Published on 1 Jul 2015
Meet the Thighmaster of urban public policy: Streetcars.
Municipal politicians all across the country have convinced themselves that this costly, clunky hardware can revitalize their flabby downtown economies.
That includes the fearless leaders of America’s capital city. The DC government has spent hundreds of millions of dollars over the last decade trying to erect a streetcar line in the up-and-coming neighborhood of H Street. The project has been an epic disaster, perfectly demonstrating how ill-suited streetcars are to modern urban life.
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July 4, 2015
June 30, 2015
Sean Noble says that the subsidies Elon Musk’s high-tech Tesla and Solar City firms are much higher than he implies:
Tesla, SpaceX, and Solar City head Elon Musk lashed out at the Los Angeles Times following an article that totaled up all the government support that his three-headed corporate-welfare monster receives. The number the Times reported was nearly $5 billion in combined support for his companies, including subsidies for those who purchase Musk’s products, such as the high-priced solar panels of Solar City and the supercars of Tesla.
Musk responded by arguing, “If I cared about subsidies, I would have entered the oil and gas industry.” He further asserted that his competitors in the oil-and-gas industry haul in 1,000 times more in subsidies in a single year than his companies have received in total. Such statements reveal that Musk seems to care as little for facts as he purports to care about the taxpayer dollars propping up his various businesses.
Earlier this year, the U.S. Energy Information Administration (EIA) released the most recent data available regarding energy subsidies provided by the federal government. The data, covering the year 2013, broke down total taxpayer subsidies across the different sectors of the energy industry. While fossil fuels did enjoy some government support through various direct expenditures, tax credits, and R&D programs, the data stands in sharp contrast to Musk’s claims.
Data from the EIA report, combined with numbers from an anti-oil advocacy group regarding state-level government support, reveals that total state and federal support for the oil-and-gas industry is no more than $5.5 billion each year. As stated, Musk’s companies combine for $5 billion in subsidies, a number that he has yet to dispute. Clearly, the difference is much smaller than Musk’s outlandish 1,000-to-one claim.
June 29, 2015
Published on 25 Feb 2015
Price ceilings result in five major unintended consequences, and in this video we cover two of them. Using the supply and demand curve, we show how price ceilings lead to a shortage of goods and to low quality goods. Prices are signals that indicate to suppliers how much is being demanded, but when prices are kept artificially low with price ceilings, suppliers have no way of knowing how many goods they should produce and sell, leading to a shortage of goods. Quality also decreases under price controls. Do you ever wonder why the quality of customer service at Starbucks is generally better than at the DMV? The answer lies in incentives and price ceilings. We’ll discuss further in this video.
June 23, 2015
Megan McArdle on what she characterizes as possibly “the worst cyber-breach the U.S. has ever experienced”:
And yet, neither the government nor the public seems to be taking it all that seriously. It’s been getting considerably less play than the Snowden affair did, or the administration’s other massively public IT failure: the meltdown of the Obamacare exchanges. For that matter, Google News returns more hits on a papal encyclical about climate change that will have no obvious impact on anything than it does for a major security breach in the U.S. government. The administration certainly doesn’t seem that concerned. Yesterday, the White House told Reuters that President Obama “continues to have confidence in Office of Personnel Management Director Katherine Archuleta.”
I’m tempted to suggest that the confidence our president expresses in people who preside over these cyber-disasters, and the remarkable string of said cyber-disasters that have occurred under his presidency, might actually be connected. So tempted that I actually am suggesting it. President Obama’s administration has been marked by titanic serial IT disasters, and no one seems to feel any particular urgency about preventing the next one. By now, that’s hardly surprising. Kathleen Sebelius was eased out months after the Department of Health and Human Services botched the one absolutely crucial element of the Obamacare rollout. The NSA director’s offer to resign over the Snowden leak was politely declined. And now, apparently, Obama has full faith and confidence in the folks at OPM. Why shouldn’t he? Voters have never held Obama responsible for his administration’s appalling IT record, so why should he demand accountability from those below him?
