Archives: 08/2017

Has L.A. Avoided Being an Olympic Sucker?

This week, the worst-kept secret in international sports became official: Paris will host the 2024 Olympic Summer Games and Los Angeles will host in 2028. There were plenty of happy faces in Paris and L.A. over the announcement—and there should be some in Boston too.

Just 2.5 years ago, Boston was a frontrunner in the sweepstakes for the 2024 Games. A group of city businessmen put together a multi-billion-dollar plan for the Games, including proposed construction of a large, temporary stadium for the main events and a beach volleyball venue that would be erected on Boston Common. The group then set to work getting political leaders and the public onboard.

In an article forthcoming in the fall issue of Regulation, Andrew Zimbalist, a Smith College economist and internationally renowned expert on the finances of mega-events like the Olympics, tells what happened next:

At first, Bostonians were excited by the Olympic prospect, inspired by claims that the event would yield long-lasting benefits in economic stimulus, international prestige, and tourism. But then they began to learn from people like Zimbalist that hosting the Olympics usually isn’t the net positive that proponents claim.

He writes of recent American Olympic history:

Lake Placid 1980 experienced cost overruns of 321% and ultimately required a bailout. The State of New York contributed $63 million (17% of total costs) and the federal government spent $179 million (50% of total costs). … Atlanta 1996 had cost overruns of 147%. … Approximately one-third of all spending—$823 million—came from taxpayers. … The federal government planned to spend $342 million on the 2002 Salt Lake City Winter Olympics. The Salt Lake City municipal government planned to spend $75 million and the Utah state government committed an additional $150 million. The final public bill was considerably higher.

Outside the United States, the Olympic experience has been even worse; barrels of red ink and/or horrifying events marked the Mexico City Games of 1968, the Munich Games of 1972, the Montreal Games of 1976, the Athens Games of 2004, the Sochi Games of 2014, and the Rio Games of 2016. And afterward, Zimbalist writes, the costs continue:

Beijing 2008’s “Bird’s Nest” stadium has been converted into a museum for tourists to visit at $12 a pop, but there is little interest. Meanwhile, the facility costs millions of dollars annually to operate and maintain. Rio’s Olympic Park has many venues that were slated for post-game use, but there was either no money to convert them or there were no private developers willing to take on the responsibility of remodeling and management. As in Athens (2004), most of Rio’s venues are now falling into disuse. London’s $700 million Olympic Stadium has been converted (at a $400 million additional public expense) into a new stadium for the West Ham soccer club, but West Ham had a perfectly good stadium beforehand.

As for claims that the Olympics bring tourism benefits, he argues this probably isn’t true on net. Major cities like Boston already attract plenty of tourists, but they’ll be inclined to stay away during the Olympics because of the chaos of the Games. And the Lyle Lanley notion that the Games would “put Boston on the map”? Well, Boston is already a pretty big dot on the map.

The Venerable Tradition of Opposing “Government Schools”

Writing in Monday’s New York Times, Katherine Stewart–author of 2012’s The Good News Club: The Christian Right’s Stealth Assault on America’s Children–has purportedly uncovered what “what the ‘government schools’ critics really mean.” According to Stewart, those who criticize government schools “have their roots in American slavery, Jim Crow-era segregation, anti-Catholic sentiment and a particular form of Christian fundamentalism.” She then catalogues a litany of unsavory characters who opposed “government schools” because they believed in the righteousness of slavery or because they saw the schools as insufficiently fundamentalist.

I’m not going to directly address Stewart’s claims about people like Robert Lewis Dabney or James W. Fifield Jr., both of whom, according to her, opposed government schools for unsavory purposes. I wouldn’t be surprised if they did. Many policy proposals can attract unsavory people, but the mere existence of such adherents is not a sufficient reason to abandon the policy. If it was, then the fact that many early-20th century Progressive economists and social reformers championed the minimum wage because it would unemploy “racially undesirable” immigrants would be a sufficient reason to oppose the minimum wage.   

Instead, I’ll focus on two fundamental errors in Stewart’s article. First, she ignores the extensive historical provenance of critics of state education, i.e. “government schools.” To demonstrate this, I can’t do better than refer you to intellectual historian and Libertarianism.org contributor George H. Smith, who has done yeoman’s work on the history of critics of state education. Smith has paid particular attention to 19th century British Voluntaryists, such as Herbert Spencer and Auberon Herbert. In a series of essays on Cato’s Libertarianism.org, Smith tells the history of those critics. “Rather than giving to government the power to decide among conflicting beliefs and values,” writes Smith, “they [British Voluntaryists] preferred to leave beliefs and values to the unfettered competition of the market.” Smith continues:

One must appreciate this broad conception of the free market, which includes far more than tangible goods, if one wishes to understand the Voluntaryist commitment to competition and disdain for government interference.

British libertarians had a long heritage of opposition to state patronage and monopoly, reaching back to the Levellers of the early seventeenth century. The Voluntaryists, like their libertarian ancestors, believed that government interference in the market, whatever its supposed justification, actually serves special interests and enhances the power of government, thereby furthering the goals of those within the government. The various struggles against government intervention were seen by Voluntaryists as battles to establish free markets in religion, commerce, and education. It was not uncommon to find the expression “free trade in religion” among supporters of church-state separation; when the editor of the Manchester Guardian stated in 1820 that religion should be a “marketable commodity,” he was expressing the standard libertarian position.

