Topic: Government and Politics

Apollo 11: A Rare Federal Success

NASA’s Apollo 11 blasted off 50 years ago today sending astronauts to land on the moon and return safely to earth. The mission was planned rapidly and executed almost flawlessly. The Saturn V rocket was the most powerful engine ever built. The computers available at the time were primitive, yet everything about the timing of burns and entry angles had to be precise. Neil Armstrong, Buzz Aldrin, and Michael Collins were unbelievably brave. It was a stunning achievement. An American triumph.

If the mission were pursued today, the president would be tweeting undignified comments and hogging the spotlight. The launch would be years behind schedule and the computers would jam like during the Obamacare launch. Environmental lawsuits would shut down the launchpad. Labor regulations would slow astronaut training. NASA executives would be indicted for graft. Federal budget squabbling would close the federal government and mission control, leaving the astronauts to find their own way home from the moon. It would be a mess.

Policymakers these days keep on dreaming of big spending projects for the government. But Washington is running trillion-dollar deficits and is far more dysfunctional than in 1969. I discuss the structural reasons why the government fails so much in this study.

The federal government has suffered from corruption, cost overruns, pork barrel spending, and nasty partisan battles since the beginning. But the problems have grown worse because the government has grown far too huge to manage and oversee properly. The federal government’s budget is 100 times larger than the budget of the average state government. As Milton Friedman said, “because government is doing so many things it ought not to be doing, it performs the functions it ought to be performing badly.”

The 1969 moonshot remains awe-inspiring, as the new Apollo 11 movie captures. But looking ahead, we would get more out of the government if it did less. We would be better off letting entrepreneurs take the lead both in space exploration and in the many challenges we face here on earth.

Rally ‘Round the Flag, Liberals

Stars and Stripes

 

Writing in the Washington Post, Kate Cohen says, Let the extreme right have the “Betsy Ross flag,” and “the left wing can just take back that boring ordinary flag we all use every day.” Why would anyone want the Betsy Ross flag, she asks:

I mean, honestly, if you’re into the Betsy Ross flag, I assume it’s because America was great back in 1777, when only white male landowners could vote and slavery was legal in all 13 colonies.

Well, I can’t speak for the extreme right. But speaking as an American history major and a lover of America’s libertarian roots, that’s not how I see it. I think the flag with 13 stars and 13 stripes represents the people who launched the first great national liberation movement to throw off their distant imperial overlords and did so with the argument that all men were created equal, endowed with the inalienable rights of life, liberty, and the pursuit of happiness. True, that promise was very imperfectly realized, and is still imperfect, but we’ve made progress in ensuring that all people are equal in the eyes of the law, with their rights guaranteed and protected. And that Declaration served as a guidestar for that progress. As Andy Craig wrote last week on July 4, those words were used by Frederick Douglass and Abraham Lincoln and Martin Luther King Jr. to challenge the nation to make good on its promissory note. And by the feminists at Seneca Falls to insist that “all men” must include women, too. And he could have added, by the advocates of equal liberty for gay people.

That’s not a flag that liberals – people who believe that the role of government is to protect everyone’s rights and freedom – should give up.

And by the way, people who don’t believe that all people are created equal? They shouldn’t fly the flag of the American Revolution. There are plenty of flags of monarchic, theocratic, ethnic, fascist, or communist states to choose from.

Housing Affordability and Zoning Reform

In recent years, housing prices and rents have increased dramatically in the cities of the Northeast corridor and the West Coast. Leading Democratic presidential candidates have proposed plans to address this issue and, fortunately, most of these proposals recognize that public policy (i.e., local zoning and land use regulations) has limited the construction of new housing. As Edward Glaeser and Joseph Gyourko observed in a 2002 Regulation article, local and state laws have restrained housing supply from keeping pace with demand. While the willingness of Democrats to admit the importance of constraints on private supply is an important step away from an exclusive focus on public provision of housing or subsidies, a more direct and local option would be to establish a framework for developers to pay localities to alter their zoning constraints.

