Infrastructure Spending Boondoggles

February 6, 2017

More evidence that undergoing major infrastructure spending, as President Trump proposes, would be foolish for boosting economic growth:

Performance data for megaprojects speak their own language. Nine out of ten such projects have cost overruns. Overruns of up to 50 percent in real terms are common, over 50 percent not uncommon. Cost overrun for the Channel Tunnel, the longest underwater rail tunnel in Europe, connecting the UK and France, was 80 percent in real terms. For Boston’s Big Dig, 220 percent. The Sydney Opera House, 1,400 percent. Similarly, benefit shortfalls of up to 50 percent are also common, and above 50 percent not uncommon.

As a case in point, consider the Channel Tunnel in more detail. This project was originally promoted as highly beneficial both economically and financially. In fact, costs went 80 percent over budget for construction, as mentioned above, and 140 percent for financing. Revenues have been half of those forecasted. The internal rate of return on the investment is negative, with a total loss to the British economy of $17.8 billion. Thus the Channel Tunnel detracts from the economy instead of adding to it. This is difficult to believe when you use the service, which is fast, convenient, and competitive with alternative modes of travel. But in fact each passenger is heavily subsidized. Not by the taxpayer this time, but by the many private investors who lost their money when Eurotunnel, the company that built and opened the channel, went insolvent and was financially restructured. This drives home an important point: A megaproject may well be a technological success but a financial failure, and many are. An economic and financial ex post evaluation of the Channel Tunnel, which systematically compared actual with forecasted costs and benefits, concluded that “the British economy would have been better off had the tunnel never been constructed.”

More here.

A Libertarian Look At Neil Gorsuch

February 2, 2017


February 1, 2017

Trump Strikes Out Defining American Greatness

January 20, 2017

American greatness is defined by one word: liberty.

Generally, liberty is the right to live our lives as we see fit, as long as we don’t violate the rights of others. Government’s job is to protect those inalienable rights (not grant them). Government, through our system of checks and balances, is not supposed to act in an arbitrary manner and do what it wants just because. This is the rule of law.

Liberty means individuals:

-Have the right to speak out.
-Have the right to worship whatever deity they wish, or abstain from worship altogether.
-Are free from arbitrary searches and seizures of their persons or property.
-Are free from punishment without due process.
-Are free to defend themselves.
-Are free to pursue their dreams and (if successful) make a profit from that pursuit.

To paraphrase the 9th Amendment, the list above is not meant to deny or disparage other freedoms.

The United States has struggled to live up to these ideals in the course of its history, but it has done better than any other country to allow liberty to flourish.

Which leads us to Donald Trump’s inauguration.

President Trump said he would use today’s speech to define American greatness. Sadly, the components of liberty were missing from his speech.

Instead, we got the fallacy of protectionism. Some key quotes:

For many decades, we’ve enriched foreign industry at the expense of American industry.

Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body and I will never ever let you down.

We will follow two simple rules; buy American and hire American.

This demagogue is clueless. These facts have been stated before on this blog, but they bear repeating again if protectionism is going to be our governing policy for the next 4 years:

-Free trade makes us wealthier. According to Daniel Griswold’s excellent book Mad About Trade (reviewed here), an American family of four is $5000.00 richer because of trade. Internationally, countries with open trade are significantly wealthier, have lower hunger indexes, and even have stronger environmental standards.

-“Buy American” provisions are job losers, depending on the level of export losses we endure due to trade retaliation. From the book Out of Work: Unemployment and Government in Twentieth-Century America, economists Richard Vedder and Lowell Gallaway estimate 20% of the increased unemployment from 1929 to 1932 was a result of the notorious Smoot-Hawley Tariff Act.

-While the job creation aspect is sometimes overstated by free trade proponents, there is a benefit.

-Protectionism that benefits certain industries always comes at the expense of other parties.

There is no morality in forcing one party to essentially pay a ransom to a second party because the second party has special political connections. If a business wants my money, than make a superior product. Provide superior service. Otherwise, you shouldn’t be in business.

If this is what the Republican Party stands for now, it’s a disgrace. I hope they fail.

We need a Milton Friedman now more than ever.

**UPDATE 1/20/17: Here’s a study showing the impact of withdrawing from NAFTA. Not too good for Trump’s vaunted manufacturing sector. Also, Radley Balko ponders the ramifications of Trump’s vow to end the country’s “anti-police atmosphere.” Not too good if value your civil liberties.

Nat Hentoff, RIP

January 14, 2017

In early 2009, I wrote an article for a now-defunct website on the so-called “Fairness Doctrine.” In it, I cited the views of famed columnist Nat Hentoff. A few days after the article was published, I received an e-mail from Mr. Hentoff to call him, because “I admire your reporting.”

To have one of your heroes tell you of their admiration for your work is something, nearly 8 years later, I’m still humbled over.

It took me a couple weeks to muster the courage to make the call. When we spoke, our conversation was brief. I told him of my admiration for his work, he asked where he could find my work, and we both expressed our dismay over the offerings of the 2008 presidential election. The call probably wasn’t more than 3 minutes, and it was the only time we ever spoke.

My blogging is now, just as it was in 2009, a hobby and not a vocation. But this hobby was spurred by a passion to speak truth to power, regardless of political affiliation. There was nobody more formative in influencing me to take up this hobby than Nat Hentoff.

