Cities and States Going Bust

A few thoughts about why Cities and States go bust, what might prevent it, and why the problem will remain.

The problem

Politicians gain from buying votes with promises of current and future payoffs financed with deferred payment arrangements.  The politicians are long gone when the chickens come home to roost.  The same is true for many of the voters that benefit from the promises.  There is little political incentive to maintain fiscal integrity over time.

Cities and States (CSs) can suffer downward financial spirals because they are not required to fully fund promises when they are made.  The result is promises of greater future payments than the CSs will be able to provide. As the cash drain from the increasing disparity between promises and financial wherewithal increases, taxes are raised, the infrastructure is allowed to decay, and services decline.  Other CSs become more attractive, and there is an exodus of firms and relatively affluent taxpayers (whose taxes support the CSs) that leads to an increasingly rapid downward spiral.

     Example: Underfunding pension funds

CSs can “underfund” pension funds, e.g., by deferring contributions until promised payments are to be made.  It becomes possible to make promises that will require future contributions beyond the CSs’ ability to pay, without material current consequences.

The answer to pension underfunding or deferring pension contributions is to disallow them.  For example, long term viability is assured if a pension fund is invested in a riskless portfolio that provides cash flows over time that match promised future payments.  This could be achieved with either an annuity or a cash matched riskless bond portfolio.  Each year’s contribution would be the amount necessary to buy an additional annuity or cash matched bond portfolio that funds the additional promises.

     Example: Funding infrastructure with long term debt

Suppose a CS wants to create a vast new infrastructure, including roads, bridges, rail systems, airports, etc.  Funding these projects with long term bonds reduces the immediate cash outflow to the interest.  If the project is large enough, the interest may consume a substantial portion of the CS’s financial resources, leaving insufficient funds to maintain the infrastructure or pay off the bonds when they come due.  Any attempt to maintain the infrastructure requires higher taxes and/or reduced services.  When the bonds come due, the CS will be unable to pay them off and will have to roll them over.  Given the CS’s financial and physical decay, any new bonds will have to be sold at bargain prices, i.e., at a much higher interest rate.

History shows that attempts to control CSs’ debt financing with either legal limits or financial responsibility don’t work.  The only answer to excessive long term debt is to disallow long term debt in the CSs’ Documents (e.g., Constitution, Charter).

Recovery

CSs that suffer financial collapse cannot recover on their own.  To be competitive with other CSs requires about the same taxes, infrastructure, and services.  Failed CSs cannot restore infrastructure and services on their own because (1) Their resources remain insufficient, (2) there is no incentive for outsiders to provide new resources, and (3) there is no incentive for firms or affluent people to move back into the CSs, which could provide more taxes, because they would shoulder the same burden they left to avoid.  That leaves only two recovery choices, bankruptcy and/or bailout.

     Bankruptcy

If bankruptcy does not forgive the failed CSs’ financial obligations, such as promised pension payments and long term debt, then the failed CSs remain without the financial wherewithal necessary for a recovery.

Even if bankruptcy does forgive the failed CSs’ financial obligations, the CSs’ financial resources remain well below those available prior to the downward spiral.  There continues to be insufficient funds to provide competitive taxes, infrastructure, and services.  Consequently, the firms and affluent people that left the failed CSs have no incentive to return.  Recovery remains problematic.

Bankruptcy that does forgive the failed CSs financial obligations is unlikely for political reasons, since the people that will be hurt include influential voting blocks, such as union workers.

In any case, bankruptcy does not guarantee that the ruling politicians will have learned a useful lesson concerning responsible fiscal management.  More likely, they will have learned that irresponsible behavior pays – because they will be gone by the time a financial collapse occurs.

     Bailout

Bailout is more likely to be politically feasible, but encourages the same unproductive fiscal behavior in the future and is unfair to those responsible citizens who must pay for it.

Privatization

Privatization of infrastructure and services on a pay as you go basis prevents CSs’ financial collapse.

     Example

A CS contracts for a new bridge.  The firm requires the cost of the bridge to be paid as it is incurred.  The bridge may not get finished, but the CS will not suffer financial collapse.

The Armed Citizen

Minimum Wage Increases Hurt Low-Wage Employment

Here is a link to an NBER  paper "Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence From Seattle".

Here is the Abstract.

This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour
in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all
sectors paying below a specified real hourly rate, we conclude that the second wage increase to
$13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs
increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the
minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month
in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an
effect of zero when analyzing employment in the restaurant industry at all wage levels,
comparable to many prior studies.

The paper's results are consistent with several conclusions.

• The demand curve for low-wage labor is downward sloping, just as you would expect.

• If the price of a good, A, is raised relative to a substitute, B, less of good A is bought and more of good B is bought, just as you would expect.

• Minimum wage laws hurt those they are intended to help and help others.

Pictures

1929 stock market crash

Central Park, New York City 1930

Delusions of Grandeur

Turley on Recusals - Rosenstein and Mueller

Here is Jonathan Turley's blog entry concerning whether Rosenstein and/or Mueller should recuse themselves.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University.

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For many weeks, I questioned the need for a Special Counsel in the Russian investigation because it seems like a coverup in search of a crime. I still do not see the evidence of a crime and simply saying “collusion” does not supply an actual crime. However, when President Donald Trump fired James Comey, I supported the appointment of a Special Counsel to investigate obstruction of justice, even though I remained skeptical of the basis for an actual obstruction charge. I still fail to see the compelling basis for an obstruction case without stretching the criminal code to the breaking point. Nevertheless, I continue to support the need for an independent investigation.

The investigation of a sitting American president however must itself be beyond question as to any bias or influence. For that reason, I have been questioning the propriety of Rod Rosenstein to continue in his current position vis-a-vis the Russian investigation. From the outset, Rosenstein seemed to me to be an inevitable and important witness. Ironically, the recent leak magnified this problem. The leak seemed calculated to protect Mueller from being terminated by publicly identifying Trump as a possible target. However, whatever benefit the leak brought Mueller, it undermined Rosenstein. If Mueller is investigation Trump for obstruction, Rosenstein should immediately recuse himself.

It is not clear if Mueller has an equal conflict of interest. There is reason to be concerned. If Mueller discussed the Comey’s termination with Trump as a candidate for the next FBI Director, he might also be considered a witness in any obstruction investigation. It would seem highly material to the investigation to learn of how Trump described his decision and what he said (if anything) to Mueller about the ongoing Russian investigation. At a minimum, the Special Counsel should address what is a reasonable question about his own knowledge of (and participation in) any meetings with Trump on the Comey termination and the Russian investigation. I do not agree with the campaign to discredit Mueller and strongly object to attacks on his character. I believe Mueller to be a person of integrity and I hope that he recognizes that such a meeting raises some legitimate questions that should be addressed.

Here is the column:

Jonathan Turley Puts the Comey Memos and CNN in Perspective

Jonathan Turley's column in The Hill.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University.----------------------------------------------

The lawsuit this week by CNN seeking the memoranda of former FBI director James Comey created something of a curiosity for viewers. In court, CNN is arguing that the memos are “FBI records” and should be turned over under the Freedom of Information Act (FOIA). On the air, CNN legal and political analysts have been insisting that these memos belong to Comey and are akin to his personal diary. The irony is that the CNN litigation could answer some of the underlying questions over the status of the memos and whether Comey was a leaker in the unauthorized dissemination of FBI information.

On Thursday, CNN filed for the release of the documents as “FBI records” in “unredacted” form and “without further delay.” There are two copies of these memos in FBI possession this week. First were the original versions created by Comey while he was FBI director. The memos were prepared on an FBI computer during the course of Comey’s investigation of the Russian matter. The memos were made in direct relation to the ongoing investigation and shared with his top staff as potentially relevant to the investigation. Second, there are the copies of the memos that were collected from Comey’s friend, Columbia Professor Daniel Richman, who received the memos from Comey to leak to the media.

