Category: Current Affairs

Environmental “Justice” Recreates Redlining

by  Alex Tabarrok in

It’s been said that the radical left often ends up duplicating the policies of the radical right, just under different names and justifications, e.g. separate but equal, scientific thinking is “white” thinking and so forth. Here’s another example from Salim Furth: the re-creation of redlining. Redlining was the practice of making it more difficult to access financial products such as mortgages by grading some neighborhoods as “hazardous” for investment. Either by design or result, redlining was often associated with minority populations.

Salim shows that Massachusetts has created a modern redlining system.

In Massachusetts, the context is that MEPA (its mini-NEPA) requires projects of a certain size to go through either a moderately-expensive or a quite-expensive process. Some types of projects automatically [require] the quite-expensive Environmental Impact Review process. The #maleg passed a 2021 “Environmental Justice” law, which defined certain people – oh euphemism treadmill! – as “Environmental Justice populations.”…So any housing (or other) project that requires a permit from a state agency and is within 1 mile of a “Environmental Justice population” now automatically triggers the expensive EIR process….How expensive? I was told it can run from $150k to $1m, and take 6 to 12 months. That’s a lot of additional delay in a state where delays are already extreme.

If there’s a, uh, silver lining here, it’s that “EJ Population” is defined so capaciously that it includes super-rich areas of Lexington (32% Asian, $206k median hh income), because all “minorities” are automatically disadvantaged. So it’s much less targeted to disinvested places than the original redlining. But the downside is that it’s *extremely well targeted* to discourage investment anywhere near transit or jobs. The non-EJ places are the sprawly exurbs. So maybe they *tried* to reinvent redlining, but all they really accomplished was reinventing subsidies for sprawl and raising housing costs along the way!

…This is a good, sobering reminder that for every 1 step forward by pro-housing advocacy, the blue states can manage 2 steps backward via wokery, proceduralism and anti-market ideas…

Jay Bhattacharya at the NIH

by  Tyler Cowen in

Trump has announced the appointment, so it is worth thinking through a few matters.  While much of the chatter is about the Great Barrington Declaration, I would note that Bhattacharya has a history of focusing on the costs of obesity.  So perhaps we can expect more research funding for better weight loss drugs, in addition to other relevant public health measures.

Bhattacharya also has researched the NIH itself (with Packalen), and here is one bit from that paper: “NIH’s propensity to fund projects that build on the most recent advances has declined over the last several decades. Thus, in this regard NIH funding has become more conservative despite initiatives to increase funding for innovative projects.”

I would expect it is a priority of his to switch more NIH funding into riskier bets, and that is all to the good.  More broadly, his appointment can be seen as a slap in the face of the Fauci smug, satisfied, “do what I tell you” approach.  That will delight many, myself included, but still the question remains of how to turn that into concrete advances in public health policy.  Putting aside the possibility of another major pandemic coming around, that is not so easy to do.

My main worry is simply that NIH staff will not trust their new director.  The problem is not so much GBD, which can be compartmentalized as a “political” stance, but rather the earlier claims that many more people had Covid early than we had thought, and that expected fatalities were going to be quite low, with a maximum of 40,000.  We all make mistakes, the question is how those mistakes get processed.  If you interrogate Perplexity it will report “Bhattacharya has not publicly acknowledged or confessed to these mistakes in his early predictions.”  You don’t have to agree with Perplexity (though contrary cites are welcome!), rather it suffices to say that reflects a common perception of the scientific community.  He also seemed to be pushing those low fatality estimates for longer than might have been considered appropriate.  And that is indeed a problem for his tenure at the NIH.

The danger is simply that NIH staff will double down on risk aversion, and they may not so readily support any attempt to make the grants themselves riskier, or rooted in the greater discretion of program directors, a’la DARPA and the like.  They will fear that their director will not sufficiently follow the evidence, or admit when mistakes are being made and reverse course.  Even if you fully agree with GBD and the like, I hope you are able to see this as a relevant problem.  Every institutional revolution requires supportive troops on the inside, even if they are only a minority.

I very much hope this works out well, but in the meantime that is my reservation.

More Randian villains

by  Tyler Cowen in

Gavin Newsom, California’s Democratic governor, announced on Monday that he would reinstate a tax credit for electric vehicle purchases if the incoming Trump Administration removes federal EV tax credits. But the state may not extend the credits to Tesla because of the company’s large market share. Tesla’s stock price fell 4% on Monday.

Here is more from The Information (gated).  GPT comments.

