Angus Deaton of Princeton University wins the Nobel prize

A critic of foreign aid, particularly where it comes to economic development and state capacity, Deaton has been at the forefront of "understanding and measuring world poverty" according to Alex Tabarrok (MarginalRevolution). Deaton on foreign aid:

Unfortunately, the world’s rich countries currently are making things worse. Foreign aid – transfers from rich countries to poor countries – has much to its credit, particularly in terms of health care, with many people alive today who would otherwise be dead. But foreign aid also undermines the development of local state capacity.

This is most obvious in countries – mostly in Africa – where the government receives aid directly and aid flows are large relative to fiscal expenditure (often more than half the total). Such governments need no contract with their citizens, no parliament, and no tax-collection system. If they are accountable to anyone, it is to the donors; but even this fails in practice, because the donors, under pressure from their own citizens (who rightly want to help the poor), need to disburse money just as much as poor-country governments need to receive it, if not more so.

More from WSJ.

The cost of regulation

No matter the party, regulations just keep increasing - of course the good news, is that the politicians are starting to take notice (Mercatus):

It's been a long time coming, but structural reforms to the regulatory process are finally starting to reach the mainstream. Presidential candidates, and sitting members of Congress alike, are increasingly proposing ideas and legislation that would change the way regulatory agencies go about making regulations, rather than reacting to each individual regulation as it is produced (although, to be sure, that still happens, too). And it's for good reason that more and more people want to change the regulatory process.

In years past, it may have been easy for politicians to delegate responsibility to agencies and then act as if the issue had been solved. But the delegate-and-forget-about-it doctrine led to a fourth branch of government — the regulatory agencies — producing far more law than Congress itself, and accumulating a stockpile of regulations that is so large that it would require nearly three years for a person to read through the current federal regulatory code.

And the costs aren't incidental:

For our RegData project, we counted the number of individual restrictions — words and phrases that indicate a specific prohibited or mandatory activity — contained in the Code of Federal Regulations (CFR). In the 2014 CFR, we found about 1.1 million restrictions, each one every bit as legally binding as a law passed by Congress and signed by the president.

According to the 2016 Regulator's Budget by Susan Dudley and Melinda Warren, taxpayers spent about $62 billion on the production and enforcement of regulations, although that figure excludes a number of significant regulators for technical reasons — and both the budget and number of restrictions have grown consistently over the time they have been measured. Over the last 20 years, the regulatory budget has more than doubled in real terms, while the number of total restrictions has grown by about 220,000 — a 25 percent increase.

Government on whole milk warnings: "oops"

An argument of why governments should be slow to regulate and control (Cato):

Let scientists conduct research, let other scientists examine it, let journalists report it, let doctors give us advice. But let’s keep nutrition – and much else – in the realm of persuasion, not force. First, because it’s wrong to use force against peaceful people, and second, because we might be wrong.

The future of work and the impact technology will have

Interviewing artificial intelligence researchers on "whether or not technological advancements inherently create more job market opportunities than they destroy": the answers, somewhat predictably, are mixed (TechCrunch).

More: How AI could change the workplace (TechCrunch)

Though the environmental apocalyptic predictions change, the solution remains the same...

More government control (libertarianism.org). I'm not sure that's a coincidence.

Reshaping healthcare in the developing world

Getting healthcare right for the poor (WSJ):

Indian philanthropist and cardiac surgeon Dr. Devi Prasad Shetty is the Chairman of Narayana Health in Bangalore. Born in a small village, Shetty went to school in Bangalore before studying in the UK. After returning to India in 1989, Mother Teresa had a heart attack, and Dr. Shetty was called to operate on her. From then on, he served as her personal physician.

Shetty founded Narayana Health in 2000. He is often called the “Henry Ford” of heart surgery in India. 12 percent of heart surgeries in India are performed by Narayana doctors. Narayana Health is a network of 32 hospitals in 20 locations throughout India. The company provides affordable health care to India’s poorest citizens. Shetty plans to expand Narayana Health internationally to Africa, Asia and Latin America. His first hospital outside of India is in the Cayman Islands.

[...] First of all, we have invested a huge amount of money in the infrastructure of the hospitals. If the same amount of infrastructure is provided in hospitals in the U.S. and Europe, it hardly gets used for eight to nine hours a day. We use our infrastructure for 14 to 15 hours a day. Secondly, we perform one of the largest number of heart surgeries in the world. Through working with us, companies capture 12% of the Indian market for cardiac health care. This brings our input costs down. Third, we’re also an academic institution training heart surgeons, cardiologists, perfusionists and nurses. We conduct 79 training programs on campus, so half of the workforce here is not paid by us. They are students undergoing a training program.

If "labor-friendly policies" are so friendly to labor...

Why do so many laborers choose to move to more conservative states that are purportedly less friendly to labor? (theDailySignal)

The so-called “progressives” love to talk about how their policies will create a worker’s paradise, but then why is it that day after day, month after month, year after year, people are fleeing liberal blue states for conservative red states?

The new Census data on where we live and where we moved to in 2014 shows that the top seven states with the biggest percentage increase in in-migration from other states are in order: North Dakota, Nevada, South Carolina, Colorado, Florida, Arizona, and Texas. All of these states are red, except Colorado, which is purple.

Meanwhile, the leading exodus states of the continental states in percentage terms were Alaska, New York, Illinois, Connecticut, New Mexico, New Jersey, and Kansas. All of these states are blue, except Alaska and Kansas.

Do Americans need to be protected from pay day loans?

According to the Consumer Financial Protection Bureau (CFPB), yes (theDailySignal). One predictable consequence that will be written off as "unintended": the people who they're aiming to help will be worse off as they will have fewer financial options.

Philanthrocapitalism

I'd object to the term capitalism - which isn't what the Nation author thinks it means, but he raises a few interesting points about the influence specific business people just because they bring money from other realms into development (especially when they argue against the very markets in which they created value).

On the other hand, it's their money to spend and waste as they please. No one is forcing us to listen to what they say.

"Not a victim"

Her story makes talk of microaggressions and "triggers" seem absurd. The story of one 16 year old girl's escape from North Korea (Reason.com):

"I watched the movie Titanic and I was shocked. Like, how could this kind of ridiculous film exist? I'd never seen people dying for love, except dying for the regime and the party."

When Yeonmi was thirteen, she and her mother escaped into China, where they were kidnapped and sold into slavery: "Chinese government, if they catch us, will sell us back to North Korea, so we are very vulnerable in China. Chinese people, they know that."

Sex traffickers took advantage of that vulnerability. "That's what happened to both of us, my mother and me." At the time, she didn't know what sex was. "I didn't even know what kissing was."

Read the whole thing.

What overregulation?

"One in three jobs in the US economy now requires government permission to hold — and many jobs requiring licenses pose no health risk." Because paperwork shuffled back and forth between bureaucrats while restricting competition creates jobs? (Cato)

This isn't going to end the way they think it will...

Obama Administration seeks to regulate temp agencies out of existence (DailyCaller):

The joint-employer standard has been around for decades. It normally helps to establish which company has responsibility over employees when multiple companies contract with one another. If one company is found to assert enough control over the employees of a company with which it holds a contract, the two companies will both be considered employers over the employees.

The NLRB has been trying to expand upon the standard. Critics like the International Franchise Association have argued the rule change is an attempt to benefit unions. This is because it’s much easier to unionize one large joint-employer as opposed to many separate employers that just so happen to contract with one another.

“For manufacturers, this case is yet another example of the NLRB changing well-established and functioning labor laws,” Amanda Wood, director of human resources for the National Association of Manufacturers, told the Washington Examiner. “Without a justifiable and sufficient change in circumstance and in how the business community operates.”

Environmentalism: an excuse to use tax payers to make the rich richer?

From Reason:

Do poor people drive Tesla roadsters? Not exactly. The average household income of Tesla owners is just shy of $300,000 per year. Low end models begin at $70,000 but rise to over $105,000. Fortunately, the Feds take a bit of the sting out of the price by handing over a $7,500 tax credit to purchasers of electric cars. A new study, "The Distributional Effects of U.S. Clean Energy Tax Credits," by two energy economists at the University of California, Berkeley finds that the rich are the chief beneficiaries of billions in federal tax credits aimed at encouraging people to buy and install energy efficient and low-carbon technologies.

What does it mean to live in poverty in the US?