I have previously written how these memos fit the broad definition of “FBI information” contained in federal rules and regulations. As such, the transfer of the memos to Richman and the sharing of the information with the media constituted a serious violation of legal and professional standards by Comey. Tasked with finding leakers, Comey became a leaker himself in order to strike back at the president.

Worse yet, Comey was fully aware that these memos would inevitably be collected as evidence by both the congressional committee and any special counsel — in addition to his own former team of investigators. Indeed, Comey was aware that he was being called to testify and could have shared these memos in a legal and professional way. Instead, he chose to use a friend to leak the memos early to the media.

CNN analysts came out immediately after Comey’s admission in his testimony, saying that first, this was not a leak because leaks are only classified (something I previously explained as entirely and facially incorrect), and second, these memos were like personal diaries that Comey had a right to disclose. Former FBI special agent Asha Rangappa on CNN balked at the suggestion of any leak as absurd because these were just Comey’s “personal recollections” like a personal diary. Others referred to the memos as being a private record or account of a private conversation.

By filing the lawsuit, CNN could force the FBI to legally identify the status of the memos. There should be multiple copies of these memos unless Comey deleted copies on his FBI computers (itself a potential violation of federal law). Each copy could be addressed in any FOIA production.

I previously noted that Comey’s suggestion that these memos belonged to him (and thus could be leaked to the media) would likely not pass muster with folks at the FBI who have to make such decisions. Indeed, it would not have passed muster under FBI Director James Comey. Leakers were pursued under his tenure as FBI director, and many of those investigated may be rather perturbed by the image of someone who went from chief law enforcer to high-profile leaker when it was to his advantage.

The FBI restricts material generated in relation to investigations “FBI information.” The agreement Comey presumably signed clearly encompassed these memos as FBI material and he swore to comply with their bar on “unauthorized disclosure” — not just during his time at the FBI but “following termination of such employment.”

FBI rules cover any “documents reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated.” He is not at liberty to remove such documents after termination by the FBI, let alone leak them to the media. He also agreed that violation would terminate his security clearance and subject him to both criminal and civil liability, including injunctive relief.

Weeks ago, I raised the issue of whether the FBI would have turned over these documents under FOIA if they were demanded by the media. I expressed considerable doubt over such a notion as someone who has dealt with FOIA fights with the FBI for years.

The FBI would likely deny the requests under a number of exceptions. First, it could object that the documents were “related solely to the internal personnel rules and practices of an agency,” under 5 U.S.C. § 552(b)(2). Second, they could claim that they fell under  documents which are “records or information compiled for law enforcement purposes,” (assuming they fell into one or more of six categories), under 5 U.S.C. § 552(b)(7). Third, and most importantly, they would also likely claim that the documents were “inter-agency or intra-agency memorandum or letters” which would be privileged in civil litigation, under 5 U.S.C. § 552(b)(5).

The FBI specifically would rely on the deliberative process privilege in making such a finding. It has insisted that the release of such information is harmful to “the integrity of agency decision-making by encouraging both full and frank discussions of policy proposals and to prevent premature disclosure of policies under review.”

Any of these claims would seriously undermine Comey’s suggestion (and those of many at CNN) that these were his personal notes and that he was free to leak them to the media.

It is possible that the FBI could dodge this thorny issue by releasing copies received from Richman or finding a way to finesse the status of the original memos. However, the lawsuit could prove highly illuminating on not just the legal status of the memos but the lawfulness of Comey’s conduct. He could be vindicated or implicated by the results. On one end of the spectrum is the suggestion by many that these memos are like diary entries by Comey.

As I have said before, that seems rather hard to square and treats the account like some eHarmony date gone bad (with awkward dinners and uncomfortable silences). On the other end of the spectrum are field reports, often called 302s, where agents memorialize meetings with potential witnesses or important discoveries. This clearly falls somewhere in the middle.

Of course, if these documents were viewed as FBI information at their creation, there remains the question on who would take the lead in investigating Comey as a possible leaker. The Justice Department as cut Robert Mueller a great berth. Yet, Comey is now a witness for Mueller — as the recent leak confirmed by telling the media that Trump is now being investigated for obstruction. It is not clear if Mueller would view Comey’s possible violations are falling within the scope of his mandate or whether he would be willing to investigate his own key witness in the obstruction investigation.

Ironically, Comey may have preferred for this to remain somewhere in the middle — undefined and uncertain. CNN could have just taken a critical step toward removing that ambiguity by forcing the FBI to classify the status of the documents. It is the type of clarity that could prove exceptionally helpful or harmful for James Comey.

From the Daily Caller

It speaks for itself.
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July 2016:
-A Hillary Clinton supporter lights a flag on fire and attacks a Trump supporter in Pittsburgh.

-Protesters jumped on cars, stole hats, fought with and threw eggs at Trump supporters outside a Trump rally in downtown San Jose. Trump supporters sued San Jose over the violence.

August 2016:
-Anti-Trump protesters attacked pushed, spit on and verbally harassed attendees forced to walk a “gauntlet” as they left a Trump fundraiser in Minneapolis, Minn., and beat an elderly man. Protesters also attacked Trump’s motorcade.

–A Tennessee man was assaulted at a garage sale for being a Trump supporter.

-A Trump supporter in New Jersey was attacked with a crowbar on the street.

Frederic Bastiat in1847

A quote from Frederic Bastiat in 1847.  FB is on target.

Economic sanity has been available for centuries, yet the majority of voters have yet to absorb it.

Here is the quote.
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The illusion arises from the fact that there is something we do not see. This is that foreign superiority only ever blocks national production in a specific area and makes it redundant only in this specific area by putting at our disposal the output of the very labor which has been destroyed in this way. If men lived in bells under water and had to provide themselves with air by means of a pump, there would be a huge source of work in this. Damaging this work while leaving men in this situation would be to do them frightful harm. But if the work ceases only because there is no longer any need for it, because men are placed in a different milieu in which air enters effortlessly into contact with their lungs, then the loss of this work is no cause for regret, except in the eyes of those who insist on seeing the value of work only in the work itself.

It is precisely this type of work that machines, free trade and progress of all sorts are gradually destroying; not useful work, but work that has become superfluous, redundant, pointless and ineffectual. On the other hand, protection restores it; it puts us back under the water in order to supply us with the opportunity to pump, it forces us to demand gold from our inaccessible national mine rather than from our national looms. Its entire effect is encapsulated in this term: wasted efforts.

Bryan Caplan Quote

Here is a quote from Bryan Caplan's book "The Myth of the Rational Voter".

BC is on target.

As Pogo said long ago, "We have met the enemy and he is Us".
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Mountains of legislation and bureaucratic diktats testify to the truth that central to the state’s business is satisfying the populace’s demand for illusions.  Legislators proclaim that wages rise for all low-skilled workers when minimum-wage legislation is enacted.  Jobs are saved and none are destroyed when tariffs are imposed.  Terrorism is thwarted and nations built when more soldiers and bombs from ‘good-guy’ countries are unleashed abroad.  The easy fix for gun violence is gun-control legislation.  Seizing the earnings of the rich and giving this booty to the poor will “grow” the economy, engender domestic peace and harmony, and ensure that politicians are never again tempted into corruption or venality.  Illusions all.

H. L. Mencken Quote

Here is a quote from H. L. Mencken that is on target.

