Reason Report Fall 2003 • Issue No.

100

Reason Wins Fight Against Tax Increases

Facing a deficit estimated at
$38 billion, California politi-
cians claimed they had to raise
taxes. Reason fought this idea
and won—by creating and
promoting a “Citizens’ Budget”
showing that new taxes are
harmful and unnecessary.
California State Senator

Tom McClintock championed
many of Reason’s fiscal solu-
tions. In an op-ed, McClintock
wrote, “Reason...has identified
$6 billion in wasteful bureau-
cracies that could be eliminated
or consolidated and $9 billion
in savings from contracting
out—$15 billion that could be
cut out of the budget without
affecting vital services.”
In their August 1 Wall Street
Journal op-ed, Kathleen
Connell, former California
State Controller, and Matt
Fong, former California State
Treasurer, urged the adoption of
the reforms contained in
Reason’s Citizens’ Budget.
Connell also promoted the plan
on radio stations across the state.
Reason staff members, Ex-
ecutive Director Adrian
Moore, Senior Fellow Carl
DeMaio, and Director of Gov-
ernment Affairs George
Passantino, spoke to legisla-
tors, city councils, chambers of
commerce, and editorial boards
about the damage tax increases
would do to California’s quality
of life. Applying the principles
© 2003 nourokphoto.com
Arnold Schwarzenegger talks with Reason Founder Robert W.
Poole Jr. before Reason’s 1989 banquet. This year’s banquet,
celebrating 35 years of advancing liberty, takes place at the
Regent Beverly Wilshire Hotel in Beverly Hills on November 5
of limited government and personnel costs and eliminating
focusing on specific budget 16,000 state positions.
cuts, the Reason team won California is not out of the
endorsements of the Citizens’ woods yet, having borrowed to
Budget principles. finance a portion of the deficit.
Before a traveling road show Reason continues to fight taxes
of politicians justifying new and press for fundamental re-
taxes reached many communi- form in state budgeting. !
ties, Reason’s team had been
there and armed Californians In This Issue
with the arguments to resist.
In July, a budget was signed. The Night the Lights Went Out,
page 3
Though the budget included
revenue from a challenged A Resounding Yes for Sullum,
tripling of vehicle license fees, pages 4-5
increases in personal income Protecting the Child,
taxes were shot down, as were page 6
increases in cigarette taxes and Memories are Made of This,
sales taxes. Adopted was $1 page 8
billion in savings from reining in
President’s Letter

Survey Says Reason Online Reaches New Audiences

A major goal of Reason is of the day. (There’s also a good share with you:
outreach, winning the hearts amount of humor.) The staff “Reason Online is extremely
and minds of people with our Web log even brings a libertar- helpful—my college debate team
message ian perspective to the news on a uses a print subscription and the
of “Free minute-by-minute basis. Web site. It is wonderful! The
Minds and Ninety-eight percent of content is always of stellar qual-
Free Mar- respondents said the quality of ity, and I enjoy the blog.”
kets.” articles is “good” or “excel- “It’s a cleanly-designed,
A new lent,” which helps explain why readable site. The articles are
survey of Reason Online generates be- top notch. Hit and Run and
Reason tween 200 and 300 new sub- Brickbats are always entertain-
Online scriptions to the print magazine ing; I check the former every
readers shows that Reason is each month. Over a third of few hours. I wasn’t too aware
succeeding in two ways: reach- the online readers have never of libertarian views until I
ing young people and crossing read the print edition and visited the site.”
ideological boundaries. Over nearly a quarter of the respon- “I frequently assign my stu-
half of the visitors to Reason dents found the print edition dents in composition and re-
Online are younger than 35 and because of the Web site. search classes to read your
one third would not describe In their comments, the read- articles.”
their views as libertarian. ers gave us tips for how we can “The quality of the writing
Reason Online succeeds be- improve Reason Online’s archi- by so many different authors—
cause it’s packed with interesting, tecture, search capability, and not only the literary style, but
timely, well-researched stories mix of stories. They also gave the meticulous attention to
about the most pressing issues positive feedback that I want to detail and fairness—is unsur-
passed by any other print or
Reason Report electronic magazine, paper,
blog…even when I disagree, I
Chairman of the Board Chairman-elect
Harry E. Teasley, Jr. William A. Dunn, DUNN Capital Management
love reading your articles.”
Board of Trustees I want to give special men-
Thomas E. Beach, Beach Investment Counsel, Inc. • David Fleming, Latham & Watkins • tion to Reason Editor-in-Chief
C. Boyden Gray, Wilmer, Cutler & Pickering • James D. Jameson • Manuel S. Klausner, Nick Gillespie, who built Rea-
Law Offices of Manuel S. Klausner • David H. Koch, Koch Industries • James Lintott,
Sterling Foundation Management, LLC • Stephen Modzelewski, Maple Engine, L.L.C. • son Online into a major pres-
Sarah O’Dowd, Heller Ehrman White & McAuliffe • Robert W. Poole, Jr., Reason Founda- ence; to Web Editor Tim
tion • Randall N. Smith, InSite MediaCom, LLC • Al St. Clair, Procter & Gamble • Walter E.
Williams, George Mason University • Frank Bond (Trustee Emeritus)
Cavanaugh, who added features
Reason Foundation and increased the daily content;
Robert W. Poole, Jr., Founder • David Nott, President • Nick Gillespie, Vice President and to Publisher Mike Alissi, who
Editor-in-Chief, Reason Magazine • Adrian T. Moore, Vice President and Executive relentlessly flaks Reason stories
Director, Reason Public Policy Institute
Reason Magazine Founding Editors
to increase visits to our site; to
Manuel S. Klausner, Tibor Machan, Robert W. Poole, Jr. Carol Sanders, who has helped
Reason Report us improve our visibility and
Donald Heath, Editor • Melissa Palmer, Associate Editor • Ray Ng, Designer • Jennifer placement on Internet search
Kambara, Layout
engines; and to Ron Unz, who
Published quarterly for supporters of Reason Foundation, 3415 S. Sepulveda Blvd., Suite
400, Los Angeles, CA 90034-6064 Phone: 310-391-2245, fax: 310-391-4395
is developing a database archive
Web: Reason.org • Reason.com • RPPI.org • E-mail: contribute@Reason.org of every Reason article going
Copyright 2003. Reason Foundation is a nonprofit 501(c)(3) research and educational back 35 years to 1968.
institution. All contributions are tax-deductible. Federal tax ID# 95-3298239. - David Nott !
2 Reason Report