Comparatively different to the rest of the world (DailySignal):

According to the government’s own reports, the typical American defined as poor by the Census Bureau has a car, air conditioning, and cable or satellite TV. Half of the poor have computers, 43 percent have Internet, and 40 percent have a wide-screen plasma or LCD TV.

Far from being overcrowded, poor Americans have more living space in their home than the average non-poor person in Western Europe. Some 42 percent of all poor households actually own their own homes; on average, this is a well-maintained three-bedroom house with one and a half baths, a garage, and a porch or patio.

According to the U.S. Department of Agriculture, only 4 percent of poor children were hungry for even a single day in the prior year because the family could not afford food. By its own report, the average poor person had sufficient funds to meet all essential needs and was able to obtain medical care for his family throughout the year whenever needed.

Seeing the poor as a monolithic block sets poverty reduction policies up for failure, argues Robert L. Woodson Sr. from Heritage (DailySignal):

Over the past 10 years, in spite of massive and growing funding of America’s anti-poverty agenda, the percentage of individuals able to support themselves free of government welfare has declined. The fundamental reason the nation has failed to effectively reduce dependency and promote self-sufficiency is that we’ve been misdiagnosing poverty.

People experience poverty for varied reasons. Remedies for poverty should take this diversity into account. Through my experience with the Center for Neighborhood Enterprise and the nearly 3,000 community groups working in low-income neighborhoods it has served, I have come to understand that there are typically four basic categories of the poor.

Read it all.

Where millenials are becoming entrepreneurs in the US

Interesting study on entrepreneurship amongst millenials (FastCompany):

The most recent index from the Kauffman Foundation found that 24.7% of all entrepreneurs were 20 to 34 years old, and those with college degrees were starting businesses in unprecedented numbers.

So where, exactly, are they starting all these businesses?

[...] 1. Birmingham, Alabama
2. Boise, Idaho
3. Boulder, Colorado
4. Nashville, Tennessee
5. Manchester, New Hampshire

Where they aren't:

1. Providence, Rhode Island
2. New Haven, Connecticut
3. Buffalo, New York
4. Albuquerque, New Mexico
5. Hartford, Connecticut

What's behind that "rapid decline in poverty, illiteracy and disease"?

Nick Kristof completely omits the lede (Cato):

The Homo sapiens has been on this earth for 200,000 years. For 99.9% of that time, we lived in ignorance, poverty and misery. What has changed? Reading the NYT, the reader is left with the impression that “good stuff,” like manna from heaven, suddenly was conjured up out of thin air.

Not so. The key to the improvements in the lives of ordinary people over the last 200 years were industrialization and trade, which generated historically unprecedented rates of growth. And the importance of growth cannot be overemphasized. There is not a single example of a country emerging from widespread poverty without sustained economic growth. As University of Oxford Professor Paul Collier writes, “Growth is not a cure-all, but lack of growth is a kill-all.”

It reminds me of Robert Heinlein's quote:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as "bad luck.

Saving the world one t-shirt at a time

Trade not aid (Cato):

Garment factories in poor countries might look dirty and dangerous to westerners, but in fact, they are one of our best hopes for poverty reduction and human development...Western activists rail against 'sweatshops,' but among researchers and economists from left to right there is a consensus that these jobs are the stepping stones out of poverty. All countries that have managed to industrialize its economy and combat poverty in modern times have done so by moving into such labor-intensive exports markets.

Reimagining CO2 into something useful

Sponsored by Canada's oil sands industry, it's an interesting alternative to regulating our way to solving environmental problems (COSIA.ca):

The US$20 million NRG COSIA Carbon XPRIZE is a global initiative, operated by the XPRIZE Foundation, designed to accelerate new technologies by converting CO2 emissions from industrial facilities for electricity generation and oil and gas production into valuable and usable products.

The competition is structured as a two-track prize, with the new technologies tested at either a coal power plant or a natural gas power plant. A total of US$20M will be awarded to winning teams, with US$10M awarded for each track.

Of course the sad part, is that any current proposed regulation does nothing to account for any future innovations that might come out of this and would have far greater impact than the myopic regulations proposed.

Cato: that $750 generic pill is a pure artifact of regulation

Yep - but for some no matter the problem the solution is always more government (Cato):

As you probably know if you follow the news, a man named Martin Shkreli in charge of a startup firm called Turing Pharmaceuticals bought the rights to a drug called pyrimethamine (brand name Daraprim), used in the treatment of AIDS and malaria, and announced that he was jacking up its price from $13.60 to $750. Massive outrage resulted, which has echoed through social media for the past week.

Pyrimethamine is long since off patent. It is not difficult to manufacture, and sells cheaply in Europe. But under the distinctive food and drug laws of the United States you can’t just start turning out pills in your factory to compete with Shkreli, at least not without compiling and submitting a huge pile of regulatory paper with the U.S. Food and Drug Administration. This calls on the services of lawyers and scientists, costs a lot of money, and takes time, and you might or might not be able to recover the costs from the relatively small pool of users.

Update (mises): Why are there are so many shortages in generic drugs?

How much better do groups of amateurs beat professional forecasters?

As it turns out about 30% - but as it turns, out the reason is because they have "doubt" (WSJ):

The top 2%, whom Prof. Tetlock dubs “superforecasters,” have above-average — but rarely genius-level — intelligence. Many are mathematicians, scientists or software engineers; but among the others are a pharmacist, a Pilates instructor, a caseworker for the Pennsylvania state welfare department and a Canadian underwater-hockey coach.

The forecasters competed online against four other teams and against government intelligence experts to answer nearly 500 questions over the course of four years: Will the president of Tunisia go into exile in the next month? Will the gold price exceed $1,850 on Sept. 30, 2011? Will OPEC agree to cut its oil output at or before its November 2014 meeting?

It turned out that, after rigorous statistical controls, the elite amateurs were on average about 30% more accurate than the experts with access to classified information. What’s more, the full pool of amateurs also outperformed the experts.

The most careful, curious, open-minded, persistent and self-critical — as measured by a battery of psychological tests — did the best.

“What you think is much less important than how you think,” says Prof. Tetlock; superforecasters regard their views “as hypotheses to be tested, not treasures to be guarded.”

California's man-made drought: not because of the lack of rain

But because of the prioritization of fish above people. The infrastructure needed to support people, never got built (theDailySignal):

Even now, in the Sierra foothills, state officials empty reservoirs to protect “unimpeded” river flows to benefit small numbers of non-endangered hatchery fish. The California Coastal Commission, the powerful agency with control of development along the shoreline, is holding up a privately planned desalination plant over concerns about its impact on plankton. The environment-friendly commission want to force the developers to build a pumping system that destroys the economics of the plant.

[...] Even the federal government is in on the action. In the far northern part of the state, along the Klamath River, federal environment officials want to remove four dams that provide water storage near the Oregon border. Their goal is to help preserve the habitat of non-native salmon. The “destroy the dams” movement had gained so much steam in recent years that San Franciscans were asked in a 2012 advisory vote to destroy the O’Shaughnessy dam in Yosemite National Park and drain the Hetch Hetchy Reservoir—the main source of water for the state’s third-largest city. Even that city’s notoriously lefty voters said “no” to shutting their main water spigot.

[...] Recent reports showed that farmers use 80 percent of California’s water resources. It’s true that farmers are an important interest group. And because of the state’s old and quirky system of water rights, we see infuriating misuses of resources—e.g., farmers growing water-intensive hay in one of the driest regions on Earth, the southern Imperial Valley.

But that 80 percent number was deceptive because it completely omitted environmental uses of water, which constitute more than 50 percent of the state’s flows. Farmers, businesses, and residents fight over what remains. What we’re seeing—water releases to benefit a small number of common fish, removing dams along major rivers, delays of desalination plants, failure to build adequate water storage—is not an anomaly. It is the cumulative effect of water policies dominated by environmental interests.

Black lives matter... but not as much as teachers unions?

New York's Mayor DeBlasio aims to close charter schools in NYC at the behest of his Teachers Union supporters (WSJ):

Good charters offer part of the answer. In New York, Eva Moskowitz’s Success Academy charter schools are arguably the best. Yet the mayor, his schools chancellor and the teachers union all apparently prefer maintaining the present inequality rather than allow Ms. Moskowitz to open more of her charters in poor minority neighborhoods.

The Success Academies are 58% black and about 27% Hispanic. Even so, these children regularly outscore their counterparts in wealthy suburban areas. So while each year the Success Academies prove that black kids can compete as equals with white kids so long as the bar is set high and teachers are held accountable, in the schools run by Mayor de Blasio the achievement gap between black and white has widened.