Men in the mass will believe anything that promises to bring in the New Jerusalem, and the more idiotic it is the more eagerly they will embrace it.  Nothing that is true ever convinces them.  They demand illusion, and on the political plane they get it….

How we waste a massive amount of infrastructure money — before building even starts

George Will in the Washington Post. GW is on target.
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Sensing that his Scottish enemies had blundered at the Battle of Dunbar in 1650, Oliver Cromwell said, “The Lord hath delivered them into our hands.” Philip K. Howard, were he the exulting type, could rejoice that some of his adversaries have taken a stand on indefensible terrain. Because the inaccurately named Center for American Progress has chosen to defend the impediments that government places in its own path regarding public works, it has done Howard the favor of rekindling interest in something he wrote in 2015.

A mild-mannered Manhattan lawyer of unfailing gentility and civility, Howard is no fire-breathing Cromwell. Rather, he is a combination of Candide and Sisyphus, his patient optimism undiminished by redundant evidence that government resists common-sensical legal and regulatory reforms of the sort he pushes up the mountain of bureaucracy when not serving as senior counsel at the white-shoe law firm of Covington & Burling.

In September 2015, Howard, founder and chair of the reform advocacy group Common Good, published the paper “Two Years Not Ten Years: Redesigning Infrastructure Approvals.” In it, he argued that time is money, and that the United States is wasting enormous amounts of both with an infrastructure approval system that is an “accident of legal accretion over the past 50 years”:

 “America could modernize its infrastructure, at half the cost, while dramatically enhancing environmental benefits, with a two-year approval process. Our analysis shows that a six-year delay in starting construction on public projects costs the nation over $3.7 trillion, including the costs of prolonged inefficiencies and unnecessary pollution. This is more than double the $1.7 trillion needed through the end of this decade to modernize America’s infrastructure.”

The nation that built the Empire State Building in 410 days during the Depression and the Pentagon in 16 months during wartime recently took nine years just for the permitting of a San Diego desalination plant. Five years and 20,000 pages of environmental assessments and permitting and regulatory materials were consumed before beginning to raise the roadway on New Jersey’s Bayonne Bridge, a project with, as Howard says, “virtually no environmental impact (it uses existing foundations and right-of-way).” Fourteen years were devoted to the environmental review for dredging the Port of Savannah, which has been an ongoing process for almost 30 years. While faux environmentalists litigate against modernizing the U.S. electrical grid, transmission lines waste 6 percent of the electricity they transmit, which equals 16 percent of 2015 coal power generation and is equal to the output of 200 average-size coal-burning power plants. In 2011, shippers using the inland waterway system of canals, dams and locks endured delays amounting to 25 years. In 2012, the Treasury Department estimated that traffic congestion wasted 1.9 billion gallons of gasoline annually. Diverting freight to trucks because of insufficient railway capacity quadruples fuel consumption. And so on, and on.

 Twenty months after Howard published his article, the response by the Center for American Progress (CAP) shows how far we have defined efficiency down: It celebrates the fact that federal environmental statements average only 4.6 years. That would be bad enough if such reviews were all or even most of the problem. Actually, there are other kinds of reviews and other layers of government involved, as with the Bayonne Bridge — 47 permits from 19 federal, state and local agencies.
CAP says that “the principal restraint facing state and local governments contemplating megaprojects is money, not environmental review.” But, again, this ignores myriad other time-consuming reviews and the costs, in both construction and social inefficiencies, driven by lost time.

 Today’s governance is illuminated by presidential epiphanies (e.g., “Nobody knew that health care could be so complicated”). Barack Obama had one concerning infrastructure: “There’s no such thing as shovel-ready projects.” This is partly because, as Stanford University political scientist Francis Fukuyama says, the United States has become a “vetocracy” in which intense, well-organized factions litigate projects into stasis.
Intelligent people of goodwill can dispute, as the CAP rejoinder does, Howard’s cost-benefit calculations. But CAP partakes of the hyperbole normal in today’s environmental policy debates: It includes Howard among “hardcore opponents of environmental review” who “consider federal laws that protect the environment fundamentally illegitimate.” Even the title of the CAP’s response to Howard’s arguments for more pertinent and efficacious environmental reviews is meretricious: “Debunking the False Claims of Environmental Review Opponents.”

 Opponents? Including Howard? Hardly. David Burge, who tweets as @iowahawkblog, satirizes this slapdash style of progressive argumentation:

 “To help poor children, I am going to launch flaming accordions into the Grand Canyon.”
“That’s stupid.”

“WHY DO YOU HATE POOR CHILDREN?”

Walter Williams: Democrats' Hoodwinking of Blacks

Walter Williams's blog.  Walter E. Williams is a professor of economics at George Mason University.

WW is on target.

Make sure you view the "clip".
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Ask any black person which political party has been black people’s political ally. With near unanimity, blacks would answer the Democratic Party. Asked which political party has been hostile to blacks, they’d say the Republican Party with similar unanimity. For better answers, check out Prager University’s five-minute clip “The Inconvenient Truth About the Democratic Party,” by Carol Swain, professor of political science at Vanderbilt University.

Since its founding in the late 1820s, the Democratic Party has defended slavery, started the Civil War and opposed Reconstruction. The Democratic Party imposed segregation. Its members engaged in the lynchings of blacks and opposed the civil rights acts of the 1950s and ’60s. During Reconstruction, hundreds of black men were elected to Southern state legislatures as Republicans, and 22 black Republicans served in the U.S. Congress by 1900. The Democratic Party did not elect a black man to Congress until 1935.

President Woodrow Wilson was a Progressive Democrat and an avowed racist who shared many views with the Ku Klux Klan. He resegregated the federal civil service. He screened the racist film “The Birth of a Nation,” originally titled “The Clansman,” at the White House; it was the very first movie ever played at the White House.

What was the party of Orval Faubus, the Arkansas governor who blocked the desegregation of Little Rock schools and defied the U.S. Supreme Court’s unanimous 1954 Brown v. Board of Education decision? What was the party of Theophilus Eugene Connor, known as Bull Connor, who, as city commissioner, set vicious dogs, fire hoses and billy clubs on black civil rights demonstrators in Birmingham, Alabama? Connor said: “You can never whip these birds if you don’t keep you and them separate. I found that out in Birmingham. You’ve got to keep your white and black separate.” If you answered that Faubus and Connor were Democrats, go to the head of the class. By the way, it was Republican President Dwight D. Eisenhower who sent troops to ensure that black students could attend Little Rock’s Central High School.

What was the political party of Alabama Gov. George Wallace, who, during the 1960s civil rights movement, declared that he stood for “segregation now, segregation tomorrow and segregation forever” and blocked black students from entering the University of Alabama?

A few years later, the only serious congressional opposition to the landmark Civil Rights Act of 1964 came from Democrats. Eighty percent of Republicans in the House of Representatives supported the bill. Less than 70 percent of Democrats did. Democratic senators, led by ex-Klansman Robert Byrd’s 14-hour filibuster, kept the bill tied up for 75 days, until Republicans mustered enough votes to break the filibuster.

Labor unions have always been allied with the Democratic Party and have a history of racism. Most of today’s black leaders give unquestioned support to labor unions and their policies that harm black workers, but yesteryear’s black leaders saw things differently. Frederick Douglass, in his 1874 essay “The Folly, Tyranny, and Wickedness of Labor Unions,” argued that unions were not friends of blacks. W.E.B. Du Bois called unions “the greatest enemy of the black working man.” Booker T. Washington also opposed unions because of their adverse impact on blacks.

