April 24, 2015 10:10 AM
Randal O’Toole of the Cato Institute has a great blog post outlining the various ills besetting America’s government-subsidized passenger rail carrier Amtrak. The gist of O’Toole’s argument is that although both federal and state governments contribute large sums of money to keep Amtrak afloat, potential riders have not been nearly as enthusiastic. A recent National Journal article does cite Amtrak’s ridership as increasing 50 percent in the last fifteen years, but O’Toole points out that the increase was largely driven by a simultaneous increase in gas prices. Amtrak’s new riders aren’t somehow more attuned to taking passenger trains than they were before, they’re simply responding to market pricing and the laws of supply and demand.
If the federal government revoked its latest $1.4 billion annual subsidy, Amtrak probably would not have even seen that 50 percent increase. O’Toole reports that in 2012, Amtrak fares averaged about 33.9 cents per mile, while travel by air and automobile averaged 13.8 and 25 cents, respectively. Taking into account these factors, as well as user costs and subsidies, O’Toole estimates that Amtrak costs about four times as much as flying and nearly twice as much as taking a car. These figures, along with the fact that Amtrak’s share of total passenger travel in 2012 was around 0.14 percent, demonstrate that demand for passenger rail in America can hardly be called robust.
Even if greater demand for passenger rail did exist, the federal government would face the odd paradox of running a profitable industry that could probably be better handled by competition among private firms. Passenger trains already have at their disposal all the revenue they should ever need: fares and onboard sales. Why take money from hundreds of millions of people to finance the travel of only a few? Congress would do the nation a favor by phasing out funding for Amtrak, saving us all money in the process.
April 23, 2015 5:17 PM
Today we’ve learned again that bureaucrats and their enormous kingdoms come before consumer welfare.
The collapse of the Comcast-Time Warner Cable merger merely because of the interference of government, not because of actual market rejection, illustrates the overwhelming power of the modern state in undermining the advance of communications technologies and services specifically in this instance, and of free competitive enterprise generally.
The proposed transaction was first announced well over a year ago, and as is now the unfortunate and disruptive norm, the parties had to await the verdicts of bureaucracies rather than set immediately about serving consumer markets. Now, the Justice Department’s Antitrust Division and the Federal Communications Commission, whose edicts change the direction of entire industries with the slightest gesture, have decided to derail the deal.
These bureaucrats have decided on our behalf that the merger wouldn’t help us. What they have really decided is that no competitor will need to react to the Comcast-TWC merger, and so competitors have been awarded a government-granted reprieve from the pressures of competition. Over and over, antitrust routinely harms consumers far more than any ordinary business transaction like this can ever do.
Sometimes mergers work, sometimes they don’t—like the failed AOL-Time Warner merger. But such matters should be settled in the marketplace, not by overlords in Washington who, if we are the slightest bit honest, are the real wielders of unchecked monopoly power over all industries, not just one sector like this.
For an earlier discussion of this merger, here’s a column of mine in Forbes. “Why Organized Conservative Opposition To The Comcast Time Warner Deal Misfires.”
On the folly of antitrust regulation (and it is regulation), see my formal comments to the Federal Trade Commission’s Antitrust Modernization Commission.
April 23, 2015 1:33 PM
If a vote goes against you, ignore it.
That is what a theatrical union did this week, when it announced it would ditch a longstanding plan that allowed actors to volunteer at small theaters.
Actors’ Equity Association, which represents 50,000 actors and stage managers, recently held a non-binding referendum on whether to abandon a minimum wage exemption for theaters with less than 100 seats. Members voted against ending the exemption, known as the 99 Seat Theater Plan, by about a two-to-one margin. Granted, the referendum was non-binding, but it does show a union’s leadership going blatantly against the wishes of an overwhelming majority of its membership.
Some actors working in small theaters had asked for greater pay, reports Southern California Public Radio (SCPR), but Actors’ Equity’s proposed solution is about as heavy-handed a way to address the issue as could be. “I believe that there is an inequality inside L.A. theater and I think it should be fixed,” actor Ramon De Ocampo told SCPR. “But I don’t think it should be fixed with a sledgehammer. We need to scalpel it away to get that payment.”