Welcome to progressive New York. Where black and Latino children in poor neighborhoods are condemned to failed schools with almost no possibility of escape. While the schools where kids are treated equally and black lives really do matter get the back of the mayor’s hand.

Fortunately it's not going to happen without a fight:

Elon Musk: fully autonomous cars "in approximately 3 years"

I hope he's right (TechCrunch):

Musk is now saying that Tesla cars should have “full autonomy” in “approximately three years.”

As for when regulators are ready to sanction self-driving technologies, they “probably will not allow for full autonomy for one to three years after that,” said Musk. “It depends on the market. Some will be more forward-leaning than others.”

What if banning private prisons made things worse?

I haven't always been comfortable with the idea of private prisons because of the problem with incentives and cronyism related to government contracts but as Reason.com notes:

There’s a key difference, however, between privately run prisons and government-run counterparts: the contract mechanism, which provides a vehicle for accountability. If dissatisfied with performance, a government can cancel a prison contract with a private company. By contrast, the government tends not to fire itself, and the watchmen ultimately watch themselves.

Of course, this depends on contracts that allow for cancellation. What's more interesting is how some states are being proactive about reshaping incentives:

In 2013, Pennsylvania cancelled all of its contracts with private operators of community corrections centers and rebid them on a performance basis, tying vendor compensation to their performance at reducing recidivism rates among the populations they manage. The state corrections agency recently announced an overall 11.3% reduction in recidivism across its 42 contracted community corrections centers between July 2014 and June 2015, marking the second consecutive year of decline.

That same year, Pennsylvania awarded a five-year correctional mental health services contract that was updated to significantly enhance performance expectations, including financial incentives to reduce the number of misconducts for mentally ill offenders, the number of inmates recommitted to prison mental health units, and the number of recommitments to prison residential treatment units. Conversely, the state can impose financial penalties on the contractor if it fails to achieve targeted baseline results for those same metrics.

Coming clean about the VW emissions scandal: more regulatory malpractice

Oops (WSJ)

A consensus has formed, in a remarkably short time since the VW scandal, that Europe’s rush to embrace diesel cars was a colossal policy error. For a meaningless cut in greenhouse emissions, Europe got higher emissions of nitrogen oxides and diesel particulates. While claims of thousands of additional deaths from this diesel pollution are questionable, Europe now realizes it converted half its cars to diesel for no good reason. And this is just the beginning.

If carbon dioxide is a problem, cars were never the solution. Cars and light trucks account for less than 8% of global emissions; U.S. cars and light trucks account for less than 3%. U.S. car makers are being required by government to spend hundreds of billions on fuel-mileage improvements in the name of global warming that will have virtually zero effect on global warming.

Regulatory malpractice: why the US hasn't developed electric planes

From Wired:

In 2004, the Federal Aviation Administration created a new category of airplanes, called Light Sport Aircraft (LSA), to make it easier and cheaper for manufacturers to certify simple, fun-to-fly airplanes.

The new rules have allowed for the creation of dozens of new two-seat airplane designs. None of these are electric, however, because in the preamble to the rule, the FAA wrote that all planes in this class must have “a single, reciprocating engine, if powered.”

The point of the rule, FAA officials acknowledge, was to keep more powerful turbine engines out of the picture. The banning of electric powertrains is unfortunate collateral damage.

“This is the thing that has scuttled electric aircraft’s significant development, for years,” says Dan Johnson, president of the Light Aircraft Manufacturing Association, a trade group. “Just by changing six or eight words, you could undo the problem — but we can’t get there.”

How capitalism improves the environment

From Reason.com:

In the 1950s, the Belarussian-born American economist Simon Kuznets hypothesized that income inequality as a nation industrializes can be shaped like an inverted U—it increases in the early stages of growth, reaches an apex, and then starts tapering down as the economy matures. The switch begins to happen after a critical mass of people abandon farm life for the big cities, where they obtain better education, benefit from economies of scale, and start agitating for policy changes.

Ironically, at a time when Kuznets' original concept has come under intensified attack in the inequality-obsessed developed world, its application to the environment has gained considerable purchase both academically and observationally. As Science Correspondent Ronald Bailey traces in "The End of Doom" (page 20), many of the woes that people still assume are getting worse are actually improving in the most advanced countries.

The coming fake meat

I'm pretty optimistic about this - and it makes sense in that it would mean meat becomes far more scalable and cheaper for human consumption while reducing waste (NYTimes):

“The true challenge will be to recreate more complex pieces of meat that are the pinnacle of the meat industry,” he added. “I believe that plausible, good-tasting steaks and pork loins are only a matter of time.”

Puglisi is advising Beyond Meat, a start-up that is a leader in the field, with investments from Bill Gates and both Biz Stone and Ev Williams of Twitter fame, not to mention Kleiner Perkins Caufield & Byers, the venture capital firm that backed Google and Amazon. Beyond Meat says its sales are doubling each year.

Whoever thought public housing was a good idea...

... should have to live there. The 'unintended consequences' of forcing people whose only commonality is poverty, to live in a ghetto. 'City: Murder victim should have known ‘risks’ of public housing' (NYPost):

The family of a college student murdered at her East Harlem housing project doesn’t deserve a dime from the city — because she should have known the “risks” of being on the dangerous grounds, city lawyers claim in court papers.

“I can’t believe they’re saying she’s responsible for her murder,” Olivia Brown’s mother, Crystal, told The Post Friday.

“Everybody has a right to be safe in their home. Why wasn’t my daughter safe? Because we’re poor and live in public housing?”

Making it more difficult for Americans to 'go galt'?

The US has decided to increase the cost of renouncing a US citizenship by 422%. According to the US State Department, it's about cost recovery... because the cost increased 422% between last year and this year? (Forbes):

When the news broke a year ago that the U.S. was hiking the fee to renounce U.S. citizenship by 422% there was a backlash. If anything, the uptick in American expatriations grew rather than declined. The U.S. State Department said raising the fee for renunciation of U.S. citizenship is about demand and paperwork. Perhaps, but a hike from $450 to $2,350 is still steep. That is more than twenty times the average level in other high-income countries. The State Department complains about demand on their services and all the extra workload they have to process people who are on their way out.

More on Elizabeth Holmes, Theranos

She's now 31 years old with a majority ownership of a company valued in excess of $9 billion (Inc):

Her parents both have had careers with noble ambition--her mother was a foreign-policy and defense aide on Capitol Hill, and her father is now the global water coordinator for USAID--but Holmes decided government agencies were not effective enough. She'd watched "all these people with incredibly good intentions" get mired in bureaucracy and politics while trying to make an impact, she says. Meanwhile, with a startup, Holmes adds, "you say, 'We're going to do this,' and you design an organization to do it."

[...] Over the past 18 months the momentum behind Theranos has been building. There's the recent deal with the prestigious Cleveland Clinic, which will use Theranos technology to test its patients. Theranos secured agreements with Capital BlueCross and AmeriHealth Caritas to be a preferred provider. A partnership with the Carlos Slim Foundation, which runs a network of health care centers in Mexico, will use Theranos tests to screen for, among other things, diabetes, a disease known to be preventable with early detection. In July, Arizona passed the country's first bill, co-authored by Theranos, allowing patients to order blood tests without a prescription. And then there's the massive Walgreens deal.

Any of Theranos's advances could potentially transform the lab test industry. But it's in pricing that Theranos arguably has the most powerful opportunity to disrupt, a point the usually restrained Holmes allows herself to get worked up over. "The premise that you're going to run a business, and that if someone is in need, I'm going to charge them a ton of money, is completely wrong," she says. "Price should be the same for everyone, period. And the price should be affordable." Theranos never charges more than half the rate set by Medicare for blood tests; in some cases, it's a 10th of the cost. A test for HIV can cost more than $80. Theranos charges $16.56.

Previously mentioned here and here.

'Well, it seemed like a good idea at the time...'

The 'unintended consequences' of excluding electric cars from high tolls in Norway (WSJ):

On the losing side of Mr. Nordbø’s commute are local municipalities, including Finnøy, which went into debt to dig the $70 million tunnel but charge no fee on electric cars because of national policies aimed at curbing carbon emissions.

The incentive helped convince many islanders to shift to electric cars. The vehicles now account for about a quarter of tunnel traffic, and allow owners to dodge one of the heaviest toll burdens in the country.

