Government – Page 59 – artdiamondblog.com

$19 Billion in Farm Subsidies Mostly Go to Big Farms

(p. A17) President-elect Donald Trump’s vow to “drain the swamp” in Washington could begin with the Agriculture Department. Federal aid to farmers is forecast by the Congressional Budget Office to soar to $19 billion in 2017. Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA. Whoever Mr. Trump names as his agriculture secretary should target wasteful farm programs for spending cuts.
. . .
While generous government subsidies are defended by invoking the “family farmer,” big farmers snare the vast majority of federal handouts. According to a report released this year by the Environmental Working Group, a Washington-based nonprofit research organization, “the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014.” The group’s analysis of government farm-subsidy data also found that the “top 20 percent of subsidy recipients received 91 percent of all subsidy payments.” Fifty members of the Forbes 400 list of wealthiest Americans have received farm subsidies, according to the group, including David Rockefeller Sr. and Charles Schwab.

For the full commentary, see:
JAMES BOVARD. “Living Off the Fat of Washington; If Trump is going to ‘drain the swamp,’ he might start with wasteful ag subsidies.” The Wall Street Journal (Mon., Dec. 12, 2016): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Dec. 11, 2016.)

Unbinding Entrepreneurs Can Create Jobs and Speed Growth

(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America’s startup economy.
Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.
Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they’re located. At the same time, fewer U.S. businesses are being started. New firms are the country’s principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.
. . .
What can President Trump do to encourage more entrepreneurship?
. . .
Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.
. . .
Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs’ costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.
. . .
With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.

For the full commentary, see:
CARL J. SCHRAMM. “The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies.” The Wall Street Journal (Weds., Nov. 16, 2016): A21.

Jane Jacobs Studied the “Mess of Everyday Life”

(p. C6) The decidedly unpredictable and unscientific mess of everyday life was the passion of the urban theorist Jane Jacobs. For her, studying the street and the city was the key to understanding how things work. Robert Kanigel’s “Eyes on the Street: The Life of Jane Jacobs” has taken a place on my bookshelf right next to Robert Caro’s landmark biography of her nemesis, Robert Moses.

For Bierut’s full book recommendations, see:
Michael Bierut. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C6.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “Michael Bierut on Jane Jacobs.”)

The book recommended, is:
Kanigel, Robert. Eyes on the Street: The Life of Jane Jacobs. New York: Alfred A. Knopf, 2016.

Failed “War on Cancer” Gets Repackaged as “Moonshot”

(p. A15) Last Friday [January 8, 2016] a group of 15 cancer researchers cut short a meeting at the Food and Drug Administration. The reason: They had been invited to Vice President Joseph R. Biden’s office to discuss his “moonshot” to cure cancer.
. . .
The idea that a concerted government push can lead to a “cure” for cancer is nearly a half century old, stretching back to President Nixon’s failed “War on Cancer.” The latest, which President Obama formalized in his State of the Union address on Tuesday, has a deeply emotional tinge. Mr. Biden’s son Beau died of brain cancer in May, and the vice president’s very public mourning and call for a “national commitment to end cancer as we know it” as he announced his decision not to run for president has moved and captivated Washington.
. . .
Unlike in 1971, when President Nixon launched his cancer war, researchers now understand that cancer is not one disease but essentially hundreds. The very notion of a single cure — or as Mr. Obama put it, making “America the country that cures cancer once and for all” — is misleading and outdated.
“Cancer is way more complex than anyone had imagined in 1970,” said Dr. Jose Baselga, the president of the American Association for Cancer Research and physician in chief and chief medical officer at Memorial Sloan Kettering Cancer Center.
. . .
Commitments by powerful Washington figures to cure cancer seem to come along about every decade.
Dr. Andrew von Eschenbach, the director of the National Cancer Institute, announced in 2003 that his organization’s goal was to “eliminate suffering and death” caused by cancer by 2015.
During an appropriations hearing, Dr. von Eschenbach got into a public bargaining session with Senator Arlen Specter, then a Republican from Pennsylvania, about how much money Dr. von Eschenbach would need to advance the date of the cure.
“I asked you what it would take to move that date up to 2010,” Mr. Specter asked.
“We have proposed a budget that would support those initiatives that would amount to approximately $600 million a year,” Dr. von Eschenbach answered.
“Six-hundred million a year?” Mr. Specter asked. “And you can move the date from 2015 to 2010?”
“Yes, sir,” Mr. von Eschenbach said.
Mr. Specter died of cancer in 2012.

