Long-term structures matter more for policy outcomes than electing a preferred candidate.
Or as Geoffrey Brennan and James Buchanan put it in the closing paragraph of The Reason of Rules: Constitutional Political Economy, p. 167:
Good games depends on good rules more than they depend on good players.
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Posted in Books, Economics, Public Choice
Next week the Senate is expected to vote on new board members for the Export-Import Bank, which gives favorable financing terms to foreign governments and businesses when they buy U.S. products. This is a bigger deal than it sounds. Ex-Im’s charter requires a quorum of three members to authorize any transactions larger than $10 million. It has lacked that quorum since 2015 due to expiring board member terms. As a result, Ex-Im has been doing just a fraction of the business it used to do. Its financing projects declined from $21 billion in 2014 to $3.6 billion in 2018.
Sen. Pat Toomey (R-Penn.) and other members have been blocking board member confirmation votes in order to keep Ex-Im to returning to its former “Bank of Boeing” status—when Boeing alone accounted for nearly half of its business in most years. A literal top 10 list of large businesses captured as much as 80 percent of Ex-Im largesse before the big 2014-2015 reauthorization and board quorum battle.
The current board quorum fight is the first act in a larger fight. Ex-Im’s charter expires on September 30. If Congress does not reauthorize it, Ex-Im would close its doors to new projects, wind down its portfolio, and then disappear entirely. This nearly happened in the 2014-2015 reauthorization cycle, when Ex-Im’s authorization lapsed for more than six months. It has lacked board quorum for much of the period since.
CEI has signed on to a coalition letter opposing Ex-Im’s reauthorization. We also hope the Senate declines to give the Ex-Im board a quorum. As the Mercatus Center’s Veronique De Rugy and Justin Leventhal point out in a recent study, Boeing and other major Ex-Im beneficiaries are doing just fine without Ex-Im. They have had no trouble finding private financing, and Boeing even set new profitability records.
Total U.S. exports have increased by $266 billion since 2014. The most recent GDP growth and employment rates are both stellar, despite four years of limited Ex-Im activity. Estimated GDP growth was 3.2 percent in fourth quarter 2018, and Friday’s employment report estimated an employment increase of 263,000 jobs and a 3.6 percent unemployment rate.
Given that the prelapsarian was Ex-Im operating at a loss of $2 billion per decade under conventional accounting standards (the Bank uses unconventional methods to show a $14 billion profit instead), it is time to close Ex-Im. Congress can do that simply by doing nothing. It can also limit Ex-Im’s cronyism by doing nothing to vote on new quorum-restoring board members.
For more on the case for closing Ex-Im, see my paper “Ten Reasons to Abolish the Export-Import Bank.”
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Posted in Economics, Export-Import Bank, Trade
James S.A. Corey – Caliban’s War (The Expanse Book 2)
The second book in The Expanse series. While it has the same general story arc as the second season of the tv series, there are plenty of differences in how events happen, and how characters meet and interact. It also introduces my two favorite characters in the series, Chrisjen Avasarala and Sgt. Roberta Draper.
Avasarala is a high-ranking UN politician. She is intelligent, cynical, and conniving, and has a surprisingly creative potty mouth, which is often a bit shocking, coming as it does from a septuagenarian in a sari. As the novel progresses, her character is filled out with little details such as a fondness for pistachios, which she always keeps in her purse, and a loving relationship with her husband, whose gentle personality could not be more different than hers. While highly observant about political strategy and personal dynamics, she can also be oblivious to what is going on right in front of her.
Draper is a physically imposing Martian marine, who even ancient Spartans might have considered a dedicated soldier. She is the lone survivor of an attack by human-alien protomolecule hybrid, which sparks a Mars-UN war. She is sent to Earth to appear in diplomatic hearings while still dealing with the trauma from the attack, and Earth gravity and culture are a bit of a shock to her, as is her obvious use by her superiors as a pawn. Events lead to Avasarala hiring her as an assistant, and they develop a nice rapport. Despite Draper’s conflicted feelings about working for the enemy, she realizes they both want peace, and are on the same side. Draper and Avasarala also have some amusing culture clash moments, both with each other and with the other characters.
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Posted in Books, Uncategorized
Here is an interview I recently did on Wayne Crews’ and my paper on antitrust law. My segment starts at about the 57-minute mark.
The paper is here.
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Posted in Antitrust, Law, Media Appearances, Uncategorized
William Manchester – The Professor and the Madman: A Tale of Murder, Insanity, and the Making of the Oxford English Dictionary
This book has come under fire for being loosey-goosey with the facts, so take it with a grain of salt. The larger story is true, though, and a lot of fun to read about. The Oxford English Dictionary is one of Britain’s proudest cultural accomplishments. It took 70 years to compile. One of its largest contributors was also an American. Worse, he was literally a crazy person who committed murder and worked his lexicographical magic from prison.
Congress is supposed to pass an annual spending budget, though it rarely gets around to it. Instead, the government is usually funded through a mashup of individual appropriations bills, omnibus appropriations bills, and continuing resolutions. This makes government spending less transparent and less accountable. It also leaves the federal government vulnerable to shutdowns during political fights, which happened in January of this year.
