Tag: Regulation

Was the 1990s Clinton Economy Really That Good?

 

I was on Bill Bennett’s always-excellent “Morning in America” radio program today, and a caller asked me — basically — to provide talking points on why the 1990s Clinton economic boom “wasn’t really that good.” (The caller probably wanted ammo against liberal coworkers or relatives when they used Bill Clinton’s economic record as reason to support Hillary Clinton.) My response  was, “Well, the Clinton years really were pretty good!”

How could I say otherwise? Why would I say otherwise? The economy grew by nearly 4% annually during the Clinton years, creating 24 million jobs and driving the unemployment rate to a superlow 3.9%. Incomes and stocks were way up, inflation and interest rates were way down. Budget deficit? What budget deficit?

Janet Yellen’s Back-to-the-’50s Interest Rates

 

Janet Yellen told us last week that the fed funds target rate will be raised slightly later this year. But after that, future rate hikes will be small and gradual over the next several years. In fact, we may never have true normalization (4 percent). In my view, Yellen is offering a back-to-the-’50s approach to interest rates. And she’s right, though for many wrong reasons.

For average folks, what might this policy mean? I’ll take a guess: No boom and no bust. No inflation and no recession. All the post-war recessions were preceded by an inverted Treasury yield curve, where short rates are higher than long rates. That won’t happen for many years. Plus, upward oil-price spikes lead recessions, but we’re now in a downward energy-price cycle.

The Libertarian Podcast: Should We Worry About Income Inequality?

 

This week on The Libertarian podcast, I’m leading Richard Epstein through a discussion of income inequality. Is it the disaster that liberals are making it out to be? What do progressive proposals to address the situation get wrong? What are some free market approaches that could help the poor? And are conservatives destined to lose this fight because of the Left’s appeal to emotion? All that below or on your mobile device if you subscribe to The Libertarian via iTunes or your favorite podcast service.

Mike Rounds, Earning That Senate Seat

 

RoundsWe have a bad habit when it comes to US Senators: the guys we pay the most mind to tend to be the ones who demonstrate the best stagecraft (as I write this, Rand Paul is filibustering the Patriot Act on the Senate floor). That has its place, but there’s also a lot to be said for the guys who roll up their sleeves and do grunt work that’s vital for the country but probably won’t ever earn them a single vote. Put South Dakota freshman Mike Rounds in that latter category. As far as I’m concerned, he can have that seat as long as he wants it. From Lydia Wheeler at The Hill:

Sen. Mike Rounds (R-S.D.) is planning to introduce a resolution Wednesday to create a committee to review rules enacted by federal agencies. The Regulation Sensibility Through Oversight Restoration, or RESTORE, Resolution would establish a Joint Select Committee to review new rules, hold hearings on the effects of those already in place and recommend ways to reduce regulatory overreach. The committee will also analyze whether it’s feasible for Congress to create a permanent committee to review all rules with economic impacts of $50 million or more before they are enacted.

Short answer: Yes, it’s feasible. Some may dare to say it’s obligatory.

How Dirigiste Are We?

 

AAA red tape vs small businessThis CNNMoney list of the best jobs in America caught my eye. Obviously, it’s subjective, but someone thought these sounded like great bets for “big growth, great pay, and satisfying work.” Here’s the methodology they used.

Go through the list, and give me your best guess: What percentage of the week do these people devote, in some way, to dealing with the government? What percentage of their income comes in one or another fashion from the government? How many of these jobs exist for the purpose of navigating between citizens and the government?

