“The Biden administration, perhaps worried about the political toll that rising food prices could extract in next year’s midterms, announced plans earlier this month to offer up to $500 million in loan guarantees to beef producers. That’s on top of $500 million approved as part of the $1.9 trillion American Rescue Plan that was supposed to “expand processing capacity and increase competition in meat and poultry” industries, according to the U.S. Department of Agriculture.
The second prong of the White House’s plans seems to involve shaming meat-processing companies. “Just four large conglomerates control the majority of the market for each of these three products (beef, pork, and poultry), and the data show that these companies have been raising prices while generating record profits during the pandemic,” Brian Deese, director of the White House’s National Economic Council, said during a press briefing last Friday, the Detroit Free Press reports.
Taken together, the White House’s approach to high meat prices can be summarized as an argument for greater government subsidies based on the idea that stimulating more competition in the meat-packing industry will expand supply and reduce bottlenecks.
But, as David Frum details in The Atlantic today, there are some good reasons to be skeptical of this argument. For starters, it takes about $200 million (and several months, if not longer) to build a single new meat-processing plant. That means the Biden administration’s new loan programs will not purchase much additional capacity, and whatever gains are made will not happen immediately. Even if the plan is successful, smaller producers will likely need ongoing support beyond the initial loans—if there was a market for more, smaller meat processors, the private sector would be investing in them already.
“There’s a real risk,” writes Frum, “that the initial commitment of $500 million in aid and loan guarantees to small packers will expand into continuing intervention in the marketplace to keep smaller competitors in business in the face of the higher efficiency and lower prices of the big packers.””
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“Offering $500 million in loan guarantees to anyone who wants to build a new meat-processing plant isn’t going to address the supply chain problems at the existing plants or end the Western drought.
Higher prices, while politically difficult for the Biden administration, will send signals up the supply chain that result in more workers being hired and more cows being raised.”
“Tenants in newly seized units obviously benefit from the lower rents that would come from government ownership. Everyone else would be worse off, as they’d be forced to compete for a smaller share of private units.
This is in effect what happened with Berlin’s brief experiment with a law that froze rents at apartments built before 2014. Rents did indeed stop rising in regulated units, benefiting the tenants who lived in them. But prices shot up dramatically for unregulated units. (In April 2021 Germany’s constitutional court struck down Berlin’s rent control.)
The number of regulated units on the rental market also collapsed, while new listings for unregulated units weren’t enough to pick up the slack.
The rent control represented “a windfall to one group of tenants: those, whether rich or poor, who are already ensconced in regulated apartments,” wrote Bloomberg columnist Andreas Kluth in March. “Simultaneously, they hurt all other groups—especially young people and those coming from other cities—by all but shutting them out of the market.”
There is robust evidence that new housing, even expensive new housing, makes cities more affordable for everyone. Berlin’s leaders should consider ways to boost housing production so the city can continue to grow and thrive, instead of just redistributing existing units to benefit a minority of incumbent renters.”
“The simplest way to understand economics is that it is a reckoning with unavoidable tradeoffs. If you spend money on something, you may obtain something in return—but you lose the ability to use those resources on something else. In the world of politics, economics helps us weigh the merits of those tradeoffs. It answers the question: Do the benefits of a policy outweigh the costs? Sometimes the benefits are larger. Sometimes they are meager or even nonexistent. But there are always costs. To acknowledge this is merely to acknowledge reality.”
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“White House press secretary Jen Psaki responded to a question about the tax impact of the $3.5 trillion spending plan now working its way through Congress by declaring that “there are some…who argue that in the past companies have passed on these costs to consumers…we feel that that’s unfair and absurd and the American people would not stand for that.”
When taxes are raised on corporations—the “companies” in Psaki’s response—corporations often respond by passing that tax on to others. In some cases, they pass costs to consumers. In others, as the Cato Institute’s Scott Lincicome wryly notes on Twitter, they reduce the amount they would have otherwise spent on wages. They have to pay more to do business, and so they make adjustments accordingly. Costs create consequences and tradeoffs.
Empirical research has consistently shown that a large portion of corporate tax increases is actually paid by labor down the line. There are some reasonable academic debates about the precise percentage of the tax paid by labor, and how that might change under certain circumstances. But there is little real debate about whether or not some of the costs are passed on. The point is that it happens. Workers, not owners, pay at least some share of higher corporate taxes.”
“In response to Australian court decisions holding media companies legally liable for the comments by users, CNN has blocked access to some of its Facebook pages from users in that country.
This is an inevitable outcome of a bad decision and a reminder of why it’s important not to try to force government-mandated moderation policies onto massive social media platforms that will inevitably lead to either censorship or lack of access to information.”
“The Seattle City Council might have found a clever way around Washington state’s ban on local rent control policies. On Monday, it passed two bills that respectively require landlords to give generous notice to their tenants of any rent increases and to provide relocation expenses to low-income renters who do move in response to large rent hikes.
