Topic: General

Another Jones Act Absurdity

Cape Ray

As North Carolina grapples with the aftermath of Hurricane Florence, transportation officials in the state are attempting to secure the use of a U.S. government-owned vessel, the Cape Ray, to transport supplies to the port of Wilmington. With the city temporarily transformed into an island by recent flooding, the roll-on, roll-off ship—or “ro-ro” in maritime parlance—will enable trucks filled with needed goods to drive aboard.

It’s a good thing the ship is government-owned—under private ownership the Cape Ray’s provision of relief supplies would be illegal. This absurd situation is due to a nearly 100-year-old law called the Jones Act. Passed in 1920, the law mandates that ships transporting goods between two points in the United States be U.S.-owned, crewed, flagged and built. The Cape Ray, however, was built in Japan.

Even if officials sought the private sector’s help and a Jones Act-compliant ro-ro ship to transport the trucks, none are available. According to data from the U.S. Maritime Administration (MARAD) there are only seven ro-ro ships in the entire Jones Act fleet. The closest one to North Carolina, the Delta Mariner, isn’t even an ocean-going vessel but rather operates on the Tennessee River. The other six vessels ply routes between the West Coast and Alaska or Hawaii.

The picture is little improved if Jones Act containerships and general cargo ships are also included, with a total of six such vessels currently on the East or Gulf Coasts (MARAD shows five but does not include the recently commissioned El Coquí). The closest one to the North Carolina flood victims is a 47-year-old general cargo ship, the Coastal Venture, which is currently moored near Charleston.

One reason behind the dearth of ships is the fact that U.S.-built vessels cost up to eight times as much as those built overseas. Such exorbitant prices mean that fewer are purchased, with fewer available for both general commerce and emergency situations. 

In contrast, there is little difficulty locating foreign-flagged ro-ro vessels in the mid-Atlantic region. The Marshall Islands-flagged Morning Pride, for example, is making its way up the East Coast toward Philadelphia, while the Norwegian-flagged Höegh Asia is bound for Baltimore. A combination cargo/ro-ro vessel, the Saudi-flagged Bahri Tabuk, is currently off the coast of North Carolina.

But because of the Jones Act, none of these ships are eligible to take on relief supplies at a U.S. port and speed them to Wilmington.

The Jones Act’s stated purpose is to ensure that the United States “shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency.” But when faced with a genuine emergency, such as Hurricane Maria in 2017 or Hurricane Florence today, the Jones Act fleet is often found wanting.

By its own terms, the law is a failure that actually impedes the realization of its goals. It’s time for the Jones Act to go. 

Cost and Abuse Problems in Low-Income Housing

A new Government Accountability Office report on the Low Income Housing Tax Credit echoes some of the concerns expressed in this 2017 Cato report. Vanessa Brown Calder and I suggested that the $9 billion program was vulnerable to abuse and that the costs of projects may be inflated.

Under the program, the IRS hands out tax credits to state agencies, which in turn give them to favored developers. We argued that the program had little oversight and that developers and contractors may inflate their claimed costs.

The GAO found that “no federal agency monitors or assesses LIHTC development costs, which are key to evaluating the efficiency and effectiveness of the tax credit program.” At the state and local levels, “few agencies have requirements to help guard against misrepresentation of contractor costs (a known fraud risk).” Because the IRS and many state agencies do not require detailed cost certifications, “the vulnerability of the LIHTC program to this fraud risk is heightened.”

The GAO compared the costs of 1,849 projects in 12 jurisdictions. They found a wide variation, as shown in the chart below.

Whether it is taxes, gasoline, or housing, everything seems to cost much more in California than Texas. The cost of low-income housing units are two and half times higher in the Golden State than in the Lone Star State. GAO found that both the hard costs of construction and the soft costs (such as architect fees) were much higher in the former than the latter.

The median per-unit cost of the new construction LIHTC projects was $218,000, of which the land cost was just $9,400. I’m not an expert, but that seems high given that you can buy a really nice tiny house for $80,000 or so.

Vanessa and I call for repeal of the LIHTC program.

To tackle housing affordability, she has suggested a deregulatory approach, which was recently embraced by HUD secretary Ben Carson.

