Public Choice – Page 27 – artdiamondblog.com

Unions Spend $108 Million on 2016 Elections

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

(p. A1) PHILADELPHIA–U.S. labor unions are plowing money into the 2016 elections at an unprecedented rate, largely in an effort to help elect Hillary Clinton and give Democrats a majority in the Senate.

According to the most recent campaign-finance filings, unions spent about $108 million on the elections from January 2015 through the end of August [2016], a 38% jump from $78 million during the same period leading up to the 2012 election, and nearly double their 2008 total in the same period. Nearly 85% of their spending this year has supported Democrats.

For the full story, see:
BRODY MULLINS, REBECCA BALLHAUS and MICHELLE HACKMAN. “Labor Unions Step Up Presidential-Election Spending.” The Wall Street Journal (Weds., Oct. 19, 2016): A1 & A4.
(Note: ellipsis, and bracketed year, added.)
(Note: the online version of the story has the date Oct. 18, 2016, and has the title “Unions Up the Election Ante.”)

FCC Regulations Motivated by Cronyism, Not Economics

(p. A13) . . . , this burgeoning competition between fixed and mobile has always been predictable and yet has figured not at all in the Federal Communications Commission’s regulatory efforts, which paint the country as descending into an uncompetitive broadband hell.
A new study by economists Gerald Faulhaber and Hal Singer details how an agency that once prized economic analysis increasingly ignores or disregards economics in its regulatory findings. Why? Because if it acknowledged the increasing competitiveness of the market, there would be nothing to regulate, no favor-factory opportunities for its political sponsors to milk.

For the full commentary, see:
HOLMAN W. JENKINS, JR. “BUSINESS WORLD; Big Cable and Mobile Are Ready to Rumble; Technology is about to upend Washington’s dire prescriptions for a broadband monopoly.” The Wall Street Journal (Sat., Oct. 8, 2016): A13.
(Note: ellipsis added.)

The working paper mentioned above, is:
Faulhaber, Gerald, and Hal Singer. “The Curious Absence of Economic Analysis at the Federal Communications Commission: An Agency in Search of a Mission.” 2016.

Medal-Winning Official Steals Concrete from Public Road and Sells to Cronies

(p. A4) MOSCOW — Corruption in Russia sometimes amounts to highway robbery, literally.
A senior prison official has been accused of stealing the pavement from a 30-mile stretch of public highway in the Komi Republic, a thinly populated, heavily forested region in northern Russia, the daily newspaper Kommersant reported on its website on Wednesday [January 13, 2016].
. . .
While he was in Komi, Mr. Protopopov won a medal for fostering “spiritual unity,” the Kommersant report said, without specifying whether the unity was with the crews doing the illicit road work.

For the full story, see:
NEIL MacFARQUHAR. “Don’t Blame Snow for Missing Road in Russia’s North.” The New York Times (Thurs., JAN. 14, 2016): A4.
(Note: ellipsis, and bracketed date, added.)
(Note: online version of the story has the date JAN. 13, 2016, and has the title “Missing a Road in Russia? This May Be Why.”)

Feds Use Taxpayer Money to Buy $20 Million of Cheese

(p. C1) U.S. agricultural officials agreed to purchase $20 million of cheese products from struggling dairy farmers who pleaded for a bailout earlier this month.
Around 11 million pounds of food will be donated to families throughout the country through government nutrition-assistance programs, the U.S. Department of Agriculture said.
. . .
The national Milk Producers Federation, a group of roughly 30,000 farmers, on Aug. 12 asked the agency to purchase a much as $150 million of cheese, as a glut of dairy products and other food commodities has sent prices for many farmers to the lowest levels in years.

For the full story, see:
Gee, Kelsy. “U.S. Says Cheese–to Aid Farmers.” The Wall Street Journal (Thurs., Aug. 25, 2016): C1.
(Note: ellipsis added.)
(Note: after much searching on 9/10/16, I could not find an online version of the story on the WSJ site.)

