Topic: Government and Politics

HUD’s Inexperienced Bureaucrats

The Washington Post slammed Ben Carson’s Department of Housing and Urban Development today. The paper found that “loyalty eclipses expertise” in the upper ranks of the agency given that 24 of HUD’s 70 political appointees have little housing experience. Most of the 24 helped on either Trump’s or Carson’s presidential campaigns.

A few thoughts.

Washington is a revolving door of analysts and operatives moving back and forth between trade associations and businesses (when their team is out) and executive branch agencies (when their team is in). Arguably, Carson’s policy of bringing non-housing outsiders into HUD is consistent with Trump’s “drain the swamp” promise. After all, when industry insiders are appointed to federal jobs, their incentive is to steer subsidies and bend regulations toward their industry friends on the outside.

The Post argues that Obama’s HUD appointees were more expert than Trump’s. Maybe so, but as small government supporters in Washington know, a great policy asymmetry is that most of the experts on government welfare programs are the liberals and lobbyists who favor the expansive status quo. That is one reason why Washington is a self-sustaining and self-protecting ecosystem so difficult to cut.

All that said, in 2015 I also critiqued federal political appointees as amateurs who have a problematic incentive structure:

The federal executive branch is headed by an elected president who appoints about 3,000 people to top positions across the bureaucracy. Political leadership of federal agencies has some benefits, but it also causes failures. New administrations come into office eager to launch new initiatives, but they are less interested in managing what is already there. Political appointees think that they know all the answers, so they do not bother learning the lessons from past efforts, and they repeat mistakes. As each administration yanks agencies in new directions, past investments are thrown down the drain. The average tenure of federal political appointees is short—just two and half years—and so appointees tend to push superficially appealing initiatives that look good on their resumes, but they shy away from tackling longer-term, structural reforms. 

Another problem with appointees is that many of them are political partisans who lack management or technical experience. One of the reasons for the failed response to Hurricane Katrina in 2005 was that many executives in the Department of Homeland Security were inexperienced party loyalists. This lesson from Katrina has not been learned. Today, for example, many U.S. ambassadors are political donors with no experience in the countries they are posted. Another example is the current acting head of the 900-employee Federal Railroad Administration, who seems to have no background in railroads or transportation, or apparently any technical qualifications. The ticket to the top for this official appears to have been a decade of media relations jobs for members of Congress and the White House.

That is the executive branch. As for the legislative branch, inexperience is an even larger problem. Most members of Congress and their staffs have little knowledge of the complexities of the industries that they subsidize, penalize, and tax. The modern Congress is a bunch of lawyers squabbling over how to manipulate a $20 trillion economy that they do not understand.

The basic problem with the federal government is that it is too big. The problem with HUD is that officials in a faraway capital are trying to micromanage local communities, not that some HUD officials were former event managers and HVAC salesmen.

For more on executive branch failings, see this study.

For more on legislative branch failings, see this study.

For an overall analysis of federal failure, see this study.

A Contemporary Economist’s Account of the “Crowning Folly of Tariff of 1930”

“[T]here came another folly of government intervention in 1930 transcending all the rest in significance. In a world staggering under a load of international debt which could be carried only if countries under pressure could produce goods and export them to their creditors, we, the great creditor nation of the world, with tariffs already far too high, raised our tariffs again. The Hawley-Smoot Tariff Act of June 1930 was the crowning folly of the who period from 1920 to 1933….

Protectionism ran wild all over the world.  Markets were cut off.  Trade lines were narrowed.  Unemployment in the export industries all over the world grew with great rapidity, and the prices of export commodities, notably farm commodities in the United States, dropped with ominous rapidity….

The dangers of this measure were so well understood in financial circles that, up to the very last, the New York financial district retained hope the President Hoover would veto the tariff bill.  But late on Sunday, June 15, it was announced that he would sign the bill. This was headline news Monday morning. The stock market broke twelve points in the New York Time averages that day and the industrials broke nearly twenty points. The market, not the President, was right.”

