“the government currently has no idea where broadband actually is and is not available.
The government defines broadband as any high-speed internet connection that is always on without needing to dial up.”
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“To determine what areas need investment, the government relies on maps from the Federal Communications Commission (FCC). But despite costing $350 million, the FCC’s maps are notoriously unreliable and have been for many years. In 2021, The Washington Post noted the maps are based on census data, so “if even one household in a census block—a statistical area that conveys population data—has broadband available, then the agency considers the entire group served. In rural areas, one block could cover dozens of square miles.” The FCC’s maps also don’t take into account physical impediments, like trees and mountains, which can disrupt wireless signals.
As Karl Bode noted this week at Techdirt, the FCC’s maps were so unreliable that multiple states took it upon themselves to draw up their own. Vermont determined that more than 18 percent of its residents lack broadband access, while the FCC’s newly redrawn maps put Vermont’s shortfall at only 3 percent.
Now, with more than $40 billion in state grants on the line, states are scrambling to challenge the new maps, which cost the FCC nearly $45 million in addition to the $350 million previously spent.”
“The Biden administration’s rush to engage in more centrally planned industrial policy, particularly when it comes to the production of semiconductor chips and other high-tech manufacturing, has always been framed as an attempt to counter China.”
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“To defeat China, the argument goes, the U.S. must adopt the tactics of the Chinese Communist Party, at least when it comes to high-end manufacturing.
How’s that going on the far side of the Pacific? Not so great, actually.
“China is pausing massive investments aimed at building a chip industry to compete with the U.S.,” Bloomberg reported last week. “Top officials are discussing ways to move away from costly subsidies that have so far borne little fruit and encouraged both graft and American sanctions, people familiar with the matter said.””
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“China might be relatively new to this game, but industrial policy has a long, mostly ugly history in other parts of the world—including right here in the U.S.—and there’s little reason to think that this time will be different.
China’s shift away from industrial policy seems to be driven, according to Bloomberg, by the strain that COVID-19 has put on the country’s economy and fiscal policies rather than by any sudden rediscovery of the benefits of free markets. Even so, there’s a certain irony to the Chinese government changing course just months after U.S. policy makers decided that we had to copy China in order to compete with it.”
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“The Bloomberg report says Xi is becoming frustrated about how tens of billions of dollars dumped into the semiconductor industry in recent years haven’t produced major breakthroughs that allow the country’s domestic chipmakers, like the Semiconductor Manufacturing International Corporation, to compete with the world’s top producers.
America’s foray into high-tech industrial policy seems to be on the same trajectory. The New York Times, for example, reported last week that “new chip factories would take years to build and might not be able to offer the industry’s most advanced manufacturing technology when they begin operations.” Meanwhile, everything from federal permitting requirements to America’s broken immigration system is creating huge hurdles for the semiconductor manufacturers that are planning to expand their capacity in the United States.”
“massive flight cancelations from are a good reminder of what a raw deal those bailouts were for taxpayers and consumers. Rather than allow the shock of the pandemic to create some needed disruption in the passenger airline industry, Congress chose to prop up a messy status quo.
The $7 billion Southwest received from three COVID relief bills allowed ineffective practices at the airline to persist. Allowing the competitive pressures to more freely do their work might have spurred some productive change within Southwest.”
“If wealthy homeowners want to live in places likely to experience severe weather events, they’re free to do so, but it shouldn’t be the federal government’s responsibility to help protect them against the consequences.”
“Danny had chronic, searing pain from an electrocution accident years earlier. For treatment, he and Gretchen, his caretaker, traveled regularly from their home in Georgia to a pain management physician in Beverly Hills, California, to receive pharmaceutical fentanyl. But on November 1, DEA agents suspended the Beverly Hills physician’s narcotics prescribing license, having decided that he was inappropriately prescribing painkillers. A week later, Danny and Gretchen killed themselves.”
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“It was the most recent of the many dreadful outcomes that follow when cops practice medicine.”
