There Is a Liberal Answer to Elon Musk | The Ezra Klein Show
There Is a Liberal Answer to Elon Musk | The Ezra Klein Show
https://www.youtube.com/watch?v=VwjxVRfUV_4
Tag: regulation
Is the Jones Act Unconstitutional?
“Passed in 1920, the Jones Act severely limits competition in the American shipping market by requiring that ships operating between U.S. ports be American-built, American-crewed, and American-flagged. The number of ships that meet the Jones Act’s standards has been declining for decades, and now fewer than 100 are in operation. Anyone who wants to ship goods—including rum—from Hawaii, Puerto Rico, or other outlying U.S. territories to the mainland is required to use one of those few dozen vessels.
Unsurprisingly, the lack of competition drives up shipping costs. The lawsuit points out that it costs roughly three times as much to ship rum from Hawaii to Los Angeles as it does to ship the same goods from Los Angeles to Australia—an international route where greater competition keeps prices lower, even though the trip is significantly longer.”
https://reason.com/2025/02/25/is-the-jones-act-unconstitutional/
Trump Administration Moves To Streamline Environmental Reviews
“The rule intends to reduce federal bureaucracy by reverting the mission of CEQ to its origins. The agency, which was created with the passage of NEPA, was originally intended to advise the executive branch on environmental matters and NEPA implementation. In 1977, President Jimmy Carter signed an executive order that required federal agencies to comply with NEPA regulations published by the CEQ. Since then, the council has been the guiding agency for the federal government’s NEPA reviews.
Trump’s executive order reversed Carter’s, which rescinded CEQ’s regulatory authority over other federal agencies. The proposed rule, if implemented, would not strike down NEPA altogether (this would require congressional approval). Instead, it would remove CEQ’s NEPA regulations from the federal register and allow federal agencies to use their own rules to comply with the law. Many agencies, including the Department of Energy, the Department of Housing and Urban Development, and the U.S. Forest Service, already have their own NEPA regulations in place.
Any effort to streamline the NEPA process should be welcomed by all. Since its passage in 1969, the law has become a redundant, bureaucratic nightmare that has slowed down or killed key infrastructure, energy, and environmental projects.”
https://reason.com/2025/02/25/trump-administration-moves-to-streamline-environmental-reviews/
Elizabeth Warren’s Hubris Allowed Trump To Defund the CFPB
“Unlike every other department and agency within the federal government, the CFPB is not funded via congressional appropriations. Instead, its funding flows directly from the Federal Reserve. Each year, the White House submits a budget to the Federal Reserve, and the central bank hands over the necessary amount—$729.4 million last year, in case you were wondering.
For a long time after the CFPB was created in 2010, there were serious questions about the constitutionality of that structure. That finally got resolved last year, when the Supreme Court ruled that Congress was within its powers to hand off the purse strings. So, funding the CFPB via the Federal Reserve is not unconstitutional—it’s just unorthodox and foolish.
Here’s where the hubris enters the story. When Warren and Obama created the CFPB, they designed that unorthodox funding structure specifically to prevent a future Republican-led Congress from trying to defund the bureau. Remember, this was in the age when Republicans were running around the country telling voters they intended to repeal Obamacare too. By isolating the CFPB from Congress’ budgetary powers, Warren was trying to make it invulnerable to attack.
Instead, she simply gave it a fatal flaw.
Earlier this week, the Trump administration submitted its CFPB funding request to the Federal Reserve. It asked for…$0.
“Pursuant to the Consumer Financial Protection Act, I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties,” wrote Russ Vought, director of the White House’s Office of Management and Budget (OMB), wrote on X on Saturday night. “The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”
That appears to be the end of the CFPB, at least until a Democrat returns to the White House. Trump will need an act of Congress if he seriously wants to abolish the Department of Education, for example, and even minor spending cuts being made across the executive branch will eventually need congressional or legal consent to be permanent. But there should be no serious questions about whether the president can unilaterally defund the CFBP. Congress has no role to play in that fight.”
https://reason.com/2025/02/13/elizabeth-warrens-hubris-allowed-trump-to-defund-the-cfpb/
Senate votes to overturn CFPB overdraft rule, in new blow for agency
“The Senate voted 52-48..to overturn a Consumer Financial Protection Bureau rule capping the overdraft fees that banks can charge, in another blow to the beleaguered agency.