  1.  Software Architect $124,000
  2.  Video Game Designer $79,900
  3.  Landman $103,000
  4. Patent Agent $126,000
  5. Hospital Administrator $114,000
  6. Continuous Improvement Manager $96,600
  7. Clinical Nurse Specialist (CNS) $89,300
  8. Database Developer $88,200
  9. Information Assurance Analyst $96,400
  10. Pilates/Yoga Instructor $62,400
  11. Clinical Applications Specialist $84,300
  12. Portfolio Manager $123,000
  13. Dentist $152,000
  14. User Experience Designer $89,300
  15. Auditing Director $132,000
  16. Real Estate Development Manager $107,000
  17. IT Program Manager $122,000
  18. Project Control Specialist $86,600
  19. Pharmacist in Charge $125,000
  20. Quality Assurance (QA) Coordinator (RN) $69,300
  21. Strategy Manager $112,000
  22. Product Development Director $131,000
  23. Physical Therapy Director $87,900
  24. Emergency Room Physician $274,000
  25. Product Analyst $67,800
  26. Rehabilitation Services Manager $86,900
  27. Health Information Management (HIM) Director $81,900
  28. Product Management Director $148,000
  29. Practice Administrator $78,300
  30. Facilities Director $97,500
  31. Accounting Director $103,000
  32. Software Quality Assurance Manager $110,000
  33. Orthopedic Surgeon $410,000
  34. Clinical Services Director $77,600
  35. Clinical Pharmacist $117,000
  36. Anesthesiologist $340,000
  37. Biomedical Engineer $82,400
  38. IT Security Consultant $110,000
  39. Telecommunications Network Engineer $90,500
  40. Technical Consultant $101,000
  41. Customer Service Director $103,000
  42. Payroll Director $99,000
  43. Private Banker $86,500
  44. Operations Director $108,000
  45. Risk Management Director $121,000
  46. Construction Manager $88,700
  47. Research & Development Engineer, IT $108,000
  48. Business Development Director $136,000
  49. Proposal Manager $87,600
  50. Financial Accounting Manager $74,500
  51. Career Services Director $62,700
  52. Hand Therapist $83,000
  53. Strategic Planning Director $139,000
  54. Internal Auditing Manager $101,000
  55. Consulting Manager $130,000
  56. Alumni Affairs Director $64,200
  57. Finance & Administration Manager $74,300
  58. Analytics Manager $109,000
  59. Nursing Manager $82,400
  60. Web Analyst $72,300
  61. Health Care Administrator $81,000
  62. Business Development Manager $99,600
  63. Regional HR Manager $84,900
  64. Athletic Director (College/University) $70,500
  65. Product Marketing Specialist $67,600
  66. Implementation Consultant $91,800
  67. Network Architect $122,000
  68. Nursing Informatics Analyst $69,400
  69. Research Analyst $64,400
  70. Assisted Living Director $56,400
  71. IT Network Engineer $79,100
  72. Business Manager, eCommerce/Web $82,600
  73. Associate Partner, Consulting Services $196,000
  74. Healthcare Consultant $108,000
  75. Contract Administration Manager $77,400
  76. Regional Property Manager $80,600
  77. Principal Architect $132,000
  78. Practice Manager $63,900
  79. Analytics Director $142,000
  80. Civil Engineer $77,400
  81. Lead Physical Therapist $84,700
  82. Financial Reporting Manager $96,800
  83. Database Administration (DBA) Manager $120,000
  84. Marketing Consultant $90,700
  85. Biostatistician $98,800
  86. Athletic Coach $47,000
  87. Financial Analysis Manager $99,800
  88. Content Strategist $80,000
  89. Transportation Engineer $78,100
  90. Information Technology Auditor $88,200
  91. Assisted Living Administrator $55,500
  92. Systems Analyst $83,800
  93. Tech Support Engineer $75,400
  94. Public Relations Director $90,500
  95. Auditing Manager $90,900 13%
  96. Program Management Director, Human Services $55,500
  97. Environmental Health & Safety Director $114,000
  98. Database Administrator $89,100
  99. Structural Engineer $80,400
  100. Laboratory Supervisor, Medical/Clinical $66,900

What do you think? What do you imagine the ratio would have been 20 years ago? 50?

The Preservationist Instinct Run Amok

 

shutterstock_105789410This year, the New York City Landmark Preservation Commission is celebrating its fiftieth anniversary. While the law that originally created the Commission was well-intended, the current rules under which the Commission operates regulate everything from the process by which landmarks are designated to the extensive restrictions on the ability of their owners to make any exterior or interior changes in their structures, down to the last ventilation duct, awning, window opening, and fire escape. The simplest way to think about landmark designation is that it puts the city in the position of part owner of the affected buildings, which then lets it decide how these buildings are maintained and altered, without having to bear anything close to the full financial burden of its decisions. As I note in my new column for Defining Ideas, the result is a deluge of government meddling in what surely ought to be private decisions. From the piece:

Rest assured that the behavior of landmark commissions and landmark preservationists alike would change rapidly if they had to raise public or private money to fund their prized projects. At this point preservationists, like everyone else, would have to learn to live within a budget, at which point they would moderate their demands so that only the best projects would be landmarked, and only in a way which minimizes the financial burdens to their owners.

…The key to any sensible reform is to put all the government claims on budget, so that the public can deliberate sensibly about how much should be spent on landmark preservation and which projects should be selected for their the aesthetic and civic virtues.

Purity Before Safety (or Science)

 

shutterstock_88312414The ‘war against tobacco’ has long since ceased to have much to do with saving lives. Here’s the latest bone-headed example:

(Reuters) – Swedish Match AB should not be allowed to alter the warning label on its snus smokeless tobacco products to claim they are less harmful than cigarettes, an advisory panel to the U.S. Food and Drug Administration concluded on Friday.

The Stockholm-based company is seeking FDA approval to remove warnings about mouth cancer, gum disease and tooth loss from its snus products and to state that they present a “substantially” lower risk than cigarettes.

