Topic: Government and Politics

Is This Infrastructure Really Necessary?

The United States has “at least $232 billion in critical public transportation” needs, claims the American Public Transportation Association (APTA). Among the “critically needed” infrastructure on APTA’s list are a streetcar in downtown Los Angeles, another one in downtown Sacramento (which local voters have rejected), one in Tempe, and streetcar extensions in Tampa and Kansas City.

Get real: even ardent transit advocates admit that streetcars are stupid. The economic development benefits that supposedly come from streetcars are purely imaginary, and even if they weren’t, it would be hard to describe streetcars – whose average speed, APTA admits, is less than 7.5 miles per hour – as “critically needed.”

Much of the nation’s transit infrastructure is falling apart, and the Department of Transportation has identified $100 billion of infrastructure backlog needs. (Page l – that is, Roman numeral 50 – of the report indicates a backlog of $89.9 billion in 2012 dollars. Converting to 2019 dollars brings this up to $100 billion.) Yet APTA’s “critical needs” list includes only $24 billion worth of “state of good repair” projects. Just about all of the other “needs” listed – $142 billion worth – are new projects or extensions of existing projects.

In fact, few if any of these new projects are “needed” – they are simply transit agency wish lists. For example, it includes $6 billion for phase 2 of New York’s Second Avenue Subway, but no money for rehabilitating New York’s existing, and rapidly deteriorating, subway system. Similarly, it includes $140 million for a new transitway in Alexandria, Virginia, but no money for rehabilitating the DC area’s also rapidly deteriorating Metrorail system. (In case anyone is interested, I’ve converted APTA’s project list into a spreadsheet for easy review and calculations.)

The $166 billion total on APTA’s “Project Examples” list is less than the $232 billion APTA says is needed, but even if all of the difference is “state of good repair” projects, that difference plus the $24 billion on APTA’s list doesn’t add up to what the DOT says is needed to restore transit infrastructure. This shows that even APTA doesn’t take public safety and “crumbling infrastructure” seriously.

I’ve previously pointed out that the best-maintained infrastructure is funded out of user fees. For example, Federal Highway Administration data show that only 2.9 percent of toll bridges are “structurally deficient,” compared with 5.5 percent of state-owned bridges funded mainly out of gas taxes and 12.2 percent of locally-owned bridges that are funded mainly out of general tax dollars. Gas taxes are a user fee, so state bridges are better maintained than local bridges, but tolls are an even better user fee so toll-funded bridges are in the best shape.

Politicians allow infrastructure funded out of tax dollars to deteriorate because they would rather spend money on new projects than maintain old ones. APTA’s list simply confirms this: APTA is trying to entice politicians into funding all sorts of new projects rather than maintain the existing ones that are falling apart.

To justify this spending, APTA claims that transit produces $4 in economic benefits for every $1 spent. This is based on a report prepared for APTA in 2009. This report includes two kinds of benefits from transit spending.

First, when anyone spends money on anything, the recipients of that money turn around and spends it again. That’s called “indirect” or “secondary” benefits. Spending money on digging holes and filling them up would produce similar secondary spending. That doesn’t mean the government should pay people to dig holes and fill them up (although that’s really what it’s doing for many rail transit projects). For one thing, if government didn’t spend that money, there would be more money in the hands of taxpayers, who would spend it, generating just as many secondary benefits.

Second, the study counts cost savings to transit riders and other travelers, such as the savings from not having to own a car, from getting to destinations faster, or from congestion relief. But transit costs far more and travels far slower than automobiles; there is no cost or time savings from substituting expensive, slow methods of transportation for inexpensive, fast methods of transportation. Transit also does not provide a significant amount of congestion relief; in fact, large buses, streetcars, light rail, and commuter trains that have many grade crossings often do more to increase congestion than reduce it.

The study’s arguments are even less plausible today, when transit ridership is shrinking, than they were in 2009, when transit ridership had been growing. Charlotte, Los Angeles, and Portland recently spent hundreds of millions or billions on new light-rail lines or light-rail extensions, yet transit ridership in those regions dropped after the new lines opened. There is no way that can that be good for transit riders or other travelers.

APTA’s wish-list is just one more reason why Congress should only pass an infrastructure bill if it is one that is funded exclusively out of user fees. An infrastructure bill funded out of tax dollars or deficit spending would impose huge costs on taxpayers in order to build unnecessary projects that we won’t be able to afford to maintain. 

Government: High Subsidies, Low Satisfaction

The OECD has released results from a survey of 22,000 people in 21 countries regarding their views of government social programs.