How regulation kills jobs

By making it more difficult for new entrants / startups / entrepreneurs (USNews):

While we find that regulation reduces the number of new business start-ups, it does not appear to harm existing businesses. In fact, we find that the largest firms in an industry – those with more than 500 employees – actually benefit when regulation increases. Why? They are less likely to go out of business, presumably because they are better able to hire accountants and lawyers to deal with the red tape. In addition, they can afford to hire lobbyists that ensure regulation is tailored to their advantage. Potential entrepreneurs, on the other hand, have neither the resources nor the political connections necessary to overcome the same red tape.

Federal regulation increased 28 percent from 1997 to 2012. The economy of the late '90s is not usually remembered as a time when unregulated firms were wreaking havoc on the economy. Our study results suggest that even just returning to the modestly lower level of regulation of the late '90s would lead to over 6,000 additional new businesses being started and 100,000 new jobs being created every year.

The morality of capitalism

Pope Francis: prioritizing the environment over the poor

"In his encyclical Laudato Si’, published today, the pope lambasts wasteful consumerism and unchecked human economic activity as a root of climate change, singling out one product in particular for censure: the air conditioner" (National Review)

Two years ago, the National Bureau of Economic Research published a study concluding that air conditioning reduced heat-related deaths in the United States by 80 percent and could save even more lives in hotter, often poorer countries. A/C is an especially promising life-saving technology given the potential effects of climate change, the authors contend. “The typical Indian experiences 33 days annually where the temperature exceeds 90 degrees fahrenheit and this is projected to increase by as much as 100 days by the end of the century.”

What Pope Francis gets terribly wrong

Markets are the greatest anti-poverty tool we have (Reason):

"Entrepreneurial capitalism takes more people out of poverty than aid." With those 10 words, spoken to an audience at Georgetown University in 2013, philanthropist rock star Bono demonstrated a keener understanding of economic reality than the leader of global Catholicism.

The U2 frontman clearly has it right—and Pope Francis is wrong to suggest that poverty is growing, or that capitalism, free markets, and globalization are fueling the (non-existent) problem. In just two decades, extreme poverty has been reduced by more than 50 percent. "In 1990, almost half of the population in developing regions lived on less than $1.25 a day," reads a 2014 report from the United Nations. "This rate dropped to 22 per cent by 2010, reducing the number of people living in extreme poverty by 700 million."

How was this secular miracle achieved? The bulk of the answer is through economic development, as nascent markets began to take hold in large swaths of the world that were until recently desperately poor. A 2013 editorial from The Economist noted that the Millennium Development Goals "may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution."

More from Mercatus: "Capitalism isn't flawless. But it far outperforms any known alternative at peacefully uniting the peoples of the world in the practical and moral enterprise of producing dignity and extraordinary wealth for the masses" And more still from USA Today: "What the United States has accomplished under a free enterprise system at home and abroad proves that business is not part of the problem; rather, it is a big part of the solution." Rich Lowry in the Politico is scathing: "In his interviews and writings, the pope blames capitalism for a host of ills, from income inequality to the degradation of people to the despoliation of the planet. Of course, no human system is perfect, and the pope wouldn’t be the pope if he didn’t warn against soulless consumerism. Where he loses credibility is in making a material case against capitalism. When it comes to the miracles of widespread prosperity and enhanced well-being wrought by capitalist development, the pope is a denier."

The fall of Chicago

Self inflicted wounds (OCRegister):

When I grew up in the north suburbs of Chicago in the 1960s and ’70s, Illinois was still a‎ financial and industrial powerhouse. The Land of Lincoln had a low-rate flat income tax, the property taxes were reasonable, the state ran budget surpluses, and Illinois was the home of such iconic megaemployers as Caterpillar, Sears Roebuck and the Chicago Mercantile Exchange.

Last week the state, had to sheepishly announce that it doesn’t even have the money in the bank to pay lottery winners. Now jackpot winners are suing the state to get their rightful money.

Perhaps the state will need a second lottery to raise money to pay off the winners from the first lottery.‎

Chicago is so broke that its bonds are junk status, and Mayor Rahm Emmanuel had to go hat in hand last week to the state capital, Springfield, for bailout money to pay the bills.

Does knowledge of economics matter at least as much as algebra?

Even more so (Mises)

Yet once we understand that all human action is economic action, we understand that we can’t escape or evade our responsibility to understand at least basic economics. To think otherwise is to avoid responsibility for our own lives.

While we shake our heads when twenty year olds can’t read at the college level or do simple algebra, we don’t worry much whether they never take economics. We would be alarmed if our children couldn’t perform basic math to know how much change they should get at a cash register, but we send them out into the world far more susceptible to being cheated by politicians. Why do we want our kids to learn at least basic geography, chemistry, and physics? And grammar, spelling, literature, history, and civics? We want them to know these things so they can navigate their lives properly as adults

And the problems with mathematical economics (Mises).

How cronyism hurts entrepreneurship

It might be shocking to some people, but entrepreneurs don't just do it for the money (USNews)

Psychologists have found the intrinsic desire to master challenges, known as "mastery," to be an important human drive. Economics has emphasized the external or monetary rewards for business, typically to the exclusion of mastery.

The words of entrepreneurs provide evidence for mastery as a business motive. Tom Monaghan, founder of Domino's Pizza, has remarked, "To me, the real substance of life and work is the constant battle to excel." Cable television pioneer Ted Turner observed, "America is about competition and rising above that competition." Michael Bloomberg has said that, "Even today, after toiling for 30 years, I wake up looking forward to practicing my profession, creating something, competing against the best … receiving psychic compensation money can't buy."

And actions speak louder than words. Many members of the Forbes Richest Americans list work long hours, even though they already have more money than one could spend in several lifetimes. A 2013 profile noted that Bill Gates was looking forward to working more with product managers in the upcoming year. Serial entrepreneur Richard Branson has started over 200 businesses and never tires of the challenge of making a new venture succeed.

[...] Cronyism can reward favored entrepreneurs with profits, but not necessarily mastery. Many top athletes would not care to compete in a contest rigged in their own favor. Similarly, some entrepreneurs or businesses, who may be well-positioned to take on a new challenge, do not seek government favoritism. And others may choose not to compete when it's clear that their performance doesn't necessarily equal results in a rigged marketplace.

The extension of cronyism in an economy over time can affect the types of individuals who choose business as a career. Profits for entrepreneurs who successfully court favor with politicians may not satisfy those with a true competitive streak. Imagine a track meet where the organizers rig the races so that their favorites, and not the best runners, win. Such a meet will likely fail to attract the world's best competitors.

The effects on the quality of entrepreneurship could be devastating in the long-term. After mastery-seekers choose other pursuits, the remaining profit-seekers will likely have no qualms about seeking or benefitting from government favors. A vicious cycle of cronyism could ensue, as more favoritism results in a group of business leaders more willing to lobby, leading in turn to more favors.

Victimhood, microaggressions, and a bit of good news

Supposedly the good news is that the national debate in the US over microaggressions is only really a debate because social status is improving among what traditionally have been disadvantaged groups:

As social status becomes more equal, they argue, people become more sensitive to any slights perceived as aiming to increase the level of inequality in a relationship. In addition, as cultural diversity increases, any attempts seen as trying to reduce it or diminish its importance are deemed as a morally deviant form of domination. As the New York University moral psychologist Jonathan Haidt has astutely observed, "As progress is made toward a more equal and humane society, it takes a smaller and smaller offense to trigger a high level of outrage. The goalposts shift, allowing participants to maintain a constant level of anger and constant level of perceived victimization."

Those experiencing what they think are microaggressions seek third-party redress of their grievances by assuming the pose of victim. "People portray themselves as oppressed by the powerful—as damaged, disadvantaged, and needy," write Campbell and Manning. The process heralds the emergence of a culture of victimhood that is distinct from earlier honor and dignity cultures. This is nothing less than demoralizing and polarizing.

Victimhood devalues/ignores individual power and responsibility. The irony is that the solutions proposed by those who supposedly advocate for victims are for entitlement systems that more permanently reduce individual power and transfer it to the state.

Why frequent business travel is so bad for you...

Hmmm... apparently there are a few reasons mixed in with a healthy dose of scaremongering... (Fastcompany):

If aging faster isn’t scary enough, it turns out that frequent business travelers are exposed to more radiation than is considered healthy. "Radiation exposure is hundreds of times higher at high altitude than at ground," says Cohen.