Regulating Sausages

by  Alex Tabarrok in

In the comments on Sunstein on DOGE many people argued that regulations were mostly about safety. Well, maybe. It’s best to think about this in the context of a real example. Here is a tiny bit of the Federal Meat Inspection Act regulating sausage production:

In the preparation of sausage, one of the following methods may be used:

Method No. 1. The meat shall be ground or chopped into pieces not exceeding three fourths of an inch in diameter. A dry-curing mixture containing not less than 3 1⁄3 pounds of salt to each hundredweight of the unstuffed sausage shall be thoroughly mixed with the ground or chopped meat. After being stuffed, sausage having a diameter not exceeding 3 1⁄2 inches, measured at the time of stuffing, shall be held in a drying room not less than 20 days at a temperature not lower than 45 °F., except that in sausage of the variety known as pepperoni, if in casings not exceeding 1 3⁄8 inches in diameter measured at the time of stuffing, the period of drying may be reduced to 15 days. In no case, however, shall the sausage be released from the drying room in less than 25 days from the time the curing materials are added, except that sausage of the variety known as pepperoni, if in casings not exceeding the size specified, may be released at the expiration of 20 days from the time the curing materials are added. Sausage in casings exceeding 3 1⁄2 inches, but not exceeding 4 inches, in diameter at the time of stuffing, shall be held in a drying room not less than 35 days at a temperature not lower than 45 °F., and in no case shall the sausage be released from the drying room in less than 40 days from the time the curing materials are added to the meat.

The act goes on like this for many, many pages. All to regulate sausages. Sausage making, once an artisan’s craft, has become a compliance exercise that perhaps only corporations can realistically manage. One can certainly see that regulations of this extensiveness lock-in production methods. Woe be to the person who wants to produce a thinner, fatter or less salty sausage let alone who tries to pioneer a new method of sausage making even if it tastes better or is safer. Is such prescriptive regulation the only way to maintain the safety of our sausages? Could not tort law, insurance, and a few simple rules substitute at lower cost and without stifling innovation?

Milei and populism

by  Tyler Cowen in

Bryan Caplan and Daniel Klein both opine on Milei and populism, Dan being very enthusiastic, while Bryan praising Milei but more reserved in his praise of populism.  I too am a big fan of Milei, and I think he is still on a good track.  If his reforms do not succeed, likely it will not be his fault, but rather the result of soft commodity prices, pending credit lawsuits (predating him), and an impatient public.  But so far things are holding up.

What neither Klein nor Caplan mentions — and it is very very important for this issue — is that Milei has hewed pretty closely to the IMF playbook for his most important reforms.  He named a very serious and mainstream finance team to oversee his changes.  And his plan is dependent on an IMF bailout.  The more “populist” elements of the original promises, such as rapid dollarization, have been put on hold indefinitely.  In other words, the actual policies, for the most part, are not populist at all.

It is fine to call Milei a populist in some very critical rhetorical regards.  But the project is working because he has turned his back on a lot of populism and is mainly following the recommendations of expertise, as well as relying on the IMF.

Sunstein on DOGE

by  Alex Tabarrok in

Good advice from Cass Sunstein, who did improve government efficiency as head of OIRA:

There is a major focus these days on the topic of government efficiency, spurred by the creation of what is being called a “Department of Government Efficiency.” I have had the good fortune of being involved in simplification of government, and reduction of paperwork and regulatory burdens, in various capacities, and here are six quick and general notations.

  1. The Administrative Procedure Act is central to the relevant project. It needs to be mastered. It offers opportunities and obstacles. No one (not even the president) can clap and eliminate regulations. It’s important to know the differences among IFRs, TFRs, NPRMs, FRs, and RFIs. (The best of the bunch, for making rules or eliminating rules: FRs. They are final rules.)
  2. The Paperwork Reduction Act needs to be mastered. There is far too much out there in the way of administrative barriers and burdens. The PRA is the route for eliminating them. There’s a process there.
  3. The Office of Information and Regulatory Affairs is, for many purposes, the key actor here. (I headed the office from 2009-2012.) A reduce-the-regulations effort probably has to go through that Office. Its civil servants have a ton of expertise. They could generate a bunch of ideas in a short time.
  4. It is important to distinguish between the flow of new burdens and regulations and the stock of old ones. They need different processes. The flow is a bit easier to handle than the stock.
  5. The law, as enacted by Congress, leaves the executive branch with a lot of flexibility, but also imposes a lot of constraints. Some of the stock is mandatory. Some of the flow of mandatory. It is essential to get clarity on the details there.
  6. The courts! It’s not right to say that recent Supreme Court decisions give the executive branch a blank check here. In some ways, they impose new obstacles. Any new administration needs a full understanding of Loper Bright, the major questions doctrine, Seila Law, and much more (jargon, I know, I know).

