Category: Public Choice

Nebraska Interest Cap Regulation Reduced Consumer Payday Loan Options

(p. A1) Nebraska’s payday lenders have all shut down in the two years since voters capped the interest rate they could charge.

The last handful gave up their delayed-deposit services business licenses in December [2021], according to records kept by the Nebraska Department of Banking and Finance.

Just six months earlier, there had been 19 such businesses.

. . .

. . ., Ed D’Alessio, executive director of INFiN, a national trade association representing delayed-deposit businesses, said the closures were predictable, based on the experience of other states that have imposed similar rate caps.

“Nebraska’s 36% rate cap on delayed-deposit loans was never about consumer protection,” he said. “It was about activists’ thinly veiled desire to eliminate a regulated service valued by many.

“But Nebraskans’ need for credit did not go away. Instead, they have been left with fewer options for managing their financial obligations,” D’Alessio said.  . . .

Payday loans, also known as cash advances, check advances or delayed-deposit loans, are a type of short-term, high-cost borrowing that people use to get small amounts of immediate cash.

For the full story, see:

Martha Stoddard. “Payday Lenders Disappear From State After Rate Cap.” Omaha World-Herald (Tuesday, Sept 13, 2022): A1-A2.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story was updated Oct. 18, 2023 [sic], and has the title “Payday lenders disappeared from Nebraska after interest rate capped at 36%.”)

Cancer “Vaccines Are Probably the Next Big Thing”

(p. A5) “Vaccines are probably the next big thing” in the quest to reduce cancer deaths, said Dr. Steve Lipkin, a medical geneticist at New York’s Weill Cornell Medicine, who is leading one effort funded by the National Cancer Institute. “We’re dedicating our lives to that.”

For the full story, see:

ARLA K. JOHNSON, Associated Press. “Vaccine Against Cancer Could Be Closer Than Ever.” Omaha World-Herald (Sunday, July 9, 2023): A11.

(Note: bracketed date added.)

(Note: the online version of the story was updated Nov 2, 2023, and has the title “The next big advance in cancer treatment could be a vaccine.”)

Biden’s Centrally Planned Cancer “Moonshot” Funds Surgery as Key to a Cure

(p. A5) WASHINGTON — President Joe Biden’s administration on Thursday [July 27, 2023] announced the first cancer-focused initiative under its advanced health research agency, aiming to help doctors more easily distinguish between cancerous cells and healthy tissue during surgery and improve outcomes for patients.

The administration’s Advanced Research Projects Agency for Health, or ARPA-H, is launching a Precision Surgical Interventions program, seeking ideas from the public and private sectors to explore how to dramatically improve cancer outcomes in the coming decades by developing better surgical interventions to treat the disease.

. . .

The initiative could markedly improve cancer treatments and make scientific breakthroughs that have as yet unknown applications, said Arati Prabhakar, director of the White House Office of Science and Technology.

“What’s true is that many cancer treatments still start with surgery,” she told The Associated Press in an interview. “So being really smart and attacking and developing new technology to make that first step better could really revolutionize how we are able to treat cancer for so many Americans.”

For the full story, see:

ZEKE MILLER Associated Press. “Cancer Research Initiative Part of Biden ‘Moonshot’.” Omaha World-Herald (Friday, July 28, 2023): A5.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story was updated Nov. 2, 2023, and has the title “Biden announces an advanced cancer research initiative as part of his ‘moonshot’ effort.”)

FTX Fraudster Sam Bankman-Fried Gave “More Than $5 Million” to Biden’s Winning 2020 Presidential Campaign

Bankman-Fried was convicted of fraud on November 2, 2023.

(p. B4) On the same day that Sam Bankman-Fried’s trial on federal fraud charges begins, the best-selling author Michael Lewis is set to publish a widely anticipated book on Tuesday [Oct. 3, 2023] about Mr. Bankman-Fried’s failed cryptocurrency exchange, FTX.

Mr. Lewis, the author of “The Blind Side,” “The Big Short” and “Moneyball,” spent months interviewing Mr. Bankman-Fried and other top FTX executives, and had access to the company’s headquarters in the Bahamas for the book, “Going Infinite.”

The book features previously unreported details about Mr. Bankman-Fried’s empire, from its founding in the Bay Area to its epic collapse in the Bahamas last year. Here are some takeaways.

. . .

Mr. Bankman-Fried started his first company, the hedge fund Alameda Research, alongside Tara Mac Aulay, an Australian mathematician who moved in the same philanthropic circles.  . . .

According to the book, Ms. Mac Aulay grew to consider Mr. Bankman-Fried “dishonest and manipulative,” and other senior figures at Alameda accused him of mismanagement.