– Dr. Benjamin M. Anderson [chief economist at Chase National Bank 1920-39], Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946 (Indianapolis, Liberty Press, 1979, pp. 229-230)

Highways and Gas Tax Diversions

The federal government imposes a gasoline tax of 18.4 cents per gallon. Lobby groups are pressing for an increase and President Trump has suggested that he may support one. But a federal gas tax increase makes no sense.

State governments own America’s highways, and they are free to raise their own gas taxes whenever they want. Indeed, 19 states have raised their gas taxes just since 2015, showing that the states are entirely capable of raising funds for their own transportation needs. State gas taxes average 34 cents per gallon.

Also consider that gas taxes used to be a more pure user charge for highways, but these days gas tax money is diverted to inefficient nonhighway uses such as transit. Politicians say, “We need a gas tax increase to fix our crumbling highways,” and then they spend the money on other things. It is a bait-and-switch.

Federal fuel taxes and vehicle fees raise about $41 billion per year. About 20 percent of those funds (about $8 billion) are diverted to transit and other nonhighway uses.

With state fuel taxes the diversion is even larger, as shown in this Federal Highway Administration table. In 2016, state governments raised $44 billion from fuel taxes, and they diverted 24 percent—14 percent to transit and 10 percent to other activities. Texas, for example, diverts 25 percent of its fuel taxes to education spending.

The states also raised $38 billion from vehicle fees. They diverted 34 percent of those funds—13 percent to transit and 21 percent to other activities.

In total, states raised $82 billion from fuel taxes and vehicle fees. They spent $59 billion (72 percent) on highways and $23 billion (28 percent) on other activities. If the highways in your state have congestion and potholes, it may because your government is taking money raised from highway users and diverting it to other activities.  

The chart below shows the shares of state fuel taxes and vehicle fees diverted to nonhighway uses. South Carolina, for example, diverts 31 percent.

Last year, South Carolina’s governor Henry McMaster vetoed a gas tax increase. He objected to his state’s diversion: “Over one-fourth of your gas-tax dollars are not used for road repairs … They’re siphoned off for government agency overhead and programs that have nothing to do with roads.”

As a rough user charge, gas taxes are a good way to fund highways, and our highways do need more investment. But motorists should be skeptical of gas tax increases until policymakers stop diverting funds to inefficient transit systems with declining riderships.

Many transportation experts say that the rise of electric vehicles will be the end of the road for gas taxes, and they are eager to impose new vehicle miles traveled (VMT) charges to fund highways. However, governments are diverting more than $30 billion in fuel tax revenues and vehicle charges a year to nonhighway uses. If that diversion was ended, these revenues could continue to be America’s highway funding source for years to come.

 

More on highways and the gas tax:

https://www.downsizinggovernment.org/transportation/federal-highway-policies

https://www.downsizinggovernment.org/infrastructure-investment

https://www.downsizinggovernment.org/chamber-commerce-misguided-gas-tax

https://www.cato.org/blog/federal-gas-tax-increase-misguided

https://www.cato.org/blog/federal-gas-tax-lahood-makes-no-sense

The Constitution and Parental Rights

Child custody is among the most fraught topics the law confronts. It is the area in which personal relationships and raw emotions must be reconciled with legal rules and court judgements. Such is the case of “Ann,” an eight-year-old girl at the center of a case now before the Wisconsin Supreme Court. Ann has periodically spent time with her paternal grandmother, but due to family squabbles, Ann’s mother stopped bringing Ann to visit. The grandmother filed a lawsuit saying she was entitled to visitation rights, which a Wisconsin statute allows grandparents to ask for in circumstances where they have a preexisting relationship with the child such that the severing of that relationship would not be in the child’s best interest.

Complicating matters, the U.S. Supreme Court has held that these familial relationships have a constitutional dimension. In the 2000 case of Troxel v. Granville, the Court struct down a Washington State law that granted grandparents visitation rights when to do so would be in “the best interests of the child.” This standard was constitutionally infirm, the Court held, because parents have important rights that cannot by overcome by a bare showing that the child would be better off being raised by someone else.

As the late Justice Antonin Scalia pointed out, a great number of children should be taken from their homes if the question is whether someone else might do a better job raising them. Wisconsin’s statute is somewhat different than the Washington law, in that it requires a greater showing before invading the parent’s decision-making. The question for the Wisconsin Supreme Court is whether that’s different enough to shift the constitutional calculus.

