Archives: 07/2017

What’s Next for Venezuela?

Yesterday’s fraudulent and illegitimate vote to install a constituent assembly in Venezuela is the definitive step towards consolidating a de jure dictatorship in that country.

The constituent assembly will enjoy supra-constitutional powers, which means that its prerogatives go beyond writing a new constitution and include, inter alia, dissolving and removing all existing institutions—including those controlled by the opposition or held by critics of the regime, such as the National Assembly and the Attorney General’s Office—and calling off scheduled elections, which the government would certainly lose. In the hours after the vote, Nicolás Maduro openly stated that the constituent assembly will strip opposition assembly members from immunity and will discharge Maria Luisa Ortega, the Attorney General.

Several myths regarding the crisis need to be addressed:

Venezuela is on the brink of a civil war: In order to have a war, both sides need to be armed. In the case of Venezuela, only one side—the government—has the guns: the Maduro regime enjoys the full support of the armed forces, the National Guard—which is responsible for brutally repressing the protests—and the colectivos, which are armed thugs that terrorize the population in motorcycles with the assistance of the police and the National Guard. Of the more than 120 people killed since the protests began four months ago, almost all have been protestors or other civilians murdered by the security forces.

The army could withdraw its support for Maduro at any moment: This is wishful thinking. For over a decade, the armed forces have been carefully purged of officials that do not support the authoritarian project of Hugo Chavez and his successor Nicolás Maduro. The Maduro government is a military regime, even though its head is technically a civilian: 13 members of the Cabinet (out of 32) are military officials, as well as 11 of the 20 Chavista governors. The armed forces are profiteering from the status quo; they are deeply involved in smuggling and drug trafficking.

The alternative to supporting the regime for the rank and file members of the military is not serving under a new democratic government or retiring with a government pension but rather being prosecuted for massive corruption or being extradited to the United States for drug trafficking. Moreover, even though there are reports of growing dissatisfaction at the troop level, the Cuban security services have infiltrated the armed forces and can easily detect and prevent any uprising from taking place. It is the perfect setup for the consolidation of a dictatorship.

Just In the Nic-O’-Tine: E-Cigarettes Get a Reprieve

Here’s some genuine good news for both individual liberty and harm reduction: the Food and Drug Administration has granted a four-year reprieve to e-cigarettes (“vaping”). In particular, it is extending from November 2018 to August 2022 the requirement to obtain regulatory clearance for, or else withdraw, vaping products now on the market. As I noted last year, under the “deeming” regulations proposed under the Obama administration 

even products currently sold on the market will have to be withdrawn unless their makers, mostly small companies, care to venture on an FDA approval process that can cost $1 million and up per item. Any resulting applications will result in permission to sell only if the agency decides the product is a net safety improvement on current offerings. And that permission will be at best chancy because the FDA, following [then-CDC head Thomas] Frieden’s lead but in contrast with the views of many others in the public health field, refuses to acknowledge vaping as a safer alternative to tobacco smoking, even though large numbers of smokers turn to vaping with exactly that goal in mind. 

While it is likely that many smokers save their life or health by switching from a cigarette habit to the less injurious electronic alternative, every such switch cuts into revenues from conventional cigarette sales—and thus the coffers of state governments and other beneficiaries of the 1998 tobacco settlement. Some of these groups, as well as some components of the tobacco business, had quietly backed the FDA’s plan to close down vaping except perhaps for the very biggest players. 

Notably, and shrewdly, the Trump White House chose to associate itself with the Friday FDA announcement: 

A spokesman for the White House told The Daily Caller News Foundation President Donald Trump “supports the FDA’s new initiative,” and noted it as an example of his administration’s efforts to give relief to small businesses across the country.

“Public health is a priority and anything that will help protect kids and assist individuals to stop smoking is a worthy cause,” the White House spokesman told TheDCNF. “The President and his administration have taken historic action to eliminate unnecessary and burdensome regulations.”

Meanwhile, new Food and Drug Administration head Scott Gottlieb says his agency will look into the possibility of limiting nicotine levels in conventional cigarettes with the aim of making them less addictive. The obvious problem with that, the incursion on liberty aside, is that if cigarettes are made to contain less nicotine, many users will choose to maintain an existing level of intake by stepping up the number of cigarettes they smoke per day, thus boosting their intake of associated tar and noxious gases. But at least there’s time to argue over the flaws of a proposal that’s down the road. The vaping regs were bearing down quickly. 