A recent New York Times editorial outlines Senator Cory Booker’s, Julian Castro’s, and Senator Elizabeth Warren’s plans to incentivize local governments to relax land-use laws and allow more housing development. Booker and Castro would require local governments to institute land-use reforms before they can obtain existing federal infrastructure subsidies while Warren would attach the land-use reform requirement to a new $10 billion spending program for governments that comply. Booker and Castro have additionally proposed increasing subsidies to tenants through tax credits or expanded housing vouchers. (Senator Kamala Harris also has proposed increasing tenant subsidies but without a parallel incentive to increase the housing supply.)

For the most part, Booker’s, Castro’s, and Warren’s plans eschew traditional, deleterious alternatives such as rent regulations and subsidies for developers. Last month I discussed how New York State’s recently tightened rent control regulations will decrease housing supply and harm both current and future renters. And, while not ideal, tenant-based assistance is more efficient and equitable than project-based assistance, such as housing tax credits.

It is encouraging that the proposals have managed to avoid those types of interventions and identified the harmful effects of zoning laws, but the proposals’ downside is that they tie land-use reform to federal subsidies for infrastructure. As a recent Regulation article argued, “although there are some reasons for higher-level governments to provide some local infrastructure projects … it is preferable for users to pay whenever that is feasible.”

In the current issue of Regulation, law professor Christopher Elmendorf proposes an alternative. Instead of incentivizing jurisdictions to relax zoning laws with federal money, state and local governments can independently create systems for developers to pay incumbent homeowners for the right to build more and denser housing. Fundamental to Elmendorf’s proposal is the recognition that zoning rules have become de facto property rights. Currently, local governments hold these rights and capture value from them by imposing impact fees, mandating that developers offer communities in-kind benefits (such as affordable housing requirements), or, most commonly, by zoning for less development than needed and extracting benefits including money, land for parks, and affordable housing from developers on a project-by-project basis (Roderick Hills and David Schleicher describe the negative consequences of this ad hoc exaction in their Fall 2015 Regulation article). The negotiations between developers and politicians are often behind the scenes and the benefits extracted do not always clearly go to incumbent homeowners.

Elmendorf’s alternative is for localities to transparently and directly sell developers the right to upzone. As he explains,

Development rights would be auctioned in the form of tradeable “development allowances” roughly analogous to the emissions allowances that are now bought and sold under cap-and-trade regimes for greenhouse gas emissions. Each allowance would permit its owner to build, say, 100 square feet of housing in excess of the baseline, up to a maximum defined by the new zoning map. To illustrate, imagine a parcel of 5,000 square feet that had been zoned for a floor-to-area ratio of 2:1, i.e., 2 square feet of housing for every square foot of lot size. After upzoning, the maximum floor-to-area ratio is 8:1. This means that the owner of the parcel, who previously could build no more than 10,000 square feet, may now construct as many as 40,000 square feet. But to obtain a permit to build 40,000 square feet, she would have to acquire and redeem 300 development allowances ([40,000 – 10,000] ÷ 100 = 300).

The local governments would be able to take the proceeds they receive and put them towards building new parks, infrastructure projects, tax reductions, or direct compensation of incumbent residents.

I have made similar proposals to resolve conflicts over Airbnb and conventional air pollution, which are rooted in economic theory developed by Nobel Laureate Ronald Coase. Allowing those with initial property rights to negotiate with entities who wish to purchase those property rights leads to trade and conflict resolution as long as transaction costs are low. In regard to the aforementioned examples and zoning rights, those who wish to offer their homes up for short-term rental, emit air pollutants, or develop new housing can purchase the right to do so and thus reimburse the initial property rights holders for any costs imposed.

Though the theory supporting Elmendorf’s idea is sound, there are pragmatic concerns. In a comment on Elmendorf’s article, economist William Fischel, one of the originators of the concept of exchanging zoning rights, notes that there will still be significant interests opposed to new development. The same incumbent homeowners that currently fight each building project and the unions and other interest groups that attempt to capture some of the producers’ surplus from development, will still attempt to influence the local politicians who will retain control of the zoning rights auctions. In fact, Fischel contends that because a zoning rights auction confers an abstract right to increase a plot’s floor-to-area ratio, as opposed to a tangible building plan that interests groups can directly address in zoning hearings, Elmendorf’s proposal actually may increase homeowners’ perceived risk of land-use change. 

