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March 12, 2018 6:34PM

Was Frederick Douglass a Libertarian?

Nicholas Buccola—one of the nation’s leading scholars of Frederick Douglass—has a piece in the New York Times blog “The Stone” in which he challenges my classification of Frederick Douglass as a libertarian. Now, as I argued on Ricochet recently, there’s a point at which any such effort at classification is rather silly: it’s more important to understand the substance of what Douglass stood for than to label it. Also, any effort to classify the man as “libertarian” or “conservative” or “progressive” or whatever will depend on us defining these terms—and such definitions are complex and contentious. Another complication is the fact that there are disagreements within these groups. Randy Barnett for example, pointed out in 2007 that libertarians don’t always agree on the practical application even of the principles that they share, even on major controversies. And then there’s the fact that many of those who call themselves libertarians actually aren’t.

On the other hand, the beginning of wisdom is calling things by their right names. And classifying—well, it’s just what scholars do. So how should we label Douglass?

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March 12, 2018 5:19PM

City of Baltimore Will Bus Students To Anti‐​Gun Protest

At a cost of $100,000, the city of Baltimore plans to provide 60 free buses to take students from its schools to planned anti-gun demonstrations in Washington, D.C. later this month.

Many things could be said against this decision. For instance, it openly breaks with the notional political neutrality of public schools so as to side with some parents' beliefs against others’. It takes money away from a Baltimore City school system that, though lavishly funded, struggles with unmet basic needs “from malfunctioning furnaces to undrinkable water.” It siphons classroom time from students in desperately underperforming schools.

But there is one more thing to say against it as well: a protest outing that is ardently enabled or even meticulously organized by the authority figures in your life can be like the ninth-grade English course that ruins Macbeth or Moby Dick for you. Writes Lynda C. Lambert in the Baltimore Sun:

Marches are normally “bottom up.” They are formed by people who are not government, usually to protest something that government is doing [or not doing].

Governments do not sponsor marches, unless that government is, say, the government of China or Russia or North Korea, where governments sponsor marches all the time that show how much the people support their governments……

Part of protesting is finding your own way, for your own reasons.

Baltimore government sponsorship of this ride to D.C. demeans our kids and demeans the point of the march. And, even more than that, it demeans the concept that a march is an uprising, a beginning, a statement made by we the people to our government.

Also, on institutional encouragement of the protests, I had a piece in the WSJ last week on the Yale admissions office’s contribution.  

As for the separate question of whether compulsory attendance and truancy laws should be enforced against students for skipping school in a favored cause, I'll see and raise: don't enforce those laws against anyone period.

March 12, 2018 4:12PM

Government Botching Air Traffic Control Upgrade

Our air traffic control (ATC) system is run by the federal government and subject to all the usual bureaucratic failures such as cost overruns, lack of innovation, a stagnant workforce, unstable finances, and ineffective leadership.

The solution to these problems is to privatize the system, as the Canadians have done with their system to great success. The Federal Aviation Administration (FAA) would continue to oversee aviation safety, but ATC operations would be moved into a private, nonprofit, self-funded company.

A recent Washington Post headline was “FAA botched $36 billion effort to modernize air traffic system, report says.” They point to a new report by federal auditors, which is the latest of many similar reports going back decades.

When will Congress finally say “enough” and pursue an overhaul?

Here are highlights from the WaPo:

The Federal Aviation Administration has mishandled a $36 billion project to modernize the antiquated aviation management system, according to a harshly critical inspector general’s report released Thursday.

It was the fourth inspector general’s critique in as many years of a program known as NextGen, on which more than $7 billion in federal funds has already been spent.

… The report said the FAA “has lacked effective management controls” in awarding contracts, sometimes spent money on low-priority projects and allocated an estimated $370 million for projects that were still awaiting approval.

… NextGen has long been a cause of consternation and frustration in Congress and with commercial airlines that are expected to invest billions of dollars in their own cash to complete the system.

NextGen is often described as a GPS-based system, but it is a vastly more complex network of interlocking systems that will change cockpit communications, guide airplanes both aloft and on the ground, and allow airlines to fly directly to their destinations rather than turning after reaching each designated way point.

… Together they will allow planes to safely fly closer to one another, save fuel and time, get immediate weather updates, and communicate more effectively with other airplanes and with air traffic controllers.