 

More on Nancy MacLean

I realize that I am a bit late to this party and that many of Nancy MacLean’s strange claims and factual errors have already been exposed and debunked by people much more familiar with her work, the intellectual history of libertarianism and the Nobel Prize-winning economist James Buchanan, than I am. However, there is one aspect of MacLean’s conspiracy theorizing in Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America (i.e., “the attempt by the billionaire-backed radical right to undo democratic governance” in America) that, I think, needs further comment.

Specifically, it would appear that in her “thoroughly researched” book, as Publishers Weekly calls it, MacLean has not bothered to talk to many actual libertarians, including, apparently, her colleague at Duke University, Michael C. Munger. Had she done so, MacLean would have realized that libertarians have come to their views for a plethora of reasons—only one of which may be the generosity of the libertarian businessman, billionaire and bête noire of the progressive left, Charles Koch. (I shall return to Charles Koch below.) But that would have, I am afraid, undermined her view of the libertarian movement as a racist (what else?) conspiracy.

At the risk of seeming self-indulgent, I would like to like to offer a personal perspective on becoming a libertarian. Growing up in 1980s Czechoslovakia, I witnessed communism’s final decade. The people around me were still afraid of eavesdropping by the secret police, jail time for anti-socialist activities, professional ruin, and social ostracism. But communism no longer inspired terror in the way it had in the early years after the Czechoslovak communist putsch in 1948.

As such, I cannot claim some sort of a victimhood status. My generation did not associate communism with firing squads and starvation. Rather, communism meant annoying, but manageable, food shortages and the grey monotony of everyday life under a dictatorship. Why do I revisit 30-year-old memories? I do so, because appreciation for political and economic freedoms, which is what I understand libertarianism to mean, often comes from personal experiences that are unconnected to (imagined) conspiracies.

Perhaps it is the realization that interactions with businesses, like the local Whole Foods, are more pleasant and satisfying than interactions with government agencies, like the local DMV. Perhaps it is the desire to consume food, drink, and drugs without an input from an all-knowing government official. Perhaps, as was the case with me, it is looking at the economic and social ruins of socialism. Hundreds of millions of human beings have learned to appreciate freedom during communism and many, far too many, still yearn for it in places like Cuba, North Korea, and Venezuela.

Immigrants and Teenage Summer Employment

A common fear about lower-skilled immigrants is that they will push native-born Americans with similar skills out of the labor market. In recent years, this argument focuses on the harm to native-born teenagers who are most substitutable with lower-skilled immigrants—especially those on the H-2B visa for seasonal non-agricultural work. This effect is supposed to be greatest in the summer time when American teenagers are on school vacation. 

Teenagers are working less than they used to but the U.S. labor market has changed in myriad ways that are unrelated to immigration, especially when it comes to the opportunity cost of teenagers. In responding to an op-ed by Senator Ben Sasse (R-NE) that lamented the loss of teenage work ethic (an oxymoron if my personal observations and experience as a teenage worker is representative), economist Ernie Tedeschi showed that increased enrollment in summer school can explain virtually the entire decline in their summer employment, at least for the month of July (Figure 1). The data allowed Tedeschi to separate part-time and full-time school enrollment after 1989. Years ago, I noted that increased summer school enrollment explained much of this decrease by leaning heavily on this Chicago Fed Letter that stated:

[w]e find no compelling evidence that associates the recent decline in teen participation with greater labor market competition due, for example, to larger cohorts of teens or an increase in the numbers of unskilled workers entering the labor market because of the 1996 welfare reform or changes in immigration.

Figure 1

Labor Force Participation & School Enrollment in July: 16-19 Year Olds

 

Source: Ernie Tedeschi’s calculations from IPUMS monthly CPS Extract.

Taxpayers Dodge a $35 Million Bullet in Prince William County, Virginia

I’m delighted to learn from Eric Boehm at Reason that a $35 million stadium subsidy is “pretty close to dead” after Potomac Nationals owner Art Silber pulled the matter from the Prince William Board of County Supervisors consideration ahead of a planned vote July 18. However, taxpayers in other Northern Virginia counties may still be at risk, as the Nationals search for a less fiscally responsible county board nearby. 