Thank Goodness for Thomas Jefferson and 1800

Not long after the limited-government U.S. Constitution was ratified and the new government resumed operation, numerous political leaders began pushing to expand federal power. Leading politicians of the 1790s did not agree with each other about the proper scope of federal authority, either legally or practically.

Treasury Secretary Alexander Hamilton proposed ideas for top-down manipulation of the economy. And fellow Federalist President John Adams signed into law the infamous Alien and Sedition Acts in 1798, which among other things outlawed any “false, scandalous and malicious writing” against the government, the Congress, and the president.

An article in the Washington Post the other day discussed some interesting details regarding the enforcement of the sedition statute:

Adams and his Federalist Party supporters in Congress passed the Alien and Sedition Acts under the guise of national security, supposedly to safeguard the nation at a time of preparing for possible war with France. The “Alien” part of the law allowed the government to deport immigrants and made it harder for naturalized citizens to vote. But the law mainly was designed to mute backers of the opposition Democratic-Republican Party led by Thomas Jefferson, who also happened to be the vice president. Jefferson had finished second to Adams in the 1796 presidential election and again ran against him in 1800.

An early target of the new law was Rep. Matthew Lyon, who had accused Adams of “ridiculous pomp.” In the fall of 1798 the government accused the Vermont congressman of being “a malicious and seditious person, and of a depraved mind and a wicked and diabolical disposition.” He was convicted of sedition, fined $1,000 and sentenced to four months in prison. Lyon campaigned for reelection from jail and won in a landslide. On his release in February 1799, supporters greeted him with a parade and hailed him as “a martyr to the cause of liberty and the rights of man.”

… Another target was James Callender, a pro-Jefferson journalist for the Richmond Examiner and the man who had exposed Federalist Alexander Hamilton’s extramarital affair. In 1800, Callender wrote an election campaign pamphlet that said of Adams: “As President he has never opened his lips, or lifted his pen, without threatening and scolding; the grand object of his administration has been to exasperate the rage of contending parties … and destroy every man who differs from his opinions.” Callander was convicted of sedition, fined $200 and sent to federal prison for nine months. He continued to write from his prison cell, calling Adams “a gross hypocrite and an unprincipled oppressor.”

… The government also came after critics of some members of the Adams administration, such as Treasury Secretary Hamilton. In 1799, Charles Holt, editor of the New London Bee in Connecticut, published an article accusing Hamilton of seeking to expand the U.S. military into a standing army. He also took personal jabs at Hamilton, asking, “Are our young officers and soldiers to learn virtue from General Hamilton? Or like their generals are they to be found in the bed of adultery?” The government promptly charged Holt with being a “wicked, malicious seditious and ill-disposed person — greatly disaffected” to the U.S. government. He was fined $200 and sent to jail for three months.

The speech crackdown extended even to private remarks, as Luther Baldwin, the skipper of a garbage boat in Newark, discovered. In July 1798, while passing through Newark on his way to his summer home in Massachusetts, Adams rode in his coach in a downtown parade complete with a 16-cannon salute. When Baldwin and his buddy Brown Clark heard the cannon shots while drinking heavily at a local tavern, Clark remarked, “There goes the president, and they are firing at his arse.” Baldwin responded that he didn’t care “if they fired thro’ his arse.” The tavern owner reported the conversation, and both drinkers were fined and jailed for sedition.

Thomas Jefferson and James Madison led the opposition to the big government Federalist policies of the 1790s, and “in the end, widespread anger over the Alien and Sedition Acts fueled Jefferson’s victory over Adams in the bitterly contested 1800 presidential election.” Free speech was restored and the incoming president would focus on cutting the excess spending, taxes, and debt built up by the prior Federalist administrations.

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Addiction Abuse

Hardly a day goes by without a report in the press about some new addiction. There are warnings about addiction to coffee. Popular psychology publications talk of “extreme sports addiction.” Some news reports even alert us to the perils of chocolate addiction. One gets the impression that life is awash in threats of addiction. People tend to equate the word “addiction” with “abuse.” Ironically, “addiction” is a subject of abuse.

