Categories
Economics

Deregulate What?

Deregulation is one of those terms people often use as a rallying cry, rather than in a thoughtful discussion.  It has come to be associated with Ronald Reagan and Thatcherism of the 1980s, and people’s opinions on whether deregulation was a welcome freeing of the markets, or government’s abdication of responsibility, generally coincides with their opinion of those leaders.

Note however that in the US, deregulation did not begin under Reagan, but under Jimmy Carter.  Yesterday, we celebrated the 40th anniversary of years of the Staggers Rail Act of 1980, the highly successful deregulation of the rail freight industry. This was sandwiched by airline deregulation in 1979 and the breakup of AT&T’s telecom monopoly in 1984, also considered big successes.

Not all regulation is bad.  But neither is all regulation good.  Many regulations are made in response to crises: for instance the Jones Act (World War I), or the World War II mohair subsidy.  When the crisis is done, they become obsolete.  Other regulations are made by fallible humans who don’t anticipate unintended consequences.  And many regulations are made very intentionally with special interests in mind.  These last should never be made in the first place, but often are.  

The world is ever-changing. Recognizing this, industries such as software make refactoring, and removing obsolete pieces of a system, part of the development process. Similarly, deregulation should not be viewed as a bugaboo, but part of the process to make sure government uses social resources efficiently.

When the world changes, our institutions and laws must change too.

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Categories
Economics

Healthcare is Hard

Healthcare is hard.  Anyone who tells you otherwise is selling something.    

Before we talk about solutions, let’s elucidate goals.  My goals are these:

  1. Universal basic healthcare
  2. Freedom to provide and purchase additional healthcare
  3. A system which controls costs
  4. A dynamic system which encourages innovation including ever better drugs, procedures, and care at ever cheaper cost

We must acknowledge one painful reality: no system is perfect.  Every system has tradeoffs.  We want a system that minimizes tradeoffs, rather than promises some fantasy level of perfection.

We should carefully study other systems around the world, but remember we have our own idiosyncrasies.  A recent paper has suggested that the high cost of US healthcare is due to five factors: traffic accidents, guns, obesity, cigarettes, and drugs. Switching to a national health system or Medicare for All does not cure these problems.

The plan I favor is AEI’s Best of Both Worlds plan, which combines elements of both market and government. One fault of our current system is that healthy people pay more to subsidize the unhealthy.  Often this means healthy people leave the system completely which doesn’t help anyone.  The AEI plan charges them at cost so they stay in the system.  To guarantee universal coverage, the government subsidizes a free basic plan and offers premium support for lower-income people who need more.  The plan would remove barriers to offering longer-term plans, and gets rid of the employer deduction.  Taken together, these provisions would offer universal care at a price society can afford.

Regardless of the plan we adopt, we need to remove regulations that make healthcare even harder than it is.  Examples include:

  1. the employer tax deduction
  2. state licensing requirements which restrict out-of-state and foreign healthcare workers
  3. restrictions on nationwide insurance offerings and long-term health insurance contracts
  4. certificate of need restrictions, which hamper hospitals from expanding

Healthcare is hard. That said, if we can simplify the system through reforms big and small, and ride new technology and market innovation, perhaps it is manageable.  But regulatory change will require politicians to put in a little thought, rather than just spout slogans.

Categories
Economics

New York Politicians to New York: Drop Dead

I’m not sure whether some New York politicians have noticed, but we’re in a huge economic crisis.  We need to do everything we can to help the economy recover.

That’s not what just happened with the Industry City rezoning, where a coterie of New York politicians — including my opponent Jerrold Nadler — egged on by a vocal minority in the community, have killed a project that would have created thousands of jobs.  Lest you think this is an outlier, consider the Amazon site.  Not the project, the site.  The Amazon project was problematic because of taxpayer handouts, but its successor, the Anable Basin project which would create 5000 housing units, is under similar threat.  Its the same story with rezonings in Gowanus, Soho/Noho, and Flushing. It’s gotten so bad that even building housing for low-income LGBTQ seniors on city land is almost impossible. 

New York is New York because it is dynamic, ever reinventing itself, continually incorporating new people, their energy and ideas.  Now any change is labelled evil development and our ability to transform in the face of financial crisis and huge technological change is under threat.  

If we take away New York’s dynamism, it is no longer New York.  Not only will it die, it’s dead already.  Don’t let that happen.

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Categories
Economics

Simplify HIPAA

The conversion of medical records from paper to digital held great promise: quick access to patient records, sharing of medical information, accuracy, and lower cost.  But electronic data systems, by their very nature, are open to abuse. HIPAA was implemented to protect the privacy of personal health information. While protection is necessary, HIPAA has proven complicated, costly, and in fact a double edged sword. 

Have you ever registered at a hospital or medical office prior to a procedure, heard again the familiar privacy questions, delivered the electronic signatures, and said (again) no I do not want printed versions of these statements? Annoying perhaps, but swiftly over. Though there are clearly certain  medical records that should not be shared with certain other parties, the flip side is that information sharing is often key to effective treatment, both individually and on a global scale. Vaccine records are key to public health and should be in a global database. In a pandemic, access to pandemic related medical information is critical. A requirement of individual consent poses a significant roadblock to identification and implementation of processes that would best contain it. More generally, electronic medical records are of inestimable value to medical research, yet complying with HIPAA privacy rules — and additional federal and state regulations — often make data sharing legally and financially prohibitive.

Cost

We are all aware of the high and rising costs of medical care. What is HIPAA’s contribution to these costs? In a 2019 article in the journal Medical Economics, Dr. Kim-Lien Nguyen estimates the actual costs of HIPAA compliance at close to $8.3 billion a year, with each physician on average spending $35,000 annually for health information technology upkeep, costs which are likely passed onto patients. The true costs, however, are unknown and buried under layers of purportedly necessary bureaucracy. These costs do not account for the added stress inflicted upon healthcare clinicians and patients struggling to allow one another access to important and necessary healthcare information (it has not helped that electronic medical records systems have been burdened with providing billing information). Nguyen writes that HIPAA has impeded communication about risks to the public, contributed to inefficient care of patients by limiting physician communication, deterred medical research through the high costs of compliance, and stolen physician time from patients.  

Overall, compliance with HIPAA privacy rules has contributed to unsustainably rising costs and impeded advances in healthcare. In a pandemic, its burdens become even more obvious and will continue to do so as vaccines become available. Drastic measures to simplify and correct impediments imposed by HIPAA are in order. 

Categories
Life

9/11 Remembrance

It rained hard the night of September 10, 2001.  My friend Tim and I went to see Apocalypse Now Redux at the Astoria, New York City’s largest theater.  The rain was torrential and we ran along 44th Street from awning to awning to get to our destination.  The inside of the theater was over air-conditioned as NYC theaters often are.  To keep warm we covered our arms with napkins.  Apocalypse Now was one of our favorite movies — we often spoke together in lines from it — but Redux is real long and I fell asleep at parts.  By the time we left, the rains had stopped.  I took the bus, but Tim insisted on walking. With his long strides and the post-rain congestion, he keep pace for quite a while.

When I woke up the next day, my thoughts were dominated by the proposal I was to give that Friday at a customer.  I was working at a company called Cysive, an internet development consulting firm born of the dotcom era and destined to die with it.  Already the bust had set in, and projects were sparse.  I hadn’t worked on anything since joining the firm in December and this represented a huge opportunity for the office.

My commute involved riding the 1/9 train down from 72nd Street to South Ferry.  Our office was at 17 State Street, on the tip of Manhattan right next to the building which looks like a tin can.  I often hopped on the express from 72nd Street to Chambers but don’t recall if I did that day.  We arrived at the Cortlandt Street–World Trade Center station and everyone got off normally.  But then there was some shouting.  I thought I heard someone yell “HE’S GOT A GUN”.  People rushed back onto the train, then things calmed down and about half of the returnees got off again.  I didn’t think much of it  – this was New York after all.  It was about 8:50.

My first real inkling that something unusual had happened was when I got out of the South Ferry Station and saw I had several messages.  One call was from Karla, my former girlfriend.  After three years together, we had broken up earlier in the summer.  I was on a low minutes plan so was gonna wait till I got to the office to listen to the messages.  When I arrived, a couple of my co-workers, Peter and Sunil, and my boss Pat immediately greeted me with the news that there was a fire or something in the World Trade Center, possibly caused by a small plane crash.  Their description didn’t seem like a major world event, and I now had another thing on my mind besides the proposal — I really needed to go to the bathroom.

The bathroom in our building was in the middle of the building and the concrete gave the sense of a bomb shelter.  I passed a few minutes, gave the toilet a big flush, then returned to the office.  Again I was greeted with news but this time with much more urgency.  There had been a big explosion at the World Trade Center (I had heard absolutely nothing in the bathroom).  Suddenly the proposal’s urgency began to recede.

We went downstairs and people were milling around, agitated.  Some were crying.  I remember hugging a black woman who was distraught.  But I didn’t understand the tears yet.

We started walking up Broadway.  I remember being with Pat and Lloyd. I was thinking of Karla, who worked in the World Financial Center.  As we passed the Fidelity office, I could see that on the television President Bush was speaking about a terrorist attack. Paper was strewn everywhere and was still floating down from the heavens like confetti.  There were other items intermingled: pictures, personal items, a shoe (this being New York I wondered whether it was from the towers or had been there already).

We reached the corner of Liberty Street and stopped.  Before us stood the towers.  Both with huge black smoking holes edged with a ring of fire.  The atmosphere was calm.  Police, people all stood looking up in shock.  There was no crying, hardly any talking.  Just shock.  To see something so iconic, so expected, so everyday to the eyes of a New Yorker suddenly in a state was unthinkable.

It was even more personal for me because I had worked in both towers: during college as an intern at Shearson Lehman Hutton on the 102nd Floor of Tower 1, and on the 95-96th Floor of Tower 2 in 1993-94 at Sumitomo Bank, before they moved office to 277 Park. They had been spooked by the earlier World Trade Center bombing and proved prescient. I also had friends working there too.  I had worked as a consultant at Marsh and McClennan several years back.  At the time their office was in midtown, but several mergers later and they were on my old 96th floor of Tower Two.  I had talked with my old boss, Sue Clyne, about a year earlier about a consulting assignment with them, but nothing had come of it.  As it turned out, Sue was already dead.  The other person I thought about was Jim, another consultant I had become close to during my stint at Marsh.  Luckily, he had been late that morning and saw the events from the Jersey side.

As we stood there, shocked, someone jumped.  It was in the distance, but he seemed a somewhat heavyset man in a yellow shirt.  In my mind I picture John Candy.  I think I heard him scream.  The crowd cried out in horror.

After about twenty minutes, Lloyd looked at me, forlorn, and said let’s go back.  I nodded.  I still thought we’d give our presentation of Friday and the proposal began to again grip my thoughts.  But not for long.  We hadn’t gone two or three blocks back down Broadway when we heard a giant crash.  Another plane?  We had heard all planes had been grounded, but who knows?  People were running panicked and yelling.  Then came a big rumbling cloud of brown smoke from the first fallen tower.  I was still young and in good shape and as I cantered away at 3/4 speed, I felt the strength of my legs and disdain  for the smoke cloud I knew I could outrun.  But then the smoke came from around the block and was before us as well.  We were trapped.  In the seconds it took to enclose us I wondered whether we would suffocate.

The smoke closed around me and suddenly everything was white. I was alone, not being able to see more than a few feet in front of me.  I made my way to the left side of the street then groped my way along the building.  There was a woman in front of me in a skirt also tottering along.  I reached the entrance of the building and entered.  It had a large open atrium where a crowd was taking refuge.  A lone janitor was trying to tell people they couldn’t stay and at one point opened a door to try to usher people out before he was angrily shouted down.

I made my way to the lobby kiosk.  It was attended by an Indian lady who was crying and giving out tissues.  I wondered if anyone was grouping her with the terrorists.  I wondered if she wondered that and was crying out of sorrow or fear or both.

I spent about half an hour in the building.  The staff was giving out masks but becoming more adamant that people couldn’t stay.  Anyway the air was clearing.  I made my way back down to our office and met my colleagues outside.  Already there were bitter jokes about I don’t remember what. Had we adjusted or were still just too shocked to realize the enormity of the circumstances.  When we heard the second tower fall, we barely looked up.  The air began to thicken again, so we headed to the shelter in the building basement.

After about another half hour, we returned to our office where we got on the Internet, emailed headquarters we were alright, and tried to contact our loved ones.  I had an emotional message from my sister asking if I were alright.  I couldn’t reach her but left a message.   Karla called me from a pay phone she had stopped at on her way home.  There was a big line.  She was distraught.  Her office was right near the towers and she had seen many people jump.  She had taken refuge in a church or something near my office for a while but had gotten trampled, and though she didn’t know it yet, had broken her foot.  She said she was heading home.  I thought of going up there to make sure she was alright.

We passed some time in the office surfing the internet.  Outside our building ambulances began to line up.  As it turned out they had little to do. Generally, people either made it whole or they did’t.

It must have been 2 or 3 when Peter and I decided to leave the office and try to walk home to my apartment on West 82nd Street.  The subways were all stopped so it would have been a long trek to his apartment in Brooklyn.  We set out through Battery Park City determined to walk past the towers from along the water.  Battery Park City looked like a war zone, covered in white chalky dust everywhere.  We hardly passed a soul, but as we made our way to the walkway along the water we were stopped by police.  They told us we couldn’t go through, and worse, that we had to get on a boat and get ferried over to Jersey.  When we objected, they said either get on the boat or get arrested.  We got on the boat.

The boat had its share of personalities.  An old Irish lady and her daughter.  The lady was having an anxiety attack and quietly murmuring about getting her medicines.  Some drunk guy kept saying “parking lot, parking lot”, meaning that’s what we should turn the Arab Middle East into and that Palestinians were celebrating in the streets.  He kept throwing beer cans into the river which struck me as somewhat less than patriotic.  No one else shared his anger and at least one quietly whispered to me how silly he thought he was.

The boat made its way to the center of the Hudson.  We were in the midst of a perfect late summer day, temperatures in the 70s, hardly a cloud in the sky… except for the huge brown smoke clouds around the towers.  It reminded me of the pictures of smoking ships at Pearl Harbor.  While we were on the water I reached my dad and he gave me the latest about the other attacks and rumors of planes still unaccounted for.

For some reason our boat wasn’t getting permission to land at Jersey City so they told us they’d try for midtown, which was fine with us, but that was disallowed too, so we ended up in Weehawken.  There we were given the opportunity to ride buses to Giants Stadium, which we politely ignored.  Luckily we were able to get a ride back to Manhattan from a ferry boat whose captain didn’t seem to care much.  Besides us, the only one heading back was a photographer. He had been in town to cover a fashion show, but now had a different subject.

When we got to midtown, contrary to our expectations, empty cabs were everywhere.  We got in with a Nigerian driver who laughlingly complained to us about how he got stuck getting from the Bronx to Manhattan, and how his silly supervisor wouldn’t cut him any slack despite the extraordinary circumstances.  It reminded me of the janitors in the building, and the ships being denied landing. Even in a crisis, some people remain stuck in everyday mode.

We got to my aparment and I reached my sister.  She asked me for a nearby pharmacy so she could get me an antibiotics prescription just in case the planes had been carrying anything biological.

Peter and I picked up the meds from a drugstore on 79th Street, then sat down for dinner outside at Cafe con Leche on Amsterdam Ave.  Everyone was on their cellphones, reassuring friends and loved ones and relating events.  The voices were calm and measured — very un-New York.

The trains were running again so Peter went home.  I heard volunteers were needed so that night I rode my bike downtown, but was stopped at 14th Street and told this was not the case.  This repeated.  In the aftermath, the desire to help out far exceeded what could be done.

The next few days were muddled.  The air quality downtown was bad so we all stayed home.  Emails came from near and far, particularly Japan where I have friends.

A couple of weeks later I did the annual New York Cycle Club Escape New York century ride.  Its name took on added significance.  There we exchanged wild stories, such as that of someone who had been on the roof of the towers and floated down on a metal plate – untrue of course.

At karaoke, someone chose New York New York and everyone sang from the heart.

Marsh and McClennan had a memorial service and we recalled many who had died.  Besides Sue, I wasn’t particularly close to any of them, but I remembered their faces, their mannerisms.  Someone related he had been on the phone with a couple of our former colleagues who were stuck in a conference room desperately trying to use wet paper towels to keep the smoke from coming thru the door. Needless to say, they didn’t make it out.

The events of 9/11 dominated most every conversation I had for a long time. It was several months before I recalled spending a whole day where it didn’t come up.  New York was a different place in the aftermath.  People were soft-spoken — you could feel a reserve, and sympathy in much greater degree than usual.  People gave each other the benefit of the doubt.  I guess it had been brought home to us, on a very elemental level, that there were things much more important, and terrible, than the petty jostling and conflicts of our everyday lives.  We had survived, and were wiser.

Categories
Economics

Speech

(given September 13th at and event with Larry Sharpe)

Hello All.  My name is Michael Madrid and I’m running for US Congress as the Libertarian candidate against Jerrold Nadler.  I hope everyone is having a great 2020.  We are certainly living in interesting times.

Interesting times like 2020, I’ve found, are not naturally conducive to running for office as a Libertarian.  We’re accused of being like Atheists in a foxhole and suddenly finding the religion of government handouts.  While this is not actually true, it is the optimistic take.  The other take is that we ignore the clarion call of DO SOMETHING, and mutter under our breath something like just let the market work.  Unadorned, this message seems cold, passing the buck, dereliction of duty almost.  We need to change this perception, to embellish this message to show that yes we Libertarians care very about the well-being of society, and it is precisely because we care that we want the government to do less.  Only then, can we make the case against those who want to radically increase government involvement in our lives. Only then can we convince people that yes we want universal healthcare, but not medicare for all, and yes we want to prevent climate change, but don’t think the Green New Deal can possibly achieve that.

We are a can-do nation, and when there’s a serious problem, we expect people of authority to step up. and who has more authority than the government? As we know therein lies the problem.  

Even under the best of circumstances, with the best intentions, power is easily misapplied.  I’ll give an example from a situation where many of us have some power, though we often feel powerless, and that is parenting.

The second time I took my twins ice skating was when they were six. They had enjoyed it the previous year so I figured they’d be fine after a short refresher. My son Julius was fine. My daughter Isabela wasn’t.

For whatever reason, she just couldn’t find her balance. I told her to take it slow. I held onto her. We went along the barrier. I reminded her how well she skated last time and now that she’s a year older and more co-ordinated so she should be fine. Logic sometimes works on six-year-olds, certainly more than on Twitter certainly, but not this time!

The more I talked, the more we got frustrated. Here was my child, for whom I’ll do anything, in distress, and somehow I can’t help her. She won’t let me help her. Do I yell at her? Do I make her sit in the corner and watch Julius and me until her attitude improves?  How draconian am I gonna have to get?

I skated away. It felt irresponsible, yet I realized no good could come from staying. So I skated away and hoped for divine intervention. And it came.  Intervention at least.   As it turned out, I didn’t need the supernatural, just some 8-year-olds! In the short time it took me to do a lap, a group of kids saw Isa crying and huddled around her. By my second lap, they had taken her under their wing. By the third lap, it was off to the races.

The lesson here is that even with authority and the best of intentions, there is no guarantee that you can do any good.  But maybe someone else can. As Barack Obama said in his 2009 inauguration speech, “it has been the risk-takers, the doers, the makers of things — some celebrated, but more often men and women obscure in their labor — who have carried us up the long rugged path towards prosperity and freedom”.  I’d like to add 8-year olds to that list.

When the government doesn’t skate away, we get examples like Helen Chu.  She’s the infectious disease expert who had been swabbing people for flu in January when the US had its first covid case.  She wanted to repurpose her swabs for COVID and tried desperately to get approval from the CDC and other authorities, but couldn’t.  On February 25th she went ahead anyway and confirmed what she feared: covid was widespread.  Even then, the CDC refused to skate away and approve her tests, instead championing its own, contaminated test.  This delayed our testing efforts by weeks.

In 1980, the MTA was forced to skate away because of a transit strike. Enterprising individuals filled the gap by providing dollar vans.  Even after the strike, the vans persisted because they offer faster, cheaper, more flexible service.  To this day they cost $2, 75 cents less than MTA buses, and ARE the transit system in areas the MTA doesn’t run.  As the MTA faces a huge budget shortfall, we should consider whether it makes sense for it to skate away from buses altogether.

If there are any silver linings to the COVID crisis, it has convinced government to skate away from restricting telemedicine, from requiring out-of-state and foreign health care providers to get re-licensed, and from restricting hospitals ability to expand, to name just a few.  Hopefully, there’s no going back and this will allow enterprising firms and individuals to provide better healthcare post-crisis.

We must cherish these examples, add to them, and always have at the ready so that the message is not that we Libertarians don’t care, but that we urge restraint because we truly want better outcomes.

We can further bolster our case by pointing out the harm that results when government doesn’t skate away.  If you’re talking to a big government fan, ask their opinion on the military budget and foreign wars, corporate welfare, PPP, or the drug war and the prison system it engenders.

This gets into another part of the message. We have shown how even when the government is virtuous and selfless, it’s often not in a position to do the right thing.  But government decision-makers are never selfless.  

Why?  Because people are self-interested and special interests will always try to insinuate themselves into the most well-meaning of legislation, which is why we continue to get fleeced by military contractor, and prison operators, and all the big business who profited off of PPP. Unless legislation is simple, transparent and focused, the chance of passing something that won’t get subverted is slim.

If someone tries to tell you that capitalism has made government self-interested, ask them to rewatch the Chernobyl series. One of the most poignant scenes is when the plant owner is discussing the test which leads to the explosion.  He’s imploring the plant manager to run the test so he can finally get people off his back, and he offers the incentive of a better position. quid pro quo.  The manager accepts and we know what happens next.  Expecting your socio-economic system to get people to stop being self-interested is not gonna work any more than conversion therapy.  You cannot make people into something fundamentally they are not.  If you try, the behavior will just go black-market — with dire results.

Aren’t businesspeople self-interested, greedy even?  And since business requires profit above and beyond its cost, isn’t that something which is always going to make things more expensive than need be?

Yes, business people are greedy, like all humans.  The beauty of markets, which we need to yell from the rooftops, is that if we ruthlessly cherish competition, and prevent cronyism from rigging the rules, self-interest is beneficial.

Competition means that if I try to raise prices, my competitors will undercut me.  It means if I want to increase my profit, my only options are to offer a more appealing product or cut my costs.  We see this wherever competition is allowed.  If we were here 100 years ago, we’d probably be talking about food prices, which were 20% of household budgets back then.  We don’t, because markets solved food production, food is ubiquitous and costs have fallen.

This doesn’t happen with big expensive government programs, where bad outcomes lead to calls for ever greater funding.

The message I have presented so far has been one of subtraction.

There are a few policies where I think we need to add as well as subtract. I will highlight the one I feel most important. But I think you will see that even though we are adding something, the end result will be much simpler government than we have today.

That policy is basic income.  We live in a very disruptive world, and the type of market-based capitalism we espouse disrupts jobs and careers even without a pandemic.  Basic income allows those disrupted the chance to get back on their feet. Done properly, it can be paid for by replacing existing programs and will result in a radical simplification of the way we do safety net, where currently we have literally hundreds of need-based federal and state programs.  It also helps us argue against restrictions that hold back markets.  When people clamor for ever higher minimum wages which as we know at some point leads to job loss, we can say not necessary because we have basic income.  When people clamor for more subsidies because the coal miners or the farmer are gonna starve, we can say nope, they’re covered by a basic income. And when special interests clamor for $2 trillion of PPP and airline bailouts. Sorry, basic income.

I know there are some in our community who view basic income with suspicion.  I’d like them to carefully consider the arguments I’ve just given.  It was arguments like these which had led Libertarian economist such as Friedman and Hayek to support basic income.

Even if you don’t believe basic income as a final destination, consider that we are on a ship going in the wrong direction towards ever more government.  This is a simplification that clearly is going in the right direction and has been gaining appeal in an electorate that otherwise often regards us as crazy anarcho-capitalists.  We need to win over that wider group if we are to turn the ships around.  Once we’re headed in the right direction it will become much clearer whether basic income is an optimal endpoint or a step to an even better place.  And that’s why I think it should be part of our message, along with skating away, and why I think it rounds out my platform as I campaign to Simplify government. 

I didn’t enter this campaign expecting to win. But I do want to make a point, and help articulate a message we can build on. I spend a lot of time out on the streets campaigning and talking to people. Even in my deep blue district, where there is a bias towards big government, many people realize things have gotten too complicated. They are ready for something new. I have talked on a couple of Yang Gang podcasts — the reception has also been wow, these ideas make a lot of sense. But key to getting them there been stepping back from proposals like M4H and Green New Deal, and stressing that yes we want the same goals, it’s just our approach is different. If we can show people that their concerns are front and center when we say smaller government, when we say Simplify , we’ll have a lot of converts.

Categories
Economics

Paul Williams and Basic Income

Paul Revere Williams was one of the most prolific and pioneering architects in Los Angeles. Though most of his over 3000 buildings are in his home town, his work spans the globe.

He also started his career as a young black man in deeply racist 1910s LA. After graduating Polytechnic High School, at a time when LA had exactly zero black architects, Williams contacted every architectural firm in LA, often offering his services for free. Three firms offered him paid work as an “errand boy”. Instead he chose the one which offered him an intern position, unpaid. Though he needed the money, he had confidence in his abilities and his undeniable skill meant he was soon getting paid. This put him on the path to designing the LAX Theme building, and homes for the likes of Frank Sinatra and Lucille Ball.

Paul Williams succeeded without a basic income. Unfortunately, we are not all Paul Williams. There are many talented people who might not have quite the confidence or even the shoestring budget he did. For them, refusing a better paying option with little growth, over a lesser paying position with a future, might not be an option.

With a basic income, it would.

Related:

More about Basic Income

Categories
Economics politics

Jerry, the Jones Act, and the Fantasy Tunnel

Image by Stefan Keller

For over 30 years, Jerrold Nadler has wanted to build a tunnel: the Cross Harbor Rail Tunnel.  As he enters the twilight of his career, I imagine he views this as the cherry on top of his legacy.  

Jerry has shown he cares about things like immigrants rights and abortion right. These are good things.  But they are expected in our district.  True caring is putting your constituents’ interests first, even when they diverge from your self-interests (and those of your big railway contributors).  The tunnel project makes abundantly clear whose interests Nadler prioritizes.

Jerry wants the rail tunnel so freight will go by rail rather than truck.  This will reduce pollution and highway congestion. Worthy goals — in isolation.  When you start to look closer, however, the case begins to unravel. While not as horrible as Robert Moses’s Lomax, the tunnel would tear up Maspeth Queens.  Opposition from residents caused the Bloomberg administration to drop support.

Then there’s the budget. The tunnel is estimated to cost at least $10 billion. This is $10 billion we didn’t have before Covid.  It is unlikely to magically materialize now.  The project is stuck behind a number of higher priority projects whose financing is far from guaranteed.  Yet over the year, Jerry continues to budget money for tunnel studies.  In 2005, he appropriated $100 million despite the Port Authority neither knowing or asking for the money.  The latest was $70 million in 2017.  Do we really have hundreds of millions to waste on something so speculative? Yet, he continues to push — most recently in the Democratic primary debate in June.

The worst part is there’s a much better solution: repeal the Jones Act.  What’s the Jones Act? It’s a piece of shipping legislation that makes domestic shippers rely on the domestic shipping cartel.  This makes shipping prohibitively expensive. In Europe 40% of cargo goes by ship.  In the US just 2%.  The Jones Act pummels not only the environment, but the economy and jobs, Puerto Rico and Hawaii — all to benefit a small coterie of shippers and unions.  There are few more blatant examples of corporate cronyism. Jerry served on the House Transportation Committee. He knows what the Jones Act is and I have discussed it with him. Repealing the Jones Act is the perfect and very obvious solution to the truck congestion problem.  I’m sure Jerry’s smart enough to realize this, so his failure to suggest it leads me to an unfortunate conclusion: he’s more interested in a tunnel with his name on it than serving the public interest.

As for me, instead of the legacy of a $10 billion vanity project, I‘d be happy with a plaque saying I saved the taxpayer $10 billion. Ok in truth I’d prefer a few more plaques on how I got rid of the Jones Act, etc — but $10 billion is a good place to start.  

Related:

10 Fun Jones Act Facts!

Categories
politics

Why I’m running against Jerry Nadler

Jerry Nadler is far from the worst congressman ever.  I am in agreement with him on many issues, from immigrants’ rights to abortion rights.

But is he the person for the next 20 years? On issues like Basic Income, he has shown little awareness.  On health care and the environment, he checks boxes like Medicare for All and Green New Deal, but does he understand these policies?  He proposes paying for medicare for all by getting rid of private insurance altogether. No universal healthcare system in the world that does this.  Likewise, the Green New Deal is a hugely complex, expensive endeavor concerned with many knotty problems besides climates.  Climate change is real and imminent.  We need climate change legislation laser-focused on…climate change. maybe it doesn’t matter because he’s an incumbent on box-checking autopilot.

Like any incumbent of over 20 years, Nadler answers to many special interests. Which makes you wonder how much he’ll rock the boat. For instance, he says he wants to change the zoning laws that prevent us from building the housing we need.  But when it comes to building in our district, he defends zoning.  While Jerry has stood up for marijuana legalization, will he champion psychedelics, which researchers are using to treat depression and PTSD?  He claims to support sex work, yet he helped pass SESTA/FOSTA.  This law purports to help prevent abuse and human trafficking.  Sex workers say it does the opposite.  Jerry says…let’s fund a study, in other words, I’m sweeping this under the rug.  Can we expect police reform from Jerry?  He did sponsor a large bill on this.  Unfortunately, it has no chance of passage because Republicans want their big bill.  Result: nothing done. Blaming Republicans is easier than rocking the boat.

The police reform bill brings up another issue.  Both sides release huge bills they know the other won’t countenance, then self-righteously blame the other for the failure. How about releasing smaller bills which you can agree on, then go back to arguing about the rest?  Nowhere has this been more tragic than the unemployment extension.  I agree with Democrats that $600 is preferable to $200.  But $200 is preferable to $0.  Secure the $200, then get back in there and fight for more.