I wrote about the Nationals’ attempt to milk the taxpayers last month:

The county found a consulting firm to produce, as it has done for many governments, an optimistic economic analysis: It suggests that a new stadium would generate 288 jobs, $175 million in economic impact, and $4.9 million in tax revenue over a 30-year lease. Similar studies have proven wildly optimistic in the past. In 2008 the Washington Post reported that Washington Nationals attendance had fallen far short of what a 2005 study predicted. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed Nationals stadium subsidy, “The wonder is that anyone finds such figures credible.”…

Silber and the board of supervisors want the taxpayers to know that this time is different; their $35 million bond issue isn’t a government giveaway:

In Prince William, the board of supervisors is considering a proposal in which it would use bond money to build the stadium. The team would then reimburse the county the entire cost over the course of a 30-year lease.

“We’ve all read about certain professional sports teams threatening to leave if a local government doesn’t buy them a new stadium. The exact opposite is happening here,” said Tom Sebastian, a senior vice president with JBG. “The Potomac Nationals have agreed to pay 100 percent of the cost to construct a new stadium so that they can stay in Prince William County.”

I will gladly pay you Tuesday, 30 years from now, for a hamburger today.

Congratulations to Americans for Prosperity, Supervisor Pete Candland and his colleagues, and especially to the taxpayers of Prince William County. 

Questions the Senate Finance Committee Should Ask

On Tuesday, the Senate Finance Committee will hold a hearing to discuss affordable housing. The committee will debate whether to expand the Low-Income Housing Tax Credit (LIHTC), a program that ineffectively subsidizes affordable housing. A bill co-sponsored by Senator Cantwell and Senator Hatch would expand the program by 50%.

Unfortunately, the program usually sidesteps scrutiny because it is not part of the discretionary budgeting process. But the Senate Finance Committee has a unique window of opportunity to ask hard questions of LIHTC during the hearing. As a result, Tuesday’s hearing is arguably more important than usual.

What questions should the senators ask? Below are a list of ten questions to get the conversation started:

  1. Does LIHTC subsidize units that would be provided by the private market in its absence? How will the program improve the real number of affordable housing units produced?

  1. Why should Congress expand a program that GAO reports is not well managed? How does this bill increase oversight?

  1. Is LIHTC a band-aid solution for destructive local zoning and land use regulation policies? Should states be required to reduce local land use and zoning regulation in order to qualify for LIHTC?

  1. How will the bill reduce the amount that developers benefit from LIHTC?

  1. How does the bill improve the cost-effectiveness of LIHTC? Is LIHTC the most cost-effective way to subsidize housing? (Research suggests it is not.)

  1. Why must LIHTC be used in conjunction with other subsidies?

  1. Will non-profit developers continue to be provided preferential treatment in the credit allocation process? Even if they are less efficient at building affordable units?

  1. Given finite federal resources, why does LIHTC subsidize moderately low-income individuals rather than extremely low-income individuals?

  1. Why aren’t Housing Finance Authorities (HFAs) required to monitor project compliance during the latter half of the 30 year “extended use” period?

  2. How will the bill reduce corruption and fraud?

It’s essential that LIHTC is given the scrutiny it deserves. The Senate Finance Committee should make sure it happens.

Topics:

President Trump Endorses Police Brutality

In a speech about criminal gangs before police officers on Long Island, New York today, the President of the United States openly encouraged police officers to abuse people they arrest and take into custody. Daniel Dale of the Toronto Star tweeted that President Trump explained that he didn’t want officers to protect suspects’ heads when putting them in police cars, saying “You can take the hand away,” which drew the officers’ loud approval. Concurrent reporting from Asawin Suebsaeng of the Daily Beast confirmed that the call for police brutality drew “wild applause.”

The president’s comments are disgraceful and anathema to responsible policing and the Rule of Law. Causing intentional injury to a handcuffed suspect is not only against police procedure, but is a federal crime for which police officers have been sent to prison. What’s worse, the reaction of the crowd of officers should strike fear into the heart of every parent on Long Island, particularly those of black and Hispanic young men, who fit the stereotypical description of the gang members President Trump described.

In the name of law and order, the president made a mockery of the Rule of Law in his call for illegal violence against presumptively innocent suspects. It is a shameful day for the presidency and police agencies across the country should condemn the president’s irresponsible and indefensible comments in the strongest possible terms.

 

This is cross-posted from PoliceMisconduct.net

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