The American Society of Addiction Medicine defines addiction as a “chronic disease of brain reward, motivation, memory and related circuitry…characterized by the inability to consistently abstain, impairment in behavioral control, craving” that continues despite resulting destruction of relationships, economic conditions, and health. A major feature is compulsiveness. Addiction has a biopsychosocial basis with a genetic predisposition and involves neurotransmitters and interactions within reward centers of the brain. This compusliveness is why alcoholics or other drug addicts will return to their substance of abuse even after they have been “detoxed” and despite the fact that they know it will further damage their lives. 

Addiction is not the same as dependence. Yet politicians and many in the media use the two words interchangeably. Physical dependence represents an adaptation to the drug such that abrupt cessation or tapering off too rapidly can precipitate a withdrawal syndrome, which in some cases can be life-threatening. Physical dependence is seen with many categories of drugs besides drugs commonly abused. It is seen for example with many antidepressants, such as fluoxetine (Prozac) and sertraline (Zoloft), and with beta blockers like atenolol and propranolol, used to treat a variety of conditions including hypertension and migraines. Once a patient is properly tapered off of the drug on which they have become physically dependent, they do not feel a craving or compulsion to return to the drug.

Some also confuse tolerance with addiction. Similar to dependency, tolerance is another example of physical adaptation. Tolerance refers to the decrease in one or more effects a drug has on a person after repeated exposure, requiring increases in the dose.

Science journalist Maia Szalavitz, writing in the Columbia Journalism Review, ably details how journalists perpetuate this lack of understanding and fuel misguided opioid policies.

Many in the media share responsibility for the mistaken belief that prescription opioids rapidly and readily addict patients—despite the fact that Drs. Nora Volkow and Thomas McLellan of the National Institute on Drug Abuse point out addiction is very uncommon, “even among those with preexisting vulnerabilities.” Cochrane systematic studies in 2010 and 2012 of chronic pain patients found addiction rates in the 1 percent range, and a report on over 568,000 patients in the Aetna database who were prescribed opioids for acute postoperative pain between 2008 and 2016 found a total “misuse” rate of 0.6 percent. 

Equating dependency with addiction caused lawmakers to impose opioid prescription limits that are not evidence-based, and is making patients suffer needlessly after being tapered too abruptly or cut off entirely from their pain medicine. Many, in desperation, seek relief in the black market where they get exposed to heroin and fentanyl. Some resort to suicide. There have been enough reports of suicides that the US Senate is poised to vote on opioid legislation that “would require HHS and the Department of Justice to conduct a study on the effect that federal and state opioid prescribing limits have had on patients — and specifically whether such limits are associated with higher suicide rate.” And complaints about the lack of evidence behind present prescribing policy led Food and Drug Administration Commissioner Scott Gottlieb to announce plans last month for the FDA to develop its own set of evidence-based guidelines.

Now there is talk in media and political circles about the threats of “social media addiction.” But there is not enough evidence to conclude that spending extreme amounts of time on the internet and with social media is an addictive disorder. One of the leading researchers on the subject stresses that most reports on the phenomenon are anecdotal and peer-reviewed scientific research is scarce. A recent Pew study found the majority of social media users would not find it difficult to give it up. The American Psychiatric Association does not consider social media addiction or “internet addiction” a disorder and does not include it in its Diagnostic and Statistical Manual of Mental Disorders (DSM), considering it an area that requires further research.

This doesn’t stop pundits from warning us about the dangers of social media addiction. Some warnings might be politically motivated. Recent reports suggest Congress might soon get into the act. If that happens, it can threaten freedom of speech and freedom of the press. It can also generate biliions of dollars in government spending on social media addiction treatment.

Before people see more of their rights infringed or are otherwise harmed by unintended consequences, it would do us all a great deal of good to be more accurate and precise in our terminology. It would also help if lawmakers learned more about the matters on which they create policy.

Are the Carolinas Ready for Hurricane Florence?

As Hurricane Florence spins toward the Carolina coast, the nation’s attention will be on the disaster readiness and response of governments and the affected communities. Have lessons been learned since the deeply flawed government response to Hurricane Katrina back in 2005?

I examined FEMA and the Katrina response in this study, discussing both the government failures and the impressive private-sector relief efforts.