Bolivia update, uh-oh

by  Tyler Cowen in

With international reserves at about a tenth of their $15 billion peak in 2014, the government of President Luis Arce is safekeeping every dollar bill and gram of gold, depressing activity, sparking fuel shortages and stoking social unrest — all in the name of avoiding a devaluation of an untenable 6.9 boliviano-per-dollar peg…

Arce has been trying to contain the collapse by reversing the damaging decline in hydrocarbon output, granting incentives for foreign oil and gas companies and liberalizing the fuel market last week in an attempt to mitigate gasoline shortages. Even if these measures are on the right track, they are too little, too late: These imbalances have been brewing in Bolivia for years, the result of policy malpractice during the golden era of Evo Morales’s socialist rule between 2006 and 2019, when Arce was his economic czar. A government with a more sensible approach would have tamed spending and invested in making sure the country’s natural gas bonanza kept paying the bills for the next decades (for a detailed chronicle of what went wrong in Bolivia, read my colleagues Peter Millard and Sergio Mendoza here.)

Here is more from Juan Pablo Spinetto at Bloomberg.

How DOGE is really going to work

by  Tyler Cowen in

In the last few days, Vivek has issued a series of tweets showing he understands how the regulatory process works.  That is good, but in turn it means DOGE ambitions end up scaled down.  Now there is a WSJ piece by Vivek and Elon.  Here is what I take to be the critical passage:

DOGE will work with legal experts embedded in government agencies, aided by advanced technology, to apply these rulings to federal regulations enacted by such agencies. DOGE will present this list of regulations to President Trump, who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission.

I’m all for this (and more), but take a look at what we are getting here.  Paused enforcement is better than nothing, but the rule doesn’t go away.  In the meantime, private companies probably will continue to act as if the rule may continue, given limited time horizons in politics and indeed for DOGE itself.  The process for “review and rescission” of course is extremely time-consuming and labor-intensive.  Again, bring it on but just do not expect too much from this.  Note further that “right-leaning regulatory troops” are quite thin on the ground, most of all in these agencies.

The column has numerous further points of interest, which perhaps I will take up in the future.  Here is a very good indeed essential piece by Stuart Buck on government efficiency,  Here again is my earlier Bloomberg column on priorities for DOGE.  James Broughel has a sunset suggestion for regulations.

Bike lanes are not about bikes

by  Tyler Cowen in

The city [WDC] has built about 20 miles of bike lanes in the past five years, but despite that, the portion of D.C. residents who bike to work peaked in 2017 and has decreased each year since, falling from 5 percent to 3 percent. So who are these lanes for?

And:

Across town, on South Dakota Avenue NE, the fight is ongoing, and, as The Post’s Rachel Weiner reported, this squabble reveals an essential truth about bike lanes as weapons of civic planning: They are often installed not to satisfy the barely measurable trickle of residents who pedal to work but mainly to make car traffic worse enough that people will be discouraged from driving.

Here is the full piece by Marc Fisher.  A rare sane take on an ultra-mood-affiliated topic.  You may recall my earlier and unfulfilled request for a good cost-benefit analysis on bike lanes for American cities.  Houston fortunately is moving away from this idea, and no “I love the Netherlands” is not an effective counter to the issues at stake here.

New Zealand’s Regulatory Standards Act

by  Tyler Cowen in

From the Antipodes:

“To lift productivity and wages, ACT’s coalition agreement includes a commitment to pass a Regulatory Standards Act.

“The Bill will codify principles of good regulatory practice for existing and future regulations,” says Mr Seymour.

“It seeks to bring the same level of discipline to regulation that the Public Finance Act brings to public spending, with the Ministry for Regulation playing a role akin to that of Treasury.

“Some regulations operate differently in practice than they do in theory. To make regulators accountable to the New Zealanders they regulate, the Bill contains a recourse mechanism, by establishing a Regulatory Standards Board. The Board will assess complaints and challenges to regulations, issuing non-binding recommendations and public reports.

“If we raise the political cost of making bad laws by allowing New Zealanders to hold regulators accountable, the outcome will be better law-making, higher productivity, and higher wages.

I am pleased to, many years ago, have done preperatory work with Bryce Wilkinson on the ideas behind this legislation.  I am told this is likely to pass, here is more on the bill.

The economic powers of the HHS secretary

by  Tyler Cowen in

That is the topic of my latest Bloomberg column, here is one excerpt:

One of the problems with an RFK Jr. ascendancy is that his core views, which run strongly against vaccines and pharmaceuticals, make it unlikely that any of these reimbursement revisions will be done in a rational or scientific way. The best evidence indicates that pharmaceuticals are a relatively cost-effective ways of saving lives, and conversely that many costly surgical procedures are not very effective. One of the main drawbacks of the US health-care system is often described as overtreatment, yet some vaccines and drugs — the Covid vaccines, GLP-1 medications and HIV-AIDS treatments, to name just a few — are yielding very high returns.

The danger is that, with RFK Jr. at HHS, the US would restrain health-care spending in exactly the wrong areas. The human costs of such a mistake are obvious, but from a more narrow fiscal perspective, a sicker America would lead to even more serious budgetary problems.

In any case, for all the recent talk and speculation about DOGE, the HHS secretary could well have more of an impact on the federal budget, for better or worse.

HHS also oversees liability protection for vaccines…

Worth a very serious ponder.