About 1,100 Puerto Rican Deaths from Maria — NOT 2,795 or 4,645

The estimated number of above-average “excess deaths” in Puerto Rico attributed to Hurricane Maria (Sept 20, 2017) is a difficult figure to estimate objectively.  Puerto Rico’s official figure of 64 deaths by December 9, 2017 (which the President remembered) counted only those deaths directly attributed to the storm and confirmed by medical examiners.  Most of the direct deaths from Katrina were from drowning – which is much easier to attribute to the storm than many other causes of death. Studies of Puerto Rican deaths from Maria aspire to account for a wide range of indirect effects that are presumed (not proven) to be consequences of the storm such as suicides and heart attacks, infectious diseases, and damage to electricity and therefore to dialysis and respirator equipment.

Among at least eight major studies of direct and indirect effects on mortality attributed to Maria, two outliers stand out as being 3-5 times larger than the others, which all cluster around 1000. The first big number was from Harvard. On September 13, Time said, “Harvard’s report, which was based on systematic household surveys throughout Puerto Rico, reached an estimate of 4,645 storm-related deaths between September and December 2017, many as a result of ‘delayed or interrupted health care.’”  Nonsense. The Harvard study extrapolated from only 15 deaths reported in a survey of 3299 households to estimate that “between 793 and 8498 people died … up to the end of 2017.” By adding 793 and 8498 and dividing the result by 2, Time and others came up with a totally meaningless “average” which were widely reported with predictable sensationalism: “The hurricane that struck Puerto Rico in September was responsible for more deaths than the Sept. 11 attacks and Hurricane Katrina combined,” exclaimed The Daily Beast.” In reality, these “estimates of death from people who were interviewed” are little better than an opinion poll, and finding 15 deaths out of a sample of 3299 can’t plausibly be multiplied into 4645 for the whole island.

The latest sensational estimate of 2,975 excess deaths over six months is from an August 28 report from the Milken Institute School of Public Health at George Washington University  (GWU) commissioned by the Government of Puerto Rico. The study mentions two “scenarios” (census and displacement) yet only publicized the one with the biggest number: “Total excess mortality post-hurricane using the migration displacement scenario is estimated to be 2,975 (2,658-3,290) for the total study period of September 2017 through February 2018.” 

The 2,975 estimate only applies to the “displacement scenario.”  That is, the study “estimates cumulative excess net migration from Puerto Rico in the months from September 2017 through February 2018 and subtracts this from the census population estimates in these months.”  The population fell by about 8%, mainly due to migration rather than death, so the fact that there were more deaths than average after the hurricane means the death rate (deaths per thousand) rose more than the unadjusted statistics would suggest because the population is smaller.  But this issue is the number of deaths, not the death rate, and displacement (migration) did not make that number any higher than half a dozen other studies found (about 1000) much less three times higher.  

Subversive Patriotism: A Constitution Day Reminder

In Washington earlier this month, one person’s words in the New York Times were were deemed a threat to national security by those at whom they were aimed.

An anonymous Trump administration official was labeled “a seditious traitor who must be identified and prosecuted for illegal conduct” for exercising his or her 1st Amendment rights by publishing an op-ed in the September 5 edition of the New York Times. Vice President Pence stated that the op-ed writer’s actions inside the Administration—trying to limit what the writer believes is the damage President Trump is doing daily to the United States—is “an assault on our democracy”—a notion unhinged from any semblance of reality. 

Like everyone else working in the Trump administration, the author of the op-ed took the same oath I did when I served in the federal government, the text of which is federal law: 5. U.S.C. § 3331. Here’s the text:

I, AB, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.

The oath makes no reference to pledging fealty to whoever happens to be President. It is a pledge of loyalty to our form of government, not an individual. The notion that the Justice Department even has a basis to prosecute the writer does not pass the laugh test, much less constitutional muster.

The anonymous Trump administration official—and if he or she is to be believed, many more working for Trump—views him as a domestic threat to the American people and the Constitution itself. Democrats and others on the political left have viewed Trump that way since he won the Electoral College vote in November 2016. Clearly others in the Administration now view Trump the same way.

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.

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