Last year, Hurricane Maria devastated Puerto Rico, again exposing all sorts of government failures. Well-known chef José Andrés has a new book on the Maria response. He had an eye-opening experience on the island volunteering on relief efforts with his World Central Kitchen.

The Washington Post’s review of the book says that Andrés saw the flaws of top-down bureaucratic relief efforts and embraces more of a spontaneous order view of effective disaster relief:

With We Fed an Island, chef-and-restaurateur-turned-relief worker José Andrés doesn’t just tell the story about how he and a fleet of volunteers cooked millions of meals for the Americans left adrift on Puerto Rico after Hurricane Maria. He exposes what he views as an outdated top-down, para-military-type model of disaster relief that proved woefully ineffective on an island knocked flat by the Category 4 hurricane.

… ‘My original plan was to cook maybe ten thousand meals a day for five days, and then return home,’ Andrés writes. Instead, Andrés and the thousands of volunteers who composed Chefs for Puerto Rico remained for months, preparing and delivering more than 3 million meals to every part of the island. They didn’t wait for permission from FEMA.

… These grass-roots culinary efforts didn’t always sit well with administration officials or with executives at hidebound charities, in part because Andrés was no diplomat. He trolled Trump on Twitter over the situation on Puerto Rico. He badgered FEMA for large contracts to ramp up production to feed even more hungry citizens. He infamously told Time magazine that the “American government has failed” in Puerto Rico. A chef used to fast-moving kitchens, Andrés had zero patience for slow-footed bureaucracy, especially in a time of crisis.

… After dealing with so much red tape and mismanagement (remember the disastrous $156 million contract that FEMA awarded to a small, inexperienced company to prepare 30 million hot meals?), Andrés wants the government and nonprofit groups to rethink the way they handle food after a large-scale natural disaster. He wants them to drop the authoritarian, top-down style and embrace the chaos inherent in crisis. Work with available local resources, whether residents or idle restaurants and schools. Give people the authority and the means to help themselves. Stimulate the local economy.

‘What we did was embrace complexity every single second,’ Andrés writes. ‘Not planning, not meeting, just improvising. The old school wants you to plan, but we needed to feed the people.’

Andrés and World Central Kitchen have embraced complexity. 

Hail to the chef!

 

 

Transit Industry Claims That Correlation Proves Causation

A new report from the American Public Transportation Association (APTA) comes out firmly in support of the belief that correlation proves causation. The report observes that traffic fatality rates are lower in urban areas with high rates of transit ridership, and claims that this proves “that modest increases in public transit mode share can provide disproportionally larger traffic safety benefits.”


Here is one of the charts that APTA claims proves that modest increases in transit ridership will reduce traffic fatalities. Note that, in urban areas with fewer than 25 annual transit trips per capita – which is the vast majority of them – the relationship between transit and traffic fatalities is virtually nil. You can click the image for a larger view or go to APTA’s document from which this chart was taken.

In fact, APTA’s data show no such thing. New York has the nation’s highest per capita transit ridership and a low traffic fatality rate. But there are urban areas with very low ridership rates that had even lower fatality rates in 2012, while there are other urban areas with fairly high ridership rates that also had high fatality rates. APTA claims the correlation between transit and traffic fatalities is a high 0.71 (where 1.0 is a perfect correlation), but that’s only when you include New York and a few other large urban areas: among urban areas of 2 million people or less, APTA admits the correlation is a low 0.28.

The United States has two kinds of urban areas: New York and everything else. Including New York in any analysis of urban areas will always bias any statistical correlations in ways that have no application to other urban areas.

In most urban areas outside of New York, transit ridership is so low that it has no real impact on urban travel. Among major urban areas other than New York, APTA’s data show 2012 ridership ranging from 55 trips per person per year in Los Angeles to 105 in Washington DC to 133 in San Francisco-Oakland. From the 2012 National Transit Database, transit passenger miles per capita ranged from 287 in Los Angeles to 544 in Washington to 817 in San Francisco.

Since these urban areas typically see around 14,000 passenger miles of per capita travel on highways and streets per year, the 530-mile difference in transit usage between Los Angeles and San Francisco is pretty much irrelevant. Thus, even if there is a weak correlation between transit ridership and traffic fatalities, transit isn’t the cause of that correlation.