We Love the ’90s! Why Doesn’t the Left?

 

Bill-ClintonHey, the X-Files is coming back. Just another sign that we are in full “I love the ’90s!” mode. It’s not just Mulder and Scully. Monica Lewinsky just gave a TED speech. Republicans are again talking about the flat tax. (In the ’90s, even the Dems were talking up the flat tax.) Hollywood is finally making an Independence Day sequel. And there’s a Clinton running for president. I wrote about that last bit of nostalgia in my The Week column. I would say most Americans remember that decade with some fondness thanks to the booming economy. But as I note in the column, those on the left have a more nuanced view of Clintonomics:

In the progressive mind, Bill Clinton quickly ejected his “putting people first” spending agenda in favor of the Alan Greenspan-approved “bond market strategy” that focused on boosting growth by cutting the deficit. (During the Obama era, Republicans adopted the strategy and renamed it “cut to grow.”) “I hope you’re all aware we’re all Eisenhower Republicans,” Clinton fumed, as recounted in Bob Woodward’s The Agenda: Inside the Clinton White House. Not long after, Clinton’s economic council was praising the much-hated — well, at least by progressives — Reagan tax cuts: “It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth.” Eventually, Clinton declared that the “era of big government is over.” Not a red-letter day in Liberal Land.

Bill Clinton did raise top labor income tax rates, but he also cut them for investment taxes. And while median wages rose, so did inequality. From 1993 through 2000, the share of market income going to the top 1 percent rose to 16.5 percent from 12.8 percent, continuing a trend begun in the Reagan years. Perhaps the biggest black mark from a progressive perspective was Clinton’s signing of the bill that deregulated Wall Street. Some critics, such as Elizabeth Warren, blame that law for at least contributing to the financial crisis and subsequent recession.

Hillarynomics: Bill’s Third Term or Barack’s?

 

Hillary_clinton_reuters_031215New York Times reporter David Leonhardt asserts that “for all their similarities, Hillarynomics (the phrase “Clintonomics” is already taken) and Obamanomics will not be identical.”

Maybe not, but the piece makes me think they’ll be pretty darn similar. For instance: Like President Obama, Clinton may seek middle-class tax cuts and pay for them through higher taxes on the rich. Would those tax hikes come through higher rates or scaling back tax breaks? Obama has done both. Would Clinton want to take the top statutory income tax rate above the current 39.6%, the top rate during hubby Bill’s administration? Similarly, as Times reporter Josh Barro wonders, would she take the capital gains tax rate above 20%, the current rate (not counting the 3.8% Obamacare tax) and the top rate during Clinton I? Back during her 2008 presidential campaign she said she would not.

Leonhardt goes on to mention a recent report put forward by the Center for American Progress’s Commission on Inclusive Prosperity, “a group with close ties to Mrs. Clinton,” which contains a number of policy suggestions. It was co-written by Larry Summers, economic adviser to Obama and Bill Clinton, and focuses both on growing the economy faster and increasing labor’s share of the gains. (I would advise paying close attention to his writings for clues to how Hillarynomics might evolve.)

Yes, Reaganomics Sure Does Need a 21st Century Update

 

shutterstock_177028802“The GOP is Debating Whether Reaganomics Needs an Update” is a must-read piece by Washington Post reporter Jim Tankersley. One side answers the “What would Reagan do?” question by offering a nostalgic return to the 1980s Reagan agenda. Another prefers to apply the Reagan principles — a dynamic private sector, strong families and neighborhoods, upward mobility, work — to modern economic reality with different conservative policy results. Tankersley:

Leading Republicans are clashing over a signature issue the party has treated as gospel for nearly 40 years: the idea that sharply lower taxes and smaller government are enough by themselves to drive a more prosperous middle class — and win national elections. That simple philosophy has been the foundation of every GOP platform since the days of Ronald Reagan. Now, some of the party’s presidential hopefuls — along with some top conservative economists and strategists — are sending strong signals that they believe today’s beleaguered workers need more targeted help, even if growth speeds up.

For some context, here are a few then-and-now stats:

The Costs of Prohibition

 

shutterstock_177594347Continuing on today’s theme of prohibition, a common and very reasonable argument made by prohibitionists is to point to all the dangers, criminality, and immorality associated with proscribed activities and ask whether society should invite more of them. The implication is that these problems are intrinsic to the activity itself and should further tip the scales toward prohibition.

Examples abound. Consider Bill Bennett & Robert White’s point in Going to Pot that modern marijuana is more potent than ever before; dangerously so, they say. Regarding a different kind of vice, prostitution opponents have, of late, focused their attention on the dangers and exploitation women and girls face, to the point that the trade is sometimes presented as being nearly synonymous with human trafficking.