Current city and state law require landlords to give their tenants 60 days’ notice of any rent increase. One bill passed by the council would increase that notification period to 180 days, likely the longest notification period in the country.
And if a low-income tenant decides to move in response to a rent increase of 10 percent or more, landlords will be obligated to provide them with “economic dislocation relocation assistance” equal to three months’ rent, thanks to another bill passed by the council on Monday.
Both are the handiwork of Councilmember Kshama Sawant, a member of the Socialist Alternative party, who argues the twin bills are needed to protect tenants from a post-pandemic upswing in rents—and from capitalism more generally.
“Today’s victories will benefit tens of thousands of renters in Seattle, who are facing skyrocketing rent increases from profit-hungry corporate landlords and the venture capitalists and big banks who are [fueling] a speculative bubble,” said Sawant after the bills passed.
Landlords were less pleased with the bills’ passage, arguing during public comment that they’d raise their costs of doing business and are, per the Seattle Times, tantamount to rent control.
That latter charge could open up the new bills to legal challenges.
Washington state law preempts municipal governments from enacting laws “which regulate the amount of rent to be charged” and instead reserves that power under the state government.”
“the country has long waxed and waned on whether to require kids to get vaccinated. School vaccine requirements have been with us a long time — nearly as long as public schooling itself. Smallpox vaccination — the only vaccine that existed early in the history of public education — was required for entry into Boston public schools in 1827. But for much of American history, mandates were inconsistently applied across geography and tended to come and go over time. For example, Washington and Wisconsin ended school vaccination requirements in 1919 and 1920, respectively, and during the 1920s, the Utah and North Dakota legislatures passed laws forbidding compulsory vaccination.
But mandates became more of a mainstay in the late 20th century, when a series of school-based measles outbreaks swept the nation in the 1970s — and it quickly became clear that vaccines could help. In Texarkana, a city split by the Texas-Arkansas border, the Arkansas side had a vaccine mandate and fared far better than the Texas side, which had no mandate. By 1980, every state had some kind of compulsory vaccination for school-age children. Annual cases of measles dropped from tens of thousands in the 1970s to fewer than 2,000 by 1983. During the 20th century, measles infected an average of more than 500,000 Americans each year. In 2005, after decades of school vaccine mandates and vaccination rates higher than 90 percent, it infected 66 people. Vaccines reduced the spread of disease, and making the vaccines mandatory all but eliminated it.”
“Anti-Black habits of disinvestment and plunder continue to this day. Government at all levels overinvests in affluent white space and disinvests in Black neighborhoods, with the exception of excessive spending on policing and incarceration. Many current public policies and processes encourage rather than discourage racial segregation. And competition between communities of abundance and communities of need sets up a budgetary politics in which affluent spaces and people usually win out. The end result is more residential sorting: A recent comprehensive analysis by the Othering and Belonging Institute found that 81 percent of metropolitan regions with a population above 200,000 were more segregated in 2019 than they were in 1990.”
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“I have identified three primary processes through which the ‘hood and affluent white space persist: boundary maintenance, opportunity hoarding and stereotype-driven surveillance.
Boundary maintenance consists of intentional state action to create and maintain a racialized physical order. Over a century, it has included racially restrictive covenants, exclusionary zoning that limits where multi-family buildings can be built, urban “renewal” projects that removed Black residents, intentionally segregated public housing, an interstate highway program laid to create racial barriers, endemic redlining, as well as disinvestment in basic services such as schools and sewage in Black neighborhoods.
While not all of these practices continue now, the federal government still invests in segregation.”
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“The federal government also funnels about $10 billion annually through the Low-Income Housing Tax Credit program for affordable housing construction. But it mostly results in construction in poor communities that already have more than their fair share of affordable housing. Nationally, only about 17 percent of LIHTC projects are built in high-opportunity neighborhoods with high-performing schools, low crime and easy access to jobs. That keeps those Americans who need affordable housing concentrated in the same low-opportunity areas.
Another program, HUD’s Housing Choice Vouchers, provides rental assistance to low-income tenants, but the program does not disrupt entrenched racial and economic segregation. Most Black and brown voucher holders land in low-opportunity areas, where more than 20 percent of residents are poor, while white voucher holders tend to find rentals in lower-poverty areas.”
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“While the vast majority of white Americans reject segregation in public opinion surveys, in practice their willingness to enter or remain in a neighborhood declines sharply as the percentage of Black neighbors increases, studies have found. The average white person lives in a neighborhood that is 76 percent white. Although most Black Americans no longer live in high-poverty Black neighborhoods, those ‘hoods persist, as does the architecture of segregation. About half of all Black metropolitan residents live in highly segregated neighborhoods.”