Today, Democrats use diplomacy to hoodwink blacks. They tell blacks to be against those — such as Education Secretary Betsy DeVos — who are for school vouchers that enable black parents to get their children out of rotten schools run by Democrats at the National Education Association. Democrats are using black congressmen to go after Milwaukee County Sheriff David Clarke, who is a high-profile conservative, champion of law and order, and supporter of President Donald Trump’s. They view Clarke as a threat to Democratic Party interests. Indeed, if Democrats lost just 25 percent of the black vote, they would be in deep political trouble.

By the way, none of what I’ve said should be taken as an argument that blacks should rush to become Republicans. I’d like to see the black community acting the way most Japanese and Chinese communities do — not getting into a tizzy over which political party is in power.

Walter Williams: How to Live in Peace

Here is Walter Williams's column.  Walter E. Williams is a professor of economics at George Mason University.

WW is on target.  The more Government supplies goods and services, the less there is going to be Peace.
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Millions of people love Apple computers and wouldn’t be caught using a PC. By contrast, there are many millions of PC users who feel the same way about Apple computers. Many men like double-breasted suits, but I wouldn’t be caught dead in one. Some people swear by Cadillac cars, but my favorite is Mercedes-Benz.

Despite these strongly held preferences, there’s no conflict. We never see Apple computer lovers picketing firms that serve PC lovers. Mercedes-Benz lovers don’t battle Cadillac lovers. In free markets, people with strong differences in preferences get along and often are good friends. The reason is simple. If you like double-breasted suits and I like single-breasted suits, we get what we want.

Contrast the harmony that emerges when there’s market allocation with the discord when there’s government allocation. For example, some parents want their children to say a morning prayer in school. Other parents are offended by that idea. Both parents have a right to their tastes, but these parental differences have given rise to conflict.

Why is there conflict? The answer is simple. Schools are run by government. Thus, there are going to be either prayers in school or no prayers in school. That means parents who want their children to say prayers in school will have to enter into conflict with parents who do not want prayers in school. The stakes are high. If one parent wins, it comes at the expense of another parent. The losing parents have their preferences ignored. Or they must send their children to a private school that has morning prayers and pay that school’s tuition plus property taxes to support a public school for which they have little use.

The liberty-oriented solution to the school prayer issue is simple. We should acknowledge the fact that though there is public financing of primary and secondary education, it doesn’t follow that there should be public production of education. Just as there is public financing of M1 Abrams main battle tanks and F/A-18 fighter jets, it in no way follows that there should be government production of those weapons. They are produced privately. There’s no government tank and fighter jet factory.

The same principle should apply to education. If state and local authorities annually spend $15,000 per student, they could simply give each parent a voucher of that amount that could only be used for education. That way, the parent would be free to choose. If you wanted to send your children to a school that does not have morning prayers, you would be free to do so. And I could send my children to a school that does. As a result, you and I would not have to fight. We could be friends, play tennis and have a beer or two together.

Free market allocation is conflict-reducing, whereas government allocation enhances the potential for conflict. But I’m all too afraid that most Americans want to be able to impose their preferences on others. Their vision doesn’t differ from one that says, “I don’t want my children to say morning prayers, and I’m going to force you to live by my preferences.” The issue of prayers in school is just a minor example of people’s taste for tyranny.

Think of the conflict that would arise if the government decreed that factories will produce either double-breasted or single-breasted suits or that there will be either Cadillacs or Mercedes-Benzes built or that there will be either Apple computers or PCs built. Can you imagine how otherwise-peaceable people would be forced into conflict with one another? Government allocation is mostly a zero-sum game, in which one person’s win necessarily means another person’s loss. The great ignored and overlooked feature of market allocation is that it is what game theorists call a positive-sum game. In positive-sum games, you get what you want, say an Apple computer, and I get what I want — a PC, in this case. My win does not come at your expense, and your win doesn’t come at my expense. And just as importantly, we can be friends.

Another Example of How Government Helps

George Will in the Washington Post. GW is on target.

Me: Government is a problem not because people in Government are different than people outside Government, but because there is no form of Government that creates incentives for citizens to act so as to create a Pareto optimum.

Here is GW's column.
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Beginning this week, Washington hopes that infrastructure, which is a product of civil engineering, will be much discussed. But if you find yourself in Oregon, keep your opinions to yourself, lest you get fined $500 for practicing engineering without a license. This happened to Mats Jarlstrom as a result of events that would be comic if they were not symptoms of something sinister.

Jarlstrom’s troubles began when his wife got a $150 red-light-camera ticket. He became interested in the timing of traffic lights and decided there was something wrong with the formula used in Oregon and elsewhere to time how long traffic lights stay yellow as they transition from green to red. He began thinking, Googling, corresponding and — here he made his big mistake — talking about this subject. He has ignored repeated demands by the Oregon State Board of Examiners for Engineering and Land Surveying that he pipe down. So the board considers him to be, like Jesse James, Al Capone and John Dillinger, a dangerous recidivist.

Not that it should matter, but Jarlstrom actually is an engineer. He has a degree in electrical engineering, served in a technical capacity in the Swedish air force and worked for Sweden’s Luxor Electronics before immigrating to the United States in 1992. He is, however, not licensed by Oregon to “practice engineering” — design skyscrapers, bridges, etc. — so, according to the board, he should not be allowed to talk about engineering or even call himself an engineer. Only those the board licenses are admitted to the clerisy uniquely entitled to publicly discuss engineering.

After Jarlstrom emailed his traffic-light ideas to the board, it declared the emails illegal because in them he called himself an engineer. The board investigated him for 22 months and fined him $500 for expressing opinions without getting a professional-engineer license. This would have involved a six-hour examination ($225 fee), an eight-hour examination ($350 fee), an application to the board ($360 fee) and a demonstration of “education and experience” that usually requires a four-year apprenticeship.

 The board has tried to bully others, too. It investigated and warned a political candidate about calling himself an engineer without being licensed by the board. (He has Cornell University and MIT degrees in environmental and civil engineering, and membership in the American Society of Civil Engineers.) For the same reason, the board is in its 12th month investigating a gubernatorial candidate who said “I’m an engineer” in a political ad. (He has a mechanical engineering degree from Purdue University and was an engineer at Ford and Boeing.)

The Oregon board has until June 14 to answer the court complaint filed on Jarlstrom’s behalf by the Institute for Justice, the nation’s liberty law firm that a few years ago stopped North Carolina’s Board of Dietetics/Nutrition from silencing a blogger who dispensed his opinions about various diets. Oregon’s board will probably receive a judicial spanking for suppressing Jarlstrom’s right to speak and, were he to try to earn income from his work on traffic lights, his freedom of occupational speech.

 William Mellor and Dick M. Carpenter II, the Institute for Justice’s founding general counsel and director of strategic research, respectively, have recently published a book, “Bottleneckers,” about people like the officious nuisances on the Oregon board. The book defines a bottlenecker as “a person who advocates for the creation or perpetuation of government regulation, particularly an occupational license, to restrict entry into his or her occupation, thereby accruing an economic advantage without providing a benefit to consumers.”

Gargantuan government, which becomes so by considering itself entitled to allocate wealth and opportunity, incites such rent-seeking. And given today’s acceptance of increased regulation and censorship of speech, bottleneckers buttress their power (as incumbent politicians do with spending regulations that control the quantity of campaign speech) by making the exercise of a constitutional right contingent on government approval.

The Oregon board should remember Diane Hartley, who probably prevented a Manhattan calamity. In 1977, the 59-story Citicorp Center was built on Lexington Avenue. In 1978, Hartley, an undergraduate engineering student, concluded that the building could be toppled by strong winds that could be expected during the building’s life. After her math was validated, emergency repairs were made.