Brazilians See Government as a Father Who Should Hand Out Subsidies to His Favorites

(p. 9) . . . “Brazillionaires” offers more than a flat collection of billionaire tales. Cuadros shrewdly presents his collage of immense wealth against an underlying background of corruption. There are kickbacks for government contracts. There are gigantic taxpayer subsidies: In 2009 alone, the state-run development bank, BNDES, lent out $76 billion, “more than the World Bank lent out in the entire world.” And of course there are lavish campaign contributions, attached to the inevitable quid pro quos. JBS, which leveraged government loans to become the largest meatpacking company in the world, spent $180 million on the 2014 elections alone. “If every politician who had received JBS money formed a party,” Cuadros writes, “it would be the largest in Congress.”
In his telling, Brazilians seem to embrace the cozy relationship between business and government as a source of pride rather than a risk for conflicts of interest. In one passage, Cuadros underscores the contrast between Adam Smith and the 19th-century Brazilian thinker José da Silva Lisboa, viscount of Cairu. Lisboa’s “Principios de Economía Politica” was meant to be an adaptation of Smith’s “Wealth of Nations.” But rather than present a paean to the invisible hand of the market, the viscount offered a rather paternalistic view of economic progress.
“The sovereign of each nation must be considered the chief or head of a vast family,” he wrote, “and thus care for all those therein like his children, cooperating for the greater good.” Swap “government” for “sovereign” and the passage still serves as an accurate guide to the Brazilian development strategy. It’s just that some children — the Marinhos, the Camargos — are cared for better than others.
. . .
It would be wrong, . . . , to understand Brazil’s plutocracy as the product of some unique outcrop of corruption. The hold on political power by the rich is hardly an exclusive feature of Brazil. Latin America has suffered for generations from the collusion between government and business. Where I grew up, in Mexico, it is the norm.

For the full review, see:
EDUARDO PORTER. “Real Rich.” The New York Times Book Review (Sun., JULY 24, 2016): 9.
(Note: ellipses added.)
(Note: the online version of the review has the date JULY 22, 2016, and has the title “Watching Brazil’s Rich: A Full-Time Job.”)

The book under review, is:
Cuadros, Alex. Brazillionaires: Wealth, Power, Decadence, and Hope in an American Country. New York: Spiegel & Grau, 2016.

Crony Credentialism Is Regulatory Barrier to Telemedicine

(p. A11) Telemedicine has made exciting advances in recent years. Remote access to experts lets patients in stroke, neonatal and intensive-care units get better treatment at a lower cost than ever before. In rural communities, the technology improves timely access to care and reduces expensive medevac trips. Remote-monitoring technology lets patients with chronic conditions live at home rather than in an assisted-living facility.
Yet while telemedicine can connect a patient in rural Idaho with top specialists in New York, it often runs into a brick wall at state lines. Instead of welcoming the benefits of telemedicine, state governments and entrenched interests use licensing laws to make it difficult for out-of-state experts to offer remote care.
. . .
Using its power under the Commerce Clause of the Constitution, Congress could pass legislation to define where a physician practices medicine to be the location of the physician, rather than the location of the patient, as states currently do. Physicians would need only one license, that of their home state, and would work under its particular rules and regulations.
This would allow licensed physicians to treat patients in all 50 states. It would greatly expand access to quality medical care by freeing millions of patients to seek services from specialists around the country without the immense travel costs involved.

For the full commentary, see:

SHIRLEY SVORNY. “Telemedicine Runs Into Crony Doctoring; State medical-licensing barriers protect local MDs and deny patients access to remote-care physicians.” The Wall Street Journal (Sat., July 23, 2016): A11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date JUNE 22, 2016.)

Obama and Koch Brothers Agree Occupational Licensing Restricts Opportunity

“Grace Granatelli, a certified canine massage therapist. In 2013, Arizona’s Veterinary Medical Examining Board demanded that she close up shop for medically treating animals without a veterinary degree.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) SCOTTSDALE, Ariz. — “I usually start behind the neck,” Grace Granatelli said from her plump brown sofa. “There’s two pressure points back behind the ears that help relax them a little bit.” In her lap, she held the head of Sketch, her mixed beagle rat terrier, as her fingers traced small circles through his fur.