The self-professed “Jewish, atheist, civil libertarian, left-wing pro-lifer” spoke the truth as he saw it, no matter the consequences. No president went unscathed: Reagan was pro-life “up to the moment of birth,” Bill Clinton “dishonored his office,” George W. Bush had a “hole in the soul,” and Barack Obama is “possibly the most dangerous and destructive president we have ever had.” Rest assured, Donald Trump’s pending presidency would not have been spared, either.

When it came to human rights, nobody wrote with more passion and persuasion than Nat Hentoff. His columns on Bush-era torture gave us a righteous anger. Hentoff’s articles about abortion gave blunt clarity to its barbaric features. And nobody was a greater champion for free speech.

Hentoff’s politics almost guaranteed you would never be in complete agreement with him. I find his favorite president to be vastly overrated, for example. But a powerful thinker will make you stop and reconsider your views. Nat Hentoff was most certainly that.

Now more than ever, we need voices that aren’t afraid to be a “pain in the ass” to those in power. Here’s hoping there are other contrarians ready to take the mantle Hentoff leaves behind. RIP.

Ron Paul On Trump, Jobs And Trade

January 14, 2017

Ron Paul gives a much-needed, clear-headed discussion on Trump and economics.

President Obama’s Legacy

January 12, 2017

I didn’t watch the other night, but I’m guessing President Obama didn’t cover how his presidency solidified perpetual warfare:

In a report to Congress submitted 90 days after the war began, Obama asserted that since U.S. airstrikes didn’t involve “the presence of U.S. ground troops, U.S. casualties or a serious threat thereof,” the WPR’s limits didn’t apply. In plainer language: If you’re bombing a country that can’t hit you back, you’re not engaged in “hostilities.”

It’s a bizarre doctrine for a putatively humanitarian, internationalist president to advance: It’s not war if you’re only killing foreigners. But as U.S. remote-warfare capabilities increase, the precedent Obama set will prove useful to future presidents of any stripe.

More here.

Trump’s Fascist Tendencies, Pt 2: Protectionism

December 6, 2016

Sheldon Richman explains one of the key components to Mussolini’s fascist Italy:

Beginning in 1929, in preparation for achieving the “glories” of war, the Italian government used protectionist measures to turn the economy toward autarchy, or economic self-sufficiency. The autarchic policies were intensified in the following years because of both the depression and the economic sanctions that other countries imposed on Italy after it invaded Ethiopia. Mussolini decreed that government bureaus must buy only Italian products, and he increased tariffs on all imports in 1931. The sanctions following the invasion of Ethiopia spurred Italy in 1935 to increase tariffs again, stiffen import quotas, and toughen its embargo on industrial goods.

Increased tariffs. Orders for government to purchase ONLY nationally made products. In fairness, there are lots of Americans from both sides of the political divide that share this belief.

And this includes the President-elect.

As quoted in the Wall Street Journal on how to supposedly rebuild the United States:

“We will have two simple rules when it comes to this massive rebuilding effort: Buy American and hire American,” Mr. Trump said at a rally Thursday evening in Cincinnati. “Whether it is producing steel, building cars or curing disease, we want the next generation of innovation and production to happen right here in America and right here in Ohio, right?”

Trump on Oreo cookies:

“Nabisco, they make Oreos. They’re moving to Mexico. I’m never eating another Oreo again. I am telling you. Never.”

Trump on Apple products:

“We’re going to get Apple to build their damn computers and things in this country instead of in other countries,” he said in January at Liberty University.

Trump vs. Ford Motor:

“They think they’re going to get away with this and they fire all their employees in the United States and…move to Mexico,” said Trump. “When that car comes back across the border into our country that now comes in free, we’re gonna charge them a 35% tax. And you know what’s gonna happen, they’re never going to leave.”

And so on.

Trump’s diatribes cherry-pick scenarios (“shipping jobs overseas”) without painting a full picture of supply-chains, value-added work, and how integral those aspects are to Americans as consumers and workers. Demagogues never do deal with the truth.

This isn’t meant to demean anyone who CHOOSES buy strictly American-made products. But Trump’s policy proposals aren’t about choice. It’s about using the powers of the federal government to punish individuals and companies for making consumer choices Trump disagrees with. That’s what protectionism does. Your right to choose what is best for you doesn’t matter. He wants you to pay the price for going against his agenda, no matter how damaging that agenda is to your pocketbook. Or your liberty.

Trump’s Fascist Tendencies, Pt 1: Flag Burning

December 4, 2016

Per the online Merriam-Webster dictionary, fascism is defined in this manner:

a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition

Nation above the individual. Forcible suppression of opposition. Which brings us to this tweet from the President-elect:

It’s not surprising Trump believes this, as do a lot of self-styled “patriots.” Soon, the United States will be handing the daunting powers of the Executive Branch over to a man who hasn’t the faintest idea what liberty means, much like these “patriots.” The oath Trump will take includes the provision to “defend the Constitution.” There’s this tiny little amendment in that Constitution, the first one, that reads something like this:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Flag burning is political speech at its most basic form. Noisy, abrasive, offensive political speech is the most American of American values. As libertarian entertainer (and former contestant on “The Apprentice”) Penn Jillette eloquently wrote,

Without the right to burn the flag, without that freedom of expression, the flag is just a piece of cloth. It means nothing. With that freedom, with our Bill of Rights, it’s the greatest symbol on earth. It’s magic.

Will the American flag eventually come to represent the very fascism America fought against in World War II? I hope that answer isn’t left up to Trump and his ilk.

The Death Of Castro

November 26, 2016

No tributes here, as Fidel Castro had no redeemable qualities. I suggest this post from Dan Mitchell if you want to get some particulars on this monster.