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“The DEA has not formally charged the physician, David Bockoff, who has been practicing medicine with a spotless record in California for 53 years. He was treating many “pain refugees” like Danny: patients with chronic pain, well-managed with opioids, whose previous physicians had either closed after a DEA visit or abruptly cut off their pain medication fearing the wrath of law enforcement.”
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“Today, 38 states have laws on the books that limit the dosage and amount of pain relievers doctors can prescribe to their patients. Many of these laws have cast in stone the Centers for Disease Control and Prevention’s now-discredited 2016 Guideline for Prescribing Opioids for Chronic Pain. The guideline came under so much criticism from pharmacologists, clinicians, and academic physicians that the agency revised it this past November. No matter. The flawed 2016 guideline remains the basis of the prescribing laws in most states. Doctors face losing their licenses or, worse, jail time if they violate these laws.”
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“All 50 states maintain Prescription Drug Monitoring Programs to surveil all prescriptions issued and filled within the state. These primarily serve as law enforcement tools. In most states, police drug task forces use them to go on warrantless fishing expeditions, hoping to find a doctor to bust for “inappropriate prescribing” or a patient they can arrest for “doctor shopping.” These programs have not reduced the overdose rate. If anything, they have driven non-medical users who cannot obtain diverted prescription pain pills to more dangerous drugs in the black market, causing the overdose rate to increase.”
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“opioid-related overdose deaths reached a record high in 2021, exceeding 71,000, 89 percent of which involved illicit fentanyl. Despite a dramatic drop in opioid prescribing, deaths have soared.
According to government data, addiction to prescription pain relievers has been relatively stable at under one percent in this century. Chronic pain patients rarely become addicted to opioids. The overdose crisis is a prohibition-induced crisis. Neither the practice of medicine nor the act of self-medication belongs in the realm of the criminal legal system.”
“The American Rescue Plan, intended to stimulate the economy from the effects of the pandemic, was a massive spending package that passed in March 2021. The legislation included $1,400 checks for individuals, expansions to unemployment insurance and child tax credit benefits, and hundreds of billions in aid to state and local governments.
For months, economists have debated the American Rescue Plan’s impact on inflation. While many economists agree that the stimulus law did worsen inflation by giving people more money to spend, they continue to disagree about the extent. The debate is, in part, about what else might be to blame in the United States and globally. Inflation started shooting up in early 2021 after the package passed and has remained stubbornly high since. But even without the stimulus, inflation would have increased. The coronavirus led to factory shutdowns around the world, shipping backlogs, and labor shortages, all of which have strained supply chains and pushed prices higher.
The disagreement essentially boils down to economists’ views on how pandemic-related factors independent of the stimulus, such as a shift to working from home, have contributed to inflation and how unique inflation has been in the United States compared to other countries.”
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“Increased housing costs have been a big driver of inflation — shelter is the largest component of the Consumer Price Index and makes up about 30 percent of overall inflation as measured by the index. Dean Baker, a senior economist and co-founder of the liberal-leaning Center for Economic and Policy Research, argued that new research on housing inflation helped support the idea that price gains were mostly driven by a mass shift to remote work and not the stimulus package. As people shifted to remote work, housing prices went up, and those prices in turn pushed overall inflation higher.
An analysis published by the Federal Reserve Bank of San Francisco on September 26 examined the rapid rise in housing prices and whether remote work, or other factors like fiscal stimulus, led to the increase. The authors — Augustus Kmetz, John Mondragon, and Johannes Wieland — wrote that as more people started working remotely, they sought out additional space at home. That resulted in a spike in housing demand and helped lead to a surge in prices.
The researchers estimated that remote work resulted in house prices rising by about 15 percent from November 2019 to November 2021, which accounts for more than 60 percent of the overall increase in house prices.
“It means we can’t blame the stimulus. Clearly that added to it,” Baker said. “But the main story there is this big switch to working from home.””
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“Holtz-Eakin said it was clear that the package significantly drove up inflation and pointed to research from the Federal Reserve Bank of San Francisco, which published an analysis in March that found that “fiscal support measures designed to counteract the severity of the pandemic’s economic effect” could have “contributed to about 3 percentage points of the rise in U.S. inflation through the end of 2021.”