Governments in the high-income OECD countries hand out more subsidies than ever, yet many people feel that they are not getting what they want. The OECD survey finds, “There is clear dissatisfaction with existing social policy. Across the surveyed countries, many respondents believe public services and benefits are inadequate and hard to reach.” And the survey finds, “More than half of respondents say they do not receive their fair share of benefits given the taxes they pay.”

Those responses make it sound like people may want a bigger welfare state. But other responses show that people don’t believe that the existing welfare state works very well. Two-thirds of the OECD respondents think, “Many people receive public benefits without deserving them,” as shown in the chart below. And 60 percent across the OECD think that “government does not incorporate the views of people like them when designing social policy.”

In my study of government failure, I found that even as the U.S. government has vastly expanded social programs, the public has not grown fonder of the government, but rather has become more alienated. Public polls show that the share of people who trust the federal government has plunged from about 70 percent in the 1960s to about 20 percent today. Today, about 80 percent of Americans are “angry” or “frustrated” by the federal government, according to Pew. Americans have grown less fond of the government even as the number of programs ostensibly created to help them has increased.

What seems to be going on is that politicians relentlessly propagate myths that the government should coddle the citizenry and that it can do so efficiently. They propagate an expansive public interest theory of government. But actual government programs are inefficient, wasteful, and often counterproductive, which the public choice theory of government better describes. Government realities are different than government dreams.

Governments overpromise and underdeliver, and that seems to underlie the dissatisfaction coming through in these polls.   

Opportunity Zones Invite Corruption

Federal politicians routinely lambast the tax code as full of loopholes favoring special interests and generating lobbying—then they add more loopholes generating even more lobbying and corruption.

The Tax Cuts and Jobs Act of 2017 created special-interest tax breaks called “Opportunity Zones.” The law empowered governors and U.S. Treasury officials to carve up every state in the nation into winner and loser areas. Investment projects in the winner areas receive capital gains tax breaks, while projects in the loser areas get the short end of the stick.

The Wall Street Journal reports that former casino head Steve Wynn lobbied Trump Treasury officials to fiddle with O-Zone regulations to favor his investments. Apparently, the Treasury did not go along, but the episode shows how narrow tax breaks fuel the lobbying industry in Washington.

Looking ahead, every jurisdiction located just outside the nation’s 8,700 O-Zones has an incentive to hire lobbyists to pressure governors, federal officials, and members of Congress to redraw the lines and put them in the winner’s circle. Thus, I am guessing that the lobbying and corruption created by O-Zones has only just begun. A better alternative is to reduce capital gains tax rates across the board.

Here is the WSJ reporting:

Former casino executive Steve Wynn generated $2.1 billion and a big potential tax bill last March when he was forced to sell his stake in Wynn Resorts Ltd. after sexual-misconduct allegations. Less than three months later, he held a meeting with Treasury Department officials as they were writing regulations for a new tax incentive that had the potential to help him defer and reduce those taxes.

Mr. Wynn met with senior Treasury officials on June 4 to discuss “opportunity zones,” a break that was part of the 2017 Republican tax overhaul. The opportunity-zone program gives individuals a chance to defer and reduce capital-gains taxes if they make investments into low-income areas.

Mr. Wynn, who left his company and a Republican National Committee position early last year after being accused of sexual misconduct by former casino employees, attended the meeting in the Treasury building with Daniel Kowalski, a counselor to Treasury Secretary Steven Mnuchin who was helping write opportunity-zone regulations. Mr. Mnuchin stopped by the meeting to greet Mr. Wynn, according to a copy of the secretary’s calendar that the department periodically releases.

 

Here are other commentaries on O-Zones:

www.cato.org/blog/opportunity-zones-whom

www.downsizinggovernment.org/opportunity-zones-will-help-connected-developers-not-poor

www.downsizinggovernment.org/opportunity-zones-fuel-corruption

www.downsizinggovernment.org/o-zones-fragment-america

www.cato.org/blog/opportunity-zones-enrich-lucky-landowners

From “Meth Crisis” to “Opioid Crisis” to “Fentanyl and Meth Crisis” to…

Today’s Wall Street Journal reports that, just as overdose deaths related to prescription pain relievers are showing signs of leveling off, officials worry that the surge in methamphetamine-related deaths is joining the surge in fentanyl-related deaths to fuel the total drug overdose rate. 

There were 1887 meth-related deaths reported in 2011. By 2017 more than 10,000 deaths were reported related to meth and other chemically-similar psychostimulants.