Matter of fact, it’s so high that "there have been calls to classify frequent business travelers as ‘radiation workers,'" he says, and notes that just seven round-trip flights a year from New York to Tokyo (about 85,000 miles) exceeds the limit for public exposure to radiation. As Cohen notes in his paper, "radiation exposure amongst commercial aircrew even exceeds that of nuclear power workers."

NYC's homeless crisis and 'unintended consequences'

It so happens the positions of 'advocates' were for a system that not only preserved the status quo but was self serving - funding the organizations that benefited from homelessness (NYPost via Instapundit):

Then, precisely as we predicted, the number of people in homeless shelters started to rise sharply, going from 38,800 in May 2011 to more than 60,000 at the peak earlier this year.

During the 2011 budget debate, the Coalition for the Homeless dismissed the Bloomberg administration’s predictions about what would happen if the Advantage program was cut by the state. They claimed our dire warnings constituted nothing more than “scare tactics.”

The results speak for themselves.

What makes us who we are?

It's more than an interesting philosophical question as it turns out. A new paper looking at Alzheimer’s and other neurodegenerative diseases suggests that it's not in our intellect or memory but in our moral character (WSJ):

The researchers found that the people who cared for the FTD patients were much more likely to feel that they had become different people than the caregivers of the Alzheimer’s patients. The ALS caregivers were least likely to feel that the patient had become a different person. What’s more, a sophisticated statistical analysis showed that this was the effect of changes in the patient’s moral behavior in particular. Across all three groups, changes in moral behavior predicted changes in perceived identity, while changes in memory or intellect did not.

These results suggest something profound. Our moral character, after all, is what links us to other people. It’s the part of us that goes beyond our own tangle of neurons to touch the brains and lives of others. Because that moral character is central to who we are, there is a sense in which Edith literally, and not just metaphorically, lives on in the people who loved her.

No, communism wouldn't work any better today just because we have better computers...

It's befuddling that anyone would think it would (Bloomberg via Instapundit):

I’ll swing for the fences and argue that no, even with better computers, Communism isn’t going to work. Nor some gauzy vision of post-capitalism that looks like Communism, but with YouTube videos.

In retrospect, Communism seems wildly stupid, or at least, incredibly naive. Did the people who dreamed up this system not understand the enormous incentive problems they were creating? As Ayn Rand dramatized the problem in “Atlas Shrugged”: “It’s miseries, not work, that had become the coin of the realm — so it turned into a contest among six thousand panhandlers, each claiming that his need was worse than his brother’s. How else could it be done?” The incentives of “from each according to his ability, to each according to his need” drive toward falling production, which means there won’t be enough to cover the needs.

Or as a former colleague who fled Communist Poland once told me, “They pretended to pay us, and we pretended to work.” There is a reason that basically all the Communist and Socialist regimes ended in some degree of authoritarianism.

Hugo Chavez: "one of the most disastrous leaders the world has seen"

Another example of how socialism works in practice (Bloomberg):

Yes, he steered a bunch of money to the poor, and did lots of things that drove both labor unions and business leaders nuts. The head of the country’s chamber of commerce even replaced him as president in a 2002 coup attempt that failed after two days. But as of 2005 Venezuela still had the highest per-capita gross domestic product in Latin America (adjusted for purchasing-power parity), and no trouble paying its bills. Chavez supporters could even point to some indicators that poverty and malnutrition were on the decline.

Now, of course, Venezuela’s economy is a disaster. The government stopped releasing regular economic statistics in December, but one official told Bloomberg News the annual inflation rate is 150 percent. The latest estimate from the Troubled Currencies Project run by Steve H. Hanke of the Cato Institute and Johns Hopkins, meanwhile, is that inflation is really 808 percent. Food shortages have become a problem, a debt default seems almost certain, and a complete economic collapse isn’t out of the question. By 2014 Venezuela had, by the World Bank’s PPP-adjusted accounting, slid to fifth place in per-capita GDP in Latin America, behind Chile, Cuba (!), Uruguay and Panama. Mexico and Brazil may pass it this year, despite their own economic troubles. Even next-door neighbor Colombia is getting within striking distance.

The end of (extreme) poverty?

Cato says yes:

Ending extreme poverty may sound like a remote dream voiced by idealists and beauty pageant contestants, but that goal’s attainment is actually closer than you think. The share of people living in absolute poverty (i.e., living on less than $1 a day) has dwindled to around five percent of the world’s population. Much of this progress can be attributed to massive poverty reduction in China that elevated hundreds of millions of people out of destitution.

Ranking the fiscal solvency of American states (and territory)

Not surprisingly, Puerto Rico is dead last. Runners up are Illinois, New Jersey and Massachusetts (Mercatus).

Breakthrough in LASERs could speed rise of self driving cars

As Glenn Reynolds says, faster please (Wired).

Where the moral argument for a "living wage" fails

The war to put additional price controls on wages continues (Mises):

Behind this effort is a philosophical claim that employers are morally obligated to pay “a living wage” to employees, so they can afford necessities (however ambiguously defined) on a single wage, working forty hours per week. This moral argument singles out employers as the morally responsible party in the living wage equation, even though the variables that determine a living wage go far beyond the wage earned.

[...] And yes, it’s true that plenty of activists regularly denounce landlords as “slumlords” or greedy capitalists for charging the highest rents the market will bear. And there are still plenty of activists who argue for price controls on rents and food. But they’re in a small minority nowadays. The vast majority of voters and policymakers recognize that government-dictated prices on food and housing lead to shortages. Setting a price ceiling on rents or home prices simply means that fewer housing units will be built, while setting a price ceiling on eggs, or milk or bread will simply mean that fewer of those staples will be brought to market.

Such assertions are barely even debated anymore, as can be seen in the near-extinction of new rent-control efforts in the political sphere. You won’t see many op-eds this Labor Day arguing for price controls on fruit, gasoline, and apartments. You won’t see any articles denouncing homeowners for selling their homes at the highest price they can get, when they really should be slashing prices to make homeownership more affordable for first-time homebuyers.

So, for whatever reason, homeowners, grocers, and others are exempt from the wrath of the activists for not keeping real wages low. The employers, on the other hand — those who pay the nominal wage — remain well within the sights of the activists since, for some arbitrary reason, the full moral obligation of providing a living wage falls on the employer.

How markets are triumphing over the Saudis

While they had previously been successful at quashing upstarts by flooding the marketing with cheap oil, that strategy hasn't worked this time for the Saudis (WSJ):

What the Saudis and the naysayers closer to home seem to have forgotten is that the free market is the greatest incubator of technological innovation. Energy producers in this country have gauged the challenges of lower prices, are working to tackle them, and it’s paying off.

The technology behind shale production is advancing rapidly, and its costs are falling. Today the industry can tap multiple separate oil pools from a single vertical hole, drilling horizontally through miles of rock with computer-guided, steerable drill bits. Some of these “octopus” wells can feature as many as 18 horizontal shafts.

Articles about falling rig counts don’t take this into account. We’re seeing additional innovations such as the use of recycled “fracking” water, carbon dioxide and other substances to break formations, reducing the use of precious fresh water in drilling.

An extended period of below-$40 prices—if that’s what’s ahead—will have an effect on the industry and many families will have to endure consolidation and layoffs. Weaker and overleveraged players will go out of business. The oil industry as we knew it before prices dropped may never be the same.

But if history is any guide, oil and gas prices won’t remain low forever. And the technology, the talent and the infrastructure associated with America’s energy renaissance aren’t going away. They’re new facts in the global landscape. When prices rise, American capital will flow back to the oil patch and production will ramp up again.

"Technology eliminates jobs, not work"

Reason's Ron Bailey facetiously asks "why are there any jobs still left?" while pointing out how technology has created far more jobs than it's destroyed:

Despite all these jobs and more lost to automation, U.S. employment continued to steadily rise. Why? Because technological progress is a "great job-creating machine," argue Ian Stewart, Debapratim De, and Alex Cole, three economists at the business consultancy Deloitte. The trio argues that "the current discourse is biased towards the job-destroying effects of technological change due to the relative unpredictability of its creative aspects."

Analyzing technological and employment trends over the past 150 years in the United Kingdom, the three find that while machines have eliminated millions of jobs, they have also conjured into existence many more. Even better, living standards dramatically improved as the technological destruction of old jobs proceeded.

