Removing Barriers to Infrastructure Investment

As Obama administration officials head for the door at the Department of the Treasury, they have released a new study on infrastructure. The study—completed by outside consultants—profiles 40 large transportation and water projects that the authors believe would generate economic growth.

For each project, the study gives the estimated benefits, costs, and benefit-cost ratio. Many of the 40 projects appear to be worthwhile, such as an $8 billion Hampton Roads highway project with a benefit-cost ratio of 4.0. The report is silent on who should fund each project, but such high returns suggest that the states have a strong incentive to invest by themselves without aid from Washington.

What the states need from Washington is not money but to get out of the way. The Treasury report suggests that some “major challenges to completion” of projects are imposed by governments.

One challenge is “significantly increased capital costs:”

Capital costs of transportation and water infrastructure have increased much faster than the general rate of inflation over the past 20 years … Increased capital costs are also a product of enhanced design standards and regulatory requirements related to performance, safety, environmental protection, reliability, and resiliency.

Another challenge is “extended program and project review and permitting processes:”

Successful completion of the review and permitting processes required by the National Environmental Policy Act of 1969 (NEPA), which requires federal agencies to assess the environmental effects of their proposed actions, is an important part of project development. NEPA helps promote efforts to prevent or eliminate damage to the environment, but has also extended the schedule and generally increased the cost of implementing major infrastructure projects. This is a long-standing challenge that has spanned the last 20 to 30 years. Studies conducted for the Federal Highway Administration (FHWA) concluded that the average time to complete a NEPA study increased from 2.2 years in the 1970s, to 4.4 years in the 1980s, to 5.1 years in the 1995 to 2001 period, to 6.6 years in 2011.

Other FHWA data show that the number of environmental laws and executive orders creating barriers to transportation projects increased from 26 in 1970 to about 70 today, as shown in the chart below sourced from a trade association.

The upshot? The incoming Trump administration can spur infrastructure investment by working with Congress to repeal rules that unnecessarily delay projects and increase costs. Other steps include cutting the corporate tax rate to increase private investment and ending the bias against the private provision of facilities such as airports.

For more on infrastructure, see here, here, and here.

 

E-Verify Gaining Ground in Texas

Texas State Senator Charles Schwertner (R-Georgetown) recently filed SB 23, a bill that would put into statute Governor Rick Perry’s executive order mandating E-Verify for all state contractors and force all state contracts to include a paragraph specifying that they must participate in the program. There’s a good faith exemption, in case the contractor receives inaccurate information from the E-Verify system (false confirmations that later come to light). SB 23 adds an enforcement mechanism that Governor Perry’s executive order lacked. Under the proposed law, a contractor’s failure to use E-Verify would bar them from receiving state contracts for five years and make the state comptroller responsible for enforcement. The legislature already mandated E-Verify for state agencies and universities.  

SB 23 won’t much affect Texas because it probably won’t be enforced. Nebraska mandates E-Verify for all public contractors, but a 2011 Nebraska report found that only 23 percent of registered state contractors were even enrolled in the system. If Texas is as uninterested in enforcing E-Verify as Nebraska, then the results will be similar.    

The real damage from SB 23 is that it brings Texas one step close to universally mandated E-Verify and all of its systematic problems. E-Verify is a government run system that is free for the user if you exclude the taxes, time, and money spent on maintaining it, using it, and resolving any identification problems that arise. E-Verify also doesn’t work well, as accuracy rates are poor, there are many ways for illegal workers to obtain SSNs from deceased Americans to fool the system, and many employers in states where the system is mandated don’t bother to use it at all. Furthermore, E-Verify doesn’t dim the job magnetE-Verify is an expensive system that doesn’t work.

SB 23 is a stepping stone toward universal mandated E-Verify in Texas and all of the problems it creates. For that reason alone, SB 23 is a rotten deal for Texans. 

Special thanks to Scott Platton for his help in researching this blog post.