The Drug Enforcement Administration has seen a 118 percent increase in meth seizures by law enforcement between 2010 and 2017. The meth is cheap and abundant and flooding the US mainly from Mexico, according to the agency. The Mexican cartels have taken up the meth trade to compete with cocaine coming up from South America. 

The Journal article quotes a spokesman from the Phoenix office of the DEA as saying the meth is smuggled through tunnels, through ports of entry, and between ports of entry. 

As I wrote here, the meth trade became the domain of the Mexican cartels after the US cracked down on homegrown meth labs and made Sudafed (a decongestant converted to meth in those labs) more difficult to obtain. 

I pointed out elsewhere that waging a war on drugs is like playing a game of “Whac-a-mole.” The war should be drawn to a close and attention should turn to ameliorating the death and other harms that prohibition has wrought. 

In 2005 Congress acted to address the “Meth Crisis.” Shortly thereafter it turned its attention to the “Opioid Crisis.” Now it is dealing with a fentanyl crisis and a replay of the meth crisis. How many more will die or suffer needlessly before lawmakers wise up?

 

House Passes Political-Omnibus Bill H.R. 1

H.R. 1, the political regulation omnibus bill, contains “provisions that unconstitutionally infringe the freedoms of speech and association,” and which “will have the effect of harming our public discourse by silencing necessary voices that would otherwise speak out about the public issues of the day.” Don’t just take my word for it; that’s the view of the American Civil Liberties Union, expressed in this March 1 letter (more). For example, the bill would apply speech-chilling new restrictions to issue ads by cause organizations, should they happen to mention individual lawmakers.

The House of Representatives nonetheless voted Friday along party lines to pass the bill, which was sponsored by Rep. John Sarbanes (D-MD). For now, it has no prospect of passage in the Senate.

The issues raised in the ACLU letter aside, H.R. 1 contains many other provisions that likely are unconstitutional, unwise, or both.  Colleagues Ilya Shapiro and Nathan Harvey enumerate some of them (“If ever adopted, [HR1] would give power to one slice of Washington’s elite at the expense of American democracy’s carefully crafted checks and balances”). More criticism: Brad Smith on the bill’s restrictions on discussion and coordination of expenditures on speech; David A. French (“At its essence, the bill federalizes control over elections to an unprecedented scale, expands government power over political speech, mandates increased disclosures of private citizens’ personal information (down to name and address), places conditions on citizen contact with legislators that inhibits citizens’ freedom of expression, and then places enforcement of most of these measures in the hands of a revamped Federal Election Commission that is far more responsive to presidential influence.”) 

On gerrymandering, an issue on which the Constitution does grant Congress a power to prescribe standards which I’ve argued it should consider using more vigorously, the bill takes the heavy-handed approach of requiring all states to create a commission of a certain format. Whatever the comparative virtues of one format or another, that would likely run into the Supreme Court’s doctrine against federal “commandeering” of state government resources. Electoral-process reform is an issue deserving of attention, but given its numerous infringements of individual rights and poorly thought out elements, this package doesn’t work even as a first negotiating position. [adapted from Overlawyered]

68% of Americans Wouldn’t Pay $10 a Month in Higher Electric Bills to Combat Climate Change

Public opinion polls have long found that Americans say they are concerned about climate change. But does that mean people are willing to reduce their own standard of living and make personal sacrifices in efforts to do something about it? New survey data suggests not. An AP-NORC survey finds that 68% of Americans wouldn’t be willing to pay even $10 more a month in higher electric bills even if the money were used to combat climate change.

ClimateChange1

Proposals that use government intervention in the economy to combat climate change, like the Green New Deal (GND), will require people make personal sacrifices. The GND resolution, introduced to Congress by Rep. Alexandria Ocasio-Cortez  (D-NY) and Sen. Ed Markey (D-MA), calls for the U.S. to undertake a 10 year national mobilization, on the scale of World War II, to overhaul its entire infrastructure and industry, including upgrading or replacing every single building in the US with new energy-efficient technology, and reach net-zero greenhouse gas emissions in 10 years with a goal of completely eliminating Americans use of gas, oil, and coal. Currently, about 80% of all the energy Americans use comes from fossil fuels like gas, oil, and coal. 

To say the least, the Green New Deal isn’t cheap. Most analyses estimate it will cost in the trillions of dollars and require Americans to make personal sacrifices. Both supporters and opponents of the plan agree that the environmental aspects of the plan would cost at least $10 trillion. That’s about three times the entire U.S. federal budget. Even when spread out over 10 to 30 years, these estimates indicate an annual price tag of thousands of dollars per U.S. household. Higher levels of government spending necessarily require higher taxes, either now or in the future. Advocates of the Green New Deal say it can be paid for with the government borrowing money (deficit spending.) But deficit spending today means higher taxes tomorrow.