Ms. Granatelli, whose passion for dogs can be glimpsed in the oil portrait of her deceased pets and the bronzed casts of their paws, started an animal massage business during the recession after taking several courses and workshops. Her primary form of advertising was her car, with its “K9 RUBS” license plate and her website, Pawsitive Touch, stenciled onto her rear window.
But in 2013, Arizona’s Veterinary Medical Examining Board sent her a cease-and-desist order, demanding that she close up shop for medically treating animals without a veterinary degree. If not, the board warned, every Swedish doggy massage she completed could cost her a $1,000 fine.
To comply with the ruling and obtain a license, Ms. Granatelli would have to spend about $250,000 over four years at an accredited veterinary school. None require courses in massage technique; many don’t even offer one.
. . .
(p. B5) The Obama administration and the conservative political network financed by the Koch brothers don’t agree on much, but the belief that the zeal among states for licensing all sorts of occupations has spiraled out of control is one of them. In recent months, they have collaborated with an array of like-minded organizations and political leaders in a bid to roll back licensing rules.
. . .
. . . the current mishmash of requirements is too often “inconsistent, inefficient, and arbitrary,” a White House report concluded last year. Many of them, the report said, have little purpose other than to protect those already in the field from further competition.
. . .
Only rarely are licensing requirements removed. Last month, though, Arizona agreed to curb them for yoga teachers, geologists, citrus fruit packers and cremationists.
But dozens more professions escaped the ax. “Arizona is perceived as a low-regulatory state, but this was the most difficult bill we worked on this session,” said Daniel Scarpinato, a spokesman for the Republican governor, Douglas Ducey.
Licensing boards are generally dominated by members of the regulated profession. And in Arizona, more than two dozen of the boards are allowed to keep 90 percent of their fees, turning over a mere 10 percent of the revenue to the state.
“They use that money to hire contract lobbyists and P.R. people,” Mr. Scarpinato said. “This is really a dark corner of state government.”
They are often joined in their campaign by lobbyists from industry trade associations and for-profit colleges, which sell the required training courses.

For the full story, see:
PATRICIA COHEN. “Horse Rub? Where’s Your License?” The New York Times (Sat., JUNE 18, 2016): B1 & B5.
(Note: ellipses added.)
(Note: the online version of the story has the date JUNE 17, 2016, and has the title “Moving to Arizona Soon? You Might Need a License.”)

The White House report mentioned above, is:
The White House. “Occupational Licensing: A Framework for Policy Makers.” July 2015.

Richest Rich Use Crony Capitalism to Game Tax System

(p. A1) Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.
. . .
(p. A12) “There’s this notion that the wealthy use their money to buy politicians; more accurately, it’s that they can buy policy, and specifically, tax policy,” said Jared Bernstein, a senior fellow at the left-leaning Center on Budget and Policy Priorities who served as chief economic adviser to Vice President Joseph R. Biden Jr. “That’s why these egregious loopholes exist, and why it’s so hard to close them.”

The Family Office
Each of the top 400 earners took home, on average, about $336 million in 2012, the latest year for which data is available. If the bulk of that money had been paid out as salary or wages, as it is for the typical American, the tax obligations of those wealthy taxpayers could have more than doubled.
Instead, much of their income came from convoluted partnerships and high-end investment funds. Other earnings accrued in opaque family trusts and foreign shell corporations, beyond the reach of the tax authorities.
The well-paid technicians who devise these arrangements toil away at white-shoe law firms and elite investment banks, as well as a variety of obscure boutiques. But at the fulcrum of the strategizing over how to minimize taxes are so-called family offices, the customized wealth management departments of Americans with hundreds of millions or billions of dollars in assets.
. . .
The major industry group representing private equity funds spends hundreds of thousands of dollars each year lobbying on such issues as “carried interest,” the granddaddy of Wall Street tax loopholes, which makes it possible for fund managers to pay the capital gains rate rather than the higher standard tax rate on a substantial share of their income for running the fund.

For the full story, see:
NOAM SCHEIBER and PATRICIA COHEN. “By Molding Tax System, Wealthiest Save Billions.” The New York Times (Weds., DEC. 30, 2015): A1 & A12.
(Note: bold, and larger font, in original; ellipses added.)
(Note: the online version of the story has the date DEC. 29, 2015, and has the title “For the Wealthiest, a Private Tax System That Saves Them Billions.”)

Taxpayer Funded Stadiums Fail to Bring Promised Economic Development

(p. C14) The Twin Cities of Minneapolis and St. Paul have been an epicenter of the U.S. stadium-and-arena boom, rolling out five major sports facilities since 1990 that together cost more than $2 billion.
Now, the neighboring cities are readying for a sixth: a 20,000-seat, $150 million Major League Soccer stadium to be built by 2018 in St. Paul about halfway between the two downtowns.
. . .
But taken with the other facilities that have a combined seat count of nearly 200,000, this latest project illustrates how the Twin Cities are an acute example of the rapid increase in stadiums and arenas in U.S. cities. These developments come despite a growing chorus of warnings from economists who say the stadiums are almost always poor drivers of economic development. Even when these facilities do spur nearby investment, economists and critics say the cost to the public is typically far higher than with traditional economic-development programs.
“I’ve lived in the Twin Cities since 1976, and have seen this proliferation of new sports stadia,” said Jane Prince, a St. Paul city council member who voted against the soccer stadium aid package. “I just don’t see the promised economic development occurring in conjunction with all of these.”
. . .
“There’s not one group that makes these decisions–it was two city governments, it was a legislature, it was sports owners,” said R.T. Rybak, the mayor of Minneapolis from 2002 to 2014. Mr. Rybak said he had long been critical of sports subsidies but he grudgingly helped craft the aid package for the Vikings stadium after the team was poised to move elsewhere.
That deal, and the others, he said, were “also driven by the increasingly crazy politics of sports economics,” in which teams want their own facilities, custom designed for their ideal crowd sizes.