Nat Hentoff, RIP

Cato Senior Fellow Nat Hentoff passed away on Saturday evening at age 91.  He was a leading authority on the Bill of Rights and most especially the First Amendment.  He authored 37 books and countless newspaper and magazine articles.  He is perhaps most well-known for his opinion articles in the Village Voice, where he wrote for 51 years, from 1957 until 2008.  He joined the Cato staff in 2009 and never stopped researching and writing.  A few years ago, he told me that he was following Duke Ellington’s guide with respect to his own work in defense of the American Constitution:

Rule 1: Don’t Quit

Rule 2: Reread Rule #1

Nat actually knew Duke and many other luminaries, from Malcolm X to Supreme Court Justice William Brennan.  He was a jazz expert, writing on music for the Wall Street Journal.  He often said that “jazz and the Constitution were his main reasons for being.”  He said his passion for jazz and liberty overlapped because they were both about respecting everyone’s individuality.  

Nat was bemused by both his fan mail and hate mail as the years passed.  He didn’t play the political game—he would condemn Democrats and Republicans alike if they attacked constitutional principles. And he was always enthusiastic when he found a member of Congress coming to the defense of the Constitution, such as Senator Russ Feingold’s (D-WI) lone vote (in the Senate) against the Patriot Act in 2001, or, more recently, Senator Rand Paul’s (R-KY) efforts to scale back the surveillance state.  Go here to view an interview with his thoughts on other current events.

Nat said one of the best things about losing his job at the Village Voice in 2008 was that it afforded him the opportunity to (sort of) read his own obituaries.  “Dig this one!,” he would tell me over the phone with a chuckle. 

Interestingly, when asked about his proudest achievement, he would say it was not anything he wrote.  He got an opportunity to work as a producer for a television special about jazz music in 1957.  He jumped at the chance to bring beautiful jazz music into the living rooms of folks who had never really been exposed to it before.  Here is Billy Holiday’s Fine and Mellow from that special.  According to Nat’s relatives, he passed away while listening to his favorite jazz tunes.

We’re sad you’re gone, but we celebrate your good life.  Rest in peace.

Coming to Mr. Trump’s Aid in the Matter of Judicial Selection

An article cited in the Cato Clips late yesterday caught my eye: “Libertarian Judicial Activism Isn’t What the Courts Need.” Written by Texas attorney Mark Pulliam, a sometime contributor to such libertarian publications as Reason and The Freeman, among others, it was posted at a site called “Southeastern Texas Record” and a day earlier at “American Greatness” (I leave it to the reader to discern what that site is about). The title speaks for itself. As the first named target of the piece, I’m given to respond, briefly.  Others, in order of appearance, are Randy Barnett, Clark Neily, Ilya Shapiro, Kermit Roosevelt III, Dick Carpenter, Anthony Sanders, and, by implication (their book, The Dirty Dozen, is cited), Bob Levy and Chip Mellor—a veritable rogues gallery of libertarian legal scholars.

Could we all be wrong? Apparently so. We’ve “devised a novel theory that the Constitution, properly understood, protects a person’s ‘right to do those acts which do not harm others,’” Pulliam argues, “enforceable against the federal government and the states,” and “it is only judges who get to decide whether a particular law is justified constitutionally.” What’s worse, we’re urging President-elect Trump to appoint adherents of this “fanciful theory” to the Court.

Federal R&D Funding

The federal government spent $147 billion on research and development in 2016, including $77 billion on defense and $70 billion on nondefense. Federal R&D spending has risen in recent decades on a constant-dollar basis, but has dipped as a share of gross domestic product. The AAAS has the data here.

How much should the federal government spend on R&D? AAAS data show that 23 percent of federal spending is for “basic” research, 25 percent is for “applied” research, and 52 percent is for “development.” Most economists would support the basic part, but be more skeptical of the applied and development parts because the private sector handles those activities.

The largest portion of federal nondefense R&D is for health care. In the Wall Street Journal today, a professor emeritus at Harvard Medical School questions the value of this funding. Tom Stossel argues that the private sector makes most medical advances:

The assumption seems to be that the root of all medical innovation is university research, primarily funded by federal grants. This is mistaken. The private economy, not the government, actually discovers and develops most of the insights and products that advance health. The history of medical progress supports this conclusion.  