The sledgehammer metaphor is especially apt considering that many actors approach performing in small theaters as a job, but as a means to gain experience and sharpen their skills. As The New York Times reports:
[H]undreds of union actors working in this city’s distinctive and thriving small theater scene are barely paid for their work. And, in an unusual twist to America’s economic fairness debates, many of them say they are O.K. with that.
“None of us is here to make money,” Lynn Odell said recently as she rehearsed a science-fiction comedy at Theater of Note, a 42-seat theater that operates in a former auto-glass repair shop in Hollywood. “We are here for the experience.”
The willingness of Los Angeles actors to perform for a pittance, hoping to hone their craft and, maybe, to catch the eye of an agent or manager, is now at the heart of an extraordinary rift in the union representing theater actors, and has opened a new front in the nation’s battle over the minimum wage.
Ironically, a prominent defender the 99 Seat Theater Plan is Tim Robbins, an avowedly liberal Hollywood actor who happens to run a small theater.
April 22, 2015 6:04 PM
This April will mark the 45th anniversary of Earth Day. Since 1970, countless people around the world have used the day to celebrate the beauty and majesty of the natural world and develop strategies for safeguarding those values.
For a long time, environmental protection policies in the United States have tended overwhelmingly in the direction of greater government involvement—more rules and restrictions, larger budgets for the Environmental Protection Agency, and more land brought under federal control. As the mandate to control more and more of the nation’s forests, ranges, rivers, and lakes has expanded, the agencies responsible—and the taxpayers who foot the bill—have shown the strain.
Since the early 20th century, practically no land under federal control has passed into private hands. We can see the real-world consequences in the federal forests. For decades, some environmental groups have successfully fought the adoption of sound forest management policies, often opposing the harvesting of any timber—even dead or diseased trees. As a result, those lands have been plagued by insect infestation, disease, and catastrophic wildfires. Because of political pressure, federal land managers ignored risks that private forest owners have always understood.
Fortunately, we have other options for channeling the enthusiasm for environmental preservation we see at Earth Day celebrations each year. Increasing private stewardship of our natural resources is an excellent tool for addressing that challenge.
As more people are coming to realize, we do not have to direct all our conservation goals through the political process, where we can only hope that the politicians we elect will make the right choices. Rather, we can join together with other like-minded individuals to accomplish the same goals. No campaign contributions required!
April 22, 2015 1:09 PM
It may be sheer coincidence, but it’s all too fitting that the first Earth Day, April 22, 1970, would occur on V.I. Lenin’s 100th birthday, given that most of the modern environmentalist movement grew out of the far left student movement of the 1960s. In that milieu, it wasn’t rare to see people brandishing and citing Chairman Mao’s Little Red Book as a source of wisdom. And many in the anti-war movement accused the capitalist chemical companies of growing rich by producing napalm and Agent Orange to drop on the people and forests of Viet Nam.
Another popular book of the time was Rachel Carson’s Silent Spring, which claimed chemical companies were profiting by poisoning the entire planet with DDT. The new environmentalist movement had found its “Little Green Book.”
And I was there.
I would periodically drive down in my Volkswagen from New Jersey to D.C. for various gatherings and marches. There was always a small libertarian contingent with the black-and-gold anarcho-capitalist flags at most of the major anti-war marches.
Most of the news I got on the student movement came from my friend the late Wilson A. Clark, Jr., a maverick Misesian, Randian, Schumacherite, small-is-beautiful libertarian and author of Energy for Survival and Energy, Vulnerability and War. Wilson later went to work for Gov. Jerry Brown as his alternative energy guru. He supported solar and wind power for libertarian reasons—so neither the state nor Con-Ed could pull the plug on you, and you could live free off the national grid (much like Karl Hess, Sr. and the recently retired Rep. Roscoe Bartlett). Unfortunately, Wilson died in an auto accident on January 30, 1983 at age 36, as he swerved to avoid a deer.
Wilson told me that the greatest coup was holding Earth Day on Lenin’s Birthday and that most of the environmental movement’s leaders still didn’t get it. You can find endless discussions on how April 22 was selected. It had to be in the spring. It had to be during spring break, when most college kids were free, and when there were no exams. On and on.
