Thursday, September 20, 2018

Raise Federal Park Fees!

People can afford to pay more to visit Federal Parks, believe me!

Suppose you ran a coffee shop.   You had plenty of customers - a line out the door, in fact.  You sold out of coffee every day before 9AM.   There were so many people buying coffee, that you created a traffic problem in the neighborhood.  To reduce congestion, you set up a website and app for customers to "reserve" their coffee in advance - it too, is sold out in minutes.   But this way, there are no long lines anymore, just people driving up and getting their coffees until you are sold out.

Despite all these customers, you are losing money - hemorrhaging it, in fact.  So you hire a consultant, who goes through your books and makes a startling discovery.  "You're selling coffee for only 50 cents a cup!" he says, "and lattes and specialty drinks for 75 cents!"

"Is that too low?" you ask.

"Well, you are losing over a dollar a cup on every cup you sell!" he replies.

"But I want my coffee to be affordable for the average person," you reply, "that way, I can practice social justice!"

"Look out the window," he says, "You see the customers driving up to the service window?   In their Mercedes?  Their $70,000 pickup trucks?  Do they look like they need social justice?   They are just taking advantage of you is all.   The shop across the street charges $2 for a cup of coffee!  And their customers are often poorer than yours - they don't have the wherewithal to reserve coffee online through their cell phones!"

Of course, such a scenario would never play out in real life.   You'd go bankrupt in short order, selling coffee for less than cost, or using "social justice" as your business plan.   You have to charge more than the cost of operating the business, in order to stay in business, as Elon Musk will shortly find out.

That is, of course, unless you are the government.   If the government ran a coffee shop, no doubt some politicians would try to curry votes by lowering the cost of coffee to 50 cents, while having taxpayers take up the slack.   And they would argue that lowering the cost of coffee and subsidizing it with tax dollars is "more fair" to poor people who can't afford coffee.   But of course, you have to ask yourself why someone who is desperately poor is buying designer coffees in the first place.   And you have to ask yourself whether it is "fair" that the same low price be charged to everyone, regardless of income.   In terms of "social justice" it doesn't even make sense - you are offering subsidies to both the rich and poor.

But that is exactly what is happening in our State and Federal Parks systems.   The going rates for staying in parks are less than half that what commercial parks are charging.  As a result, most government-run parks are at full capacity at all times, which creates a lot of wear and tear on the facilities and increases the cost of labor and overall costs.   While the government doesn't have to pay property tax or a mortgage on their land (as private park owners do) they do have overhead to cover.

Every time Congress tries to raise fees to a level even approaching free-market rates, the social justice types cry foul.  "How will the poor be able to afford to visit our nation's parks?" as if the homeless have a vacation days coming up.   And we see this even on our little resort island, where retired New York school teacher couples, taking in over a hundred grand a year in pension money, have decided to "preserve our island for the average Georgian!"

In their condescending minds, the "average Georgian"is a hillbilly with no shoes, riding his donkey to the campground.   The reality is somewhat different.   Those rednecks you scoff at have a fifth-wheel trailer nearly as large as your first house - and are towing a second trailer behind it with a bass boat, a golf cart, a four-wheeler, or perhaps all three.   They hardly need a subsidy to go on vacation, and in fact, they don't mind spending money on vacation - that is, indeed, what one does on vacation.

Artificially lowering prices on commodities doesn't enact social justice - it just creates a windfall for some lucky winners and distorts market prices.   After the war, New York City enacted "rent control" which locked the rental prices of certain apartment buildings at artificially low rates.   The net result wasn't "social justice" but that a lucky few won the apartment lottery - and kept their apartments for decades, even after they moved out.   Many very wealthy people keep a pied-à-terre in New York, thanks to rent control.

The same effect occurs in our parks system.   People stay up until midnight, 364 days ahead of their scheduled arrival date, to click on "RESERVE" at 12:01 AM to lock in a site at Bahia Honda or John Pennycamp State Parks in the Florida Keys.   These are not "poor" people looking to vacation on a budget, but rather middle-class and upper-middle-class people with expensive motorhomes who want an exclusive vacation campsite on the beach.   And thanks to the nonsense pricing the government uses, they get it.  You drive down there and look for a site, it is all reserved a year in advance.   So you end up paying two or three or even four times as much to stay at a much less desirable "commercial" campground.

Worse yet are these "golden years" passes that the Federal government and States hand out.  I was in Florida recently and offered a 10% discount for being over 55.   While I gladly took the discount, I didn't feel that by dint of being "older" I deserved it.  In fact, the young couple behind me, staying in a tent with a young baby, needed this discount far more than I did.  But again, we have social justice rearing its ugly head.   "Old people are all poor and need financial assistance!" they cry.  Yet the sorts of folks "full timing" in a $250,000 motorcoach are hardly poor and hardly need a subsidy.  But they will take one, if you offer it.  And oddly enough, if you ask them, they will tell you they are entitled to it.

The other unintentional effect of subsidizing park fees is that often you end up with people living in parks.   The fees are so low - and many parks offer huge discounts for weekly or even monthly rates - that many people decide to simply live in an RV at a State or Federal Park.   Parks try to fight this by limiting stays to 14 days or so, but often this just means moving to another campsite in the same park, or indeed, merely shifting to a neighboring park, every two weeks to a month.

The fees we are talking about are often not a lot of money.   Many parks charge only $15 to $25 for an overnight stay - certainly "affordable" for anyone.  There is headroom to increase fees.   Granted, entry fees for "name brand" parks like Yellowstone, Denali, or Yosemite are far more than that - and camping fees charged on top of that.  But when you have a line out the door - well, that usually means you are undercharging for your service, and you need to raise rates.

As Mark learned in Hotel/Restaurant Management school, if your hotel is full every single night, you are doing something wrong.   Your rates are far too low and you are actually making less money than is optimal.   You are better off charging more and having a few empty rooms than to lower prices and sell out every night.   Your labor costs and wear-and-tear are less if the hotel is only 3/4 full, and you have extra rooms available "just in case" something comes up, like a guest setting off a sprinkler head (I've seen it happen!).

This is not capitalistic "greed" as the social justice crowd would have you believe, but just good management and good stewardship of resources.  And when it comes to public lands, good stewardship is in everyone's interest.

The coffee shop scenario illustrates the fallacy of using social justice as business model.  Yet that is, in essence, what socialism or communism are all about - having politicians, not business-people, set prices and policies for businesses, often to appease voters who want something-for-nothing.   Governments can prop up money-losing businesses, but not for long.  Eventually, they run out of money.

And often the people benefiting from this government largess are not the poor and downtrodden, but the middle-class who just wants free shit - or stuff at a discount.  But those are people who - unlike the poor - actually vote and thus actually have a voice.   So they badger their congressman to lower fees or keep fees low, and get away with it.

The Republicans posit that the Democrats get into power and stay in power by offering bread-and-circuses to the masses.  The Democrats argue the Republicans get into power and stay in power through trickery and offering lower taxes to the rich.   Both are right, to some extent.  But often, it is the middle-class, wanting its special discounts (such as the home mortgage tax deduction) which drives the political process.   The middle-class votes and has political power.  And they argue for special treatment and special discounts on the grounds they are "helping the poor."

But in fact, they are merely helping themselves!