The resolution under the Congressional Review Act now heads to the House, where the Financial Services Committee approved a companion bill on a 30-19 vote earlier this month. CRAs both invalidate regulations and preclude future administrations from introducing “substantially similar” proposals.”
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“The Biden administration finalized the overdraft rule — part of its campaign against so-called junk fees — in December, to the chagrin of Republicans who had asked financial regulators to pause rulemaking after the election until the new administration was sworn in. Banks, which say the rule would limit their ability to offer overdraft coverage, fiercely opposed the regulation and sued to stop it hours after it was finalized.”
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“Under the rule crafted by former CFPB Director Rohit Chopra, banks and credit unions with more than $10 billion in assets would have three options when a consumer overdraws their account: charging $5; charging a fee that covers no more than costs or losses; or disclosing the terms of a profit-generating overdraft loan as they would with other loans.
Sen. Josh Hawley (R-Mo.), the lone Republican to vote against overturning the rule, said the regulation would “save the average working class household something like $265 a year.”
“I do not want to give big banks the ability to charge people outrageous sums of money,” Hawley said. “Under this… they can charge whatever their expenses are on an overdraft, and if that’s more than $5 per overdraft, they’re allowed to charge that, but they’re not allowed to charge anything more.”
Banks currently charge an average fee of $35 to extend overdraft services. The CFPB estimated the rule would save consumers $5 billion in fees per year.”
https://www.politico.com/live-updates/2025/03/27/congress/senate-overturn-cfpb-overdraft-rule-00251896
Thank Jimmy Carter for Cheap Airfare
“Before deregulation, a cross-country flight could cost thousands of dollars (inflation adjusted) and would take all day. Afterward, travelers benefited from myriad choices that dropped prices and promoted innovation in scheduling and aircraft design.
It’s not as bougie to fly these days, but almost everyone can now afford to do it. Yet the nostalgia never ends. “The professor obviously never talked to passengers, pilots, flight crews, investors and airline executives,” author Rene Henry argued last year. “All were happy with regulation and the way things were.”
Of course, passengers, pilots, airline executives, and investors liked the old system. Passengers were usually wealthy or engaged in business travel. Airlines didn’t have to worry about upstart competitors. Investors were largely guaranteed a huge return. For the rest of Americans, well, they were stuck taking Greyhound or driving. The number of airline travelers increased from 383 million in 1970 to 4.4 billion today.”
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“Carter also signed laws deregulating trucking, rail, and telecommunications, which paved the way for transformative innovations that have vastly improved our lives. “He set up cabinet-level oversight councils to review the new agencies’ most important regulatory proposals and to encourage more cost-effective forms of regulation,” wrote Susan Dudley in an article appropriately title, “Jimmy Carter, The Great Deregulator.”
Many of us remember when Vice President Al Gore, who during a 1999 interview when he was running for president, boastfully said, “I took the initiative in creating the Internet” based on legislation he authored in Congress. Carter never claimed to help create the resulting technologies, which emanated from private-sector savants. But he helped enable everything from FedEx to the iPhone by dismantling government rules that impeded these developments.
“Freight deregulation was key to our modern, robust supply chains where customers can find just about anything in retail stores across the country, and next-day shipping is the norm,” explained the transportation journal Freight Waves in its remembrance of Carter.
Many progressives and populists now complain about the results of these emergent industries as they ramp up antitrust efforts and wax poetically about an ideal past that never existed. Criticize Carter if you choose, but much of the progress we take for granted would never have emerged without deregulation. He wasn’t only a fine man, but a notable president.”
https://reason.com/2025/01/10/thank-jimmy-carter-for-cheap-airfare/
Regulations Keep Millions of Bedrooms Empty During a Housing Crisis
“in 23 of the 30 largest U.S. cities, there are laws that limit occupants deemed “unrelated,” defining a “family” only as a group whose members are related by blood, marriage, or adoption. In St. Louis, no more than three unrelated persons may live together. In Sugar Land, Texas, the limit is four. Private homeowner associations may be even more strict. In the Chase Oaks Homeowners Association in Plano, Texas, a “household” can comprise no more than two unrelated persons, though there is an exception for live-in employees.