. . .

When FTX was thriving, Mr. Bankman-Fried became a prolific political donor, contributing more than $5 million to Joseph R. Biden Jr.’s 2020 presidential election effort.

For the full story, see:

David Yaffe-Bellany. “Takeaways From a New Book on Sam Bankman-Fried.” The New York Times (Tuesday, October 3, 2023): B4.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date October 2, 2023, and has the same title as the print version. Where the online version has more detailed wording, the passages quoted above follow the online version.)

The book reporting new details on the FTX debacle is:

Lewis, Michael. Going Infinite: The Rise and Fall of a New Tycoon. New York: W. W. Norton & Company, Inc., 2023.

Highly-Taxpayer-Subsidized Lincoln Airline Collapses After Three Months

The “American Rescue Plan Act” was also called the “Covid-19 Stimulus Package” or the “American Rescue Plan.” (To paraphrase Shakespeare on a rose: a “boondoggle” by any other name smells just as foul.)

(p. B2) LINCOLN — Red Way, the startup airline that had been providing service from Lincoln to destinations such as Las Vegas and Orlando, is ceasing operations at the end of the month.

. . .

The Lancaster County Board issued a written statement Wednesday [Aug. 23, 2023], saying it “is deeply disappointed and troubled at this unexpected and sudden turn of events.”

The board said there are “many unanswered questions regarding the Red Way project, (and it) looks forward to receiving a full accounting of this situation as the Lincoln Airport Authority charts a new path forward to serve our community.”

Board member Matt Schulte lamented the $3 million in lost American Rescue Plan Act funds — $1.5 million each from Lancaster County and the City of Lincoln — but called the air travel experiment a chance worth taking.

“I personally voted for this project believing that the air service would develop long term service,” he said. “Unfortunately, it didn’t work. I hope this failed experiment does not have a negative impact on the ability to expand service to the city of Lincoln.”

. . .

Airport officials had seemed optimistic about the airline’s prospects, noting that it had sold 10,000 tickets in just its first two weeks of operation.

In fact, Red Way flew just over 13,000 total passengers in June and July.

But cracks had started to show recently.

Red Way announced in July that it was dropping seasonal flights to Atlanta, Austin and Minneapolis in early August, months earlier than planned, because of poor ticket sales. That news came just two days after the airline had announced new flights to Tampa and Phoenix over the winter months.

Nick Cusick, who resigned from the Airport Authority Board in July after serving more than 10 years, confirmed to the Lincoln Journal Star on Wednesday that Red Way had already burned through most of a $3 million incentive fund provided through ARPA dollars.

It used more than $900,000 in the first month and it withdrew even more in the second month, Cusick said.

For the full story, see:

MATT OLBERDING, Lincoln Journal Star. “Red Way Airline Ceasing Operations.” Omaha World-Herald (Thursday, Aug. 24, 2023): B2.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story was updated Sept. 30, 2023, and has the title “Lincoln’s Red Way ceasing operations less than 3 months after inaugural flight.”)

To Force Use of Organic Farming, Government Banned Chemical Fertilizers; A Ban Which “Devastated” Crops and “Destroyed the Farmers”

(p. A6) GALENBINDUNUWEWA, Sri Lanka—For more than half a century, Pahatha Mellange Jayaappu has tilled the field on his modest farm in Sri Lanka’s agricultural heartland, unswayed by recurrent political and economic turmoil.

Now the 71-year-old is just trying to eke out enough of a harvest to feed his family after an abrupt ban on chemical fertilizers last year devastated his crops. He says he has given up on planting for profit.

“We have lived through armed insurrections and bad government policies,” Mr. Jayaappu said. “This is the worst year I’ve ever seen. They have destroyed the farmers.”

Many Sri Lankans aren’t getting enough to eat, and farmers and agricultural experts say the food shortages are set to worsen. The government reversed the ban in November and promised fresh supplies of chemical fertilizers, but farmers said many received only a small amount, and too late for the current growing season.

. . .

The ban on imports of agricultural chemicals took effect in May 2021, and the rice harvest the following March was down 40%, according to government data. Prices soared. Sri Lanka, which had been largely self-sufficient in rice, was forced to use some of its fast-dwindling foreign reserves to import the key staple. Other crops, like tea, an important foreign-exchange earner, have also suffered. In May, the country defaulted on its external debt.

. . .

Mr. Wickremesinghe was installed by Parliament last month after his predecessor, Gotabaya Rajapaksa, fled the country and resigned in the face of mass protests over fuel shortages and food prices.  . . .