If busybodies like those on Oregon’s board had been wielding power in New York in 1978, Hartley would have been fined for “practicing” — that is, speaking her mind about — engineering without a license, and what then was the world’s seventh-tallest building might have fallen, full of people, into congested Midtown.

Got a Problem? Pass a Law

From Don Boudreaux's blog.  DB is on target.
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Not a day passes without professors, pundits, preachers, and politicians offering dozens of new proposals for government interventions to “correct” this or that problem.  Nearly all of these problems (some of them real, many of them nothing more than the costs of trade-offs that individuals make) are the consequences of social processes rich in billions of unfathomable details, much of them inarticulable and all of them – individually and as they hang together – unknowable to a single human mind.  Yet such swirling complexity is masked by words and phrases (“the health-care market” or “the level of inequality in America” or “America’s trade with China” or “the plight of low-skilled workers” or “the crises in the Middle East”).  Deluded into supposing that reality is as simple as are the words, concepts, and aggregate numerical data that we use to describe reality – and romantically supposing that government officials who are members of our favorite party are very much like Hollywood heroes – we demand that the Great Minds who are falsely imagined to walk amongst us save us from ourselves, and save us as well as our favorite pet groups from the Bad Guys.

“Got a problem? Pass a ‘law’ or appoint government agents to ‘solve’ that problem” is about as common – and about as naive – a reaction as is possible in human society.

Dershowitz on Comey and Trump

Here is Alan Dershowitz's comment on Fox News.

AD is a prominent scholar on United States constitutional law and criminal law, and a leading defender of civil liberties. He spent most of his career at Harvard Law School where in 1967, at the age of 28, he became the youngest full professor of law in its history. He held the Felix Frankfurter professorship there from 1993 until his retirement in December 2013.
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In his testimony former FBI director James Comey echoed a view that I alone have been expressing for several weeks, and that has been attacked by nearly every Democratic pundit.

Comey confirmed that under our Constitution, the president has the authority to direct the FBI to stop investigating any individual. I paraphrase, because the transcript is not yet available:  the president can, in theory, decide who to investigate, who to stop investigating, who to prosecute and who not to prosecute.  The president is the head of the unified executive branch of government, and the Justice Department and the FBI work under him and he may order them to do what he wishes.
                   
As a matter of law, Comey is 100 percent correct.  As I have long argued, and as Comey confirmed in his written statement, our history shows that many presidents—from Adams to Jefferson, to Lincoln, to Roosevelt, to Kennedy, to Bush 1, and to Obama – have directed the Justice Department with regard to ongoing investigations. The history is clear, the precedents are clear, the constitutional structure is clear, and common sense is clear.

Yet virtually every Democratic pundit, in their haste to “get” President Trump, has willfully ignored these realities.  In doing so they have endangered our civil liberties and constitutional rights.

Now that even former Director Comey has acknowledged that the Constitution would permit the president to direct the Justice Department and the FBI in this matter, let us put the issue of obstruction of justice behind us once and for all and focus on the political, moral, and other non-criminal aspects of President Trump’s conduct.

Comey’s testimony was devastating with regard to President Trump’s credibility – at least as Comey sees it.  He was also critical of President Trump’s failure to observe the recent tradition of FBI independence from presidential influence.  These are issues worth discussing but they have been distorted by the insistence of Democratic pundits that Trump must have committed a crime because they disagree with what he did politically.

Director Comey’s testimony was thoughtful, coherent and balanced.  He is obviously angry with President Trump, and his anger has influenced his assessment of the president and his actions.  But even putting that aside, Comey has provided useful insights into the ongoing investigations.

I was disappointed to learn that Comey used a Columbia law professor as a go-between to provide information to the media.  He should have has the courage to do it himself.  Senators must insist that he disclose the name of his go-between so that they can subpoena his memos and perhaps subpoena the professor-friend to provide further information.

I write this short op-ed as Comey finishes his testimony. I think it is important to put to rest the notion that there was anything criminal about the president exercising his constitutional power to fire Comey and to request – “hope” – that he let go the investigation of General Flynn. Just as the president would have had the constitutional power to pardon Flynn and thus end the criminal investigation of him, he certainly had the authority to request the director of the FBI to end his investigation of Flynn.

So let’s move on and learn all the facts regarding the Russian efforts to intrude on American elections without that investigation being impeded by frivolous efforts to accuse President Trump of committing a crime by exercising his constitutional authority.

The Real Deniers

Here is a Washington Times column by Richard Rahn.

RR is on target.
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No one knows what is going to happen 100 years from now — what problems human beings will face and what advances they’ll make. Are you willing to double your electrical bill — to European rates — to reduce global temperatures by two-tenths of 1 degree 100 years from now?

Are you aware that England has only been an island for about 9,000 years or so? Up until the end of the last ice age, our ancestors could walk from France — which they can, in theory, again do, thanks to the Chunnel. A hundred years ago, air conditioning was almost non-existent. Now we have huge, rich cities such as Singapore, Panama City and even Miami, thriving in the tropics, because air conditioning has made them very livable all year around. A hundred years ago, antibiotics had not been invented, nor had the semiconductor, let alone the smartphone and iPad.

At the present, we do not know how to cost-effectively reduce many carbon-dioxide emissions, but we do know how to adapt to slowly rising sea levels and slightly warmer temperatures. Sea levels have been rising since the end of the last ice age, and there is no evidence that this rate of rise has increased during the past half-century — and mankind has adapted just fine. Despite rising sea levels, the island of Manhattan has grown in size over the last four centuries — because it makes economic sense to create landfills.

It is odd that many in the media and “public intellectuals” call people climate deniers who merely want to have a civil discussion about the rate of climate change and how much is caused by man — while, at the same time, being in deep denial about the real costs, particularly to the poor, of many of their proposed solutions.

There was predictable outrage this past week when President Trump withdrew the United States from the Paris Climate Agreement. The agreement had the goal of reducing the Earth’s temperature by about less than two-tenths of a degree within a hundred years, primarily by reducing carbon-dioxide emissions. Setting aside the issue of whether the required actions by countries would actually achieve the temperature reduction goal, what do you think the probability is that all the countries of the world will actually do what they say they will do, when the required (but voluntary and nonenforceable) actions conflict with domestic political realities?

Air pollution is a real problem in China — something many of us have experienced firsthand. An agreement that gives China a free pass until 2030, while putting U.S. workers and competitiveness at an artificial disadvantage, makes no sense for the United States and the rest of the world.

Rich liberals, like John Kerry and Leonardo DiCaprio, predicted dire consequences (more children with breathing problems) while, of course, conveniently ignoring the hypocrisy of the huge carbon footprint from their private jets and multiple large homes. These folks probably have no idea what they pay for electricity because it does not affect their lifestyles — so they can afford to be moralistic.

Those climate scientists and others in universities who enjoy lucrative government contracts and grants to deal with real or imaginary problems, of course, were unhappy with the president, because his decision might impose a real cost to many of them. (Most of these folks do not think about who pays for their grants and the costs to taxpayers and workers of their climate action demands.) Many corporate types were unhappy because their companies receive large government subsidies or contracts to work on alternative energy projects — most notably, Elon Musk, whose Tesla would not exist without government subsidies. Rich TV news anchors and other liberal media types who depend on a constant flow of bad news and crisis stories (again, real or imaginary) to maintain ratings also have a self-interest in scaremongering. Many in the bigger government political class who want more power over other people’s lives, such as Gov. Jerry Brown of California, were in full attack mode.

Mr. Brown even went so far as to claim that the president’s decision would kill children — where a more unbiased analysis is likely to show just the opposite. Higher energy costs and higher taxes reduce job creation, and real wages and economic growth — all of which hurt children (and everyone else) and slow medical advances.

