Category Archives: News commentary

Did Nader Really Call Apple a Monopoly?

“Consumer advocate Ralph Nader, concerned about fake news prevalent on social media sites, believes Congress should weigh in with antitrust legislation targeting Facebook, Google, Microsoft and Apple,” reports the Washington Examiner. Say what? Just what do Microsoft and Apple have to do with so-called fake news? How are any of these companies monopolies? Is Ralph Nader getting senile or was he misquoted?

YouTube has a video of part of his comments that he gave at an event commemorating the passage of the Freedom of Information Act. It doesn’t show the whole event, but it appears that one of the other speakers or someone in the audience said something positive about the role of social media in mobilizing grassroots activism.

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Making a Good Budget Great

President Trump’s 2018 budget takes a meat cleaver to many federal programs. In my issue areas–transportation, housing, and public lands–it would end the Federal Transit Administration’s New Starts program; end funding for Amtrak’s long-distance trains; eliminate HUD community development block grants; and reduce funding for public land acquisition. There’s no high-speed rail or trillion-dollar infrastructure program, and nothing that suggests Trump would support federal funding for those things.

Trump calls this the “America First” budget. What it really is is a “Federal Funding Last” budget, as Trump proposes to devolve to state and local governments and private parties a number of programs now funded by the feds. In theory, the result should be greater efficiency and less regulation. However, in most of the areas I know about, Trump could have gone further and produced even better results.

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Infrastructure Yes; Federal Deficits NO!

The American Society of Civil Engineers (ASCE) will surely benefit if the federal government were to spend a trillion or three dollarson infrastructure. So it is no surprise that its latest infrastructure report card says the nation needs to spend not one, not three, but four-and-a-half trillion dollars on infrastructure.

Yet there is no reason for the federal government to get involved in any of the infrastructure needs claimed by ASCE. In fact, the potential for federal spending on infrastructure is probably doing more harm than good since other people aren’t doing what they should be doing because they are counting on, or at least hoping for, the floodgates of federal funding to open.

Here are some of the most important infrastructure needs identified in the ASCE report:

  • Transit gets the lowest grade of any of ASCE’s infrastructure categories. Not coincidentally, transit is the most tax-dependent and gets more federal subsidies of any of the other infrastructure categories.
  • Railroads get ASCE’s highest grade. They also happen to be the least subsidized, being almost entirely private. Will anyone learn this lesson about private vs. public ownership of other infrastructure.
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APTA Wants a Piece of the Infrastructure Pie

Everyone wants a piece of Trump’s trillion-dollar infrastructure plan, even though they don’t really know what that plan is. Perhaps most arrogant of all, the American Public Transportation Association thinks that transit industry should get $200 billion, or 20 percent of the total.

That’s the same transit industry that carries 1 percent of all passenger miles in the United States–and no freight. That’s the same transit industry into which taxpayers have pumped more than $500 billion in operating subsidies and $350 billion in capital improvements since 1990, only to see annual transit trips per urban resident fall from 47 in 1990 to 40 in 2016. That’s the same transit industry that’s likely to be mostly replaced by self-driving cars in a few years. So, sure, blow $200 billion on it.

APTA’s plan might sound reasonable to transit fanatics who think that transit is worth a lot more than roads. But this assumes that the entire trillion-dollar infrastructure plan is for transportation. In fact, infrastructure includes things like Flint, Michigan’s water supply, a smart electrical grid, and high-speed internet to rural and low-income areas. With all these potential projects, why should an obsolete transportation system that carries 1 percent of passenger travel and no freight get 20 percent of the funds?

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Slow Growth of Labor Productivity

The Bureau of Labor Statistics has published a report finding that labor productivity has grown more slowly after the last recession–in other words, during the Obama administration–than during any other recovery period in recent history. Normally, the response to a recession is for private companies to clean out all of their least productive programs, and the people who worked in those programs find more productive jobs elsewhere. The result is a growth in labor productivity during the recovery period.

Much of Obama’s “stimulus” program, however, was aimed at protecting jobs during the recession, so many less-productive programs managed to survive and the people working in those programs didn’t have the (admittedly stressful) opportunity to find more productive work. Other parts of the stimulus program involved funding of less productive projects that normally wouldn’t have been funded. The result was a slow growth in productivity.

We can see the difference between government and private productivity by comparing the private rail industry with Amtrak and the transit industry. As shown in the table below, transit employees have more than doubled while ridership has grown by just 50 percent, so employee productivity has declined by more than 30 percent.