… But the cost of equipping each plane to handle the new systems has been estimated at $200,000. Airlines say they need reassurance that if they invest, the NextGen program will be delivered on schedule.

That led House Republicans, later with the support of President Trump, to propose that the NextGen program and more than 30,000 FAA workers be spun off into an independent, nonprofit corporation.

… There have been 13 confirmed or acting heads of the FAA since the precursor of NextGen was proposed as the Advanced Automation System in 1983.

… “FAA does not have today, and has not had since its inception, anything that would approximate a real plan for achieving a lot of the things it has advertised for the NextGen program,” said an FAA employee familiar with the program, who asked to remain anonymous to speak candidly. “I think the sentiment out there is that NextGen has been a big dud, and it’s hard to disagree with that sentiment if you look at what’s actually been produced.”

More on air traffic control reform here.

March 12, 2018 2:37PM

California High‐​Speed Rail Cost May Triple

The Los Angeles Times reports on the latest setbacks to California’s high-speed passenger rail project. The project is far over budget and way behind schedule. Is anyone surprised?

Randal O’Toole describes the plague of cost overruns in government rail systems here, and he explains why high-speed passenger rail makes little sense here. I discuss the epidemic of cost overruns on government infrastructure projects here.

The LAT says:

The price of the California bullet train project jumped sharply Friday when the state rail authority announced that the cost of connecting Los Angeles to San Francisco would be $77.3 billion and could rise as high as $98.1 billion — an uptick of at least $13 billion from estimates two years ago.

The rail authority also said the earliest trains could operate on a partial system between San Francisco and Bakersfield would be 2029 — four years later than the previous projection. The full system would not begin operating until 2033.

… The new estimates will force California’s leadership to double down on its political and financial commitments if it wants to see the system completed, against a backdrop of rising costs, years of delays, strident litigation and backlashes in communities where homes, businesses, farms and environmental preserves will have to give up land to the rail’s right-of-way.

… The new business plan is based on a wide range of uncertainties, Kelly said. Among the most challenging is the cost of about 36 miles of tunnels through mountainous Southern California, which could range anywhere from $26 billion to $45 billion, according to the report.

… A spokesman for Gov. Jerry Brown, who since the 1980s has championed high-speed rail, said the disclosures do not change the strong support he expressed in his recent State of the State address, when he said: “I make no bones about it. I like trains and I like high-speed trains even better.”

… The disclosure about the higher costs comes nearly a decade after voters approved a $9-billion bond to build a bullet train system. The original idea was that the federal government would pay about a third of what was then an estimated $33-billion project, with private investors covering another third.

When project supporters are admitting that the cost “could be as high as” $98 billion, it obviously will be at least that high in the end. That would be triple the original promised cost, and ten times the amount that voters directly approved.

But Jerry likes trains, so full steam ahead!

March 12, 2018 11:45AM

The Case for Government Control of Internet Speech Grows Weaker: Filter Bubble Edition

Cass Sunstein has been for some time a capable and influential critic of individual choice and limited government. Over the past decade, he has argued that the Internet is failing liberal democracy. Left to their own preferences, he says, individuals choose to avoid political views that challenge their prior beliefs. They form filter bubbles that exclude contrary views and echo chambers that polarize debates. Both complicate solving national problems.

These alleged filter bubbles and echo chambers comprise expressing and hearing (or reading) speech, both highly protected activities in the United States (or in any polity deserving the name liberal). The harms of filter bubbles and echo chambers should be much more than alleged to justify government actions to “improve” our debates.

Sunstein’s claims about filter bubbles and echo chambers have a certain appeal. We can imagine people choosing to avoid unpleasant people and views. As communications researcher Cristian Vaccari notes:

social media users can make choices as to which sources they follow and engage with. Whether people use these choice affordances solely to flock to content reinforcing their political preferences and prejudices, filtering out or avoiding content that espouses other viewpoints, is, however, an empirical question—not a destiny inscribed in the way social media and their algorithms function.

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March 11, 2018 3:04PM

Leland Yeager on Trump and Trade

Cato adjunct scholar Leland B. Yeager had a long career at the University of Virginia Department of Economics in its golden age and later at Auburn University. He is the author of Foreign Trade and U.S. Policy: The Case for Free International Trade (1976), International Monetary Relations: Theory, History and Policy (1976), and Free Trade: America's Opportunity (1954). At 93 he is still as insightful and as blunt as ever, and he just published this critique of President Trump's understanding of trade policy at Liberty magazine under the title "Profound and Destructive." The whole thing is reprinted below.