While we can stipulate that intoxicants and the selling of sex are more likely to be fraught than other industries, prohibition — or regulations equivalent to it — can have the simultaneous effect of reducing consumption (at least a little) while making what consumption remains even more dangerous than before. As Milton Friedman argued nearly 40 years ago, increasing a drug’s potency increases its portability, something highly desired in contraband. Analogously, consider both how much easier it is to smuggle whisky into a party than a full case of beer and how much more potentially dangerous the former is.

If Washington Isn’t Behind the Decline in US Startups, Then What Is?

 

021815startups

My (seemingly) never-ending mission to figure out what’s going on with the decline in American startup ventures — over the past three decades the annual entry rate of new firms fell approximately from 15% to 10% —  continues with research from George Mason University’s Nathan Goldschlag and Alex Tabarrok. They investigate whether federal regulations are to blame. Apparently not:

To investigate the extent to which the decline in entrepreneurship can be attributed to increasing regulation, we utilize a novel data source, RegData, which uses text analysis to measure the extent of regulation by industry. Our analysis suggests that Federal regulation is not a major cause of the decline in US business dynamism. … Contrary to expectation, there is a slight positive relationship; industries with greater regulatory stringency have higher startup rates. We find a similar relationship with job creation rates.

Member Post

 

We’re well on our way to a conservative civil war on taxes.  On one side, we’ve got my heroes at the Wall Street Journal editorial page and most recently Amity Schlaes.  On the other, we’ve got my heroes Ramesh Ponnuru,  Marco Rubio, and Mike Lee.  Cut it out, guys!   Preview Open

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A Connecticut Yankee in Big Brother’s Hospital

 

Last week, Tenet Healthcare — a Dallas-based, for-profit company — withdrew its bids for five struggling Connecticut hospitals. It had been trying to work with regulators for two years on just the first of the purchases. But regulators in Connecticut’s Office of Health Care Access (OHCA) insisted on imposing 47 conditions on the acquired hospitals’ operations. The conditions, backed by hospital employee unions, included a five-year ban on reductions in staffing or consolidating services. As the company explained in a statement, “The extensive list of proposed conditions to be imposed on the Waterbury Hospital transaction… has led us to conclude that the approach to regulatory oversight in Connecticut would not enable Tenet to operate the hospitals successfully for the benefit of all stakeholders.”

The deal’s collapse caught Democrats and regulators (and only Democrats and regulators) by surprise. “I expected people to talk,” said a forlorn (Democrat) Waterbury state legislator. Now, Waterbury Hospital faces the prospect of closure. The hospital has lost tens of millions of dollars each year recently, and projects similar losses for the foreseeable future. There is also a consensus that the hospital needs $50 million of capital improvements. “There is a point — and it’s very close — where there are no more options,” said the hospital’s CEO. Nearly 75% of the its patients rely on Medicare and Medicaid. Some state Democrats are now trying to spin the loss by saying the state has too many hospital beds anyway.

The Rule of Culture vs. Fiat in Holidays, or, In Which I Don’t Get How My City Can Assign a Date for Trick-or-Treating

 

shutterstock_921171Does anybody else live in a city that “decides” when kids will go trick-or-treating…and it’s not on Halloween? We moved to Huntington, West Virginia seven years ago and this was the first place I’d ever even heard of such a thing. It rubs me the wrong way, because this is a cultural practice that’s evolved, independent of government, over many hundreds of years. It strikes me as a gross overstepping of authority for a city to assign a date on which the custom will be carried out by individual citizens, especially when that date isn’t when the culture says it should be.  It’s almost as if the city decreed that people will open their Christmas presents on December 23rd.

I’m not all that interested in justifications for why they’re choosing a given date, though I’ve heard rumors that it’s to avoid kids being out when drunk adults are driving back from their Halloween parties. I’m mostly wondering how a city thinks it can insert itself into this aspect of private life. And what is it that the city actually does in assigning the date? Do they pass a law? Surely not. Do they have some informal resolution of the city council encouraging people? More likely, but I’ve never heard the details.

This is so foreign a concept to me that I’m amazed the citizens all go along with this. If it were a recent innovation, there would have to be push-back, but I’m not hearing any. So I assume this was all fought out decades ago. Yet it’s the first place I’ve ever heard of it. My elder, teenaged daughter (who knows everything) tells me that the entire state does this, and that I should stop complaining. I have my doubts. But another city over the border, where I teach, does it too, and I wonder if it’s some regional thing.

Member Post

 

From the Ricochet Twitter feed, via James Poulos:  Using the threat of an unlimited Treasury investigation, the President and Senator Dick Durbin stopped Walgreen (WAG) from moving to Switzerland. The wreckage of some $10 billion in lost stock value for mostly Main Street investors was left as a grim reminder not to cross the government […]

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