… In America, innovation came from physicians in universities and research institutes that were supported by philanthropy. Private industry provided chemicals used in the studies and then manufactured therapies on a mass scale.

… Since then, improvements in health have accumulated. Life expectancy has increased. Deaths from heart attack and stroke have radically decreased, and cancer mortality has declined. New drugs and devices have ameliorated the pain and immobility of diseases like arthritis. Yet the question remains: Is the government responsible for these improvements? The answer is largely no. Washington-centric research, rather, might slow progress.

… By contrast, private investment in medicine has kept pace with the aging population and is the principal engine for advancement. More than 80% of new drug approvals originate from work solely performed in private companies.

Cato’s Terence Kealey is also a skeptic of government-funded science.

Topics:

79% Want Police Misconduct Investigated by Independent Agencies

In most jurisdictions, local police departments typically conduct internal investigations of police officer shooting and misconduct complaints.[1] However, 79% of Americans would prefer that an “outside law enforcement agency take over the investigation” when an officer is suspected of criminal wrongdoing. Alternatively, 21% favor police departments conducting internal investigations of their own officers.

The proposal to have outside investigations of misconduct, rather than internal department investigations, enjoys broad public support. Overwhelming majorities across demographics and partisan groups, including majorities of blacks (82%), whites (81%), Hispanics (66%), Republicans (76%), independents (77%), and Democrats (83%), all favor outside investigations and prosecutions of officers accused of misconduct.

Find the full public opinion report here. 

For public opinion analysis sign up here to receive Cato’s upcoming digest of Public Opinion Insights and public opinion studies.

 The Cato Institute/YouGov national survey of 2000 adults was conducted June 6–22, 2016 using a sample drawn  from YouGov’s online panel, which is designed to be representative of the U.S. population. YouGov uses a method  called sample matching, and restrictions are put in place to ensure that only the people selected and contacted by  YouGov are allowed to participate. The margin of sampling error for all respondents is +/-3.19 percentage points.  The full report can be found here, toplines results can be found here, full methodological details can be found here.

 


[1] USCCR, “Revisiting Who Is Guarding the Guardians? A Report on Police Practices and Civil Rights in America,” U.S. Commission on Civil Rights, November 2000, http://www.usccr.gov/pubs/guard/main.htm.

Thou Shalt Not Covet Thy Neighbor’s “Leadership” in Syria

In December, Russia, Turkey, and Iran began high-level talks to work toward a political settlement of the brutal civil war in Syria. Much to the chagrin of Washington officials and commentators, these countries have deliberately excluded the U.S. from the negotiations.

One broad sketch of their approach to a settlement, according to some reports, is to first achieve a cease-fire on the ground, as best they can, and then negotiate a division of Syria into three separate regions in which Assad’s Damascus-based Allawite sect would share power in a federal structure. Assad himself would step down at the end of his current term. The plan is in its infancy, subject to change, and would of course require agreement from the regime and opposition forces, before ultimately seeking buy in from the Gulf states, the U.S., and the European Union.

There is no indication that this latest push is going to be any more successful than previous diplomatic efforts to resolve the Syrian civil war. Nationalism is a powerful force and, as recent history suggests, plans to simply divide war-torn states into federated systems get tossed into the trash bin pretty quickly, as happened with Iraq and with Bosnia and Herzegovina. That said, the players have clear interests at stake. Russia has real leverage with the Syrian regime and has now staked its prestige on mitigating the conflict on favorable terms. Turkey borders Syria and has not only borne the brunt of the spillover effects with regard to refugees and militancy, but also has a strong national interest in preventing the Kurds from carving out territory along the border so as to keep a lid on its own Kurdish separatist movement. And Syria is Iran’s only Shiite ally in the region and has proven a strategic asset for Iran on several fronts, not least in its proximity to Lebanon’s Hezbollah. When the stakes are high for the negotiating parties, they tend to take care in constructing a settlement.