Those who have more limited incomes or job prospects know that higher electricity and other energy prices cause real pain, so they tended to applaud the president’s climate decision. Those who have an understanding of business economics — and are not in denial about a world in which there are real tradeoffs and real costs to actions that may or may not yield future benefits — also were likely to have supported the president. And finally, also those who revere liberty and understand that markets are more likely to solve climate (and other) problems — than arrogant, power-seeking, self-proclaimed experts and bureaucrats.

A hundred years from now, mankind will have far more wealth and knowledge about how to deal with climate change than it has now. The greatest legacy the current generation can bequeath to future generations is a prosperous world so there will be enough wealth to invest in new technologies to solve such problems.

Amira Willighagen Sings

You won't believe this one.

Check this link out.

A Perspective on Trade

The following discussion is couched in terms of products and a single consumer utility function for each country.  Consequently, it does not address investments directly or the problem of aggregating individuals’ utility functions.  Nevertheless, the discussion provides useful insight that puts the pronouncements of most of the talking heads, media, and politicians in perspective.

Advocates of free trade rightfully point out that it can lead to producing more of everything versus no trade, hence can make everyone better off.  What they gloss over or ignore is that actual trade is not the free trade presumed in their analysis and that not everyone ends up better off.

Background

Consider two countries, A and B, that each can produce several products.  Each country has a production possibility frontier (PPF) that represents the maximum possible output combinations of the products, i.e., where increased output of one product necessitates decreased output of one or more other products.  Equivalently, one person cannot be made better off unless another is made worse off.  This is called a Pareto optimum.  Each country’s PPF represents a Pareto optimum for itself.

If a country’s production combination plots inside its PPF, then production of one or more products can be increased without decreasing production of any other product.  This implies that everyone can be made better off.  Therefore, maximum wellbeing requires that each country’s production schedule be on its PPF.

The PPF’s slope with respect to pairs of products is the ratio of how much more of one product can be produced per unit of the other product foregone.  It is called the marginal rate of transformation (MRT).

The discussion below presumes the following, unless otherwise stated.

·         Perfect competition, i.e., marginal revenue equal to price, no frictions due to government regulations, import or export taxes, subsidies, vampires etc.

·         Business decisions based on marginal analysis.

·         Marginal cost curves that slope upward.

·         A PPF that is convex outward for all countries (all MRTs are negative and decreasing, i.e., more and more of one product’s production must be given up to produce an additional unit of another product.)

In the absence of trade, the optimum point on a country’s PPF is determined by its PPF’s shape and its citizens’ product preferences.  At the optimum point, any increased production of one product produces a positive marginal utility (increased satisfaction) that is exactly offset by the negative marginal utility due to the necessary decreased production of other products.  This is true for each country.

Typically, the PPFs of different countries have different shapes and/or its citizens have different preferences.  If so, then, without trade, it is likely that each country’s production point on its PPF has MRTs for at least some pairs of products that differ from other countries’ MRTs for the same pairs of products. In this case, each country is said to have a comparative advantage for one or more products.  For such product pairs, trade makes possible increasing the aggregate production of one or both products without decreasing the production of other products.  This implies that trade makes it possible to produce more of everything and can make everyone better off if any country has a comparative advantage with respect to another.  Although each country may be at a Pareto optimum separately without trade, the countries cannot be at a Pareto optimum in aggregate without trade.

Example

Countries A and B are not trading and both are producing cars and oranges.  Due to differing circumstances, the MRT for Country A is currently 1 car for 1 ton of oranges and the MRT for Country B is currently 1 car for 2 tons of oranges.  Country A has a comparative advantage in cars and Country B has a comparative advantage in oranges.  The comparative advantages provide an incentive to trade.  It pays for Country A to ship cars to Country B, exchange them for oranges at 2:1 (rather than the domestic 1:1 tradeoff), and ship the oranges back to Country A.  Country A’s car production and Country B’s orange production increase.  Country A’s orange production and Country B’s car production decrease.  More of both cars and oranges are produced overall, and it is possible to make everyone in both countries better off.  This trading cycle works due to the countries’ comparative advantages, and regardless of the exchange rate.

Due to the PPF’s convexity, each country’s MRT changes as the trading builds.  The increased production of cars and decreased production of oranges in Country A results in raising the real relative price of cars and decreasing the real relative price of oranges in Country A.  In other words, 1 car becomes exchangeable for more than 1 ton of oranges in Country A.  In contrast, the decreased production of cars and increased production of oranges in Country B results in lowering the real relative price of cars and increasing the real relative price of oranges in Country B.  In other words, 1 car becomes exchangeable for less than 2 tons of oranges in Country B.  Trading continues until the MRTs and the real relative prices for cars and oranges is the same in both countries or until Country A produces only cars and Country B produces only oranges.

There is no incentive to trade if each country’s PPF shape and preferences results in equilibrium such that the countries’ MRTs are identical without trade.  This condition is unlikely, hence trade almost certainly provides a benefit.

Don't Send Your Child to This College

Jonathan Turley on Evergreen State College.  JT is on target.

The best new is that the School's enrollment is plunging and it has budget problems.  I'm hoping it goes under.  We do not need faculty like this teaching our children and influencing them.
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We previously discussed the proposal at Evergreen State College to have all white faculty, staff, and students leave campus for a day as part of a “Day of Absence” to raise awareness of the contribution of the black community.   Evergreen State College biology professor Bret Weinstein made a reasoned objection to the plan for this year’s “Day of Absence.” As shown in a videotape, there was a mob scene around Weinstein as students called him a racist and called for his resignation.  Protests have denounced his “anti-blackness” and demanded his removal from teaching.  Now, the faculty at Evergreen State College has sent a letter to students supporting the protesters and their demands for  disciplinary action of Prof. Weinstein.

The faculty called for none of the students to be disciplined under “the misguided language of the current Student Conduct Code.”  The letter also calls for actions to counter “alt-right narratives that are demonizing Evergreen and Day of Absence specifically.” The most disturbing call for action is the last:

Demonstrate accountability by pursuing a disciplinary investigation against Bret Weinstein according to guidelines in the Social Contract and Faculty Handbook. Weinstein has endangered faculty, staff, and students, making them targets of white supremacist backlash by promulgating misinformation in public emails, on national television, in news outlets, and on social media.

The videotape of the students was appalling it their treatment of Weinstein and I fail to see why Weinstein’s objections to this discriminatory proposal is worthy of investigation.

The 71 professors state that they are “angry and frustrated and concerned” but seem little concerned for academic freedom or free speech, a growing failure among faculty in other schools (as demonstrated recently at Northwestern).  I fail to see why Weinstein should be investigated in standing up against a deeply troubling proposal and arguing that “On a college campus, one’s right to speak — or to be — must never be based on skin color.”

Racial protests have occurred all year and in January, according to the student newspaper the Cooper Point Journal, students grabbed a microphone during a ceremony welcoming the new police chief and chanted “F— cops!”  There is a concern that Evergreen could face that same downward spiral of University of Missouri after a series of protests over racisms and demands to reforms.  We have discussed how the school is now faced with plunging enrollments and budget problems.

President George Bridges has refused to take any action against the students and agreed with protesters to require mandatory cultural competency training for all faculty and staff.  He has also ordered a comprehensive effort to combat what minority students describe as a hostile environment.

The letter is likely to exacerbate tensions with legislators who are looking at options for stripping funds from the college and even forcing it to go private (a move that could result in the closure of the school).  Republican State Rep. Matt Manweller is leading the effort.  Manweller wants the school to move into private ownership over five years. It could be a tough transition in this economic environment after the state withdraws its $24 million in capital funding currently allocated under the state budget.