But if the compensation for change is high enough and directed specifically to incumbent homeowners, change occurs. For example, Northern Virginia was once dominated by single-family homes. Between the late 1980s and early 2000s, developers bought up neighborhoods for redevelopment, often paying homeowners more than double the listed price of their houses. The Ballston corridor now has 22-story apartment buildings.

Allowing local governments to convert the current in-kind, opaque, underground market for zoning change into an explicit legal exchange of cash for density would facilitate the development of housing and address affordable housing shortages.

Written with research assistance from David Kemp.

 

We Need More Speech about the Census

Facebook has pledged to remove misinformation about the Census from its platform. Inevitably this removal involves suppressing speech that would be protected by the First Amendment if uttered in a public forum. After all, there is no misinformation exception to the First Amendment.  However, Facebook may remove the speech because as a private firm, it is not obligated to enforce the First Amendment. Nonetheless, we might ask: why speech about the Census? What’s different about misinformation about that project? I see four possibilities as to why speech about the Census might merit closer attention by content moderators.

Facebook might feel obligated to protect basic political institutions. For example, Facebook tries hard to combat misinformation around elections including the 2018 American midterms. The Census and elections are mentioned in the U.S. Constitution, with authority over the latter largely given to the states. But so are Congress, the presidency, the courts, and the Post Office. I doubt anyone expects Facebook to remove misinformation about all these institutions.

And the slope might be slippery. Facebook faces pressure to adopt an expansive, militant understanding of “democracy” in Europe. It has largely resisted doing so, relying on account authenticity, advertising transparency, and fact-checking to support election integrity. Facebook’s restraint makes sense. An expansive agenda of protecting institutions might lead to suppression of speech that should be seen.

The distinction between facts and opinion offers a second general justification for treating “Census speech” differently. “Misinformation” would contravene clear, not controversial, facts. This justification appeals to many. Consider an election example. Polls in a district are open for a set period that is public and easily confirmed. Spreading the wrong hours for voting is incorrect beyond doubt. In contrast, opinions about who should win and hold office cannot be confirmed by some external authority. Disagreements about that question are why we have elections.

Some questions about the Census are clearly not facts. One might believe that ours is a Constitution of No Authority, that the more efficient exercise of state power is deleterious of freedom, and that, as James C. Scott writes, to be made legible is to be governable. From this perspective, the census is a dangerous tool of control. Whatever you may think of this position, it is coherent, internally consistent and plausible even if ultimately wrong. Articulations of this belief ought not be thrown out with the bathwater of misinformation.

Some propositions look like facts but are really contestable claims (i.e. opinions). Consider the apparently factual claim that “the census will help the government deport illegal immigrants.” The government denies this. Some say that this is misinformation intended to depress census completion rates. Notice this is a “fact” about the future. Perhaps the past might inform our assessment of this “fact.” While census data may not be legally shared with law enforcement, this prohibition was lifted during the Second World War to allow the FBI to more efficiently apprehend Americans of Japanese ancestry. In other words, the past suggests a reasonable person might have doubts about future uses of census data. The government’s future use of census data is more a matter of trust than of hard facts. Facebook cannot use the “clear facts” criterion to side with the government here.  

Political science suggests one important difference between “census speech” and other social media talk. Organized groups and the Census Bureau are concerned about misinformation on Facebook about the Census. Misinformation that matters little to organized groups or the government may be overlooked by social media content moderators. But Facebook should avoid at all costs acting in response to specific demands of organized groups. The more Facebook is seen to cater to specific demands, the more demands will be made of it. And being responsive to interest group campaigns may delegitimate Facebook’s content moderation in general.

The Census Bureau seems to be different. Facebook generally enforces local laws criminalizing speech. The law requires responding to the Census which itself, as mentioned, is constitutionally required. But speech misinforming the public about the census is not illegal in the United States. The Bureau is asking Facebook to help facilitate law enforcement regarding the census. And the law requiring answers to the census is, in fact, a constitutional exercise of legislative power under the necessary and proper clause (John Marshall edition). The same can be said of laws criminalizing sodomy prior to Lawrence v. Texas. Would Facebook have facilitated enforcing Texas’s law prior to Lawrence? Something that might seem as simple as helping the Census Bureau turns out to require Facebook to take sides on controversial political questions.