While it is entirely possible, and indeed probable, that Gaylord Nelson and other establishment greens did not deliberately pick Lenin’s birthday to celebrate Earth Day, I believe the young anti-capitalist students knew precisely what they were doing in selecting April 22. Was it sheer coincidence they would select Lenin’s 100th birthday—out of 365 days in the year—to celebrate the first Earth Day? I find it hard to believe.
April 22, 2015 1:07 PM
Prof. Steve Horwitz of St. Lawrence University has a fascinating article up at MarketWatch, in which he argues that many of the major changes in family structure and gender roles we have seen over time are primarily a result of market forces and increasing prosperity. Serendipitously, I recently attended a lecture by Prof. Jerry Muller, presented by the Snider Center for Enterprise and Markets, in which he made many of the same connections.
The Industrial Revolution, for example, created new opportunities for wage labor outside the home and family farm, so all sorts of poor people—men, women, and children—ended up taking those jobs to contribute to the household’s income. As real wages rose with increased productivity, more men were able to become sole breadwinners for their entire family, and children and women were able to return to the domestic sphere. Many of those children went to school rather than doing any physical work, and women generally assumed the role of what many people today consider the “traditional” homemaker.
But in many ways that tradition was short-lived. As an array of labor-saving devices for the home proliferated in the early 20th Century, women were again seeking career opportunities outside the home. Horwitz points out that this has led, for example, to more women working with young children, a trend that itself has been made possible because women, in recent decades, have been having fewer children on average, making paid daycare a more affordable option.
I suspect Horwitz and Muller might disagree on the second half of Horwitz’s MarketWatch article that applies the same analysis to sexual orientation and individual expression, but the overall theory—that “social” trends have a lot more to do with economic effects than many historians and sociologists acknowledge—remains a compelling one.
April 22, 2015 1:05 PM
The Joint House-Senate Conference Meeting on the federal budget has begun. Chairman Tom Price of Georgia remarked:
Completing a budget is one of Congress’ core legislative responsibilities. It helps ensure we are embracing our Constitutional power of the purse and legislating in an orderly manner....we must remember that a budget is more than just a set of numbers. It is a reflection of our priorities and vision for how we can achieve real results and move our country in the direction of greater opportunity, economic growth and a safer and more secure nation – one where Americans have the best chance of achieving their dreams for the future.
The basic plan purports to just barely balance the budget within 10 years. We’ll have a $6 trillion annual fiscal budget under Obama in 2025—but it’ll be at least $5 trillion under Republicans. Under Obama’s plan, we’re going to spend $49.3 trillion between 2016 and 2025; Republicans, $43.1 trillion.
The initial Republican plan released in February promised to get rid of Obamacare. However, Republicans are running away from that despite pre-election promises and can be counted on this summer to advance legislation embracing fundamental premises of Obamacare (even keeping “kids” on the parents’ policy until age 26 by force. Take a look at Los Angeles Times: “Obamacare Repeal Falls Off Republicans's To-Do List as Law Takes Hold.”)
This issue alone assures no balanced budget in 10 years, as does the inevitable one-upsmanship among Republicans to spend more on defense.
For future entrepreneurial progressives, the summer 2015 cave-in on Obamacare will remove key barriers to single-payer for some future Congress when the mixed approach fails. If Republicans are choosing government controls, then they are choosing government controls.
April 22, 2015 11:54 AM
Back in 2012, I warned that California’s bill (now law) that would explicitly recognize the legality of automated vehicles and order state regulators to develop a detailed safety framework would tie the hands of innovators. In those days, Google was the chief proponent of such legislation, with California Gov. Jerry Brown signing the bill into law (sponsored by now-Secretary of State Alex Padilla) at Google’s headquarters, with Google co-founder Sergey Brin looking on.
That 2012 law spawned a series of chaotic regulatory actions at the California Department of Motor Vehicles, which has still failed to implement the required licensing and operations regulations and which also imposed regulations that forced Google to dial back its efforts to produce and test a fully automated vehicle on public roads. Ironically, these now-forbidden operations were likely completely legal before California enacted its autonomous vehicle law in 2012.
