gave Doyle over $28,000 in donations shortly after he allowed the merger to go through. Critics at the time wondered why Doyle didn't ask for common-sense economic concessions

OK, lets take this in two parts.  First, lets look at Doyle's decision on the merger.  The article says that Doyle is being criticized basically for NOT holding two companies for ransom.  Often anti-trust law is used as "merger tax" to extract some sort of pay-off from the parties, in the form of reduced prices or a spun-off properties or whatever.  However, no matter what you call it, this is a bribe the government is demanding to let individuals carry forward with a private business transaction.  Usually this bribe is waved around by some politician in order to score some populist political points toward their next reelection (the Europeans and Elliot Spitzer are both good at this).

Is this really what Morrissey thinks Doyle should have done?  As a libertarian, I find that conservatives' support for truly free market capitalism sometimes runs hot and cold, but I would generally expect a conservative to oppose this kind of extortion and interference with the free market.  So does Morrissey really think Doyle did the wrong thing?

The second part of the story, of course, are the campaign contributions.  First, I would argue that if Doyle's merger decision was not wrong, then donations based on this decision are not wrong either.  Many, many companies out there donate to politicians who promise to keep the government off their back.  I certainly do - does that make my contributions graft?  Finally, Morrissey admits that

These donations do not appear to have broken any laws, although the timing strongly suggests some sort of payoff

Look at it the other way around:  If Doyle HAD extracted concessions to approve the merger, it would not have strongly suggested a soft of payoff, it would have been a definite payoff.

Captain Ed- I enjoy your site immensely, even when I disagree with it.  It is OK for you to say that Doyle made the right decision on the merger without backing off of him over the election issue -- just as it is OK for those of us who had concerns about the war in Iraq to gleefully support that country's return to democracy.

Why Aren't There More Private Schools?  This is a conversation my dad and I have had any number of times - as he has sat on the board of a number of public and private schools / districts and I have, given frequent moves, oven shopped for schooling for my kids.

The first, perhaps most obvious answer is that there is not that large of a market, because few people can afford to pay two tuitions for their kids (i.e. public school tuition via property taxes and then a separate private school payment).  But, I think that that answer is wrong.  This country is tremendously wealthy, both on average and at the top end.  Most really good private k-12 schools are oversubscribed -- with competitive entry requirements and long waiting lists.  We have all heard stories about New York City schools where you have to practically go straight from the act of conception to the admissions office to have a chance to get the kid in.

I have my own experience with this, in many cities, but take Seattle for example.  In the east side suburbs, their are 3-5 high quality private elementary schools, and for the most part, they are all way oversubscribed.  One of them admits something like 6% of applicants.  And charges $10,000+ a year for kindergarten and more for later years.

What other industries are there where 94% of the demand for a $10,000+ product goes unmet by new entrants?  And unmet for decades, not just in a short period of mismatched capacity?  Just look at iPods - how many people jumped into the market with copycat products when they saw the popularity of this product, and Apple's inability to keep up with demand?

But what really got me thinking about this problem was when I moved back to Phoenix.  Despite having my kids in some of the best schools in every city we have lived in, the absolute best is, of all places, here in Phoenix.  How do I know it is the best?  Well, my son went to kindergarten at this Phoenix school, and then we moved to Seattle for two years.   In Seattle, we went to what was supposed to be about the best elementary school on the east side -  Gates sent some of his kids here, as did the McCaws, and many other people who could afford any place they wanted.  At the end of second grade, the school told me my son could have skipped second grade, which means he could have skipped first grade there too.  In two years, he never learned anything more than he learned in one year of kindergarten in Phoenix.

There are two other interesting things about this Phoenix-area private school, beyond just its excellence:

• It is by far the cheapest we have ever attended, less than half what we paid in Seattle and well under the average per-pupil spending in public schools
• It is for profit - not a charity or foundation.  It has no donations, government grants, endowments, etc.  It runs itself for profit, it is inexpensive, and the education is great.

The school is not perfect -- it has a strong focus on academics, without the big theater programs or art programs or photography classes you might find in a large public school, so we have to supplement that stuff outside of school.  But my point is, why aren't there more schools like this?  Why aren't people jumping in to fill this market?  This is more than of academic interest to me.  I am a big supporter of school choice, but to support choice you have to believe that private schools will be created to meet the new demand vouchers would open up.

Thus it is with great interest that I saw this post at Marginal Revolution about the barriers to starting a private school.  They link this article from the Reason foundation.  The Reason Foundation argues that a lot of micro-regulation, particularly zoning, limits private schools, especially when zoning boards are dominated by people who have an interest in protecting public schools from competition.

In the context of my Seattle story earlier, by the way, note this proposal that came out a while back to actually ban private school (and church) construction in large parts of the county that Seattle is in. 

UPDATE:

There were several responses to this along the lines of 'so what - everyone has to navigate basic permitting processes'.  That may be, but my experience is that zoning is stacked against private schools, even before you consider the proposed total ban on private school construction described in the article I linked above.  For example, in the Seattle eastside suburbs, one private school that needed to move to larger quarters was unable to find a site within a 20 mile radius where they were allowed to build a private school.  Residential zoned tracks did not want more traffic from a school, and they were not allowed to have a school with little kids in most commercial zoned tracks.  The point is that private schools face permitting hurdles that go beyond what most businesses face, and, as I mentioned earlier, most zoning boards are packed with people who have a vested interest in not allowing new private schools to be built anywhere.