When fellow free-traders, such as Richard Cobden, supported state education, the Voluntaryists took them to task for their inconsistency. Those who embrace free trade in religion and commerce but advocate state interference in education, argued Thomas Hodgskin (a senior editor of The Economist) in 1847, “do not fully appreciate the principles on which they have been induced to act.” “We only wonder that they should have so soon forgotten their free-trade catechism,” wrote another Voluntaryist, “and lent their sanction to any measure of monopoly.”

Before free-traders ask for state interference in education, Hodgskin argued, “they ought to prove that its interference with trade has been beneficial.” But this, by their own admission, they cannot do. They know that the effect of state interference with trade has always been “to derange, paralyze, and destroy it.” Hodgskin maintained that the principle of free trade “is as applicable to education as to the manufacture of cotton or the supply of corn.” The state is unable to advance material wealth for the people through intervention, and there is even less reason to suppose it capable of advancing “immaterial wealth” in the form of knowledge. Any “protectionist” scheme in regard to knowledge should be opposed by all who understand the principle of competition. Laissez-faire in education is “the only means of ensuring that improved and extended education which we all desire.”

Apple, China, and the Wages Of Tyranny

This week, Apple announced it had pulled several apps from its iOS App Store that offer virtual private network (VPN) services in China. As quoted by tech blog TechCrunch, Apple stated:

Earlier this year China’s [Ministry of Industry and Information Technology] MIIT announced that all developers offering VPNs must obtain a license from the government.  We have been required to remove some VPN apps in China that do not meet the new regulations. These apps remain available in all other markets where they do business.

One published report claims that as many as 60 VPNs were pulled from the China version of the App Store. A Google search on the topic generally shows Apple taking a public beating for the action, which, in fact, was unavoidable if Apple was to comply with the new Chinese government law. 

As David Pierson of the LA Times noted, it’s hardly Apple’s first anti-free speech accomodation to the Communist Chinese government:

This is not the first time Apple has acquiesced to authorities in China, the company’s second-biggest market after the U.S. It has pulled apps from its China app store that mention the Dalai Lama and ethnic Uighur activist Rebiya Kadeer. Apple also removed the New York Times app this year and disabled its news app in China in 2015.

Apple will face exactly the same situation in November, when a new Russian law banning VPNs comes into effect. 

Veteran Apple watcher John Gruber made the following observation on Apple’s decision:

The thing I keep thinking about is that iMessage and FaceTime are among the few protocols available inside China with end-to-end encryption. The Chinese just started blocking WhatsApp a few weeks ago. I don’t know why they allow iMessage and FaceTime to continue working, but they do, and both of those protocols are designed from the ground up to only work using end-to-end encryption. There is no “off switch” for iMessage encryption that Apple can flip inside China. If you’re using iMessage, it’s encrypted. It would surprise no one if China started blocking iMessage and FaceTime, but for now, their availability is a real benefit to the people of China that seems to go largely unrecognized.

You can pretty much take it to the bank that blocking iMessage and FaceTime will be next up for Chinese (and probably) Russian censors, with further demands that other apps offering end-to-end encryption be excised from the iOS App Store.

And it will be those kinds of precedents that incoming FBI Director Christopher Wray and his colleagues in the American Intelligence Community use to force Apple and other manufacturers of privacy technology and software to give them “back doors” into said apps and services or to seek an outright ban on them on “national security” grounds. If that happens, American citizens should remind their federal legislators that if House and Senate members are allowed to use encrypted messaging apps and services, so should the citizens who elect them and pay their salaries.

Finding Common Ground for Land-Use Regulation Reform

Cross-posted at the Urban Institute, following our online debate.

Across the country, many people are finding it harder and harder to pay their rent. Among the leading reasons for rising rents is that housing supply isn’t growing fast enough to keep up with demand. The shortage of affordable rental housing has generated surging interest in regulatory reform, especially in California.

Despite that trend, restrictive land-use regulations that reduce housing supply enjoy support from people with a wide range of political attitudes and affiliations, as these regulations promise to accomplish appealing objectives. They can ensure that new residents provide revenue through property taxes or development fees to support schools, roads, parks, open space, and affordable housing. They  sometimes reduce gentrification and often control neighborhood aesthetics. And regulations that reduce housing supply enough to raise housing prices benefit residents who own homes.

Given the breadth of support for restrictions from various corners, any efforts to reform regulation must be correspondingly broad. Results from an online debate last month cofacilitated by experts from the Cato Institute and the Urban Institute hint at the potential for new coalitions.

Where the experts agree

The debaters, whose ideological perspectives varied broadly, agreed that, sometimes, land-use regulations are too rigid, limit growth too much, and create too much uncertainty. Results include higher housing costs, racial and economic segregation, constrained economic opportunity and innovation, and slower economic growth.