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“intentional segregation of Black people in the 20th century shaped development and living patterns for everyone and put in place an infrastructure for promoting and maintaining segregation that lives on. Racial steering by realtors who nudge homebuyers into segregated spaces, discrimination in mortgage lending, exclusionary zoning, a government-subsidized affordable housing industrial complex that concentrates poverty, local school boundaries that encourage segregation, plus continued resistance to integration by many but not all white Americans — all are forms of racial boundary maintenance today.”
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“The segregation of affluence facilitates opportunity hoarding, whereby wealthy neighborhoods enjoy the best public services, environmental quality and private, public and natural amenities, while other communities are left with fewer, poorer-quality resources. Worse, suburban-favored quarters are subsidized by the people they exclude: Through income and other taxes, people of all racial and class backgrounds who live elsewhere help pay for the roads, sewers and other infrastructure that make these low-poverty, resource-rich places possible.
This pattern of overinvestment in exclusionary, predominantly white space and disinvestment or neglect elsewhere is replicated within cities across the country. In her book Segregation by Design, Jessica Trounstine amasses empirical evidence to support her theory that segregation creates a city politics that reproduces inequality — a racial hierarchy of favored and disfavored residents. After local governments deployed land use, slum clearance and other policies to tightly compact Black Americans beginning in the early 20th century, those residents also were denied adequate sewers, roads, garbage collection and public health services. Segregation institutionalized the preferences of white property owners, protecting their property values and giving them exclusive access to high-quality public amenities — a nefarious pattern that continues. Today, business elites bend local government to their will, ensuring that the luxury residential and commercial development they want gets built, regardless of competing community and housing needs.”
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“a 2019 Urban Institute study found that majority-white neighborhoods in Chicago received about three times more public and private investment than majority-Black neighborhoods.”
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“Chicago had closed 70 public schools over eight years by 2012. Then, in 2013, Mayor Rahm Emanuel closed 50 additional public elementary schools — the largest one-time mass school closure in the country. The Great Cities Institute at the University of Illinois at Chicago found that schools with large numbers of Black students had a higher probability of closure than other schools with comparable test scores, locations and utilization rates.
As school infrastructure evaporated in Black ‘hoods, the city invested in new options elsewhere. An investigative report by a local public radio station in 2016 revealed that new school building expansions after the 2013 closures were “overwhelmingly granted” to specialized schools that serve relatively low percentages of low-income and Black students.”
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“The Center for Investigative Reporting released a study in 2018 that analyzed 31 million records revealed by the Home Mortgage Disclosure Act and found a disturbing pattern of denials by banks of Black and Latino applicants for traditional mortgages where white applicants with similar qualifications would be accepted. This modern-day redlining persisted in 61 metro areas, from Atlanta to Detroit, Philadelphia to San Antonio. The greater the number of Black or Latino people in a neighborhood, the more likely a loan application would be denied.”
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“A recent study by the Center for Municipal Finance found that cities are taxing owners of low-valued properties at higher rates than they should relative to actual land values, while taxing owners of high-valued properties at lower rates than they should.”
“according to some top environmental economists, we have good reason to believe the true cost of emitting carbon is actually a lot higher than that price tag suggests.
There are a couple of reasons for that. First, until now, the economists who calculated the SCC had barely factored in one of the biggest harms that climate change can cause: human mortality. Second, the way the SCC had been calculated rested on a problematic premise: that damage in the future counts for significantly less than damage in the present.”
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“People do tend to value the present more than the future. You may grab that chocolate chip cookie today, for instance, even though you know it means you’ll have to lean into the diet extra hard tomorrow. But that doesn’t necessarily mean our climate models should follow suit. In fact, some philosophers think baking in people’s rate of pure time preference is a terrible idea.
“We’re basically just measuring a form of human impatience and irrationality, then trying to add it into political decision-making,” Toby Ord, a senior research fellow at the Future of Humanity Institute at Oxford University, argued on the 80,000 Hours podcast in 2017. “It doesn’t seem to be the kind of thing that one should be respecting at all. It’s just like finding a cognitive bias that we have, and then adding it back into your economic analysis in order to make your analysis biased in the same way.””
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“Now, that’s not to say the pure rate of time preference should be absolutely zero. As Carleton and Greenstone wrote, “Perhaps the most compelling explanation for a nonzero pure rate of time preference is the possibility of a disaster (e.g., asteroids or nuclear war) that wipes out the population at some point in the future, thus removing the value of any events that happen afterwards.” Ord has made the same argument, suggesting we should discount the future by the extinction risk to humanity, and no more.
Whatever you think about discounting, intellectual honesty requires us to admit that how we choose to answer the question of what we owe to future generations gets baked into the discount rate and thus into the SCC. And any answer to that question will be a subjective moral judgment, not some objective mathematical truth.”
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“even the first purely economic reason to discount the future (society will be wealthier in the future, and damages matter less the wealthier you are) is not some objective truth.”