Many 2020 Democratic hopefuls have signed on to the plan, including Kamala Harris, Elizabeth Warren, Cory Booker, Kirsten Gillibrand, Bernie Sanders, and Amy Klobuchar. They may believe this is a popular move with the public. Perhaps because surveys show the public is concerned about climate change. For instance, a 2018 Quinnipiac survey found that 69% of Americans say they are concerned about climate change.  And the same survey found that a smaller, but still substantial, share (50%) believe that climate change will personally affect them during their lifetimes.

But what people say they are concerned about and what they are actually willing to do about it are not the same thing.  An AP-NORC survey found that 68% of Americans wouldn’t be willing to pay $10 a month in high electric bills to combat climate change. The survey asked people if they would be willing to pay a fee in their electric bill every month that would be used to combat climate change. Then the survey asked about different potential fee amounts. The survey found overwhelming majorities of Americans opposed paying the fee to combat climate change if it cost:

  • $10 a month, 68% opposed
  • $20 a month, 69% opposed
  • $40 a month, 76% opposed
  • $75 a month, 83% opposed
  • $100 a month, 82% opposed

Was there any amount Americans were willing to pay to combat climate change? Yes, $1 dollar. Fifty-seven percent (57%) of Americans would be willing to pay a $1 a month fee in their electric bills to combat climate change.

Although Americans say they are worried about climate change, most clearly aren’t worried enough to spend their own money on it, or make personal sacrifices for the cause. Perhaps it might be that people know they are supposed to be concerned about climate change because this is a salient message they receive from trusted sources and thus say so on surveys. However, receiving these messages and cues hasn’t been enough to convince them to give up their own money, let alone lower their own standard of living, for the cause of combating global warming. However, significant personal sacrifices are what proposals like the Green New Deal will require. These data provide some indication that purported support for government interventions in the economy to deal with climate change may be inflated. Instead, Americans may be more supportive of public policies that foster an economic environment that allows for technological innovation and invention among rising entrepreneurs and private sector businesses competing to come up with the next big idea that makes our world cleaner, healthier, happier, and more productive. 

 

Senator Hawley’s Apostasy and the Substantive Due Process Problem

A week or so ago, the nomination of George Mason Law’s Neomi Rao to fill Justice Brett Kavanaugh’s seat on the D.C. Circuit ran into some unexpected headwinds when Missouri’s freshman Republican senator, 39-year-old Josh Hawley, raised several concerns about her views, all centered around his opposition to abortion. Fearing that the nomination might fail in committee, the Wall Street Journal’s editorial board took the extraordinary step last week of running not one but two house editorials questioning Senator Hawley’s “judgment.” In the end, the senator came around. On Thursday, Prof. Rao, since July 2017 the head of the Office of Information and Regulatory Affairs and a highly credentialed critic of the administrative state, was voted out of committee on a straight party-line vote of 12-10. 

But questions linger about the motivation and thinking behind Sen. Hawley’s opposition, not least because he himself is highly credentialed (Stanford, Yale Law, clerk for Chief Justice Roberts), and he came of age when the issues he raised were being hotly debated on the Right. He was quoted initially, for example, as saying that “I am only going to support nominees who have a strong record on life”—the “litmus test” approach to nominations more often associated with the Left. But he was also cited as concerned, more broadly, that Rao “might be comfortable with substantive due process,” the doctrine the Supreme Court employed in 1973 when it found a right to abortion. It seems, however, that he may have finally reconsidered that larger concern, for the Journal’s second editorial tells us that “Mr. Hawley now claims he doesn’t object to using this method to incorporate the Bill of Rights to states, only to progressive abuses of substantive due process.” 

Few constitutional doctrines have more vexed conservatives than substantive due process, so a word is in order on the subject, especially given that it’s likely to reemerge with future nominations. Justices Scalia and Thomas have called the doctrine an “oxymoron,” yet that hasn’t stopped the Court’s conservatives from employing it variously, as in finding that the Second Amendment binds the states pursuant to the Fourteenth Amendment’s instruction that no state shall “deprive any person of life, liberty, or property, without due process of law.” And a fortnight ago, joined this time by the Court’s liberals, they again invoked the Fourteenth Amendment’s Due Process Clause to apply the Eighth Amendment’s Excessive Fines Clause against the states, although here, as elsewhere, Justices Thomas and Gorsuch expressed their concerns that the Fourteenth Amendment’s Privileges or Immunities Clause might be the better way to go: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States.” 