San Francisco and Washington actually saw slightly more per capita driving than Los Angeles in 2012, yet APTA says they had significantly lower fatality rates (3.7 fatalities per 100,000 residents in San Francisco and 3.6 in Washington vs. 6.4 in Los Angeles). Clearly, some other factor must be influencing both transit ridership and traffic fatalities.

With transit ridership declining almost everywhere, this is just a desperate attempt by APTA to make transit appear more relevant than it really is. In reality, contrary to APTA’s unsupported conclusion, modest rates in transit ridership will have zero measurable effect on traffic fatality rates.

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RIP Andrea Rich

I am saddened to report that my dear friend Andrea Millen Rich died this morning at her home in Philadelphia at the age of 79 after a 19-year battle with lung cancer. She was, among many other things, the proprietor of Laissez Faire Books and the wife for 41 years of Howard Rich, the Cato Institute’s longest-serving Board member.

For more than 40 years Andrea was at the center of the libertarian movement, a mentor, counselor, friend, supporter, facilitator, networker, and gracious hostess to hundreds of freedom lovers – young, old, well-known, obscure, successful, down-on-their-luck, didn’t matter. 

She was the first chair of the New York Libertarian Party in 1973-74. The vice chair was Howard S. Rich, whom she soon married. From 1974 to 1977 she was vice chair of the national Libertarian Party, and in 1980 she played a key role in developing television advertising for the campaign of Ed Clark, the Libertarian presidential nominee.

From 1982 to 2005 she was the president of Laissez-Faire Books, which billed itself as “the world’s largest collection of books on liberty.” It had a retail location on Mercer Street in Greenwich Village, described in Radicals for Capitalism by Brian Doherty as “an important social center for the movement in America’s biggest city, a place for any traveling libertarian to stop for company and succor.” But in those pre-Amazon days, it was far better known for its monthly catalog that reached libertarians around the world. Through its Fox & Wilkes publishing imprint it brought many classic libertarian books back into print. (Brian Doherty’s own reflections, along with those of Nick Gillespie, can be found at Reason.)

Andrea often negotiated with publishers to make books more affordable, and some books only found publishers because Laissez-Faire could guarantee an audience beyond the small academic market. She even taught me how to negotiate with publishers. Through her work with Laissez-Faire she became friendly with leading libertarian writers including Milton and Rose Friedman, Robert Nozick, Thomas Sowell, Nathaniel Branden, Thomas Szasz, Charles Murray, Richard Epstein, David Kelley, and Margit von Mises, widow of economist Ludwig von Mises.

As president of the Center for Independent Thought, the parent organization of Laissez-Faire Books, she also launched and managed the Thomas S. Szasz Award for Outstanding Contributions to the Cause of Civil Liberties and the Roy A. Childs Fund for Independent Scholars. CIT’s biggest project was Stossel in the Classroom, which repackaged ABC News and Fox Business videos on economics and public policy by John Stossel for classroom use. The videos have been viewed by tens of millions of high school students – according to Stossel, reaching more people than ABC News and Fox News.

Along the way she also helped to found the Center for Libertarian Studies in 1976 and served on the boards of the Foundation for Economic Education, the oldest free-market think tank, and the Atlas Network, an international association of think tanks. She traveled as far as Russia and Kenya to meet libertarians and spread the ideas of freedom.

Andrea Millen was born February 8, 1939, to the late Louis and Vera Millen of Johnson City, Tennessee. She graduated from Science Hill High School and attended the University of Alabama. After she got a summer job at CBS answering fan mail for Mighty Mouse and Heckle and Jeckle (“my handwriting was perfect for it, they said”), she never went back to school. For 18 years, she worked in television, including for Sid Caesar, Joe Pyne, and the NBC News election unit.

She lived most of her life in Manhattan and Orangeburg, NY, but moved to Philadelphia in 2009.

She is survived by her husband of 41 years, Howard Rich, her sister Elaine Millen of Charlotte, NC, stepsons Joseph Rich and Dan Rich, Dan’s wife Maureen, and granddaughters Cati and Samantha.

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