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Confusion about Infrastructure

The Christian Science Monitor thinks that the Democrats wrote their infrastructure plan as a “political bridge to President Trump.” Fox News thinks that Trump might “get on board” the Democrats’ plan. Statements like these show that many reporters–and by extension members of the public–haven’t yet figured out the real issues behind the infrastructure debate.

As Business Insider points out, there’s a bigger difference between the two sides over “how it’s paid for” than “what gets built.” The Democrats want the federal government to spend a trillion dollars, money it would have to borrow. Trump wants private investors to spend their own money. Never the twain shall meet.

But Business Insider doesn’t understand how Trump’s idea will work. If Trump is going to rely on the private sector, it says, then only projects that generate revenue will be built because “projects that don’t generate revenue for the private sector generally don’t get financed.” But there are two kinds of public-private partnerships. The kind that Business Insider is writing about is called demand risk because the private partner takes the risk that tolls, fares, or other user fees won’t repay the cost.

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Competing Infrastructure Plans: Trump vs. Democrats

Senate Democrats have proposed an infrastructure plan that calls for $1 trillion in federal deficit spending. In detail, the plan calls for:

  • $100 billion for reconstructing roads & bridges;
  • $100 billion to “revitalize Main Street,” that is, subsidies to New Urbanism and affordable housing;
  • $10 billion for TIGER stimulus projects;
  • $110 for reconstructing water and sewer;
  • $50 billion for modernizing rail (Amtrak and freight railroad) infrastructure;
  • $130 billion to repair and expand transit;
  • $75 billion for rebuilding public schools;
  • $30 billion to improve airports;
  • $10 billion for ports & waterways;
  • $25 billion to improve communities’ resistance to natural disasters;
  • $100 billion for a next-generation electrical grid;
  • $20 billion for broadband;
  • $20 billion for public lands and tribal infrastructure;
  • $10 billion for VA hospitals;
  • $10 billion for an infrastructure bank;
  • $200 billion for “vital projects” that “think big” such as building “the world’s fastest trains.”

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The New Housing Bubble

Because the past few years have seen the slowest recovery from a recession on record, the Federal Reserve Bank has been keeping interest rates low and in fact cutting them to almost zero. But this has raised concerns among leading bankers that the low rates are producing another asset bubble, including another housing bubble.

The above graph shows the home price index for several metropolitan areas calculated by the Federal Housing Finance Agency using the Case-Shiller method. (The official Case-Shiller Index published by Standard & Poors doesn’t include as many metropolitan areas as the FHFA index.) It shows that, not only are housing prices rising again, in some urban areas–on the chart, Honolulu, San Francisco-Oakland, San Jose, and Seattle–already have prices much greater than they were at the peak of the 2006 bubble. It seems likely that these prices are going to crash again soon.

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Fake News Stories Undermine Our Economy

Democrats complain that fake news stories from web sites linked to Russia undermined the electoral process. The Antiplanner has been concerned with a related issue for some time, which is fake news stories inspired by Russia that undermine our economy. Here are a few of those stories that I hope Democrats will disavow.

Fake News Item #1: Urban sprawl is paving over all of our farms–This is an old one that has been used to justify central planning similar to that done in the Soviet Union. According to the U.S. Department of Agriculture, the contiguous 48 states have 900 million acres of agricultural land, of which we use only about 40 percent for growing crops. The acres used for crop production have been declining, not because they are getting paved over, but because per-acre yields of most crops are growing faster than our population.

Meanwhile, the department also says that just 84 million acres have been urbanized. This is a little less than the Census Bureau’s estimate of 106 million acres, but either way, as the Department of Agriculture says, urbanization is “not considered a threat to the Nation’s food production.”

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It’s Infrastructure, So It Must Be Worthwhile

The city of Port Angeles, Washington spent $107,516 putting up wind turbines in a new city park. The turbines will power 31 lights in the park. This will save the taxpayers of Port Angeles a whopping $41.58 per month. At that rate, it will take 216 years for it to pay off (at zero interest rate).

That’s before subtracting operating costs, though no one yet knows how much it will cost to operate them. The city is in a dispute with the manufacturer, so it will be another month or so before they turn them on.

The ridiculous benefit-cost ratio is unimportant, says one city councilor, because the purpose of the turbines wasn’t to generate electricity, it was “to educate folks about wind power.” That’s quite an education they are getting. “I wouldn’t have voted for it knowing it was that little” electricity, the councilor added. Isn’t it her job to ask questions like that?

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