The analysis — which was written by Òscar Jordà, Celeste Liu, Fernanda Nechio, and Fabián Rivera-Reyes — found that the United States’ “core” inflation, which strips out volatile food and energy prices, rose more quickly in 2021 compared to the average rate of core inflation of other wealthy countries. Compared to the other countries — Canada, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, and the United Kingdom — the United States injected more fiscal stimulus into its economy.
“The difference is really the stimulus in the US,” Holtz-Eakin said.
But Josh Bivens, the director of research at the left-leaning Economic Policy Institute, said that inflation has been ubiquitous “across every advanced economy” since the pandemic began and he didn’t believe the American Rescue Plan was a major contributor to inflation. An analysis published in August by Bivens, Asha Banerjee, and Mariia Dzholos examined the United States’ core inflation from December 2020 to May 2022 and compared it to core inflation in other Organization for Economic Cooperation and Development (OECD) countries. To calculate the rate of acceleration in each country, the researchers took the difference between the “post-pandemic” core inflation and the “pre-pandemic” core inflation using data from 2018 and 2019.
The researchers found that the acceleration in the United States’ core inflation was “on the higher side” but was “far from the top” and not that far above the average for all other OECD countries. All but one OECD country saw an acceleration in core inflation, the researchers found. For example, Canada’s core inflation grew at a slightly slower rate compared to the United States, but Portugal’s sped up faster, according to the analysis.”
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“Bivens also pointed to the Federal Reserve Bank of San Francisco’s research on housing inflation and said that price gains in the United States were mostly driven by pandemic-related events that would have occurred without the stimulus — like supply chain disruptions and increased demand for housing. And although he said he believed the American Rescue Plan had inflationary impacts, the trade-off was necessary to stave off higher unemployment numbers.”
“When it was passed, the law provided subsidies for the construction of a domestic shipping industry, while imposing various employment rules and other shipping regulations. It has been amended in the century since, but it continues to prohibit foreign-flagged ships from traveling between U.S. ports, and many of its wage and labor regulations are still in effect, making it beloved, almost obsessively, by unions.
In at least one way, the Jones Act has served at least part of its intended purpose: It has benefited the domestic shipping industry by shielding it from foreign competition. But it has done so at considerable expense to everyone else.
By restricting and regulating shipping at America’s ports, the Jones Act considerably raises the costs of transporting goods, which in turn raises prices on everything from food to electronics to textiles. In good economic times, the Jones Act is a cost borne by the majority to bolster the fortunes of a few. In periods of global economic instability and high inflation, the Jones Act makes supply chain problems worse and drives prices even higher. On a daily basis, it is a force for impoverishment. ”
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“Just about any time one finds a politician taking credit for specific business decisions by specific companies, one ought to be skeptical, worried, or both. In this case, the proximate cause of much of Biden’s factory-jobs campaigning is the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, a $52 billion package of industry subsidies Biden signed into law in August. Manufacturers who stand to benefit from these subsidies have played along, with Micron’s leadership saying that its facility is “the first of Micron’s multiple planned U.S. investments following the passage of the CHIPS and Science Act.” Micron, however, was publicly teasing the possibility of new manufacturing facilities as early as October 2021, long before the CHIPS Act became law.”
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“Just as the Jones Act ends up distorting the shipping industry, shaping it in ways that make it less flexible and less responsive to genuine consumer demand, we should expect the CHIPS Act to push the semiconductor industry into labor and production decisions intended to satisfy politically determined subsidy requirements rather than genuine market needs. Subsidies are more likely to incentivize inefficiency and dysfunction than genuinely useful production, inflating prices in the process. When subsidies are driving decisions, that means subsidy programs, not end users, are the true customer. “
“The free market’s price system, along with competition by sellers for customers and by consumers for good deals, play an essential role in gathering and processing the information about our economy that is dispersed among millions of buyers and sellers. The resulting prices are a measurement of how much people value goods and services.