Mr. Rajapaksa billed the ban as a nationwide shift to organic farming, but agricultural experts say that requires a yearslong transition. Opposition lawmakers said cutting off imports of fertilizer, which the government heavily subsidizes for farmers, was a shortsighted attempt to hold on to foreign reserves.

. . .

Farmers complained that the organic fertilizers that came on the market after the ban took effect were poor quality, full of material that wasn’t fully decomposed. And the haste of the ban left insufficient time to make their own compost, or learn how to farm organically.

For the full story, see:

Shan Li and Philip Wen. “Sri Lanka’s Farmers Struggle to Survive.” The Wall Street Journal (Saturday, August 20, 2022): A6.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 19, 2022, and has the title “Sri Lanka’s Farmers Struggle to Feed the Country—and Themselves.”)

Blacks Are Migrating Away from Northern Cities, Due Partly to Rising Costs and Violence

(p. B3) The waves of migration that brought Black Americans to many northern cities are reversing.

Departing residents are heading everywhere from nearby suburbs to high-growth areas in the southern U.S., such as metro Atlanta, according to demographers, real-estate agents and public officials.

The latest U.S. Census Bureau estimates, released Thursday, indicate Black residents are continuing to leave many urban centers in the North and elsewhere, adding to decades of decline. These losses have hit many major cities with historically large Black populations, including Chicago, Detroit, Cleveland and Oakland, Calif.

. . .

Some are motivated by rising housing costs and worries about safety.

“I wanted some peace and quiet. I was tired of the gunshots, the sirens,” said Mary Hall-Rayford, a retired teacher who moved from Detroit to neighboring Eastpointe, Mich., in 2012. “Eastpointe was a nice little city.”

She serves on the school board and is running for mayor.

For the full story, see:

Jimmy Vielkind, Jon Kamp, Paul Overberg and Jack Gillum. “Black People Are Departing Cities in North.” The Wall Street Journal (Friday, June 23, 2023): B1 & B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 22, 2023, and has the title “Black Americans Are Leaving Cities in the North and West.”)

Betting on Elections Is a Form of Free Speech

(p. A17) The Commodity Futures Trading Commission has moved to shut down PredictIt, an online marketplace for futures contracts on the outcomes of political events, effective Feb. 15, 2023. This is a blow to investors in these contracts, such as those on the presidential election of 2024, who are left uncertain as to how their positions will be unwound. And it’s a blow to the public at large, because political futures have proven to have better predictive power than polls.

. . .

. . . in early 2020, . . . PredictIt listed a contract on whether the World Health Organization would declare Covid-19 a pandemic. According to John Phillips, chief executive of Aristotle, the firm that operates PredictIt, the CFTC telephoned to complain about that contract, saying it was in poor taste. The contract had already expired.

. . .

If investors can express their opinions on the future prices of corn and pork bellies, surely the First Amendment also protects their ability to do the same on elections and other political matters. It’s a matter of free speech that you can put your money where your mouth is.

For the full commentary, see:

Donald Luskin. “The Feds Don’t Want You Betting on Elections.” The Wall Street Journal (Wednesday, Nov. 2, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 1, 2022, and has the same title as the print version.)

Public Sector Unions Make Government Unaccountable to the Will of the People

(p. A17) In 2008, six years after securing control over New York City’s public schools, Mayor Michael Bloomberg and schools chancellor Joel Klein put forward a program to tie teacher tenure to student performance. The goal was to reward the best-performing teachers with job security, encourage better student outcomes, and hold teachers accountable for demonstrated results. To most New York residents, it surely sounded like a good idea.

To New York’s teachers’ unions, however, the program was utterly unacceptable. Union leaders lobbied Albany, threatened state lawmakers (who could pass legislation binding the mayor) with the loss of political support, and walked away with a two-year statewide prohibition on the use of student test performance in tenure evaluations. In short, the union thwarted the mayor’s authority over the city’s schools and commandeered the state’s legislative power.

In this case and many others, a public-sector union served its own interests at the expense of the public’s. In “Not Accountable,” Philip Howard shows in vivid detail how such practices have made government at all levels unmanageable, inefficient and opposed to the common good. He argues that, in fact, public unions—that is, unions whose members work for the government—are forbidden by the Constitution. The argument, he notes, would have been familiar to President Franklin Roosevelt and George Meany, the longtime president of the AFL-CIO, both of whom championed private-sector labor but believed that public workers—teachers, fire fighters, policemen, civil-service employees—had no right to bargain collectively with the government.

. . .

Mr. Howard makes a persuasive case, but the chances of seeing it affect American political life are, at the moment, remote.

. . .