___________________

President Trump’s destructiveness requires few words here. Consider how world stock and currency markets have been shaken by the resignation on March 6 of Gary Cohn, regarded until then as Trump’s chief economic adviser. Although not a trained economist, Cohn apparently had some sound instincts derived from years of financial experience. His departure apparently and ominously leaves more influence, or echo, to Peter Navarro — look him up with Google.

This latest example of destructiveness follows the one touched off by Trump’s March 2 tweet bewailing America’s loss of “many billions of dollars on trade with virtually every country it does business with” and heralding trade wars as “good, and easy to win.”

I’ll spend more words on how profound Trump’s ignorance is. He considers a country’s excess of imports over exports a measure of loss. This measure applies even to trade with each foreign country separately. He counts China and Mexico among the worst offenders, deserving punishment. He does not understand the multilateral aspect of beneficial trade.

Nor does he understand how we gain in buying goods cheap from abroad. What difference does it make if steel and aluminum are cheap because of low foreign prices or because they grow cheaply on bushes at home? Money cost is a measure of opportunity cost, which means the loss of other goods when resources go instead to make the particular good in question. Opportunity cost reflects scarcity. Scarcity applies even to prosperous America, where we could enjoy still higher standards of living if food, clothing, shelter, entertainment, and other goods and services came costlessly and miraculously from heaven. Scarcity and how gains from domestic and foreign trade alleviate it are fundamentals of economics. The principle of comparative advantage goes far in explaining how.

Without understanding the academic presentation of the “absorption approach to the balance of payments,” everyone should be able to grasp its central idea, which is sheer arithmetic. If we as a country use more output for consumption and real investment than we produce, then the difference must come from somewhere — from abroad in the form of more imports than exports. A big item in this excess absorption, alias national undersaving, is government deficits. Yet Trump and Congress are complacent about increasing the deficit and debt by taxing less and spending more.

All too many politicians say that they are in favor of free trade if it is “fair trade” played on a “level playing field.” These slogans express Trump’s view of international trade as a game, a zero-sum game in which one player’s gain is another’s loss.

Trump does not understand how the price system coordinates economic activity, making most government planning about jobs and industries unnecessary and harmful.

The profundity of Trump’s ignorance goes beyond economics. It extends to diplomacy in domestic and foreign relations and even to the behavior of a decent human being. Yet his destructive economic ignorance remains prominent.

March 9, 2018 1:49PM

Inflation Is Largely a Global Phenomenon

When economic journalists speculate about looming inflation risks in the U.S. or any other country, they implicitly assume that each country’s inflation depends on that country’s fiscal or monetary policies, and perhaps the unemployment rate. Yet The Economist for March 3rd–9th shows approximately 1–2 percent inflation in the consumer prices index (CPI) for virtually all major economies. 

Inflation rates were surprisingly similar regardless of whether countries had budget deficits larger than ours (Japan and China) or big surpluses (Norway and Hong Kong), regardless of whether central banks experimented with “quantitative easing” or not, and regardless of whether a country’s unemployment rate was 16.9 percent (Spain) or 1.3 percent (Thailand). 

The latest year-to-year rise in the CPI was below 1 percent in Japan and Switzerland, 1.5 percent in Hong Kong and the Euro area, 1.6 percent in Canada and China, 1.8 percent in Sweden, 1.9 percent in Norway and Australia, 2 percent in South Koreas and 2.1 percent in the U.S.  Among major countries, U.K. was on high side with inflation of 2.7 percent.  Three economies with super-fast economic growth above 6 percent (India, Malaysia and the Philippines) do have slightly higher inflation—above 3 percent—but the CPI is up just 1.6 percent in one of them, namely China. 

Major Country Inflation

The remarkable similarity of CPI inflation rates is surprising since countries measure inflation differently and consume different mixes of goods and services. The fact that inflation rates are nonetheless so similar, and move up and down together, suggests that inflation is largely a global phenomenon.  The U.S. may well have a disproportionate influence on global inflation, since it accounts for about 24 percent of global GDP and key commodities are priced in U.S. dollars.  Yet U.S. inflation nonetheless goes up and down in synch with other major economies, as the graph shows. 

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