What Is the Women’s World Cup Worth? Not Even FIFA Knows

By Rachel Bachman of The WSJ. 

"The 2018 men’s World Cup’s global audience was massive: 3.572 billion including out-of-home and streaming viewers. But it has been stagnant in recent years. The Women’s World Cup’s audience has more than doubled since 2011.

Brand Finance, a brand-valuation consultancy based in the U.K., documented the growth in that market by comparing the TV audience for two teams that made parallel trips through the 2018 and 2019 tournaments: England’s men and England’s women.

The women’s semifinal match drew 11.7 million viewers in the U.K. That was about 44% of the 26.5 million viewers that watched the English men play in the semifinals of the tournament a year earlier, according to Bryn Anderson, Brand Finance director of sports services."

Warren’s Assault on Retiree Wealth

Her vision of ‘accountable capitalism’ would destroy savings built over a lifetime—and sink the economy.

By Phil Gramm and Mike Solon.

"households headed by people over the age of 55 own 73% of the value of domestically owned stocks, and the same share of America’s total wealth. Households of ages 65 to 74 have an average of $1,066,000 in net worth, while those between ages 35 and 44 have less than a third as much on average, at $288,700."

"Seventy-two percent of the value of all domestically held stocks is owned by pension plans, 401(k)s and individual retirement accounts, or held by life insurance companies to fund annuities and death benefits."

"Several Democratic congressmen and presidential candidates have proposed to limit stock buybacks, which are estimated to have increased stock values by almost a fifth since 2011, as well as to block dividend payments, impose a new federal property tax, and tax the inside buildup of investments."

States Look for New Ways to Recycle Your Plastic and Paper

After China stopped taking certain recyclables, states work to create a long-term, domestic solution

By Jennifer Calfas of The WSJ.

"Two years ago, China turned the American recycling industry on its head when it stopped accepting millions of tons of its scrap materials."

"In 2017, the U.S. exported about 14.5 million metric tons of scrap recyclables to China, according to the Institute of Scrap Recycling Industries, an industry trade group. That dropped to around 9.4 million metric tons in 2018. Since China implemented its new policy at the start of 2018, U.S. states and cities have felt the brunt of falling prices on certain recyclables. The average price for mixed paper in the U.S., for example, dropped from $67 in August 2017 to negative $2 in August 2019."

"municipalities have sent some recyclables to landfills and stopped accepting certain kinds of plastic or incinerated items."

"Maine could soon require package producers to support recycling programs and cover at least 80% of the cost of packaging materials sold in the state that aren’t easily recyclable."

Endangered Species Overreach

A new rule won’t put more fish and wildlife at risk

WSJ editorial.

"Perhaps you’ve been reading that the Trump Administration wants to make it easier to eliminate polar bears, spotted owls and other species from the face of the earth. As ever in Donald Trump’s Washington, the reality is different, so allow us to explain.

The uproar concerns a proposed new rule to revise some practices under the 1973 Endangered Species Act. For all the praise liberals shower on that law, it has achieved far less than advertised. A 2018 report from the Heritage Foundation’s Robert Gordon found that since 1973 the ESA has helped to recover only 40 species, and nearly half of those were mistakenly listed in the first place.

Meanwhile, the law has become a legal weapon to strip property rights and block millions of acres from private development. Congress ought to rewrite the ESA but can’t break a partisan impasse. So this week Interior Secretary David Bernhardt tried to clarify regulation under the law to prevent abuses.

The new rule restores Congress’s original two-tiered approach, killing the Fish and Wildlife Service’s “blanket rule” that treated “endangered” and “threatened” species alike. This will devote scarce government dollars—and landowner attention—to the species most at risk. It will also provide states more flexibility to assist species that are struggling though not seriously endangered.

The new rules clarify vague terms such as “the foreseeable future” to mean only as far as the government can “reasonably determine” a danger of extinction. This will make it harder for activists to use claims of vague future climate damage to declare many more species endangered.

And the rules remind regulators they must use the same five criteria in deciding whether to delist a species as they did when listing one—destruction of habitat or range; overutilization; disease; inadequate regulation; or other natural or manmade factors. This will guard against special interests that move the goalposts every time a recovered population is proposed to be cleared.

Another reform would limit the use of “critical habitat” designations that tie up tens of millions of acres of U.S. land. The rules reinstate a requirement that agencies first evaluate acreage that contain the at-risk species before considering new, unoccupied areas. Agencies also must prove that unoccupied critical habitat contains “one or more of the physical or biological features essential to the species’ conservation.”