For the full story, see:
ELIOT BROWN. “Twin Cities to Get Yet Another Stadium.” The Wall Street Journal (Weds., March 23, 2016): C14.
(Note: ellipses added.)
(Note: the online version of the story has the date March 22, 2016, and has the title “In Twin Cities, How Many Stadiums Are Enough?”)

Imperial Passivity of the Holy Roman Empire Allowed Liberty and Diversity

(p. C7) On Aug. 6, 1806, an imperial herald decked out in full court regalia galloped purposefully through the streets of Vienna to a magnificent medieval church at the center of the city. Once there, he ascended to the balcony, blew his silver trumpet and declared that the Holy Roman Empire, an institution that had lasted for more than 1,000 years, was no more.
. . .
But because the empire never evolved into a viable nation-state, many scholars and politicians regarded it as a failure. The Germans in particular (including the great 19th-century historian Leopold von Ranke) blamed the empire for the fact that Germany remained a “delayed nation” that was only unified (through Prussian machinations) in 1871.
Yet it was precisely this lack of political centralization, Mr. Wilson argues, that provided the empire with its greatest strength. Imperial passivity meant that individual rulers and states were largely left alone to govern as they wished. And all subjects had the right to appeal to the emperor if they believed their rights had been trammeled upon. Jews, for example, were given imperial protection as early as 1090; and though forced to live as second-class citizens during much of the empire’s history, many viewed its dissolution as a catastrophe.
Political fragmentation also had cultural benefits. Unlike France and England, with their single capital and monarch, the Holy Roman Empire had numerous kings, courts and centers of patronage. The result was a remarkably wide distribution of educational and cultural institutions, one that is still observable in the former imperial lands. It was probably also no coincidence that both the printing press and Europe’s first mail service were launched within the fragmented empire or that the imperial territories experienced higher levels of economic growth than regions of Europe with more centralized control.
. . .
Though far from perfect, the empire lasted for as long as it did because it strove to provide the two things most hoped for in a state: liberty and security.

For the full review, see:
MARK MOLESKY. “The Strength of a Weak State; In the Holy Roman Empire, individual rulers and states were largely left to govern as they wished.” The Wall Street Journal (Sat., May 21, 2016): C7.
(Note: the online version of the review has the date May 20, 2016.)

The book under review, is:
Wilson, Peter H. Heart of Europe: A History of the Holy Roman Empire. Cambridge, MA: Belknap Press, 2016.

Feds Spend Over $500 Million to Aid Barges Shipping Coal

(p. B1) CHARLEROI, Pa.–A few years ago, coal barges lined up 20 or 30 deep, waiting their turn for a towboat to shuttle them through the locks near this town along the Monongahela River.
These days it is the towboats that often sit idle. Cheap natural gas, stricter power-plant-emissions rules and a weak steel market have gutted coal demand, and with it traffic on the rivers that have served as the industry’s commercial arteries for over a century.
Nevertheless, river infrastructure is about to be flooded with federal cash. In December, Congress authorized $405 million to improve river locks and dams over the next fiscal year, the most since 2008.
The money follows a multimillion-dollar lobbying effort spearheaded by the Waterways Council Inc., which represents an array of companies including coal producer Murray Energy Corp., utility FirstEnergy Corp., agricultural-commodities trader Cargill Inc. and Marathon Petroleum Corp.
. . .
“It’s kind of ironic–we’re spending even more to update and modernize this system when the value and volume of the commodities is diminishing, and coal is something that we as a country are moving away from,” said Steve Ellis, vice president of Taxpayers for Common Sense, a conservative-leaning advocacy group that analyzes infrastructure spending.

For the full story, see:
ROBBIE WHELAN. “Barges Get a Boost, Even as Demand Sinks.” The Wall Street Journal (Thurs., Feb. 4, 2016): B1 & B7.
(Note: ellipsis added.)
(Note: the online version of the story has the date Feb. 2, 2016, and has the title “U.S. Opens Spigot for Lock-and-Dam Fixes, Even as Coal Traffic Dwindles.”)