Still, the goal is admirable and worth pursuing. In place of public-sector collective bargaining, Mr. Howard calls for a merit-based system for hiring and evaluating government employees. Instead of stultifying work rules that thwart creativity, he envisions a public-sector structure in which employees can use their talents and judgment to improve the functioning of government. Fundamentally, Mr. Howard views the Constitution, and the law generally, as a mechanism for both action and accountability, one that entrusts powers to inevitably fallible human beings while subjecting them to the checks of others in authority and, ultimately, to the will of the people.

For the full review, see:

John Ketcham. “BOOKSHELF; Unelected Legislators.” The Wall Street Journal (Tuesday, March 14, 2023): A17.

(Note: ellipses added.)

(Note: the online version of the review was updated March 13, 2023, and has the title “BOOKSHELF; ‘Not Accountable’ Review: Unelected Legislators.”)

The book under review is:

Howard, Philip K. Not Accountable: Rethinking the Constitutionality of Public Employee Unions. Garden City, NY: Rodin Books, 2023.

Cars Give Commuters Flexible Choices Absent from Public Transit

(p. A14) Across the United States, transit systems that have relied for decades on office workers are scrambling to avoid financial collapse as commuters stay home. Many systems are asking their local governments for bailouts as federal pandemic relief runs dry, . . .

. . .

“If anyone says that they know the way out of this difficult situation, they’re fooling themselves,” said Brian D. Taylor, the director of the Institute of Transportation Studies at the University of California, Los Angeles. “This is a really challenging time.”

. . .

“You can put the New York City subway in the middle of Oklahoma and you wouldn’t have any ridership — that’s kind of the harsh reality for American transit,” Mr. Elkind said. “There’s only so much they can do with service and fares to lure riders back.”

In many cities, riders may need to go to the office only on Wednesdays. Or they want to pick up their children from school in the middle of the day or make a run to the grocery store.

For the full story, see:

Soumya Karlamangla. “With Commuters Scarce, Transit Agencies Try New Enticements.” The New York Times (Tuesday, June 20, 2023): A14.

(Note: ellipses added.)

(Note: the online version of the story has the date June 19, 2023, and has the title “With Commuters Staying Home, Transit Agencies Try to Reinvent Themselves.”)

Builders of Untested Fragile R101 Airship Feared Revealing Danger to Head of British Air Ministry

The airships called “dirigibles” were sometimes also called “zeppelins” after their German inventor.

(p. 43) . . . zeppelins had fatal flaws. A single ignition source could turn one into a fireball, as British fighter pilots discovered once they started arming their planes with incendiary bullets. Explosive properties aside, dirigibles were all but uncontrollable in high winds and struggled to stay aloft when rain saturated their cloth skins, adding tons of extra weight.

. . .

That Britain persisted with its airship program owes much to the book’s main character, Lord Christopher Thomson, a retired brigadier and Labour Party politician who in 1923 was appointed to run the British Air Ministry. Witty, cultured and handsome, the India-born Thomson had a romantic vision of a “peaceful, air-linked world” that was closely tied to romance of a different sort. Thomson had for years been carrying on a long-distance affair with Marthe Bibesco, a ravishing (and married) Romanian princess and celebrated author. By 1930, during his second stint as air secretary, there was a chance he would be tapped as the next viceroy of India, a job that would take him even farther from his beloved. In Gwynne’s persuasive telling, Thomson believed that airships could save both the empire and his love life.

Thomson comes across as decent but hopelessly naïve, his faith in R101 based partly on bad information from the underlings responsible for building it. They knew the airship was too heavy, and that its gas bags — made from cow intestines — were prone to leakage. But with few exceptions they kept that knowledge to themselves, for fear of displeasing the boss.

It didn’t help that Thomson was on a tight schedule. Having claimed a berth on R101’s inaugural, round-trip voyage to India, he was determined to be back in London in time for a conference of colonial premiers, perhaps imagining a dramatic, Phileas Fogg-style entrance that would underscore the brilliance of his scheme. To accommodate him, flight tests were cut short, and the airship took off despite reports of bad weather along the route over France. There is reason to believe that the airship’s senior officer may have been drunk at the time.

For the full review, see:

John Lancaster. “Hot Air.” The New York Times Book Review (Sunday, June 4, 2023): 43.

(Note: ellipses added.)

(Note: the online version of the review has the date May 1, 2023, and has the title “When Ego Meets Hot Air, the Results Can Be Deadly.”)

The book under review is:

Gwynne, S. C. His Majesty’s Airship: The Life and Tragic Death of the World’s Largest Flying Machine. New York: Scribner, 2023.

The story of the competition between the privately-built R100 and the government-built R101 was earlier well-told in:

Squires, Arthur M. The Tender Ship: Government Management of Technological Change. Boston, Massachusetts: Birkhauser, 1986.