Those who would like to form a household of five single adults or multiple unmarried couples in order to share costs are not permitted to do so—no matter how many bedrooms are available. These relics stand in the way of allowing the widowed, divorced, and never-married to build households.”
https://reason.com/2025/01/17/regulations-keep-millions-of-bedrooms-empty-during-a-housing-crisis/
How marijuana legalization played itself
“States’ efforts to create and then tightly regulate legal markets for pot have, ironically, made the black market for weed bigger than it’s ever been.”
https://www.vox.com/the-highlight/379796/marijuana-legalization-black-market-drug-war-raids
The Hidden Costs of Capping Credit Card Interest Rates
“The current average credit card interest rate is 21 percent, but it didn’t get there overnight. In 2008, the average rate was 14 percent, at a time when the savings rate was much lower and consumers were overextended. In 2009, a Democratic supermajority in Congress passed the CARD Act, bringing a bevy of new regulations for credit card companies, such as requiring advance notice of any rate increases and limitations on fees for late payments.
Interest rates began rising immediately following the passage of the CARD Act and continued to rise as the risk-free rate—the Federal Reserve’s overnight lending rate, currently about 4.75 percent—fell to 0 percent throughout most of the 2010s. Objectively, credit card interest rates are high today, but they are arguably high as a direct result of legislation passed at the end of the 2000s. Capping credit card interest rates is simply an intervention to correct the results of previous interventions.”
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“There is a reason that credit cards carry a higher average interest rate than mortgages (7 percent) or car loans (8 percent). Mortgages and car loans are secured lending—the bank has collateral in the event of a default which increases recovery rates. Credit card borrowing is unsecured lending—lenders rely on nothing more than trust in the borrower. When losses occur, they are total and catastrophic. Credit card lending is inherently risky.
The vast majority of borrowers are unprofitable at a 10 percent interest rate. If credit card interest rates were capped at 10 percent, it wouldn’t just disrupt individual finances—it could destabilize the entire credit system. Major credit card lenders, such as Capital One Financial, would likely terminate the accounts of millions of their less creditworthy customers, which could mean anyone with a credit score of 780 or lower. To the extent possible, they might introduce new fees to make up for the loss of interest revenue, but the Consumer Financial Protection Bureau is already taking a hard look at late fees, which can be large relative to small credit card balances.
Customers who lose access to credit would have to resort to cash or debit cards—and find that it is hard to function in modern society without a credit card. Even renting a car or getting a hotel room are activities that require a credit card.”
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“Interest rates are prices—the price of money—and all prices are signals. Capping credit card rates might sound like a win for consumers, but in practice, it’s a lesson in unintended consequences. Policymakers must tread carefully, weighing the broader economic impacts before introducing well-intentioned but potentially devastating reforms.”
https://reason.com/2024/12/04/the-hidden-costs-of-capping-credit-card-interest-rates/
Cigarette Taxes and Regulations Continue To Fuel a Thriving Black Market
“If you want to create a black market in a perfectly legal product, just make regulations and taxes so onerous that many people prefer to buy from illegal vendors to escape being hassled and mugged by the powers that be. As a new study reveals, that’s certainly the case with cigarettes, which remain available for sale across the United States but with much of the trade continuing to involve smokes smuggled from one jurisdiction to another. Since busybody politicians refuse to learn from the ongoing trade, this is a tempting business opportunity for risk-tolerant entrepreneurs as well as low-tax jurisdictions.”
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“”As tax rates increase, consumers and suppliers search for ways around these costs. In cigarette markets, consumers tend to shop across borders where the tax rates are lower and dealers develop black and gray markets to sell illegally to consumers, paying little or no tax at all.””
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“At $3.51 per pack, Massachusetts isn’t even the most heavily taxed state when it comes to cigarettes, nor does it have the largest black market in tobacco products. That honor belongs to New York, which last year raised its tax rate to $5.35 per pack (New York City adds another $1.50).
“New York has the highest inbound smuggling activity, with an estimated 54.3 percent of cigarettes consumed in the state deriving from smuggled sources in 2022,” note Hoffer and Macumber-Rosin. “New York is followed by California (46.7 percent), New Mexico (41.2 percent), Massachusetts (39.7 percent), and Washington (36.8 percent).”
The cigarette-tax study authors add that because their tax rates drive people to purchase their smokes from illicit dealers, high-tax states suffered a revenue hit in 2022 of more than $5 billion. Since 2007, they’ve lost out on more than $79 billion.”
https://reason.com/2024/12/06/cigarette-taxes-and-regulations-continue-to-fuel-a-thriving-black-market/