How? First, technology substitutes for labor, thus raising productivity and lowering prices. Since 1950, the percent of British incomes spent on food and clothing has fallen from 35 and 10 percent to 11 and 5 percent, respectively. In addition, the real price of automobiles has been halved. In 1948, a television in the U.S. would have cost the equivalent of $12,000 in today's money. Since then, the price of a TV has since fallen by 98 percent.

Second, the sectors that are the sources of innovation expand, boosting the demand for labor. The Bureau of Labor Statistics reports that the number of people working in computer systems design and related fields rose from 400,000 in 1990 to over 1.5 million in 2011. Similarly, the number of people employed in life sciences (biotechnology, pharmaceuticals) increased from 174,000 in 1990 to 1 million in 2012.

Third, technology improves outcomes in areas such as medicine, leading to increased demand for labor in those areas. Consider that the annual death rate for cardiovascular diseases in the United States has fallen from 805 per 100,000 in 1963 to 236 per 100,000 today. Five-year cancer survival rates have risen from 50 percent in 1970 to 70 percent today. Meanwhile, U.S. health-care employment rose from 2 percent of the workforce in 1950 to 9 percent today—that is, from 1.2 million to 13.4 million workers.

"Resource curse" hits Brazil

The "resource curse" that typically hits developing countries really doesn't accurately describe the principle problem: bad government. Brazil is no different whose politicians can most charitably be described as idiots (WSJ):

Buoyed by China trade, nationalist-minded politicians launched a foreign policy meant to reduce the role of the U.S. in Latin America. Brazil blocked a U.S. free-trade initiative for the Americas. They teamed with Venezuela to create a regional security council to supplant one that included the U.S. The foreign minister worked from an office with a huge map of the world upside down, offering the message that the era of emerging markets was at hand.

But the world wasn’t upside down. While Brazil tied itself more closely to anti-American governments like Venezuela, Argentina and Iran, some regional neighbors—Chile, Colombia and Peru—went around Brazil and cut individual free-trade deals with the U.S.

Brazil also started spending its commodity windfall before its oil and ore were out of the ground—another feature of the resource curse.

Anticipating commodity sales, the government spent increasingly heavily. Government banks supplied Brazilians with easy credit. Brazil subsidized energy bills, issued cheap loans to big companies with government ties and built stadiums to host global events such as the 2014 World Cup and the 2016 Olympics.

Americans have more, and work less than 30 years ago

In a way it's depressing that there's almost never any historical context in current political discourse... especially since the demagoguery is used to enact policies that counteract some of the gains they've seen:

Not only are Americans wealthier on average, but they are also working less. The average American worker in 2015 works 30 fewer hours in a year than her counterpart in 1988, and yet is almost $18,000 dollars richer in real terms.

Is capitalism on the decline?

Nope, it's flourishing (TheEconomist via Instapundit):

If you define capitalism as the interaction of individuals with a market economy, the system is advancing, not retreating. New-economy websites such as Airbnb and Etsy allow people to earn money in new ways—renting out their homes while they are on holiday, or selling arts and crafts. In the past, homeowners might have struggled to find renters and hobbyists to find buyers; aggregator websites make the task much easier.

It is true that some of these new websites undermine existing business models, just as file-sharing wrecked music-publishing companies. But investors expect most of these companies to be profitable eventually, judging by the valuations they attract. Google started as a free internet-search business but has found a way to monetise its reach. The move from an economy based on physical goods to one based on software and intellectual property seems to be allowing higher returns on capital than before. The internet has been in wide use for 20 years or so, and corporate profits are close to a post-war high as a proportion of American GDP.

By reducing the cost of information, the internet kills some business models. But not all. New models will appear and people will always be willing to pay for products that convey status, whether luxury watches or fast cars or branded clothing. They can stream music for nothing, but people will spend vast sums to hear rock bands play live.

Another new-economy effect is that the old idea of lifetime employment is fading. More people will follow “portfolio careers”, switching from one employer, or even industry, to another as the economy changes. This will require them not just to learn new skills as they age, but to monitor the economy for new opportunities.

Many more people are likely to be self-employed, offering services to a wide range of customers. In a sense, they will be artisans, not employees. Activities such as sales, marketing and accounting—matters that salaried employees leave in the hands of specialist colleagues—will become the responsibility of the individual. Such workers will have to be more, not less, sensitive to the market economy than the typical office drone.

And then there are pensions. Two decades ago, many workers could rely on a paternalistic system under which companies provided a retirement income linked to their final salary. New private-sector workers merely build up a savings pot, which they must use to see them through their retirement years as best they can.

California: now with more poverty than Mississippi

A bit of a surprise (NewGeography):

Back in the years when the nation had a "California Dream," it would have been inconceivable for things to have gotten so bad --- particularly amidst what is widely hailed as a spectacular recovery. The 2013 data shows California to have the worst housing cost adjusted poverty rate among the 50 states and the District of Columbia. But it gets worse. California's poverty rate is now more than 50 percent higher than Mississippi, which long has set the standard for extreme poverty in the United States

The rush to regulate the "gig economy"

Yep (TechCrunch):

With a number of technologies emerging together to enable the unprecedented ability to coordinate and allocate resources in real time, a corresponding rise of new work and organizational structures may be an inevitability.

Despite this, a number of policy leaders and many in the media are still having the wrong conversation about these platforms, not asking the right questions about the underlying technology shifts taking place.

Instead, they are attempting to categorize the entire industry as either good or bad. In our view, this is almost like 19th century politicians trying to hold a Yes/No vote on industrialization.

What's wrong with the West's economies?

Essay about some of the apparent failings of economies in the west and exploring the role education has to play (NYBooks):

In the classical models I have been describing, no one is trying to think up something new (except perhaps new profitable investments) and no one is attempting to create it. There is no conception of human agency, only responses to wages, interest rates, and wealth. The economy is mechanical, robotic. The crops may be growing, but there is no personal growth. In the classical canon, Bentham, with his “sum of utilities,” portrays individuals like machines working to contribute their share to the general welfare. Joseph Schumpeter portrays “innovation” as produced by hard-driving entrepreneurs who make “obvious” applications of discoveries occurring outside the nation’s economy—as if the economy’s central participants possessed no imagination whatever.

Such classical models are basic to today’s standard economics. This economics, despite its sophistication in some respects, makes no room for economies in which people are imagining new products and using their creativity to build them. What is most fundamentally “wrong with economics” is that it takes such an economy to be the norm—to be “as good as it gets.” The cost is that elements of the Western economies are becoming products of this basically classical economics, which has little place for creativity and imagination.

Why do so many intellectuals hate markets?

Because they don't trust people... interesting discussion/podcast (Cato):

Robert Nozick, in his essay “Why Do Intellectuals Oppose Capitalism?” proposed that many highly-educated public intellectuals tend to lean towards collectivism and authoritarianism because they expect society to work best in the way that schools and the academic system (which is the system they are most familiar with) operates.

Why no one really wants to make vaccines anymore...

So the companies that may have cured Ebola don't actually expect to make money from it... there's something horribly bizarre about this (fool.com via Instapundit):

However, for investors who bid up Ebola vaccine developers in 2014, there may not be much financial reason to cheer. Even if Merck and NewLink are successful in bringing rVSV-ZEBOV to market, it may not wind up making either company a profit (aside from the $50 million NewLink received upfront from Merck for worldwide rights to the vaccine). The reason is that vaccines are wholly dependent on outbreaks and government stockpiling demands. Out of the gate there could be strong initial demand for the vaccine, especially in select developed nations and the worst-affected African countries. Beyond an initial stockpiling, though, sales of rVSV-ZEBOV could dry up, or at best be incredibly lumpy.

Of course, there are some who also believe that drug companies should take this approach to all their drugs... and then wonder why no one wants to create new drugs.

Tipping and travel...

Useful but recurring issue... how much to tip while travelling abroad? (WSJ)

This is the charter school that NYC's mayor wants shut down

"New York's largest charter network outperformed traditional public schools in wealthy zip codes" (Reason.com):

Success Academy schools did well in English—68 percent of students were proficient, compared with 30 percent in the city over all—but in math, the scores were astonishing. Ninety-three percent of Success Academy test-takers were proficient in math, compared with 35 percent citywide.

To put that into perspective, of the 1,282 public schools tested, just 12[*] were part of the Success Academy network, or 1 percent of the total. Yet 5 out of the 10 schools that scored highest in math were part of the Success Academy network. Of the 20 schools that did best in math, 9 were part of the Success Academy network. All twelve schools in the network were ranked in the top 40 for math. Results of this sort were unheard of before Success Academy arrived on the scene.