Yes, yes, I know. You can’t say this is all Obama’s fault. Government IT is almost doomed to be terrible; the public sector can’t pay salaries that are competitive with the private sector, they’re hampered by government contracting rules, and their bureaucratic procedures make it hard to build good systems. And that’s all true. Yet note this: When the exchanges crashed on their maiden flight, the government managed to build a crudely functioning website in, basically, a month, a task they’d been systematically failing at for the previous three years. What was the difference? Urgency. When Obama understood that his presidency was on the line, he made sure it got done.
Update: It’s now asserted that the OPM hack exposed more than four times as many people’s personal data than the agency had previously admitted.
The personal data of an estimated 18 million current, former and prospective federal employees were affected by a cyber breach at the Office of Personnel Management – more than four times the 4.2 million the agency has publicly acknowledged. The number is expected to grow, according to U.S. officials briefed on the investigation.
FBI Director James Comey gave the 18 million estimate in a closed-door briefing to Senators in recent weeks, using the OPM’s own internal data, according to U.S. officials briefed on the matter. Those affected could include people who applied for government jobs, but never actually ended up working for the government.
The same hackers who accessed OPM’s data are believed to have last year breached an OPM contractor, KeyPoint Government Solutions, U.S. officials said. When the OPM breach was discovered in April, investigators found that KeyPoint security credentials were used to breach the OPM system.
Some investigators believe that after that intrusion last year, OPM officials should have blocked all access from KeyPoint, and that doing so could have prevented more serious damage. But a person briefed on the investigation says OPM officials don’t believe such a move would have made a difference. That’s because the OPM breach is believed to have pre-dated the KeyPoint breach. Hackers are also believed to have built their own backdoor access to the OPM system, armed with high-level system administrator access to the system. One official called it the “keys to the kingdom.” KeyPoint did not respond to CNN’s request for comment.
U.S. investigators believe the Chinese government is behind the cyber intrusion, which are considered the worst ever against the U.S. government.
June 18, 2015
At Real Clear Science, Ross Pomeroy explains how historical “expert knowledge” and government cheerleading pointed in exactly the opposite direction of today’s experts and government regulators:
For decades, the federal government has been advising Americans on what to eat. Those recommendations have been subject to the shifting sands of dietary science. And have those sands ever been shifting. At first, fat and cholesterol were vilified, while sugar was mostly let off the hook. Now, fat is fine (saturated fat is still evil, though), cholesterol is back, and sugar is the new bogeyman.
Why the sizable shift? The answer may be “bad science.”
Every five years, the Dietary Guidelines Advisory Committee, composed of nutrition and health experts from around the country, convenes to review the latest scientific and medical literature. From their learned dissection, they form the dietary guidelines.
But according to a new editorial published in Mayo Clinic Proceedings, much of the science they review is fundamentally flawed. Unlike experiments in the hard sciences of chemistry, physics, and biology, which rely on direct observational evidence, most diet studies are based on self-reported data. Study subjects are examined for height, weight, and health, then are questioned about what they eat. Their dietary choices are subsequently linked to health outcomes — cancer, mortality, heart disease, etc.
That’s a poor way of doing science, says Edward Archer, a research fellow with the Nutrition Obesity Research Center at the University of Alabama, and lead author of the report.
“The assumption that human memory can provide accurate or precise reproductions of past ingestive behavior is indisputably false,” he and his co-authors write.
Two of the largest studies on nutritional intake in the United States, the CDC’s NHANES and “What We Eat,” are based on asking subjects to recall precisely what and how much they usually eat.
But despite all of the steps that NHANES examiners take to aid recall, such as limiting the recall period to the previous 24 hours and even offering subjects measuring guides to help them report accurate data, the information received is wildly inaccurate. An analysis conducted by Archer in 2013 found that most of the 60,000+ NHANES subjects report eating a lower amount of calories than they would physiologically need to survive, let alone to put on all the weight that Americans have in the past few decades.
Quick question for you: What’s the optimal amount of corruption in politics?
If you said “zero,” then I’m sorry. You do not win the prize. (It was a year’s supply of Mr. Clean Magic Erasers, just so you know.) The optimal amount of corruption in any system is almost never zero, and that goes double for politics.