For the full story, see:
GINA KOLATA and GARDINER HARRIS. “‘Moonshot’ to Cure Cancer, to Be Led by Biden, Relies on Outmoded View of Disease.” The New York Times (Thurs., JAN. 14, 2016): A15.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date JAN. 13, 2016.)

Infrastructure Costs Often Exceed Benefits

(p. A13) Most federal infrastructure spending is done by sending funds to state and local governments. For highway programs, the ratio is usually 80% federal, 20% state and local. But that means every local district has an incentive to press the federal authorities to fund projects with poor national returns. We all remember Alaska’s infamous “bridge to nowhere.”
In other words, if a local government is putting up only 20% of the funds, it needs the benefits to its own citizens to be only 21% of the total national cost. Yet every state and every locality has potential infrastructure needs that it would like the rest of the country to pay for. That leads to the misallocation of federal funds and infrastructure projects that benefit the few at the cost of the many.
. . .
Japan tried infrastructure-heavy serial fiscal stimuli for decades and is trying again under Prime Minister Shinzo Abe. Yes, Japan now has many new bridges, roads and paved drainage ditches, but the spending has done little to improve Japan’s meager growth rate.

For the full story, see:
MICHAEL J. BOSKIN. “All Aboard the Infrastructure Boondoggle; Whoever wins on Nov. 8, a flood of public-works money is coming. Cost-benefit tests are crucial.” The Wall Street Journal (Tues., Nov. 1, 2016): A13.
(Note: ellipsis added.)
(Note: the online version of the article has the date Oct. 31, 2016.)

Space Trash Start-Up Aims to Be Quicker than Government

(p. D1) Mr. Okada is an entrepreneur with a vision of creating the first trash collection company dedicated to cleaning up some of humanity’s hardest-to-reach rubbish: the spent rocket stages, inert satellites and other debris that have been collecting above Earth since Sputnik ushered in the space age. He launched Astroscale three years ago in the belief that national space agencies were dragging their feet in facing the problem, which could be tackled more quickly by a small private company motivated by profit.
“Let’s face it, waste management isn’t sexy enough for a space agency to convince taxpayers to allocate money,” said Mr. Okada, 43, who put Astroscale’s headquarters in start-up-friendly Singapore but is building its spacecraft in his native Japan, where he found more engineers. “My breakthrough is figuring out how to make this into a business.”
. . .
(p. D3) “The projects all smelled like government, not crisp or quick,” he said of conferences he attended to learn about other efforts. “I came from the start-up world where we think in days or weeks, not years.”
. . .
He also said that Astroscale would start by contracting with companies that will operate big satellite networks to remove their own malfunctioning satellites. He said that if a company has a thousand satellites, several are bound to fail. Astroscale will remove these, allowing the company to fill the gap in its network by replacing the failed unit with a functioning satellite.
“Our first targets won’t be random debris, but our clients’ own satellites,” he said. “We can build up to removing debris as we perfect our technology.”

For the full story, see:

MARTIN FACKLER. “Building a Garbage Truck for Space.” The New York Times (Tues., Nov. 29, 2016): D1 & D3.
(Note: the online version of the story has the date Nov. 28, 2016, and has the title “Space’s Trash Collector? A Japanese Entrepreneur Wants the Job.”)

