The federal government plays a large role in the nation’s highways through the funding of aid programs for the states and the imposing of top-down regulations. Congress passed a major highway bill in 2015 that authorized $305 billion in spending over five years, of which $226 billion was for highways and most of the rest for urban transit.

The Trump administration is promising a fresh approach to highway spending and regulation. What are the main problems with current highway policies, and what reforms should the administration pursue?

Transportation expert Gabriel Roth and I examine these questions in a new study at DownsizingGovernment.org. We review the history of federal highway interventions, describe the inefficiencies of federal aid and regulations, and discuss possible reforms.

We argue that Americans would be better off if federal highway and transit spending, fuel taxes, and related regulations were cut. The states can more efficiently tackle their transportation needs with a reduced federal role, and they would be more likely to pursue privatization and other market-based reforms.

Our primer on federal highway policies is here.

“Is Amazon getting too big?” asks Washington Post columnist Steven Pearlstein, in a 4000-word column seeking justification for the Democrat Party’s quixotic pledge to “break up big companies” in its recent “Better Deal.” “Just this week,” notes Pearlstein, “Democrats cited stepped-up antitrust enforcement as a centerpiece of their plan to deliver ‘a better deal’ for Americans should they regain control of Congress and the White House.” He concludes by saying “it sometimes takes a little public power to keep private power in check.” But maybe it takes a lot of public power to write antitrust lawyers some big checks.

Politics aside, the question “Is Amazon getting too Big?” should have nothing to do with antitrust, which is supposedly about preventing monopolies from charging high prices. Surely no sane person would dare accuse Amazon of monopoly or high prices. 

Even Mr. Pearlstein has doubts: “Is Amazon so successful, is it getting so big, that it poses a threat to consumers or competition? By current antitrust standards, certainly not… Here is a company, after all, known for disrupting and turbocharging competition in every market it enters, lowering prices and forcing rivals to match the relentless efficiency of its operations and the quality of its service. That is, after all, usually how firms come to dominate an industry…”

That should have ended this story “by current antitrust standards.” But if we simply lower those standards, then “Better Way” antitrust shakedown threats could become far more numerous, unpredictable, and lucrative for politically-generous antitrust law firms. 

Among the 19 largest law firm contributions to political parties in 2015/2016, according to Open Secrets, all but one, Jones Day, contributed overwhelmingly to Democrats. More to the point, all of these law firms contributing most generously to the Democratic Party are specialists in antitrust and mergers: They appear on U.S. News list of top Antitrust attorneys. And the Trial Lawyers Association (now disguised as “American Association for Justice”) contributed over $2.1 million to Democrats, over $1 million to liberal organizations and $67,500 to Republicans.

Antitrust law is a very big, profitable and concentrated industry. Antitrust lawyers’ have a special interest in greatly expanding the reach and grip of antitrust law. They were surely delighted by Pearlstein’s prominent endorsement of law journal paper by Lina Khan, a 28-year old student and fellow at the “liberal-leaning” think tank New America.

Ms. Kahn believes it self-evident that low operating profits must prove Amazon is “choosing to price below-cost.” That’s uninformed accounting. What low profits actually show is that Amazon has been plowing-back rapidly expanding cash flow into capital expenditures, such cloud computing, a movie studio, and unique consumer electronics (Kindle and Echo).

 “If Amazon is not a monopolist, Khan asks, why are financial markets pricing its stock as if it is going to be?” That’s uninformed finance theory. Investors rightly see Amazon’s current and future growth of cash flow (the result of expensive investments) as the source of future dividends and/or capital gains (more net assets per share).

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This week, the worst-kept secret in international sports became official: Paris will host the 2024 Olympic Summer Games and Los Angeles will host in 2028. There were plenty of happy faces in Paris and L.A. over the announcement—and there should be some in Boston too.

Just 2.5 years ago, Boston was a frontrunner in the sweepstakes for the 2024 Games. A group of city businessmen put together a multi-billion-dollar plan for the Games, including proposed construction of a large, temporary stadium for the main events and a beach volleyball venue that would be erected on Boston Common. The group then set to work getting political leaders and the public onboard.

In an article forthcoming in the fall issue of Regulation, Andrew Zimbalist, a Smith College economist and internationally renowned expert on the finances of mega-events like the Olympics, tells what happened next:

At first, Bostonians were excited by the Olympic prospect, inspired by claims that the event would yield long-lasting benefits in economic stimulus, international prestige, and tourism. But then they began to learn from people like Zimbalist that hosting the Olympics usually isn’t the net positive that proponents claim.

He writes of recent American Olympic history:

Lake Placid 1980 experienced cost overruns of 321% and ultimately required a bailout. The State of New York contributed $63 million (17% of total costs) and the federal government spent $179 million (50% of total costs). … Atlanta 1996 had cost overruns of 147%. … Approximately one-third of all spending—$823 million—came from taxpayers. … The federal government planned to spend $342 million on the 2002 Salt Lake City Winter Olympics. The Salt Lake City municipal government planned to spend $75 million and the Utah state government committed an additional $150 million. The final public bill was considerably higher.

Outside the United States, the Olympic experience has been even worse; barrels of red ink and/or horrifying events marked the Mexico City Games of 1968, the Munich Games of 1972, the Montreal Games of 1976, the Athens Games of 2004, the Sochi Games of 2014, and the Rio Games of 2016. And afterward, Zimbalist writes, the costs continue:

Beijing 2008’s “Bird’s Nest” stadium has been converted into a museum for tourists to visit at $12 a pop, but there is little interest. Meanwhile, the facility costs millions of dollars annually to operate and maintain. Rio’s Olympic Park has many venues that were slated for post-game use, but there was either no money to convert them or there were no private developers willing to take on the responsibility of remodeling and management. As in Athens (2004), most of Rio’s venues are now falling into disuse. London’s $700 million Olympic Stadium has been converted (at a $400 million additional public expense) into a new stadium for the West Ham soccer club, but West Ham had a perfectly good stadium beforehand.

As for claims that the Olympics bring tourism benefits, he argues this probably isn’t true on net. Major cities like Boston already attract plenty of tourists, but they’ll be inclined to stay away during the Olympics because of the chaos of the Games. And the Lyle Lanley notion that the Games would “put Boston on the map”? Well, Boston is already a pretty big dot on the map.

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