We shouldn’t try to get corruption to zero because fighting corruption is costly. Think, for example, of government contracting, which mindlessly awards contracts to the low bidder, as if quality and reliability were irrelevant considerations. This sloppiness inevitably adds time and costs. Or the various requirements we impose on civil service workers to make sure that not one of them enjoys so much as a stray sandwich on the taxpayer dime … and thereby ensure that normal business practices, like sitting down for an inexpensive group meal to discuss something, are almost comically difficult to arrange. All these procedural rules make government less effective and more costly. My father, who was the head of a trade association for contractors on heavy infrastructure projects, estimates that adding federal money to a project adds about five years to its completion date.
There’s even more reason not to strive for zero corruption: Politics is the art of getting widely disparate factions to come to some sort of policy agreement, and “clean graft” greases those wheels. Now, calm down — I’m not advocating that we move to a full-on kleptocracy like Russia. What I’m suggesting is in attempting to root every last vestige of pork and patronage out of the system, we have inadvertently produced the partisan gridlock that we now decry. Anyone who thinks that this is a crazy statement should read Jonathan Rauch’s terrific new e-book, Political Realism: How Hacks, Machines, Big Money, and Back-Room Deals Can Strengthen American Democracy. At a trim 55 pages, it is a fast read, and at $0, it is the bargain of the century.
Megan McArdle, “In Politics, It’s Good to Be a Little Bad”, Bloomberg View, 2015-05-07.
June 17, 2015
At International Liberty, Dan Mitchell points out an example of leftists who genuinely want higher taxes on “the rich” even when the higher rate will return less money to the government:
Every so often, I’ll assert that some statists are so consumed by envy and spite that they favor high tax rates on the “rich” even if the net effect (because of diminished economic output) is less revenue for government.
In other words, they deliberately and openly want to be on the right side (which is definitely the wrong side) of the Laffer Curve.
Critics sometimes accuse me of misrepresenting the left’s ideology, to which I respond by pointing to a poll of left-wing voters who strongly favored soak-the-rich tax hikes even if there was no extra tax collected.
But now I have an even better example.
Writing for Vox, Matthew Yglesias openly argues that we should be on the downward-sloping portion of the Laffer Curve. Just in case you think I’m exaggerating, “the case for confiscatory taxation” is part of the title for his article.
Here’s some of what he wrote.
Maybe at least some taxes should be really high. Maybe even really really high. So high as to useless for revenue-raising purposes — but powerful for achieving other ends. We already accept this principle for tobacco taxes. If all we wanted to do was raise revenue, we might want to slightly cut cigarette taxes. …But we don’t do that because we care about public health. We tax tobacco not to make money but to discourage smoking.
The tobacco tax analogy is very appropriate.
June 2, 2015
May 28, 2015
This is a general and pernicious failing of the left in my view. They really, just really, don’t get what it is that markets do and do very well. What markets do do is they produce the information, through the price system, of who is willing to produce what at which price and who desires to consume what at which price. Thus we get an efficient allocation of scarce resources by our use of markets. And Hayek pretty much got his Nobel for proving that there is no other system to hand which can perform this function. The planner simply cannot gain enough information to be able to perform that function, nor process it real time (and no, computing can’t do it either, Allende and his computer to run the Chilean economy was wrong.)
It’s entirely possible to critique markets on the grounds of equity though. For example, too many people are too poor if we just leave it to the market. Perhaps we agree with that idea, perhaps we don’t: but that argues for changing peoples’ incomes through intervention, not for abolishing the market in the provision of goods. Or, as I’ve said before, if Chavez and Maduro want poor Venezuelans to be better off then send them more money. Don’t mess with the market: the result of that messing will inevitably be the sort of breakdown we see here.
As for the people of Venezuela, well, obviously, this isn’t going to work out well. Their rulers have pretty much bankrupted the country through their incompetence: and now they’re taking more economic power unto themselves?