Threats have led to closures on campus.  Weinstein himself was not allowed to teach in his classroom but instead meet his students in a park out of fear of violence. He wrote about that decision:

This presented traditional independent academic minds with a choice: Accept the plan and let the intellectual descendants of Critical Race Theory dictate the bounds of permissible thought to the sciences and the rest of the college, or insist on discussing the plan’s shortcomings and be branded as racists. Most of my colleagues chose the former, and the protesters are in the process of articulating the terms. I dissented and ended up teaching in the park.

Here is the letter: Faculty letter

Another Attack on Free Speech

Jonathan Turley's comment from his blog.  JT is on target.

Governments gain control by curtailing free speech.  The sad aspect is that the People, who will lose, often encourage Governments to do so.
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We have previously discussed how politicians often attack free speech and other rights to show that they are “tough” on terror after attacks.  Prime Minister Theresa May however may have set a record.  May did not hesitate in immediately blaming the Internet and calling for government regulation of free speech to combat attacks like the one in London.  Of course, if these terrorists were connected to ISIS (or inspired by ISIS), their extremism was not caused by free speech on the Internet.  Indeed, the Internet often allows security to track extremists on the web.


May wants new rules for cyberspace would “deprive the extremists of their safe spaces online” and impose new controls over such speech.  Governments have long sought to regulate the Internet, which remains the single greatest invention for free speech since the emergence of the printing press.  Government naturally gravitate toward more and more control over communications.  China has taken the lead in curtailing free speech on the Internet but Western nations often run into free speech principles when officials demand control over the web.  Thus, governments often wait for an attack to try to get people to surrender their free speech willingly.  There is nothing like fear to get a free people to give up part of their freedom.


The only thing missing was May saying “England Prevails”:

England of course has been a free fall for free speech.  We have previously discussed the alarming rollback on free speech rights in the West, particularly in France (here and here and here and here and here and here) and England ( here and here and here and here and here and here and here and here and here and here).  Even the Home Secretary has been accused of hate speech for criticizing immigrant workers.

The combination of the increasing English criminalization of speech with new Internet controls could be a deadly combination for free speech.  It is alarming how many citizens will dismiss free speech principles when told that less freedom will make them more safe. It is the ancient Siren’s Call of all governments.  May is only the latest government official to blame free speech – an easy target for governments who long for greater control over communications.  However, the United Kingdom shows that it is easy to surrender rights but it is very hard to regain those rights.  Citizens should tell May that her job is to make Britain safe while preserving the freedoms that define Britain.

The CBO and Health Coverage Projections

Here is an article from the Galen Institute, by Doug Badger, that shows why you should not take the CBO's health coverage projections seriously.
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Bureaucratic oracles at the Congressional Budget Office (CBO) have decreed that 23 million fewer people will have health coverage in 2026 if a House-passed bill to repeal and replace Obamacare were to become law.

As with CBO’s past Obamacare-related pronouncements, corporate and social media sources are uncritically repeating that estimate, overlooking the questionable assumptions that underlie it.  A careful reading of the report reveals that the 23 million people that CBO says will join the ranks of the uninsured if the House-passed bill were to become law includes “a few million” who have health insurance.  And CBO is sticking with its claim that 14 million fewer people would have Medicaid coverage in 2026, the same conclusion it drew about an earlier version of the House bill.  In CBO’s opinion, the fact that the revised House measure spends $46 billion more on Medicaid than the previous one will not result in a single additional person gaining coverage under the program.

The CBO estimate provides a very shaky foundation for policy decisions about health care reform.   Those involved in the health policy debates should those estimates with extreme caution because:

1. CBO is wrong. Estimating the coverage effects of big and complex legislation is treacherous work and CBO can hardly be faulted for getting it wrong every time.  The agency itself acknowledges that its coverage estimates are “especially uncertain.”  Guessing how many people will gain or lose coverage under shifting circumstances requires something approaching omniscience.  No one can say for sure what sorts of products insurers will offer, what they will charge, what (if anything) relatively healthy people will be willing to pay for a policy, how many people might drop coverage if the tax on the uninsured were repealed.

It is curious, though, that CBO’s errors with respect to exchange-based enrollment are not only massive – one of their projections of 2016 exchange-based enrollment was off by 140 percent – but always wrong in the same direction.  Time after time, they overestimate exchange-based enrollment.  The House-passed bill is measured against these inflated “baseline” coverage numbers, resulting in an erroneously high estimate of the number of people who would become uninsured.

Public Broadcasting's Immortality Defies Reason

George Will gets it right in the Washington Post.

Most of the time, Do-Gooders are about wanting to force you to live "right".
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As changing technologies and preferences make government-funded broadcasting increasingly preposterous, such broadcasting actually becomes useful by illustrating two dismal facts. One is the immortality of entitlements that especially benefit those among society’s articulate upper reaches who feel entitled. The other fact is how impervious government programs are to evidence incompatible with their premises.

Fifty years and about 500 channels ago, the Corporation for Public Broadcasting was created to nudge Lyndon Johnson’s Great Society — it aimed to make America great for the first time — the final inches toward perfection. Today, the CPB, which has received about $12 billion over the years, disperses the government’s 15 percent of public television’s budget and 10 percent of public radio’s. Originally, public television increased many viewers’ choices by 33 percent — from three (CBS, NBC, ABC) to four.

 Twenty-five years ago, Sen. Al Gore, defending another appropriation increase for the CPB, asked what he considered a dispositive question: “How many senators here have children who have watched ‘Sesame Street’ and ‘Mister Rogers’ Neighborhood’? . . . This is one thing that works in this country.” So, senators, mostly affluent, should compel taxpayers, mostly much less affluent, to subsidize the senators’ children’s viewing because it “works,” as measured by means that Gore neglected to reveal.

 Eighteen years ago, some public broadcasting officials, who understood the importance of being earnest — and imaginative — testified to Congress that public television’s educational effects on the workforce give the economy a $12 billion boost. Fifteen years ago, however, the then-president of public television said, “We are dangerously close in our overall prime-time numbers to falling below the relevance quotient.” Relevance? To what?

 Today, Mick Mulvaney, director of the Office of Management and Budget, thinks we can risk terminating the CPB. This would reduce viewers’ approximately 500 choices to approximately 499. Listeners to public radio might have to make do with America’s 4,666 AM and 6,754 FM commercial stations, 437 satellite radio channels, perhaps 70,000 podcasts, and other Internet and streaming services.

 America, which is entertaining itself to inanition, has never experienced a scarcity of entertainment. Or a need for government-subsidized journalism that reports on the government. Before newspaper editorial writers inveigh against Mulvaney and in support of government subsidies for television and radio, they should answer this question: Should there be a CPN — a Corporation for Public Newspapers?

The CPB was created “to encourage public telecommunications services which will be responsive to the interests of people.” Of course: people’s interests, not people’s desires. The market efficiently responds to the latter. Public broadcasting began as a response to what progressives nowadays call “market failure.” This usually means the market’s failure to supply what the public has not demanded but surely would demand if it understood its real “interest.”

One reason many Americans are becoming “cord cutters,” abandoning cable and satellite television, is that they want an a la carte world. One reason ESPN has lost 12 million subscribers in six years is that it is an expensive component of cable and satellite packages and many of those paying for the packages rarely watch ESPN.

 Compelling taxpayers to finance government-subsidized broadcasting is discordant with today’s a la carte impulse and raises a point: If it has a loyal constituency, those viewers and listeners, who are disproportionately financially upscale, can afford voluntary contributions to replace the government money. And advertisers would pay handsomely to address this constituency.