Hillary Clinton Did Not Give a Rat’s Ass About a Rat’s Ass Lawsuit

(p. A4) LITTLE ROCK, Ark.–One of Hillary Clinton’s first assignments as a corporate lawyer landed her far from her roots. She helped overturn a ballot measure that increased electric rates for businesses and lowered them for the poor.
“Instead of defending poor people and righting wrongs, we found ourselves squarely on the side of corporate greed against the little people,” her colleague, Webb Hubbell, later wrote.
The future presidential contender worked for 15 years as a corporate litigator at the Rose Law Firm in Arkansas’s capital, longer than any other position in or out of government. Her portrait still hangs in the firm’s downtown offices.
. . .
In her 2003 book, Mrs. Clinton writes only briefly about her work at Rose. She highlights a couple of cases, including her first jury trial, where she defended a canning company sued by a man who found the rear end of a rat in his pork and beans. He claimed he couldn’t kiss his fiancée because every time he thought about the situation he would spit.
Mrs. Clinton argued the man hadn’t suffered any real damages and because the rodent part had been sterilized it would be considered edible in parts of the world. She said the plaintiff won “only nominal damages.” Mrs. Clinton didn’t identify the name of the man or the company involved.

For the full story, see:
LAURA MECKLER and PETER NICHOLAS. “Clinton’s Forgotten Law-Firm Career.” The Wall Street Journal (Sat., Oct. 29, 2016): A4.
(Note: ellipsis added.)
(Note: the online version of the story has the date Oct. 28, 2016, and has the title “Hillary Clinton’s Forgotten Career: Corporate Lawyer.”)

Longer Permit Delays Slow Construction of Houses

(p. A3) Home prices and rents are surging in Denver, but local builder Jared Phifer said his construction work virtually ground to a halt last fall.
The reason: He can’t get permits for new projects.
The process can take as long as eight months, at which point the prices he quoted buyers often are out of date, he said.
The delays are “almost making us go bankrupt,” he said. “We’ve had to put a halt on so many projects that I’m in the process of getting a loan for $150,000 to cover all of our expenses.”
. . .
Developers of single-family homes reported that the median delay was seven months in 2015, compared with four months in 2011, according to the National Association of Home Builders.
. . .
Last July [2015], Denver saw the biggest permit backlog in its history, according to Brad Buchanan, the executive director of community planning and development. Residential projects were taking as long as three months to review, three times the target duration. Apartment and office projects were taking two months to review, although some developers and homeowners reported waiting much longer.
“Last summer our phones were ringing off the wall with people who couldn’t even get permits to change out water heaters,” said Jeff Whiton, chief executive officer of the Home Builders Association of Metropolitan Denver.

For the full story, see:
LAURA KUSISTO. “Home Builders Slowed by Permit Delays.” The Wall Street Journal (Fri., March 4, 2016): A3.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the story has the date March 3, 2016.)

Regulatory Restrictions on Business Have Doubled Since 1975

Source of graph: online version of the WSJ article quoted and cited below.

(p. A2) Measuring the regulatory state is no easy task. The Code of Federal Regulations contains more than a million restrictions, as signified by the use of the words “shall,” “must,” “may not,” “required,” and “prohibited,” according to two scholars from the Mercatus Center, a free-market think tank. The total has doubled since 1975, pausing only during Ronald Reagan’s first term and Bill Clinton’s second.

Rule enforcement is also getting more serious. Responding to accusations of lax oversight in the past, federal authorities have imposed criminal penalties, in particular on financial companies, averaging $7 billion a year in the past four years, up fourfold from the prior 11, according to Brandon Garrett, a law professor at the University of Virginia.
. . .
Brent Skorup, a scholar at the Mercatus Center, says regulators like the FCC increasingly extract behavioral conditions from companies via transaction approvals rather than rule-making. For example, Comcast Corp. acquired NBC Universal in 2011 after agreeing to a long list of conditions, from not charging for faster network access (aka abiding by “net neutrality”) to expanding local, public-interest and children’s programming.

For the full commentary, see:
GREG IP. “CAPITAL ACCOUNT; AT&T Feels Growing Reach of Presidency.” The Wall Street Journal (Thurs., Oct. 27, 2016): A2.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Oct. 26, 2016 title “CAPITAL ACCOUNT; Reaction to AT&T-Time Warner Deal Shows Presidency’s Growing Reach.”)