Not going to work, is it? Even competent governments haven’t been able to make nationalised food distribution systems work…
Tim Worstall, “Amazingly, Maduro Is Going To Make The Venezuelan Economy Even Worse. Yes, Worse”, Forbes, 2015-05-03.
May 24, 2015
Well, “proposes” isn’t quite the right word:
Let me describe first the requirements for the Evil Business Plan of Evil, and then the Plan Itself, in all it’s oppressive horror and glory.
Some aspects of modern life look like necessary evils at first, until you realize that some asshole has managed to (a) make it compulsory, and (b) use it for rent-seeking. The goal of this business is to identify a niche that is already mandatory, and where a supply chain exists (that is: someone provides goods or service, and as many people as possible have to use them), then figure out a way to colonize it as a monopolistic intermediary with rent-raising power and the force of law behind it. Sort of like the Post Office, if the Post Office had gotten into the email business in the 1970s and charged postage on SMTP transactions and had made running a private postal service illegal to protect their monopoly.
Here’s a better example: speed cameras.
We all know that driving at excessive speed drastically increases the severity of injuries, damage, and deaths resulting from traffic accidents. We also know that employing cops to run speed traps the old-fashioned way, with painted lines and a stop-watch, is very labour-intensive. Therefore, at first glance the modern GATSO or automated speed camera looks like a really good idea. Sitting beside British roads they’re mostly painted bright yellow so you can see them coming, and they’re emplaced where there’s a particular speed-related accident problem, to deter idiots from behaviour likely to kill or injure other people.
However, the idea has legs. Speed cameras go mobile, and can be camouflaged inside vans. Some UK police forces use these to deter drivers from speeding past school gates, where the speed limit typically drops to 20mph (because the difference in outcome between hitting a child at 20mph to hitting them at 30mph is drastic and life-changing at best: one probably causes bruises and contusions, the other breaks bones and often kills). And some towns have been accused of using speed cameras as “revenue enhancement devices”, positioning them not to deter bad behaviour but to maximize the revenue from penalty notices by surprising drivers.
This idea maxed out in the US, where the police force of Waldo in South Florida was disbanded after a state investigation into ticketing practices; half the town’s revenue was coming from speed violations. (Of course: Florida.) US 301 and Highway 24 pass through the Waldo city limits; the town applied a very low speed limit to a short stretch of these high-speed roads, and cleaned up.
Here’s the commercial outcome of trying to reduce road deaths due to speeding: speed limits are pretty much mandatory worldwide. Demand for tools to deter speeders is therefore pretty much global. Selling speed cameras is an example of supplying government demand; selling radar detectors or SatNav maps with updated speed trap locations is similarly a consumer-side way of cleaning up.
And here’s a zinger of a second point: within 30 years at most, possibly a lot sooner, this will be a dead business sector. Tumbleweeds and ghost town dead. Self-driving cars will stick to the speed limit because of manufacturer fears over product liability lawsuits, and speed limits may be changed to reflect the reliability of robots over inattentive humans (self-driving cars don’t check their Facebook page while changing lanes). These industry sectors come and go.
Dan Mitchell clearly understands what modern western government is really all about:
May 19, 2015
I should say I’m no free-speech absolutist. I think the notion that we should treat pole dancing like constitutionally protected speech while we try to ban actual political speech is just one of the loopiest manifestations of our popular confusion over the First Amendment. In fact, government support for the arts doesn’t offend me in theory, it’s just how they do it in practice that bothers me.
Specifically, I cannot stand the way New Class bureaucrats think they must be autonomous from the taxpayers who pay their salaries. Imagine if we lived in anything like the “Christianist” theocracy so many lefties live in quaking fear of. Evangelical bureaucrats would likely fund art they liked. The professional Bohemians would shriek — with some justification — that the state was imposing its values on the rest of us. But when those same people are in driving the gravy train, they think there’s nothing wrong — and everything right — with imposing their values.
Of course, this is a problem that extends far beyond outposts like the National Endowment for the Arts (NEA). Public teachers’ unions and ed-school priests hate the idea that parents and other taxpayers should have a real say in how education money is spent. Bureaucrats in general have become a kind of secular aristocracy that resents second-guessing by the people who fund their will-to-power.