In a well-functioning competitive market, this argument continues, these critical price “reports” tell us the most advantageous ways to use finished goods and services, intermediate goods, raw materials, and—importantly—human time and talent, and lead entrepreneurs to produce what we want most intensely as efficiently as possible. In economics terms, prices convey information about scarcities and about wealth-creating incremental substitutions.
It’s a mind-blowing system where, as French political scientist Frederic Bastiat reminded us decades ago, although no one plans it, “Paris gets fed daily.”
Enter Samuel Gregg and his wonderful new book, The Next American Economy. Gregg’s case for the free market goes beyond the classic economic argument.
He writes that “the case for free markets involves rooting such an economy in what some of its most influential Founders thought should be America’s political destiny; that is, a modern commercial republic.” He adds that “politically, this ideal embodies the idea of a self-governing state in which the governed are regularly consulted; in which the use of the state power is limited by strong commitments to constitutionalism, the rule of law, and private property rights; and those citizens consciously embrace the specific habits and disciplines needed to sustain such a republic.”
Yes! I like to believe I’m a great advocate for markets, but whenever I omit these last points, I sabotage my own case. For one thing, terms like “competitive markets” give the impression of a heartless process. But the most important aspect of this competitive process is cooperation.”
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“No serious free marketer believes that markets are perfect. We aren’t utopians. Unfortunately, perfect markets and perfect competition are often the starting point of economic textbooks. This rosy starting point leads many to conclude that when conditions are less than perfect, the best course of action for a correction is government intervention. It’s wrong.
Not only is government itself imperfect, as anyone can plainly see, but the market is a process to find and fix errors. A market imperfection is an opportunity for entrepreneurs to profit. As Arnold Kling recently wrote, “Markets fail. Use markets.” That’s because, Kling adds, “entrepreneurial innovation and creative destruction tends to solve economic problems, including market failures.”
This isn’t to say that the government plays no role aside from protecting property rights. But it means that faith in government intervention should be tempered with an acknowledgment of government’s own flaws, including a tendency to favor one group of people over another and an inability to adapt when policies fail or circumstances change.
The bottom line is that when we talk about the “free market,” it is a shorthand for a combination of institutions that allow people to cooperate, tolerate one another, live in peace, and flourish. As Gregg reminds us, all these elements are a quintessential part of what President George Washington envisioned for the new nation he led and described as “a great, a respectable & a commercial nation.””
“Following months of increasingly contentious head-butting, officials in the mountain town of Vail, Colorado, are moving to seize a property from a local ski resort to prevent it from constructing new housing for its employees.
The property in question is a 5-acre site abutting a frontage road in the eastern part of the 5,600-person ski town. After nearly five years of rezonings, planning, permitting, and litigation, ski resort operator Vail Resorts is ready to move ahead with the $17 million Booth Heights project that would create 165 beds for its work force.”
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“Standing in their way is the town of Vail itself, which filed a petition in Eagle County District Court on Friday to invoke its eminent domain powers to seize the Booth Heights site and hold it as open space”
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“Throughout the process, Vail Resorts has maintained that its project would not harm the area’s bighorn sheep. Plack tells Reason the company has committed to paying $100,000 for habitat restoration and would install barriers around its property to prevent residents and pets from interfering with the sheep.
An environmental impact report prepared for the project concluded that it would not harm the area’s sheep. Vail Resorts notes in a lawsuit challenging the emergency ordinance stopping construction of its project that the town has approved several large homes within the bighorn sheep’s range.”
“Despite their increasingly bitter differences, Democrats and Republicans generally agree that content moderation by social media companies is haphazard at best. But while Democrats tend to think the main problem is too much speech of the wrong sort, Republicans complain that platforms like Facebook, Twitter, and YouTube are biased against them.
The government cannot resolve this dispute and should not try. Siding with the critics who complain about online “misinformation” poses an obvious threat to free inquiry and open debate. And while attempting to mandate evenhandedness might seem more consistent with those values, it undermines the freedoms guaranteed by the First Amendment in a more subtle but equally troubling way.”