Often the last, and sometimes the first, recourse of constituencies whose subsidies are in jeopardy is: “It’s for the children.” Big Bird, however, is more a corporate conglomerate than an endangered species. If “Sesame Street” programming were put up for auction, the danger would be of getting trampled by the stampede of potential bidders.

 The argument for government-subsidized broadcasting is perversely circular: If the public were enlightened, there would be no need for government subsidies. But, by definition, an enlightened public would understand the inherent merits of subsidies by which the government picks more deserving winners than the market does.

However, because government-subsidized broadcasting exists, any argument for it would be superfluous, given what governmental inertia usually accomplishes for government enterprises. Long ago — in January — there was bold Republican talk about Congress restoring “regular order”: There would be 12 appropriations bills, and they would be enacted before the 2018 fiscal year begins Oct. 1. Instead, there probably will be another “swallow this or shutter the government” omnibus bill in which almost everything survives by sparing almost everyone the torture of choices. This is, of course, a choice.

The Amazing Arrogance of the Paris Climate Agreement

Here is Jeffrey Tucker on the Paris Climate Agreement.  JT is on target.
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It was December 12, 2015, when headlines in the world’s leading newspapers, in implausibly bold type, celebrated the “historic” agreement in Paris between all nations of the world to curb carbon emissions and thereby stop climate change: or so they said, as if elites get to say what is and is not historic.

The spin, like the agreement itself, was crammed down our throats.

I read the stories that day, and the next and the next, and the continuing coverage for weeks that nearly every reader – apart from a few dedicated activists and permanent regime bureaucrats – ignored. The stories appeared on the international pages and didn’t touch the business pages. Energy stocks weren’t affected in the slightest.

 The stories had all the signs of dutiful public service announcements – “fake news,” as they say today – and they contained not a single quote from a single dissenting voice, because, of course, no respectable news outlet would give voice to “climate deniers.”

Let me pause to protest this “denial” language. It attempts to appropriate the widely shared disgust toward “Holocaust denial,” a bizarre and bedraggled movement that belittles or even dismisses the actual history of one of the 20th century’s most egregious mass crimes against human rights and dignity. Using that language to silence questions about an attempt to centrally plan the energy sector is a moral low that debases the language of denial.

This rhetorical trick reveals all you need to know about the desperate manipulation the climate planners are willing to engage in to realize their plot regardless of popular and justified skepticism concerning their regulatory and redistributionist policies.

And what are the specifics of that agenda? The Paris Agreement is a “voluntary” agreement because its architects knew it would never pass the US Senate as a treaty. Why? Because the idea of the agreement is that the US government’s regulatory agencies would impose extreme mandates on its energy sector: how it should work, what kinds of emissions it should produce, the best ways to power our lives (read: not fossil fuels), and hand over to developing world regimes billions and even trillions of dollars in aid, a direct and ongoing forcible transfer of wealth from American taxpayers to regimes all over the world, at the expense of American freedom and prosperity.

And you wonder why many people have doubts about it.

Consider what else was going on December 12, 2015. Donald Trump was in the midst of a big battle for the Republican nomination. He started with 16 challengers to beat. He was widely considered to be a clownish candidate, a guy in it just to get press attention to build his business brand. Surely the American system of electoral politics, largely but imperfectly managed by responsible elites, would resist such demagogues. Besides, the media that trumpeted the Paris Agreement would be on hand to shame anyone who supported him. He couldn’t win.

The press mostly pretended that he wasn’t happening. The Huffington Post put coverage of his campaign in the humor section.

And so President Obama came home from the Paris meetings to the acclaim of all the right people. He alone had made the responsible choice on behalf of the entire country: every business, every worker, every consumer, every single person living within these borders who uses some measure of this thing we call energy. He would be our master and commander, ruling on our behalf, fresh off cocktail parties in Paris where the best and brightest – armed with briefcases full of government-funded science – decided to give the Industrial Revolution its final comeuppance.

 The exuberant spokespeople talked about how “the United States” had “agreed” to “curb its emissions” and “fund” the building of fossil-free sectors all over the world. It was strange because the “United States” had not in fact agreed to anything: not a single voter, worker, owner, or citizen. Not even the House or Senate were involved. This was entirely an elite undertaking to manage property they did not own and lives that were not theirs to control.

 And then Trump spoke. He said that this Paris bit was a bad deal for Americans. We are already in a slow-growth economy. Now these global elites, without a vote from Congress, are presuming to mandate massive controls over the economy, hampering its productive sector which benefits everyone and transferring countless billions of dollars out of the country, with the acquiescence of the party in power.

He spoke about this in a way that bested all his opponents. The entire scenario fed his America First worldview, that the global elites were operating as parasites on American prosperity and sovereignty. His answer was to put up the wall: to immigrants, to trade, to global managerial elites, and reclaim American sovereignty from people who were selling it out. It was another flavor of statism (globalism and nativism are two sides of the same coin), but it tapped into that populist vein of the voting public that looks for a patriotic strongman to save them from a distant ruling class.

 Everything about the Paris Agreement seemed structured to play into Trump’s narrative of how the world had gone mad. And then he won the nomination. Then he won the presidency. None of this was supposed to happen. It wasn’t part of the plan. History took a different course from what the power elite demanded and expected to happen. Not for the first time.

 But the “globalists” of the type that tried to make Paris work have a stunning lack of self-awareness. They pretend to be oblivious to the populist resentment they breed. They act as if there is not a single legitimate doubt about the problem, their analysis of cause and effect, the discernment of their selected experts, or their proposed coercive solution. And there certainly isn’t a doubt that their mighty combination of power, resources, and intelligence can cause all the forces in the universe to adapt to their will, including even the climate that King Canute himself said could not be controlled by kings and princes.

 As with countless other statist plans over the last hundred years, they figured that it was enough to gather all the right people in one room, agree to a wish list, sign a few documents, and then watch the course of history conform to their wishes.

The Paris Agreement is no different in its epistemological conceit than Obamacare, the war on drugs, nation-building, universal schooling, or socialism itself. They are all attempts to subvert the capacity of society to manage itself on behalf of the deluded dreams of a few people with power and their lust for controlling social and economic outcomes.

 How far are the Democrats from recognizing what they have done? Very, very far. John C. Williams, writing in the New York Times, has decried the “The Dumb Politics of Elite Condescension”:

"As a progressive, I am committed to social equality - not just for some groups, but for all groups. . . Everyone should have access to good housing and good jobs. That's the point. . . Too often in otherwise polite society, elites (progressives emphatically included) unselfconsciously belittle working-class whites. Democrats should stop insulting people."

That would be a good start. But it is not only about rhetoric. Policy preferences have to change. A global agreement that somehow binds entire countries to centrally plan and regulate the whole of a crucial sector of economic life that supports all economic advances of our time – at the very time when the energy sector is innovating its own solutions to carbon emissions in the cheapest possible way –  is certainly going to breed resentment, and for good reason. It is a bad and unworkable idea.

Continued reliance on undemocratic, uneconomic, imposed strategies such as the Paris Agreement will only further feed the populist revolt that could end in the worst possible policy combinations of strong-man nationalism, nativism, protectionism, closed borders, and backwards thinking in general. No good can come from this. The backlash against globalism can be as dangerous as globalism itself.

You might think that the election of Trump would offer some lessons. But that is not the way the arrogant minds behind the climate agreement work. They respond by merely doubling down on disdain, intensifying their commitments to each other, heaping more loathing on the workers and peasants who have their doubts about these deals.

Trump and his ilk abroad, backed by voting masses with pitchforks and torches – and not a managed transition from fossil fuels to clean energy – are their creation.