When voters say that bureaucrats shouldn’t spend money on X, the bureaucrats shriek “censorship!” But it is only the equivalent of censorship if you work from the assumption that it’s all the government’s money anyhow. As Bill Clinton once said about the federal surplus, “We could give it all back to you and hope you spend it right.” But if we did, alas, not enough of you would spend it on urophagic art.
Jonah Goldberg, “Bureaucrats Use Taxpayer Money to Subsidize Their Own Values — and No One Else’s”, National Review, 2015-05-09.
May 16, 2015
Published on 11 May 2015
The American ideal of limited government on life support. Is it time for civil disobedience? Charles Murray says yes. Murray has been writing on government overreach for more than 30 years. His new book, By The People, is a blueprint for taking back American liberty. Jonah Goldberg sits down with Murray to discuss civil unrest in Baltimore, the scope of the government, and why bureaucrats should wear body cameras.
According to AEI scholar, acclaimed social scientist, and bestselling author Charles Murray, American liberty is under assault. The federal government has unilaterally decided that it can and should tell us how to live our lives. If we object, it threatens, “Fight this, and we’ll ruin you.” How can we overcome regulatory tyranny and live free once again? In his new book, By the People: Rebuilding Liberty Without Permission (Crown Forum, May 2015), Murray offers provocative solutions.
At The Diplomat, Catharine Putz wonders if there can be a Kazakhstan without President Nursultan Nazarbayev:
In a new report, the International Crisis Group says that Kazakhstan is facing a stress test – its only president since independence turns 75 this summer and Russia’s “actions in Ukraine cast a shadow over Kazakhstan.” To date, the report notes, Kazakhstan’s devotion to continuity has trumped needed democratic reforms. Nursultan Nazarbayev’s recent landslide reelection demonstrates his absolute centrality to political stability in the country and could prove to be “a serious vulnerability.”
The report encourages Kazakhstan to act soon – reconfirming its independence from Russia and lifting the veil on government operations in order to reassure citizens and foreign powers “that the state is not the work of one man or an exclusive ethnic project and that the transition to a post-Nazarbayev era will be smooth.” The report recommends that Kazakhstan continue to pursue a multi-vector foreign policy by engaging equally with Russia and the EU; take a “recognizable role” in pursuing a solution to the Ukraine crisis; give senior officials – other than Nazarbayev – some stage time; practice restraint in issues of language, ethnicity, and nationalism; and broaden economic development beyond Astana.
This is not the first time parallels have been drawn between Ukraine and Kazakhstan. Kazakhstan, like all of Central Asia, had a sizeable ethnic Russian population when the Soviet Union dissolved. That population has dwindled; in a country of 17 million a 2009 census determined that ethnic Russians accounted for 23 percent, ethnic Kazakhs more than 60 percent. This is a more modern development, as it wasn’t until the mid-1980s that the ethnic Kazakh population bypassed that of ethnic Russians in the region. Now, most ethnic Russians are concentrated along the northern border with Russia.
How do you say “Après moi, le déluge” in Kazakh?
The governments of these United States, from the federal to the local level, have managed to insinuate themselves between citizens and their property at every point of significance. In that, our governments are very much like most other governments, liberal and illiberal, democratic and undemocratic. We have allowed ourselves to be in effect converted from a nation of owners to a nation of renters. But while medieval serfs had only the one landlord, we have a rogue’s gallery of them: the local school board, the criminals at the IRS, the vehicle-registry office, etc. Never-ending property taxes ensure that as a matter of economic function, you never really own your house — you rent it from the government. Vehicle registration fees and, in some jurisdiction, outright taxes on automobile ownership ensure in precisely the same way that you never really own your car: You rent it from the government. Stock portfolio? Held at the sufferance of politicians. A profitable business? You’ll keep what income they decide you can keep. Your own body? Not yours — not if you use it for profitable labor.
A Who down in Whoville? You should be so lucky: Welcome to Whomville, peon.
Kevin D. Williamson, “Property and Peace”, National Review, 2014-07-20.