Fortunately, Google appears to have learned from its mistakes and is now opposing a similar piece of legislation in Texas. The technology giant isn’t explaining its about-face in the Longhorn State, but the automakers’ chief lobby, the Alliance of Automobile Manufacturers, was more candid:
The Alliance of Automobile Manufacturers, which represents 12 automobile manufacturers including General Motors and Ford, was more forthcoming. Spokesman Dan Gage said the group was concerned that the bill might create state-specific standards related to safety or manufacturing that could tap the brakes on the development of the technology.
“We don’t feel that legislation in this area in Texas right now is necessary,” Gage said. “The concern is by putting pen to paper you actually could prematurely limit some of those types of developments.”
Gage said many of his group’s members are testing autonomous vehicle technology, but he could not say whether any are doing so on Texas roads or highways. Such testing would likely be legal here, as Texas law does not address self-driving vehicles, according to state officials. Google drove its self-driving car on Texas roads during a trip to Austin to promote the technology in 2013.
April 21, 2015 11:32 AM
Is Jonathan Gruber, the MIT economist who seemingly dropped out of public view after he was caught on camera bragging how he and other Obamacare architects misled the American public, now advising the Department of Labor?
No evidence indicates that he is, but the authors of sweeping new 444-page DOL regulation that would sharply curtail choices of assets and investment strategies in 401(k)s, IRAs and other savings plans appear to share Gruber’s mindset on the “stupidity of the American voter” (a revelation National Review editor Rich Lowry aptly described as “us an unvarnished look into the progressive mind, which … favors indirect taxes and impositions on the American public so their costs can be hidden, and has a dim view of the average American”).
Now, President Obama and Secretary of Labor Tom Perez are advancing a new regulatory and hidden-tax scheme while claiming to protect average Americans’ retirement savings from unscrupulous financial professionals. The proposed “fiduciary rule” would restrict the investment choices of holders of 401(k)s, IRAs, health savings accounts, and Coverdell education accounts.
In a speech to AARP, Obama proclaimed:
If you are working hard, if you're putting away money, if you’re sacrificing that new car or that vacation so that you can build a nest egg for later, you should have the peace of mind of knowing that the advice you’re getting for investing those dollars is sound, that your investments are protected.
Similarly, a DOL “fact sheet” describes the rule as “protecting investors from backdoor payments and hidden fees in retirement investment advice.”
Yet in practice, the rule seems premised on the Gruberite notion that American investors need protection from is their own stupidity. According to the DOL rule:
[I]ndividual retirement investors have much greater responsibility for directing their own investments, but they seldom have the training or specialized expertise necessary to prudently manage retirement assets on their own. (page 8)
Therefore, they “need guidance on how to manage their savings to achieve a secure retirement.”
Can’t savers who feel they need this guidance seek it out under a variety of investment professionals under a system with strong disclosure and anti-fraud rules? Absolutely not, says the Obama administration.
“Disclosure alone has proven ineffective,” states the rule. “Most consumers generally cannot distinguish good advice, or even good investment results, from bad” (page 91). In fact, proclaims the DOL, “recent research suggests that even if disclosure about conflicts could be made simple and clear, it would be ineffective—or even harmful.”
So, in the administration’s view, the only solution is to tax these dimwitted investors—for their own good, of course—and expose financial professionals to a flurry of lawsuits and penalties, if administration officials deem their advice not to be in savers’ “best interests.”
April 21, 2015 11:29 AM
The Competitive Enterprise Institute, TechFreedom and a coalition of free-market groups issued an open letter to Members of Congress, urging them to consider amendments to the National Cybersecurity Protection Advancement Act (NCPAA) of 2015. The NCPAA intends to increase cyber security by facilitating greater sharing of potential cyber threats by private companies with each other and with government. But it also raises real privacy concerns because potential Cyber Threat Indicators could include private information like email content or Internet usage history.
“Congress must ensure that agencies can’t strongarm companies into sharing information involuntarily, and that agencies can be held liable for recklessly misusing private data they might receive. And agencies should be barred from using such information for regulatory purposes or for unrelated criminal prosecutions,” said Ryan Radia, Associate Director of Technology Studies at the Competitive Enterprise Institute. “Finally, the existing bill’s blanket immunity for ‘defensive measures’ could encourage unauthorized access to protected computers, potentially endangering innocent bystanders caught in the middle of cyberattacks.”
The letter proposes eight amendments: