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.

Related:

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
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
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.

Categories
Economics

The Hardest Part of 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. Julius was fine. Isabela wasn’t.

For whatever reason, Isa just couldn’t find her balance. I told her to take it slow. I held onto her. We went along the barrier. Nothing was working. I reminded her how well she skated last time and now she’s a year older and more co-ordinated. Logic sometimes works on six-year olds. Not this time!

The more I talked, the more I got frustrated and she got frustrated. The year-older argument wasn’t working on her, but it was making the continued problem incomprehensible to me. Here was my child, for whom I’ll do anything, in distress, and somehow I can’t help her. Do I yell at her? Do I make her sit and watch Julius and I until her attitude improves?

I skated away. It felt irresponsible, yet I realized no good could come from staying. So I skated away and hoped for divine intervention. 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 time, it was off to the races.

Lesson Learned

There is a lesson here for parents and all authority figures. It feels irresponsible stepping away from a problem you are keenly aware of. But sometimes that’s the best solution, and giving the community, whether it be a market, or concerned citizens — or a group of 8-years — the chance to solve the problem, will result in a better solution.

An Appeal to Voters

Before you go gaga for the loudest politician shouting from the rooftops how they’re going to DO SOMETHING, consider whether the government is in a position to help. Helping requires an intimate understanding of the problem and the ability to stay impartial in the face of very self-interested lobbies. Governments often aren’t in this position. In those case, often it’s better to let the populace figure things out. Most politicians aren’t inclined to make that choice because it limits their power, and especially when egged on. So next time, as a voter please consider whether they really need egging on…or egging off!

Categories
Economics

What I want out of a Trillionaire

There is much hate for billionaires these days. There is a perception they are stealing from people. Or that they contribute nothing to society.

Is this actually the case?

Many answer by pointing to the tremendous number of jobs created by the companies who have also created billionaires. This is definitely a consideration. Then there is someone who always gets left out of these conversations: the consumer.

I like Amazon because I can find many goods there for cheaper than in the store. Like fluoride mouthwash, which is half of what is costs in the local CVS and I don’t have to walk there.

If Jeff Bezos gets a few pennies for every time I save $5, I’m fine with that.

The richest man in modern times was John D. Rockefeller. Like Jeff Bezos, he has many critics, but his effect on American society is unequivocal:

Rockefeller’s efforts did bring American consumers cheaper kerosene and other oil by-products. Before 1870, oil light was only for the wealthy, provided by expensive whale oil. During the next decade, kerosene became commonly available to the working and middle classes. (Wikipedia)

The wealth Rockefeller attained was a very small fraction of the tremendous wealth he created for society.

Many people DO get rich stealing from others, for example Bernie Madoff, but this is rare among the billionaires people complain about. Gates, Bezos, Jobs, Page/Brin have created things that everyday people use daily. If you really hate billionaires, try going a week without using something created or sold by a billionaire.

You can argue that we should continue to encourage the entrepreneurs who build companies like Apple, Microsoft or Amazon, but we shouldn’t allow as much of the spoils to go to the founders. An arguable point. If you could guarantee that the innovation and consumer benefit happens, I’d not necessarily be opposed. But the amounts in question are small compared to consumer benefit, so tread carefully.

My Kind of Trillionaire

Energy hasn’t been a great minter of billionaires recently, but if I were to hope for a trillionaire, it would be someone who discovered near costless clean energy — cold fusion, really efficient solar panels, technology X? — and had the managerial skill to spread it around the world. One trillion is a lot of money, but a fraction of what the world spends on energy consumption in a year. Not to mention the cost of energy pollution, or the benefit of the whole new industries, jobs and products which near costless energy would engender. If it led to these benefits, would having a trillionaire really be that terrible?

Categories
Economics

Saturday Morning for Basic Income

On Saturday morning we took a trip over to the building of my opponent, incumbent Jerry Nadler, to take part in the Income Movement‘s push for basic income. Needless to say Jerry was not there. We spoke to a few people who liked Jerry, but also were interested in hearing about basic income.

As foot traffic was slow, we moved to Broadway and had some interesting conversations there. One with an ardent Jerry supporter, maybe even a staffer. What about basic income, or the Jones Act, or housing and safer streets? No we need to get rid of Trump! Well yes, but has Jerry done that?

I also talked to a Republican (a rarity on the Upper West Side) who didn’t basic income because she thinks income should be earned. I agree income should generally be earned. But many of the people earning their income in March are now are unable to do so through no fault of their own. Disruptions like this are why I support basic income – to get people through the rough patches.

My most interesting conversation was with a woman from the Bronx, a NYCHA resident who is absolutely sick of the neglect her complex is getting. I suggested an opinion which is not always popular: that the solution is not pouring more money down a broken system, but building an abundance of housing, so that rents go down and if your landlord is neglecting you, you give them the finger and move across the street. I was preaching to the choir. We had a good conversation.

Categories
Economics

What if the Yankees went #BuyAmerican

Joe Biden seems intent on continuing Donald Trump’s #MAGA campaign (oh but the phrase #BuyAmerican sounds so much nicer). Even Jacobin Magazine is calling him out (okay they’re calling Trump out but SSDP):

“Buy American” campaigns have historically done more to intensify xenophobia than improve workers’ conditions.

As the Who song Don’t Get Fooled At tolls in my head, I reflect on who the Yankees would lose if they did #BuyAmerican:


They’d lose half their potential starting rotation, their star closer, and more than a third of their starting lineup. Would that make the Yankees better?

Players we’d lose around the league include Albert Pujols, Miguel Cabrera, Jose Altuve, and Shohei Ohtani.

The historical icons we’d have to erase is a long list but includes Mariano Rivera, Rod Carew, David Ortiz, Pedro Martinez, Manny Ramizez, Ichiro, Juan Marichal…

Like baseball teams, American consumers are best off when they have the right to access the best the world has to offer at the best price. And remember that many of those consumers are firms — if they’re hampered by MAGABuyAmerican requirements, they lose competitiveness. Without those requirements are American firms going to wilt? Somehow I think Apple, Microsoft, Google and Tesla will be just fine.

Do MAGABuyAmerican restrictions save jobs? Unlikely. Look how the quintessential MBA reg, the Jones Act, has destroyed our shipping industry. And when the government is overpaying to meet some amorphous expensive local content requirement, it builds less. Builds less means you get less bridges and workers get less bridge building jobs. Lose Lose Lose.

Don’t get fooled again.