Fortunately, the Republican Study Committee (RSC) has just issued a proposed budget. It is likely the only budget that will be introduced in Congress this year, though unlikely to pass a Democratic House. As with any issue-spanning document, one can quibble with its contents regardless of political persuasion. Still, the RSC deserves a great deal of credit for at least putting something out there.
Other parts of the GOP should also issue their own proposed budgets; unlike The Highlander, there can be more than one. Across the aisle, a Democratic budget(s) would face similar obstacles in a Republican Senate and White House. They still should release their own budgets to make their policy priorities more concrete.
The whole RSC FY 2020 Budget is here. The document cites CEI sources on a variety of issues:
Kudos to the RSC for putting out a tangible document that should serve as a starting point for debating federal priorities for the next fiscal year—and for attempting to fix a broken budget process. They also have excellent taste in finding sources for many of their ideas; interested readers can find more in CEI’s Free to Prosper: A Pro-Growth Agenda for the 116th Congress.
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Posted in Export-Import Bank, Media Appearances, Political Animals, regulation, Spending, Uncategorized
Charles Darwin – On the Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle for Life
There is something to be said about reading primary sources. In this case, it is surprisingly readable. For a book about theory, Darwin is heavily empirical. Every facet of natural selection he brings up in the book is illustrated by real-life examples from nature, including animals, plants, fungi, and more. In a way it’s an Attenborough-esque nature tour, with more depth and a unifying theme.
The book stands up better than I expected. Science has advanced much in the last 160 years, but those advances are more updates and expansions than a wholesale rebuilding of natural selection theory. The biggest advances have been in genetics; the Origin of Species’ biggest shortcomings are in that area, though that isn’t necessarily Darwin’s fault.
Darwin also had a charming humility. His personality was more shy and retiring than brash and combative, and it showed in his writing. He’s hard to hate as a person, and his lack of dogmatism and certainty would in most cases be disarming. But considering the uproar he caused, that turns out not to have been the case. Darwin went noticeably out of his away to avoid mentioning the God hypothesis, though he does allude several times to the need for longer-than-biblical time scales for natural selection processes to operate. Even so, critics pounced. Even today, some people reject evolutionary thinking, though nearly always for religious rather than scientific reasons.
As with Adam Smith, the ratio of people who have strong opinions about Darwin to the people who have actually read him is very large. As a result, popular conceptions of his views tend not to be entirely accurate. I encourage interested readers to improve that ratio and read the book. The Origin of Species turns out to have literary value as well as scientific, and there is something to be learned from the delivery as well as the content.
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Posted in Books, Science, Uncategorized
The 19th-century French economist Frederic Bastiat observed, “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.” I thought of this quotation when looking for a statement from President Trump on his early-term regulatory reform efforts. This is a top quote from a WhiteHouse.gov press release, presumably from its Department of Redundancy Department:
We will get rid of the redundancy and duplication that wastes your time and your money.
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Posted in General Foolishness, regulation, Uncategorized
John McWhorter – Our Magnificent Bastard Tongue: The Untold History of English
McWhorter’s larger thesis is both kindly and curmudgeonly. Languages change over time. This is fine; deal with it. In this book, McWhorter applies that philosophy to the history of the English language. How did Old English become Middle English? The big historical reason was the Norman conquest of 1066. By about 1100, a generation had passed since the invasion. The Normans, who by then made up as much as 10 percent of the population, had had enough time to have their linguistic impact, importing grammar and continental vocabulary along with themselves.
But the invaders also had to learn the Old English the natives spoke, and the resulting Middle English is a messy hybrid of the two cultures and languages as they met and mixed in a completely ad hoc manner. Everyone knows how difficult it is for adults to learn a new language; McWhorter argues that a big part of this change is, as with so many other things, simply adults screwing things up. Conquerors and natives also often intermarried, and simplifying language by mostly stripping it of elaborate verbal conjugations and gendered nouns helped these new families communicate with each other.
There was also some precedent for this simplified grammar in nearby Celtic languages, further helping matters. So if you ever wondered why English, for its many other quirks and complexities, is mercifully simple in those areas, that is part of the reason why. It is a mixture of cultural exchange, nearby precedent, necessity, and language’s inborn tendency to change over time.
from Herbert Simon, Administrative Behavior, 4th Edition, p. 244:
Even reading one book a day—a pretty good clip—a person who has collected a library of 30,000 books will take 100 years to read through all of them. We may even consider it a bit ostentatious of people to collect more books than they can possibly read—as though they were trying to impress us with their learning. However, we must not be too hasty in judging them. If their libraries are properly indexed, then each of our collectors has potential access to any of the information in the 30,000 volumes. They are quite justified in collecting more volumes than they can read if they cannot predict in advance what particular information they will need in the future, and if they have a good indexing system for finding, on demand, what they want to see.
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Posted in Books, Uncategorized
Inertia Wins! 