Facebook might do better by distinguishing between misinformation about the Census that can be dealt with by “more speech” and misinformation that cannot. Most errors about the Census may be corrected by “more speech.” After all, unlike elections, the census does not take place on one day at determinate places. The government and its allies can make their case against misinformation, disinformation, and controversial claims. There is time for “more speech” to bring about the best outcome for the society.

Elections may be different. Let’s say it’s widely and wrongly reported that a candidate has dropped out of a race. That’s a hard fact though perhaps temporarily unclear. It matters a lot whether the report circulates two days or two weeks prior to election day. “More speech” can handle the latter; avoiding harm to the candidate might be much harder two days before the voting. Speech inciting violence may be criminalized because in limited situations there is no time for “more speech” to rebut the appeals to force.

But there’s an important difference between the two harms, violence and false beliefs about elections. I cannot avoid being punched in the nose as a result of incitement. I can avoid false beliefs by modest research regarding facts. Here’s a (hardly obscure) place to start. Our freedom of speech does require that citizens take some responsibility for their beliefs and the reasons for them. Facebook should not protect us from our sloth.

Senators Manchin and Braun Are Attempting to Practice Medicine Without a License—And Fighting the Wrong War

Senator Joe Manchin (D-WV) and Mike Braun (R-IN) are still trying to address the fentanyl and heroin overdose crisis—soon to be joined by a methamphetamine and cocaine overdose crisis—by denying chronic pain patients access to pain relief. They have just introduced a bill they call The FDA Opioid Labeling Accuracy Actwhich would “prohibit the Food and Drug Administration (FDA) from allowing opioids to be labeled for intended use of ‘around-the-clock, long-term opioid treatment’ until a study can be completed on the long-term use of opioids.”

Set aside the fact that most pain specialists agree that, in some cases, long-term opioid therapy is all that works for some chronic pain patients. The 2016 guidelines on opioid prescribing put forth by the Centers for Disease Control and Prevention have already been misinterpreted and misapplied by legislators and regulators, leading to forced and rapid tapering off of opioids in many chronic pain patients, causing many to resume lives immobilized by pain, and in many cases, seek relief in the black market or by suicide. It has gotten so bad that the CDC recently issued a “clarification” in April, reminding regulators that the guidelines were only meant to be suggestive, not prescriptive, and did not in any way mean to encourage the rapid tapering of patients on chronic opioids for pain management. Johns Hopkins bioethicist Travis Rieder, PhD delves deeply into this subject and relates his own experiences in his book, In Pain.

What the senators fail to recognize is that patients are not one-size-fits-all. Different patients respond to pain and to pain management differently. Their proposed legislation, if passed, will only serve to exacerbate the unnecessary suffering of patients in pain that the CDC is trying to undue with its guideline clarification.

Meanwhile, they should take a look at the government’s own numbers. The data show there is no correlation between the number of prescriptions written and the incidence of non-medical use of prescription opioids or prescription pain reliever use disorder. And less than 10 percent of opioid-related overdose deaths in 2017 involved prescription pain relievers unaccompanied by other drugs such as cocaine, heroin, alcohol, or fentanyl.

The continued war on patients by politicians and regulators will not get one IV heroin user to take the needle out of their arm. Senators Manchin and Braun need to recognize that the overdose crisis has been on a steady, exponential increase since the 1970s and shows no signs of stopping—and that its ultimate cause is drug prohibition

If they want to get serious about addressing the problem, they should switch their focus to harm reduction. A good way to start would be to repeal the “Crack House” statutes that prevent cities and states from establishing overdose prevention sites called “safe injection facilities.”

Republicans Turn Progressive

What are the philosophies of the two parties in Congress today? One of them has veered far to the left. The other one, it’s not clear what defines it. Conservative? Certainly not on spending restraint or deficit control.

Nor on federal land issues. For more than a century, federal policy was to unload western lands. The government privatized 792 million acres of land between 1781 and 1940 and transferred 470 million acres to the states.