Even supporters of regulation conceded that regulations fail to work as advertised. They often expose people to harms instead of protecting them; diminish, rather than enhance, aesthetic and environmental quality; and aggravate public service degradation instead of preventing it.

Reflecting agreement on the problems of regulation, some debaters found common ground on what to do about those problems. Most of the agreement centered on local reforms that loosen or reduce regulation for improvements in efficiency, affordability, and equity. Dana Berliner from the Institute for Justice suggested broadening permitted uses, eliminating parking requirements where parking is abundant, and removing restrictions on home garage uses. Tony Arnold of the University of Louisville favored reducing regulatory requirements for affordable housing and agreed with Berliner on the importance of reducing unnecessary permitting delays. And Robert Dietz of the National Association of Home Builders recommended lowering development impact fees used for general revenue collection.

Some debaters also agreed that state governments are important actors in driving local regulatory reform. Richard Rothstein of the Economic Policy Institute endorsed state “fair share” affordable housing plans. New Jersey’s decades-old approach to battling suburban exclusionary zoning hinges on these plans and is supported by affordable housing advocates, civil rights leaders, and for-profit builders. That support wouldn’t materialize without provisions that override local restrictions and guarantee that builders incorporate affordable housing in their developments. Rothstein, Arnold, and American University’s Derek Hyra supported inclusionary zoning, but without the quid pro quo of increased certainty and density, the policy can generate stiff opposition from for-profit builders.

Why further debate is crucial

Some debaters offered pros and cons of regulations and advocated for policies that others opposed. Many of these items deserve more thought and discussion, even if we don’t reach an agreement now, because they illuminate trade-offs and potential approaches for future policy designs that could ease the housing supply crisis. We hope you’ll come up with some ideas of your own when you read the full Cato Institute and Urban Institute debate here.

Federal Marijuana Legalization?

U.S. Senator Cory Booker (D-NJ) 

is proposing a far-reaching bill that would both legalize marijuana at the federal level and encourage states to legalize it locally through incentives.

Federal legalization is unquestionably the right policy. The bill does go farther than necessary by 

[withholding] federal money for building jails and prisons, along with other funds, from states whose cannabis laws are shown to disproportionately incarcerate minorities.

If federal law legalizes, state prohibitions become irrelevant given that state borders are porous. Eight states have already legalized, and competition for marijuana tax revenues will drive most others to follow suit once federal prohibition is gone.

Alas,

The New Jersey Democrat’s bill, called the Marijuana Justice Act, has virtually no chance of passage in the Republican-controlled Congress and in a presidential administration that’s decidedly anti-marijuana.

Nevertheless, Booker gets three cheers for trying.

ICE Deputizes More Cops for Immigration Enforcement

Yesterday Immigration and Customs Enforcement (ICE) announced that eighteen counties in Texas are taking part in the 287(g) program. The program allows police departments to enter into agreements with ICE, thereby permitting their officers to carry out certain federal immigration enforcement functions. The news from Texas is the latest evidence that President Trump’s campaign pledge to “expand and revitalize” 287(g) was a serious commitment, not political bluster. The expansion of 287(g) is a worrying development. The program has been widely criticized for harming police-community relationships and prompting racial profiling. It also grows the power of the federal government, which traditionally has not played a major role in state and local law enforcement.

287(g) was, until a few years ago, a program that had three models: Jail, Task Force, and a Jail/Task Force hybrid model. The Jail agreements allow participating officers to check an individual’s status in a detention facility and issue detainers. Using detainers, officers can hold individuals 48 hours longer than they usually would so that ICE can pick them up. The Task Force model allowed officers to carry out immigration enforcement in the field such as questioning and arresting people suspected of violating immigration law. At the end of 2012 the Obama administration announced that the Task Force 287(g) model would be scrapped, with ICE declaring that other programs “are a more efficient use of resources for focusing on priority cases.”

The Department of Homeland Security (DHS) Office of Inspector General (OIG) raised concerns related to 287(g) in a 2010 report, which stated:

NGOs critical of the 287(g) program have charged that ICE entered into agreements with LEAs that have checkered civil rights records, and that by doing so, ICE has increased the likelihood of racial profiling and other civil rights violations.

Claims of civil rights violations have surfaced in connection with several LEAs participating in the program. Two LEAs currently enrolled in the program were defendants in past racial profiling lawsuits that they settled by agreeing to collect extensive data on their officers’ contacts with the public during traffic stops, and adopt policies to protect the community against future racial profiling. Another jurisdiction is the subject of (1) an ongoing racial profiling lawsuit related to 287(g) program activities; (2) a lawsuit alleging physical abuse of a detained alien; and (3) a DOJ investigation into alleged discriminatory police practices, unconstitutional searches and seizures, and national origin discrimination.

The DHS OIG report was correct to point out the criticism leveled at 287(g). As I’ve noted before, the American Immigration Council found that “287(g) agreements have resulted in widespread racial profiling.” According to the ACLU of Georgia, “The 287(g) program in Cobb and Gwinnett has encouraged and served as a justification for racial profiling and civil and human rights violations by some police officers acting as immigration agents.”