And they say that conservatives are the "mean ones"? (paulg on Twitter)

As true then as it is now...

Uber is so obviously a good thing that you can measure how corrupt cities are by how hard they try to suppress it.

— Paul Graham (@paulg) July 9, 2012

More: Researchers at Philadelphia’s Temple University that suggests the entry of Uber’s low-cost ride service, Uber X, into 14 California counties led to a 3.6 to 5.6 percent decline in drunken driving deaths (KQed via PaulG).

Share of people in and out of poverty

How can you not be incredibly optimistic when you see stuff like this? Two centuries ago your chance of living in poverty was 94% Today it's 14%. Though, apparently you can as the first comment in the twitter stream is asking about inequality (Max Roser)

Brink Lindsey's guide to fixing the US economy *and* inequality

Four steps (Reason.com): fix intellectual property rights - restrictive patents, free immigration particularly for highly skilled workers and entrepreneurs, dismantle excessive occupational licensing and zoning. Read the white paper (PDF, Cato).

Update: Even the White House agrees that occupational licensing hurts jobs and consumers (Reason.com).

"Democrats Vs. Uber"

'How can the government possibly help you if you aren't regulated?' (Forbes):

In Hillary Clinton’s recently unveiled economic plan, she heavily criticized Uber and the sharing economy as a major contributor to the rise in income inequality arguing it creates independent contractors, such as Uber drivers, who do not receive government mandated employee benefits.

However, these arguments ignore evidence that in Uber’s top 20 markets, Uber drivers “averaged more than $19 an hour in earnings, compared to $12.90 in average hourly wages for cab drivers based on Occupational Employment Statistics data”, according to a study co-authored by Princeton economist Alan Krueger, one of Hillary Clinton’s named economic advisers.

At least the robots are pleased...

"Wendy’s explains what mandated wage hikes do to jobs at burger joints" (WSJ):

CFO Todd Penegor talked about the pressure to pay higher wages and said that “we continue to look at initiatives and how we work to offset any impacts of future wage inflation through technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant. And you’ll see a lot more coming on that front later this year from us.”

On last week’s call with securities analysts, Wendy’s CEO Emil Brolick was asked how the franchisees who own and operate Wendy’s locations could raise prices to offset the higher wage costs in places like New York. He replied that “our franchisees will likely look at the opportunity to reduce overall staff, look at the opportunity to certainly reduce hours and any other cost reduction opportunities, not just price. You know there are some people out there who naively say that these wages can simply be passed along in terms of price increases. I don’t think that the average franchisee believes that.”

Mr. Brolick elaborated that “we believe that some of these increases will clearly end up hurting the people that they are intended to help. And we continue to believe that one of the great opportunities you have in a business like ours is that an entry-level person, in a very short period of time, can rise to become a manager in a restaurant, and have an income above the median household income in the United States of America.”

Cato: why and how government fails

From the Cato Institute:

Most Americans think that the federal government is incompetent and wasteful. What causes all the failures? A new study from Cato scholar Chris Edwards examines views on government failure, and outlines five key sources of federal failure. Edwards concludes that the only way to substantially reduce failure is to downsize the federal government: “Political and bureaucratic incentives and the huge size of the federal government are causing endemic failure. The causes of federal failure are deeply structural, and they will not be solved by appointing more competent officials or putting a different party in charge.”

The Swedish Welfare State

And the myths that are believed by many... (WeeklyStandard).

Is America becoming a Bureaucratic Tyranny?

Maybe a bit overwrought as I suspect (and hopefully, I'm not wrong that) many of these regulatory regimes are unsustainable politically. In the short(er) run, if America is becoming a "regulatory state" there will be significant costs to both freedom and economic growth (PointsandFigures via Instapundit):

We’re headed for an economic system in which many industries have a handful of large, cartelized businesses— think 6 big banks, 5 big health insurance companies, 4 big energy companies, and so on. Sure, they are protected from competition. But the price of protection is that the businesses support the regulator and administration politically, and does their bidding. If the government wants them to hire, or build factory in unprofitable place, they do it. The benefit of cooperation is a good living and a quiet life. The cost of stepping out of line is personal and business ruin, meted out frequently. That’s neither capture nor cronyism.

Russia after Putin...

Predictions of a breakup (Nextbigfuture via Instapundit, Stratfor). But as a friend wonders, what will happen of their black budgets and nuclear arms?

Why vaccines don't get developed

The NYT piece makes the claim that the primary issue is cost, but doesn't do a good job at looking at why the costs are as high as they are, nor why drug companies aren't able to generate an adequate return on their investments in the space (NYT via Instapundit):

Dr. Berkley and other vaccine experts note a grim irony. Scientists showed that this vaccine was effective in monkeys a decade ago. Thereafter, the vaccine lingered in scientific limbo.

“We should have had an Ebola vaccine at least two or three years ago,” said Dr. Peter J. Hotez, the president of the Sabin Vaccine Institute and a science envoy at the State Department.

[...] Vaccines are one of the great triumphs of science, but the way that modern medicine functions makes it hard to develop new ones. “That model doesn’t work,” said Dr. Hotez. “It hasn’t worked for decades, and it was really brought home with Ebola.”

To make a vaccine, scientists first design experimental forms to test on cells and animals. It may cost $25 million to perform these studies, said Dr. Plotkin. The cost of that basic research is typically covered by governments or philanthropies.

Then researchers have to put vaccines through several rounds of trials in humans. In small initial studies, they evaluate its safety and figure out the right dose. In larger studies, they look more closely at its effectiveness and side effects.

The cost of taking a vaccine all the way through this process is hundreds of millions of dollars, said Dr. Plotkin.

Major pharmaceutical companies can afford to pay for the later stages of vaccine development, said Dr. Adel A.F. Mahmoud, the former president of Merck Vaccines and now a professor of molecular biology and public policy at Princeton.

But drug companies are increasingly reluctant to take the risk. “The next step, nobody is touching,” he said.

Don't follow your passion, do what contributes...

From Ben Horowitz, co-founder of Andreessen Horowitz (Inc.):

There are four big problems with using passions as a guide: (1) They're hard to prioritize, (2) they change, (3) a passion may reflect something you aren’t actually good at and (4) following your passion is kind of self-centered.

American foreign policy reminder: peace is not the absence of war

While it may be a bit early to evaluate the legacy the Obama Administration leaves when it comes to foreign policy, the indicators to date, aren't promising (Cato):

By praising Ethiopia’s repressive regime for being “democratically elected” last week, President Obama was driving home once again something that should be abundantly clear by now: His administration marks a radical departure from previous ones when it comes to democracy promotion.

On the contrary, the Obama legacy will be one of propping up dictatorial regimes around the world. His praise for the government of Prime Minister Hailemariam Desalegn merely took to Africa what Obama and his foreign policy team have already done on a grander scale in Iran, Cuba and Burma.

To be sure, President Obama was standing next to Desalegn at a joint press conference in Addis Ababa when he spoke. Maybe he didn’t want to be a bad guest. And the president did add that the Ethiopian government has “more work to do.” After a slew of criticism at home, he later also questioned why African leaders cling to office rather than leave after their terms are completed.

Of course they would...

Unions demand an exemption from the $15 minimum wage laws they advocated for (theDailySignal).

A bit of perspective on Cecil the Lion

From a Zimbabwean student studying in the US (NYT)

We Zimbabweans are left shaking our heads, wondering why Americans care more about African animals than about African people.

Don’t tell us what to do with our animals when you allowed your own mountain lions to be hunted to near extinction in the eastern United States. Don’t bemoan the clear-cutting of our forests when you turned yours into concrete jungles."

And please, don’t offer me condolences about Cecil unless you’re also willing to offer me condolences for villagers killed or left hungry by his brethren, by political violence, or by hunger

Markets in everything... the lucrative business of disaster rescue

Not sure how much ethics (as Wired claims) come into play here... if there weren't the incentive, the solution wouldn't exist.

Quibbling over the vernacular: "post capitalism"

In general, I like the article but to call the increased efficiency of markets as being "post capitalist" seems as a bit silly and sensationalist but the basic premise is this:

New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.