The data presented in the left panel of the graph above is described in the following article:
Al-Ubaydli, Omar, and Patrick A. McLaughlin. “Regdata: A Numerical Database on Industry-Specific Regulations for All United States Industries and Federal Regulations, 1997-2012.” Regulation and Governance (2015), doi: 10.1111/rego.12107.

The data can be downloaded at:
http://regdata.org/data/

The Garrett results mentioned above, are reported in his article:
Garrett, Brandon L. “The Rise of Bank Prosecutions.” The Yale Law Journal Forum (May 23, 2016): 33-56.

After Global Warming Hits Vietnam: “We Live Better Now”

(p. A9) On a chilly January day recently, Do Van Duy slugged back another shot of rice liquor. It had been a good year for raising fish in the Red River delta of northern Vietnam. He and other villagers in Nam Dien had gathered to toast their success as the Lunar New Year approached–and question whether climate change is such a bad thing after all.
“We live better now,” said Mr. Duy, 31 years old, who now farms grouper, shrimp and crab in the brackish waters of the delta after giving up rice a few years ago. “If you can make the switch there’s a lot more money to be made.”
Nearly three-quarters of households in Nam Dien have abandoned rice farming, said Bui Van Cuong, a fisheries official with the People’s Commune in Nam Dien, as salt water flows farther into the delta’s farmland. “The changes are very apparent over the past 10 years,” Mr. Cuong said.
The shift is focusing attention on a difficult question: Is it better to invest resources in fighting the effects of climate change, or in helping people adapt?
. . .
“Their competitive advantage is changing,” said Le Anh Tuan, a director at the Institute for Climate Change Studies at Can Tho University. “The delta might not always be the best place to grow rice, but people can raise shrimp instead.”

For the full story, see:
JAMES HOOKWAY. “Vietnam’s New Tack in Climate Fight.” The Wall Street Journal (Thurs., Feb. 25, 2016): A9.
(Note: ellipsis added.)
(Note: the online version of the story has title “Vietnam Tries New Tack in Climate-Change Battle: Teach a Man to Fish.”)

Land Use Regulations Increase Income Inequality

Source of graph: online version of the WSJ article quoted and cited below.

(p. A3) In this year’s election, candidates have focused blame for rising income inequality on broad economic forces, from globalization to the decline of the American manufacturing base. But a growing body of research suggests a more ordinary factor: the price of the average single-family home for sale, from Fairfield, Conn., to Portland, Ore.

According to research by Daniel Shoag, an associate professor of public policy at Harvard University, and Peter Ganong, a postdoctoral fellow at the National Bureau of Economic Research, a decadeslong trend in which the income gap between the poorest and richest states steadily closed has been upended by growth in land-use regulations.
Moving to a wealthier area in search of job opportunities has historically been a way to promote economic equality, allowing workers to pursue higher-paying jobs elsewhere. But those wage gains lose their appeal if they are eaten up by higher housing costs. The result: More people stay put and lose out on potential higher incomes.
. . .
Messrs. Shoag and Ganong looked at mentions of “land-use” in appeals-court cases and found the number of references began rising sharply around 1970, with some states seeing a much larger increase than others. For example, the share of cases mentioning land use for New York rose 265% between 1950 and 2010 and 644% in California during the same period. By contrast, it increased by only 80% in Alabama.

For the full story, see:
LAURA KUSISTO. “Land Use Rules Under Fire.” The Wall Street Journal (Weds., Oct. 19, 2016): A3.
(Note: ellipsis added.)
(Note: the online version of the story has the date Oct. 18, 2016, and has the title “As Land-Use Rules Rise, Economic Mobility Slows, Research Says.” A few extra words appear in the online version quoted above, that were left out of the print version.)

The research by Ganong and Shoag, mentioned above, is:

Ganong, Peter, and Daniel Shoag. “Why Has Regional Income Convergence in the U.S. Declined?” Harvard University, John F. Kennedy School of Government, Working Paper Series, Jan. 2015.