Thomas and Gorsuch are right, but they’re up against stare decisis. In one of its worst decisions ever, especially considering its context and implications, the Reconstruction Court in the infamous Slaughterhouse Cases of 1873 rendered the Privileges or Immunities Clause “a vain and idle enactment,” as Justice Stephen Field put it in dissent. Meant to protect “the natural and inalienable rights which belong to all citizens,” the Court majority read the clause as protecting only a few federal rights, like “the right to use the navigable waters of the United States.” There the clause has sat, all but “idle” ever since. One might think that result an embarrassment for conservative originalists, constitutional textualists as they generally are.

What then explains their refusal to override stare decisis, a principle at its weakest in constitutional adjudication. Hawley put his finger on it: progressive abuses of substantive due process. After the Slaughterhouse debacle, Fourteenth Amendment cases continued to come before the Court, of course. With the Privileges or Immunities Clause having been reduced to a nullity, however, the Court turned to the Due Process Clause, finally incorporating its protection for property rights in 1897, for contractual freedom in 1905, free speech in 1925, and so on, one right at a time. But after the New Deal constitutional revolution, the Court was largely deferential to the political branches and the states, until the mid-1950s when it got its second wind, and not a moment too soon in the case of civil rights, criminal procedure, and certain other rights. But at the same time, the Warren and Burger Courts were finding other “rights” that were nowhere to be found, even among the unenumerated rights the Ninth Amendment was written to protect. And that led to a conservative backlash and a call for “judicial restraint.” 

It is that fear that lingers today among a fair number of conservatives, although in the last few decades, the debate has shifted on the Right, with ever more conservatives, prodded often by classical liberals and libertarians, recognizing the political infirmities of judicial restraint and, more important still, its constitutional inconsistency. For if textualism is originalism’s bedrock methodological principle, then judges cannot ignore the plain text of the Ninth and Tenth Amendments—they must be read together—or the Privileges or Immunities Clause of the Fourteenth Amendment. Rather than restrained, judges must be engaged. And that means, when necessary, informing the text with the rich natural rights and common law theory that stands behind it.

So Senator Hawley was right, eventually: The problem is with progressive abuses of substantive due process—with court’s finding rights nowhere to be found (and powers nowhere granted). Thus, the Griswold Court was right. The Connecticut statute that criminalized the sale and use of contraceptives, like the Texas statute years later in Lawrence that criminalized private same-sex sodomy, was enacted under the state’s police power, the power mainly to secure our rights. But in those cases, there were no rights to be secured—no plaintiffs who might have brought a civil suit or criminal complaint against the defendants—yet there were rights the statutes did infringe, our basic natural right to liberty, a right “retained by the people.” 

Roe v. Wade, however, is a very different case, for the question there was whether the Texas statute at issue was indeed protecting rights, the rights of the unborn child. Here too the scope of the police power was at issue. Just after Samuel Alito’s 1985 Justice Department memo on abortion came to light—his 2007 Supreme Court confirmation hearings about to begin—I argued in the Wall Street Journal that because abortion at bottom is a criminal law matter concerning where to draw a line about which reasonable people can reasonably disagree, this police power question belongs with the states, which in 1973 were already drawing that line, in different ways, as they should have been left to do. That is a point that no less than then-Judge Ruth Bader Ginsburg made in her NYU Madison Lecture in 1993, two months before she was nominated for the High Court—and it almost nixed the nomination! 

Thus, contrary to what too many conservatives have too long believed, it is hardly difficult for judges to read the text of the Constitution—the whole text—in light of the document’s structure and background assumptions and theory. Griswold, Lawrence, and similar cases, especially many involving economic liberty, are straightforward rights cases, easily decided by courts. Roe was more difficult, but in the end, because the inherent line-drawing belongs properly to the people and their state legislatures, absent egregious examples like those that would sanction infanticide, it was a federalism case. 

Unfortunately, with the Slaughterhouse Cases, the Fourteenth Amendment got off to a bad start, and it’s never fully recovered. And the debate over substantive due process, a concept with roots in Magna Carta, has often only clouded matters. The Due Process of Law Clause will do the job, but it takes more work than many judges are prepared to do. As I wrote above, Justices Thomas and Gorsuch are right. The Privileges or Immunities of citizens of the United States Clause is the better route, because it takes us more directly to the Constitution’s text and, especially in light of the ample debates that produced it, to the natural rights theory that lends substance and legitimacy to our political and legal order. 

 

Pages