During the 20th century, progressives favoring federal control gained the upper hand. They thought that federal management would be efficient and environmentally sound. They were wrong as discussed here and here, and for a while Republicans fought back against the progressive folly.

Today, the federal government owns 640 million acres—mainly in the West—which is 28 percent of land in the nation. Federal control continues to expand as few policymakers seem interested in countering centralization.

Rather than supporting land privatization, Republicans today are embracing the opposite according to a Wall Street Journal editorial:

Democrats on the House Natural Resources Committee voted in June to mandate permanent spending of $900 million a year for the Land and Water Conservation Fund. The LWCF was created in 1964 to “assist in preserving, developing and assuring accessibility to … outdoor recreation resources.” It is funded mainly by federal oil and gas drilling royalties.

Over the years it has become a piggy bank for government to buy more private property, especially in the American West. Some of the purchase priorities are recommended by state and local governments or conservation groups, while the feds focus on buying more of the 2.6 million acres of privately owned land that remain within national park boundaries. This serves the liberal goal of locking up more acreage for political control, and the Democratic House will likely pass it this summer.

The feds do a miserable job managing the 640 million acres they already own. The National Park Service has a maintenance backlog of $12 billion. The Forest Service spent more than $2 billion last year fighting blazes that destroyed 8.7 million acres—much of it poorly managed federal forestland.

In March President Trump signed legislation that permanently reauthorized the LWCF, which means Congress will no longer be taking a fresh look at priorities and value on an occasional basis. Making its funding permanent would compound that legislative abdication. Congress is supposed to make annual judgments about what the fund needs, and its average size over the past 15 years is about $360 million a year. Providing bureaucrats a guaranteed $900 million annually is a stipend far beyond need.

RIP Ross Perot, the Billionaire Who Ran for President

Ross Perot, the billionaire entrepreneur who in 1992 became the most successful independent or third-party presidential candidate since Theodore Roosevelt in 1912, has died at 89.

Many people say that Perot, running on an anti-deficit platform, cost President George H. W. Bush reelection. I don’t think so. The most impressive political prediction I ever made was around June 1992, when I saw a poll that showed Bill Clinton running third behind Perot and Bush (it was probably the Gallup Poll shown here, with Perot 39, Bush 31, and Clinton 25). I told colleagues then, “This poll shows that Clinton will win, because third-party candidates always fade and the most important number in this poll is that only 31 percent of voters want to reelect the president.” Clinton would have won a majority if voters hadn’t had a third option.

Perot has some obvious similarities with President Trump – a businessman with no political experience, who opposed free trade and the recent Gulf War, promised to go to Washington to “take out the trash and clean out the barn,” had a predilection for conspiracy theories, and was enough of a celebrity to announce his candidacy on Larry King’s popular CNN show. However, his big issue was the $4 trillion national debt – those were the good old days! – and the deficits being run up by both parties. And instead of insulting tweets and ranting speeches, Perot’s stock in trade was 30-minute television ads full of charts and graphs, backed up by a 50-page economic plan promising cuts in domestic spending and tax hikes on high incomes and gasoline.

Perot was reported to have spent $65 million of his own money on his campaign (the Democratic and Republican candidates got $55 million each in taxpayer money in exchange for pledges by the candidates to limit direct campaign contributions, but they still managed to raise about $60 million each in “soft money”). In one sense, Perot’s campaign was a perverse result of federal campaign finance regulations. The Federal Election Campaign Act severely restricted how much money one could contribute to a campaign – unless you were the candidate. You could spend as much of your own money on your own campaign as you wanted. So the only way that Perot could spend $65 million (he tossed around suggestions of spending $100 million) was to run for president himself. But maybe the country would have been better off if he had been able to donate that money to, say, the well-respected Sen. Warren Rudman of Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act fame. Similarly, maybe it would have made more sense for Steve Forbes to donate $38 million to supply-side evangelist Rep. Jack Kemp in 1996 rather than to run himself. 

Ross Perot did have one positive impact on American politics. He made spending, deficits, and debt a real political issue, and that surely played a role – along with the booming economy – in bringing down deficits during the Clinton administration.

Perot also demonstrated that it’s extremely difficult to run an even modestly successful presidential campaign outside the two major parties unless you are both a billionaire and a celebrity.

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