It's worth noting that the term "capitalism" itself was coined and created as a pejorative by self described "socialists" (econlib)

Puerto Rico defaults on debt

They're not going to be the last... (USAToday via Instapundit):

Puerto Rico's Government Development Bank paid only $628,000 of the $58 million due creditors, the agency said. It said the decision "reflects the serious concerns about the Commonwealth's liquidity" and the need to ensure "essential services (residents) deserve are maintained."

​Given the tiny payout, "Moody's views this event as a default," said Emily Raimes, vice president at the U.S. credit giant.

Puerto Rico's outstanding debt of $72 billion is far bigger than Detroit's $20 billion bankruptcy two years ago but a fraction of Greece's $350 billion in obligations. But unlike Detroit, there's no law allowing Puerto Rico to declare bankruptcy. And Treasury Secretary Jack Lew has said the federal government won't bail out the island, as institutions such as the International Monetary Fund rescued Greece.

While the USAToday article seems to infer that the problem is because of a phase out of corporate tax breaks for the commonwealth, the more obvious reason seems to be that the government spent far too much money on things that didn't result in an economic return (BondBuyer, 2013) - ie they ran out of other people's money.

The case for second-best solutions

I agree... Some progress is better than none at all (Cato):

But again, it isn’t within Cato’s power to wave a magic wand and make free trade or marriage privatization happen. So our scholars usually opt for trying to move policy in a better direction. Center director Dan Ikenson writes, “Despite their flaws, free trade agreements have helped reduce domestic impediments to trade, expand our economic freedoms, and lock in positive reforms, even if only as the residual byproduct of an ill-premised mercantilist process. Ultimately, free trade agreements have delivered freer trade.” Not free trade, alas. But freer trade.

As I put it in a Facebook debate in June, “Best is best, but better is better than worse.” And that’s the standard that has mostly guided us at Cato for 38 years. We want to push public debate and public policy in a direction consistent with liberty and limited government. Sometimes, as in my book The Libertarian Mind and much of the material on Libertarianism.org, that entails laying out the case for libertarianism and strictly limited government. And sometimes, as in many of our policy studies, it involves offering politically realistic reform plans or second-best solutions.

How subsidies increase the cost of tuition

Much like the housing crisis, by making it cheaper to borrow, a bubble has formed in tuition prices schools can charge (WSJ):

Federal student loans allow Americans to borrow at below-market rates with scant scrutiny of their credit and no assessment of their ability to repay. Meanwhile, federal Pell grants, which help low-income college students and don’t need to be repaid, more than tripled to more than $30 billion a year between 2001 and 2012. Education tax credits roughly quadrupled to about $20 billion a year.

The cost of getting a degree similarly exploded. From 2000 to 2014, consumers’ out-of-pocket costs for college and graduate-school tuition rose 6% a year, on average, according to the Labor Department’s consumer-price index. By comparison, medical-care inflation looks meek at an average 3.8%. Overall consumer prices climbed 2.4% a year.

Correlation or causation? The study looked at schools that derive a great share of revenue from student aid with those that derive a small share from aid. It compared tuition growth at those schools during the past decade with several moves made by Congress to increase caps on individual Pell grants and undergraduate subsidized loans, which are based on financial need and have better terms than unsubsidized loans.

The study found that, on average, for a $1 increase in the subsidized-loan cap, tuitions rose by as much as 65 cents. For Pell grants, it translated to 55 cents on the dollar. The study pinpoints private schools—both nonprofit and for-profit—as bigger offenders than public ones.

How (some) tyrannies are born?

NationalReview (via Instapundit):

You know, when I first started pondering the book, I thought it might be all about economics. About ten years ago I went on a junket to Switzerland and attended a talk with the CEO of Nestlé. Listening to him, it became very clear to me that he had little to no interest in free markets or capitalism properly understood. He saw his corporation as a “partner” with governments, NGOs, the U.N., and other massive multinationals. The profit motive was good for efficiency and rewarding talent, but beyond that, he wanted order and predictability and as much planning as he could get. I think that mindset informs the entire class of transnational progressives, the shock troops of what H. G. Wells hoped would lead to his liberal-fascist “world brain.”

If you look at how most liberals think about economics, they want big corporations and big government working in tandem with labor, universities (think industrial policy), and progressive organizations to come up with “inclusive” policies set at the national or international level. That’s not necessarily socialism — it’s corporatism. When you listen to how Obama is making economic policy with “everyone at the table,” he’s describing corporatism, the economic philosophy of fascism. Government is the senior partner, but all of the other institutions are on board — so long as they agree with the government’s agenda. The people left out of this coordinated effort — the Nazis called it the Gleichschaltung — are the small businessmen, the entrepreneurs, the ideological, social, or economic mavericks who don’t want to play along. When you listen to Obama demonize Chrysler’s bondholders simply because they want their contracts enforced and the rule of law sustained, you get a sense of what I’m talking about.

I don’t think Obama wants a brutal tyranny any more than Hillary Clinton does (which is to say I don’t think he wants anything of the sort). But I do think they honestly believe that progress is best served if everyone falls in line with a national agenda, a unifying purpose, a “village” mentality expanded to include all of society. That sentiment drips from almost every liberal exhortation about everything from global warming to national service. But to point it out earns you the label of crank. As I said a minute ago about that “We’re All Fascists Now” chapter, I think people fail to understand that tyrannies — including soft, Huxleyan tyrannies — aren’t born from criminal conspiracies by evil men; they’re born by progressive groupthink.

Surprisingly, a move to push suffocating regulations in the right direction

Great news for consumers and producers of meats in the US (Reason.com):

Late last week, Rep. Thomas Massie (R-Ky.) introduced a bill that would dramatically re-shape the way many animals are slaughtered for food in this country. The PRIME Act, which has several co-sponsors, including Rep. Chellie Pingree (D-Maine) and Reps. Justin Amash (R-Mich.), John Garamendi (D-Calif.), Scott Garrett (R-N.J.), Jared Huffman (D-Calif.), and Jared Polis (D-Colo.), would give states the option of setting their own rules for processing meat that’s sold inside state borders. That’s a power Congress took from the states and handed to the USDA in 1967.

Not so great news for large food processors who have depended on regulation to bury the competition.

The Bruce Lee technique to learning

Focus on one thing, repeat, repeat, repeat (Quartz):

Bruce Lee said, "I don’t fear the man who has practiced 10,000 kicks. I fear the man who practiced one kick 10,000 times."

Automated cars need new laws

It's been exciting watching the rapid development and acceptance of the idea of automated cars. Instapundit points to how laws can/should change in a world with automated cars.

What the dentist who paid $50,000 to kill Cecil the lion did wrong

According to Reason.com:

The problem isn't that Palmer paid a lot of money to hunt a lion, it's that he didn't pay enough money, he paid it to the wrong people, and he killed the wrong lion.

The Reason post goes on to talk about another trophy hunt and how it contributed to conservation. Lost in the outrage is the lack of compassion for the people of Zimbabwe and the suffering they've been subjected to by a highly corrupt government (Reuters) and the primary cause of the destruction of wildlife in Zimbabwe (Cato).

Reframing economics and markets

Economics is about social cooperation, not money or greed (tomwoods).

What if sweat shops made the poor better off?

The evidence suggests it does (ASI). But does it matter?

Do the British owe India reparations for colonialism?

An interesting debate. For the motion. Against.

They didn't earn that?

A "journalist" at Quartz attempts to argue entrepreneurs take risks because they come from families with money. There's one small problem - not only does she somehow avoid actually proving her point in her screed, the facts contradict her views (businessideaslab).

Update: more examples (albeit anecdotes) where her argument clearly doesn't hold (Inc.)

Inadvertent experiments in minimum wage

And their consequences... fallout in Seattle (Fox) while New York announces its own (Reason).

More: what gay marriage has in common with arguments against minimum wage - why should the state intervene in "acts between consenting adults"?

More (DailyCaller): An update on the CEO who raised wages for his workers to $70,000 (NYTimes). I like experiments like this - but they should be kept to the private sector. If this experiment succeeded in building an even greater business it would have meant other companies would have copied those ideas much like how Ford tripled his wages to actually achieve and retain greater productivity in his work force (Forbes).

Update: Glenn Reynolds at Instapundit quips: "but the robot community is very excited."

The deworming wars, antipoverty and fail

A look at a discredited study on the impact deworming has on development (Vox via instapundit).

What they don't tell you about 'liberté, égalité, fraternité'

How the French revolution resulted in mass murder (tomwoods.com).

Yep, pretty much...

Regulated cabs vs Uber (via Reason.com):