Category: Public Policy

RiskAhead“Most of economics can be summarized in four words: ‘People respond to incentives,’” says economist Steven E. Landsburg. “The rest is commentary.”

When governments create a regulation, they are creating an incentive for individuals and businesses to respond in a particular way. But the people who create the regulations — government regulators — also respond to incentives.

As Elon Musk, the CEO of Space X and Tesla Motors, explains,

There is a fundamental problem with regulators. If a regulator agrees to change a rule and something bad happens, they can easily lose their career. Whereas if they change a rule and something good happens, they don’t even get a reward. So, it’s very asymmetric. It’s then very easy to understand why regulators resist changing the rules. It’s because there’s a big punishment on one side and no reward on the other. How would any rational person behave in such a scenario?

 

 

mass-incarcerationWith the 2010 publication of The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Ohio State University law professor Michelle Alexander, the conversation about America’s exploding prison population singularly became focused on the intersection of race, poverty, and the War on Drugs. According to the narrative, the drug war disproportionately targets blacks in lower income communities as a means of social control via the criminal justice system similarly to the way Jim Crow controlled blacks in the early 20th-century.

The one problem with mass incarceration-as-Jim-Crow thesis is that it does not fit the empirical data. The drug war is not the reason that today we have nearly 2.5 million people incarcerated in this country. In the mid-1970s the U.S. prison population grew from about 300,000 to 1.6 million inmates, and the incarceration rate from 100 per 100,000 to over 500 per 100,000 largely due to violent crime, property crime, and rogue prosecutors. Drug policy changes would, therefore, have little effect on prison population rolls.

The first significant challenge to the Alexander thesis came from Yale Law School professor James Forman, Jr. In a 2012 article, “Racial Critiques of Mass Incarceration: Beyond the New Jim Crow,” Forman observes that drug offenders constitute only a quarter of our nation’s prisoners, while the violent offenders make-up about one-half. While sympathetic to the ways in which those living in poor black communities are more likely to end up incarcerated than those in middle-class black communities, it is simply not true that drug policy, targeted at blacks, is driving prison numbers.
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anti-establishment-bernie-sanders-donald-trumpWith Donald Trump and Bernie Sanders outperforming all expectations in the current election cycle, much has been said and written about the widespread dissatisfaction with the so-called “establishment.”

“We’re tired of typical politicians,” they say. “It’s time for real change and real solutions. It’s time to shake up the system!”

Yet, as Jeffrey Tucker points out, blind opposition to the status quo, no matter how bad it may be, is not the same as supporting liberty.

The state power we oppose is not identical to the establishment we reject. You can overthrow the establishment and still be left with a gigantic machinery of legalized exploitation. All the agencies, laws, regulations, and powers are still in place. And now you have a problem: someone else is in charge of the state itself. You might call it a new establishment. It could be even more wicked than the one you swept away.

Indeed, it usually is. Maybe always.

Or, as Peggy Noonan recently wrote, considering the prospect of a completely dismembered GOP: “Something important is ending. It is hard to believe what replaces it will be better.” (more…)

single-payerA plurality of Americans support “Medicare for All”, legislation endorsed by Bernie Sanders and other Democrats that would establish a universal single-payer health care system in the U.S. At least they do until they find out what “single-payer” really means.

A recent AP poll found that 39 percent support and 33 oppose replacing the current private health insurance system in the U.S. with a single government-run and taxpayer-funded plan like Medicare for all Americans that would cover medical, dental, vision, and long-term care services. (Another 26 percent neither support nor oppose the change.)

But the same percentage (39 percent) opposed single-payer when it was found that it would cause their own taxes to increase or they’d need to give up other coverage, like health insurance provided by their employers. In both cases, about 4 out of 10 flipped to opposition when they discovered that caveat.

Even higher numbers opposed the plan if it would lead to longer wait-times for non-emergency medical services (47 percent) or if it took longer for new drugs and treatments to become available (51 percent).

“People say they believe in a principle, but when you describe the policy, it often loses support because they don’t like that there are side effects,” said Robert Blendon, a professor who tracks public opinion on health care at the Harvard T.H. Chan School of Public Health.

So what exactly would an American version of single-payer plan look like?
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The Blue MarbleYesterday I had the pleasure of taking part in a panel discussion at Calvin College, hosted by the Paul B. Henry Institute, focusing on challenges facing the next president. The topic of this inaugural panel for the series was “The Environment,” and there was what I thought was a very worthwhile conversation with Jamie Skillen of Calvin’s Geology, Geography and Environmental Studies department, moderated by Micah Watson of Calvin’s political science department.

I had the chance to prepare some opening remarks, and I ordered them as five basic theses each paired with its own corollary. To wit:

Thesis 1: Our world belongs to God. Corol. God’s world belongs to us.

Thesis 2: Humans have a unique stewardship responsibility. Corol. Humanity is of unique significance in the world.

Thesis 3: Stewardship involves being productive. Corol. A clean environment is a costly good (cf. Cornwall Declaration).

Thesis 4: Economic and environmental stewardship, rightly understood, are not fundamentally opposed. Corol. Short-termism is the enemy.

Thesis 5: Good stewardship of fossil fuels is the key environmental challenge today. Corol. Nuclear has to be part of the solution for transcending fossil fuels.

coal_power_plant

What just happened?

On Tuesday the Supreme Court temporarily blocked the Obama administration’s effort to regulate emissions from coal-fired power plants. The vote was 5-to-4, with the court’s four liberal members dissenting, to put a temporary halt on the implementation of an Environmental Protection Agency (EPA) rule change.

Why is this significant?

As the New York Times notes, the Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court:

“It’s a stunning development,” Jody Freeman, a Harvard law professor and former environmental legal counsel to the Obama administration, said in an email. She added that “the order certainly indicates a high degree of initial judicial skepticism from five justices on the court,” and that the ruling would raise serious questions from nations that signed on to the landmark Paris climate change pact in December.

In negotiating that deal, which requires every country to enact policies to lower emissions, Mr. Obama pointed to the power plant rule as evidence that the United States would take ambitious action, and that other countries should follow.

What was the EPA rule change?

In June 2014, the EPA issued a proposed rule change on “emission guidelines for states to follow in developing plans to address greenhouse gas emissions from existing fossil fuel-fired electric generating units.”

Specifically, the EPA is proposing state-specific rate-based goals for carbon-dioxide emissions from energy producers (mostly from 600 coal-fired power plants) and setting guidelines for states to follow in developing plans to achieve new state-specific goals.

Is this is an important change?
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fy2017-budgetWhat is the President’s budget?

Technically, it’s only a budget request—a proposal telling Congress how much money the President believes should be spent on the various Cabinet-level federal functions, like agriculture, defense, education, etc. (A PDF of the 182 page document can be found here.)

Why does the President submit a budget to Congress?

The Congressional Budget Act of 1974 requires that the President of the United States submit to Congress, on or before the first Monday in February of each year, a detailed budget request for the coming federal fiscal year, which begins on October 1.

What is the function of the President’s budget request?

The President’s annual budget request serves three functions:
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