Regulating in the Dark
The juice had barely started
flowing again in the Northeast,
Midwest, and Canada when
Reason Director of Economic
Policy Lynne Kiesling joined
Nobel Laureate Vernon Smith
to tell Wall Street Journal read-
ers that “a systematic rethink-
ing of the power demand and
supply system—not just trans-
mission lines—is required to
bring the energy industry into
the contemporary age.”
A clearer failure of treating
the production and distribution
of electricity as a monopoly
would be harder to find (espe-
cially in the dark). Lynne and
Reason Public Policy Institute
Executive Director Adrian
Moore explained the need for
deregulation in many newspa-
per, radio, and television inter-
views in the days following the
blackout. They explained that
the key point of failure in our
electric system isn’t a transmis-
sion line in Ohio, but the fact
For more on electricity deregulation, see the October
2003 issue of Reason’s Privatization Watch
Reason.org
News
Executive Director Adrian Moore tells the CNN audience that the
transmission of electricity is not a “natural monopoly”
constraints on the sale of gener-
that consumers don’t get price
ated electricity. However, retail
signals and can’t adjust their
prices and electrical transmis-
demand accordingly. The
sion are still regulated under
system therefore must be built
the assumption that provision
to handle peak demand and
of electricity is a natural mo-
when it can’t, it fails spectacu-
larly. nopoly. That assumption leads
to an inefficient market and to a
The limited deregulation that
transmission system that is
has occurred in electricity has
unable to meet our needs for
been to remove some con-
capacity and for reliability.
straints on wholesale pricing
and to remove geographical So, what is needed? In
their new policy study,
Movin’ Juice: Making
Electricity Transmission
More Competitive, Lynne
and Adrian recommend
the use of distributed
generation technology,
innovative forms of
contracting and other
institutional and techno-
logical changes that
would create more op-
portunities for competi-
tion in electric transmis-
sion. They shed wel-
come light on this oppor-
tunity to deregulate. !
3
News

Readers High on Sullum Book

Now in its second printing, Saying Yes: In Defense of Drug Use by
Reason Senior Editor Jacob Sullum makes the case that not all
drug use is drug abuse and that currently illegal drugs should be
treated the way we treat alcohol.
Reviews of the book have appeared everywhere from Mother
Jones to The New Yorker to The Washington Post. National Review
praised the book, saying “A highly effective debunking...well-
written, persuasive, and important.” Library Journal wrote “This
thoughtful, engaging analysis is sure to spark discussion.”
Reason has been actively getting the message out through me-
dia appearances and a cross-country tour made possible by Rea-
son supporters, many of whom opened their homes for a celebra-
tion of the book’s impact.

Noted drug policy reformer John
Sperling and Reason Editor-in-
Chief Nick Gillespie in Phoenix
Thursday, May 29
Dear Mr. Sullum:
I caught your appearance on C-SPAN yester-
day. You were brilliant! You opened my
eyes to a whole other side of the drug war.
Ironically, I am a member of the U.S. Coast
Guard and have spent a portion of my career
fighting that war....

Guy Riggs, hostess Andrea Rich

of Laissez Faire Books, and
Reason President David Nott
in New York City

BILL O’REILLY: “Oh, stop it. I’m

not even going to get into it.
I’m not a hypocrite. Mr. Sullum,
you’re not either. You want to
get stoned, have a good time.
Don’t get in a car, and don’t Jacob Sullum’s views on responsible drug use so
come near my family.” enraged Bill O’Reilly that he called Jacob a “pinhead”

4 Reason Report

A Strong Show of Support for Sullum
Jacob Sullum speaking with
James and Eloise Proctor at the party
they hosted in Washington, D.C.
Reason President David Nott, Ethan
Nadelmann of the Drug Policy Alliance, and
Reason Torchbearer Bob Gelfond take a
break from conversing at the New York City
home of Howie and Andrea Rich
Dan Grossman talks to Reason President
David Nott at the home of James and Eloise
Proctor in Washington, D.C.
Reason.org
News
MTV’s Kurt Loder clowns with Reason Contributing
Editor Cathy Young and Editor-in-Chief Nick Gillespie
Mickey Kaus, writer of Slate’s “mostly political” Web
log—kausfiles, talks with Reason Founding Editor
Manny Klausner and Reason Editor-in-Chief Nick
Gillespie at the Beverly Hills home of Mike Friend and
Reason Trustee Randall Smith
June 7, 2003
“I caught the O’Reilly/Sullum in-
terview on news radio in Houston.
I was never so disgusted in my
life. Bill O’Reilly is so full of
himself.... I never got a chance
to hear more than a few words of
what Sullum had to say—his presence
of mind was extraordinary consider-
ing the rudeness and provocation of
O’Reilly....”
5
News

Reason Advocates One-Stop Child Protection

There is an innovation in
child protective services that
makes the system child-focused
and parent-focused, instead of
bureaucracy-focused.
Child advocacy centers are
designed to reduce trauma to
an abused child by coordinating
the child’s interview to include
professionals from multiple
agencies. Today, according to
Victim Services, a New York-
based advocacy organization,
children are on average sub-
jected to eight retellings of
their story. A child advocacy
center reduces the number of
interviews and improves the
quality of the investigation.
“You have managed to do in
one day what we have tried to
do over the course of several
years—that is, bring our cen-
ters to the forefront as being a
major component of the solu-
tion,” wrote a staff member at a believe as I do about the horrific
New Jersey child center. system we use wherein children
Lisa Snell, Reason’s educa- are repeatedly murdered, abused,
tion director, is the author of and neglected with the approval
Child Advocacy Centers: One Stop of state run agencies.” U.S.
on the Road to Performance-based Rep. Jim Moeller (D-WA)
Child Protection. Reason sent offered to forward the study to
her study to more than 6,000 other members of the House
legislators, government staff Children and Family Services
members, and child advocacy Committee.
professionals. Many of them Support for the study was
expressed their appreciation. provided by the Scaife Family
An adoption worker in Foundation. The complete text
Florida told Reason, “Your is available online at RPPI.org/
article gave me hope that others ps306.pdf. !
“Life, Liberty, and the Pursuit of Happiness”
The Heartland Institute of Chicago, Illinois
will be honoring Reason Founder Robert W.
Poole, Jr. with the Heartland Liberty Prize at
their 19th anniversary dinner on Thursday,
October 16, 2003. For details, call Heartland
at 312-377-4000.

Reason Weekend 2004

Featuring
Steven Pinker, author of
The Blank Slate and How the
Mind Works
Charles Murray, author of
Human Accomplishment
James Randi, demystifier of
the paranormal and super-
natural
and more
March 4-7, 2004
Hyatt Regency Grand
Cypress, Orlando, Florida

Register now at Reason.org/

Reason Editor-in-Chief Nick Gillespie discusses topics in the news
RW2004.html on C-SPAN’s “Washington Journal”
6 Reason Report
 Impact

Impact Highlights Impact Summary

October 1, 2002-June 30, 2003
! On June 16, Reason Director of Transporta- Articles Citing Reason Experts .................. 1,400
tion Robert W. Poole, Jr. argued in the Washing-
ton Times that efforts by air traffic controller Total Audience (based on
unions to derail efforts to expand competition circulation of outside print articles) .. 202 million
within the FAA are based on deception. Television and Radio Appearances .............. 260
! On June 19 in a Los Angeles Daily News edito-
Reason Circulation ................................. 58,390
rial, Reason Director of Government Affairs
George Passantino argued that California is
suffering a “competitiveness crisis.”
Reason Foundation Online Growth
! Reason Associate Editor Jesse Walker’s review
of All the Rave: The Rise and Fall of Shawn 2,000,000

Fanning’s Napster appeared in The Washington

Post’s “Book World” on June 8.
Page Impressions
! On June 25, Senior Editor Jacob Sullum ap-
peared on MSNBC’s “Hardball” to discuss smok- 1,000,000

ing bans and the risks of secondhand smoke.

Unique Users
! On July 2, Reason Director of Economic Policy
Lynne Kiesling testified to the House Subcom-
mittee on Energy Policy, Natural Resources, and 0
Jan-00 Jul-00 Jan-
Jan-01 Ju
Jul-01 Jan
Jan-02 Jul-02 Jan-02
Jan- Jul-03
Regulatory Affairs about the federal ethanol
mandate and its negative consequences on
California’s economy and environment.
Recent Policy Publications
! On July 24, Reason Director of Privatization
Geoffrey Segal testified to the Senate Commit-
tee on Energy and Natural Resources on the Revisiting the Public Interest in Private Water
benefits of competing out services within the (Policy Brief 22) by Alexei Tsybine and Don
National Park System. S. Evans, May 2003
! On August 9, Reason Editor-in-Chief Nick
Child Advocacy Centers: One Stop on the Road
Gillespie appeared on Fox News Channel’s
to Performance-Based Child Protection (Policy
“From the Heartland with John Kasich” to dis-
Study 306) by Lisa Snell, June 2003.
cuss the California recall vote.
! On July 28, Reason joined such major maga- Federal Competition Talking Points by Adrian
zines as Forbes, U.S. News and World Report, Es- T. Moore, Geoffrey Segal and Carl DeMaio
quire, Mother Jones, and Kiplinger’s Personal Fi- (with the Performance Institute), July 2003.
nance as a launch partner of KeepMedia, an on-
line service offering unlimited access to a data- Frequently Asked Questions About Federal
base of magazine content for a monthly fee. The Outsourcing, Competitive Sourcing, and Com-
database offers search capabilities, allowing users petition (Policy Brief 23) by Geoffrey F.
to fine Reason’s unique take on topics of interest. Segal and Adrian T. Moore, July 2003
! On August 17, the Orange County Register
urged California gubernatorial candidates Cruz Emergency Medical Services Privatization:
Bustamente and Peter Ueberroth to join Tom Frequently Asked Questions (Policy Study 310)
McClintock, Bill Simon, and Arnold by Ted Balaker and Adam B. Summers,
Schwarzenegger in adopting principles from August 2003
Reason’s “Citizens’ Budget.”

Reason.org 7
News
Reason Founder Robert Poole, Jr. Looks
Back at 35 Years of Advancing Liberty
I was just a year out of
graduate school when I
chanced upon my first issue of
Reason in 1968. It was mimeo-
graphed, published by a jour-
nalism student in Boston, and
had pretensions of becoming a
national magazine. Little did I
realize that a year later my first
published article would appear
as its cover story—and that six
months after that I’d be (with
several partners) its owner.
When Tibor Machan and I
wrote Reason’s first business
plan, we did aspire to produce a
serious national magazine, one
that would influence discussion
of ideas and issues in a pro-
liberty direction. We did not
yet have in mind the creation of
a think tank and its related
work of shaping public policy—
that would be nearly a decade
in the future, when we created
Reason Foundation in 1978.
Reason Foundation
3415 S. Sepulveda Blvd., Suite 400
Los Angeles, CA 90034-6064
Both the magazine and the lysts helping to privatize half
policy research have been far the federal bureaucracy, and
more successful than we ever with Reason editors and authors
imagined. appearing all over the national
My first clue that Reason media, we’ve come a very long
could have national impact way from our early California
came in 1978, shortly before garage-business origins. To
Reason Foundation opened its celebrate that wondrous jour-
doors. A cover story I’d written ney, I hope you will join my
two years before, about the colleagues and me for our gala
private fire-protection company on November 5 at The Regent
in Scottsdale, Arizona, had Beverly Wilshire in Beverly
caught the attention of a “60 Hills, California. !
Minutes” producer, and I
worked with him to help him
research what became the first
network TV coverage on the
privatization of a municipal
service. That was the first of
many Reason stories picked up
by the national media. And it
directly inspired my book,
Cutting Back City Hall, and the
creation of what became
Reason’s Privatization Center.
Today, with our policy ana-
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