Perhaps the issue which puts a point on it for me is Nadler’s Cross Harbor Tunnel proposal. It starts out with the reasonable proposition that truck congestion on our highways is a problem.  It then proposes a $10 billion rail tunnel (in the unlikely case it gets finished on budget).  Jerry has been proposing this for 20 years. It would tear up neighborhoods and cost us money we don’t have.  It is pure fantasy.  Yet he continues to waste hundreds of millions on engineering studies.

The worst part is there’s a much better solution: repeal the Jones Act, a piece of shipping legislation which makes domestic shippers rely on the domestic shipping cartel.  It also makes shipping prohibitively expensive, which means many items go on much dirtier trucks which cause the congestion Jerry complains about.  In Europe 40% of cargo goes by ship.  In the US, just 2%.  The Jones Act pummels not only the environment, but the economy and jobs, Puerto Rico and Hawaii — all for a small coterie of shippers and unions.  There are few more blatant examples of corporate cronyism.  Yet you will never see Jerry, with his rail and tunnel interests, speak against it.  Next time you consider how much Jerry cares, think about how your interests stack up against his big tunnel vanity project.

The Swamp is Alive and Well

Cronyism made Trump’s Drain the Swamp message resonate in 2016.  Bad news: Trump has made the swamp worse.  Politicians should take this as a wakeup call, but I see little evidence. Whether it’s the Jones Act, or the slapdash way in which PPP was doled out to connected entities instead of small businesses, it’s very obviously business as usual.

Are you fed up?  I’m fed up.  That’s why I’m giving up a year of income on a quixotic campaign to be a voice of reason, not of populism, and say we need a simpler, more open, more responsive government.  No this is not a call to abolish government.  It’s a call to let government do the things it can do well and impartially, and get rid of the crony wheezes and complications which are leading to a deep distrust of our government and social order.  Being a voice of reason means eschewing slogans and partisan attacks.  It means thoughtfully looking for solutions, and considering the counter-arguments.  It takes time and effort and, quite frankly,  it’s a lonely path.  But we need it to make things better.  I hope you will join me.

Categories
Economics

Are Unions Progressive?

Progressives like to stress their solidarity with unions. On important issues, unions don’t return the favor. If you look at self-interest, it’s obvious why.

Police Unions

The veil has been lifted on police unions and few progressives would call police unions progressive. Many are calling for them to be disbanded. Many other unions, however, don’t share this sentiment, and given how embedded police unions are within organized labor, it seems unlikely they will come around.

The Environment

Unions remain extremely ambivalent on the environment, even the Green New Deal, a policy specifically designed to appeal to them. In the broader scope, making renewables as cheap as possible — including reducing labor costs — will speed our transition to clean energy. Job creation is far from guaranteed. Even if the clean energy transition creates jobs, many incumbent unions in fossil fuel will cease to exist. These unions clearly know where their interests lie. Unfortunately, it is not with the environment.

Immigration

Immigration is another area where conflicted interests are on display. The conflict is familiar: Should unions protect their own? Or should they fight for all workers?

UBI

Finally there is UBI, an idea which has gained traction among progressives (and espoused by Libertarians like Milton Friedman) as an important part of the social safety net. Unions? Not so much traction. The AFL-CIO has not endorsed it. This paper by PSI, a global union organization representing union views, roundly rejects UBI for (among other things) not strengthening union or worker bargaining power. Its true UBI won’t help the bargaining power of unions, but it can help the bargaining power of workers.

PSI also states UBI doesn’t improve job instability. That’s not its purpose. The point is to help workers through periods of disruption and give them the leeway to re-tool. This clearly helps the worker, but not unions. While PSI is only one organizations, we should reflect whether unions, whose livelihoods rely on jobs, have an interest in promoting a scheme which gives power to individual workers not unions, and loosens the coupling between income and jobs. I suspect the answer is no.

The Way Forward

Are unions bad? Like most human organizations — including but not limited to corporations, government bodies, charities, and religious organizations — unions are self-interested. Meaning rather than good or bad, they are human. I’m not saying we should vilify them — they shouldn’t. But we should realize that union interests are about protecting jobs, specifically incumbent jobs. Anything which threatens incumbent jobs, like new environmental technologies, or the importance of jobs in general, like UBI, is going to be a hard sell. We should try to find ways to get unions on board with goals like preventing climate change and basic income. But don’t defer. Insist on the goals.