The goal of all this is to return to a rules-driven, scientific approach to species management. States like California are threatening to sue, but Interior will have a strong defense because its new rule adheres closely to the text of the statute. Greens long ago commandeered the species law via lawsuits and regulatory overreach to put more land under bureaucratic control. This has alienated landowners and misallocated scarce resources.

Many struggling species live on private land, and the cooperation of owners is crucial for recovery. Environmental laws and regulations should encourage stewardship, rather than penalize private partners. To the extent the rules improve private-public cooperation, the key deer and sage grouse will benefit. Which is supposed to be the point of the law."

CDC Confirms That the Vast Majority of Vaping-Related Lung Disease Cases Involve THC Products

The latest findings highlight the irrationality of banning legal e-cigarettes that deliver nicotine.

By Jacob Sullum of Reason.

"Today the U.S. Centers for Disease Control and Prevention (CDC) finally confirmed that the vast majority of patients with vaping-related respiratory illnesses have reported using cannabis products, typically purchased on the black market. Among 514 patients for whom the information was available, the CDC found, 77 percent reported using THC products. Just 16 percent said they had vaped only nicotine, although the types, sources, and brands of the products were not identified.

Since people may be reluctant to admit illegal drug use, the true rate of THC vaping among the patients with respiratory symptoms is almost certainly higher. Prior data from several states indicated that 83 percent to 100 percent of patients reported that they had vaped THC.

Another CDC study, based on interviews with 86 patients in Wisconsin and Illinois, found that 87 percent "reported using e-cigarette products containing THC." Two-thirds of the THC vapers said they used cartridges "sold under the brand name Dank Vapes," one of several "largely counterfeit brands with common packaging that is easily available online and that is used by distributors to market THC-containing cartridges with no obvious centralized production or distribution."

In light of this information, the main thrust of which has been apparent for at least a month, it is harder than ever to justify the insinuation that legal e-cigarettes are to blame for the lung disease outbreak, which involves 805 cases and 12 deaths by the CDC's latest count. While 16 percent of the patients in the CDC's study of 514 cases said they vaped only nicotine, those self-reports may not be reliable given the sensitivity of the subject. In any case, there is no indication so far that any of the patients were using legal e-cigarettes, as opposed to black-market pods or e-liquids, which may pose special hazards.

The CDC's findings make sense, since legal e-cigarettes have been used by millions of Americans for years without reports of lung illnesses like these. The cases emerged only in recent months, which suggests that the problem is relatively new additives or contaminants in THC vapes, and possibly also in counterfeit nicotine pods or nicotine e-liquids of unknown provenance.

"It seems there's too much conflating these tragic lung injuries with store-bought brands of regulated, legal e-cigs like Juul and NJOY," former Food and Drug Administration Commissioner Scott Gottlieb observed yesterday, "and far too little blaming THC, CBD, and bootleg nicotine vapes—where so far, the only available hard evidence points." While "some people may be getting sick from legal e-cigs," he said, "to save lives and make sound policy we must follow science."

The CDC has slightly revised its muddled message about the hazards of vaping. "While this investigation is ongoing," it says, "CDC recommends that you consider refraining from using e-cigarette, or vaping, products, particularly those containing THC" (emphasis added). That last part is new. The CDC also implicitly acknowledges that conventional, combustible cigarettes are more dangerous than e-cigarettes: "If you are an adult who used e-cigarettes containing nicotine to quit cigarette smoking, do not return to smoking cigarettes."

Meanwhile, however, Massachusetts has banned all vaping products, leaving former and current smokers without this harm-reducing alternative. Earlier this month, Michigan and New York imposed "emergency" bans on the flavored e-cigarettes that former smokers overwhelmingly prefer. This week Rhode Island announced a similar ban, and today Washington state followed suit.

Rhode Island Gov. Gina Raimondo (D) and Washington Gov. Jay Inslee (D) both cited the lung disease outbreak, along with recent increases in underage vaping, as part of their justification, even though the bans they plan to impose will not apply to the products that seem to be the main culprits. All of these bans are being imposed by unilateral executive action, without any input from state legislatures.

These panicky prohibitions create a situation where former smokers may go back to a far more hazardous source of nicotine and current smokers may be deterred from quitting by the lack of appealing alternatives. The bans also give a boost to the very black-market products that have been implicated in vaping-related respiratory illnesses. The predictable result will be more diseases and deaths, which the governors presumably do not intend."

Fewer people are dying from climate catastrophes

From Mark Perry.

Cronyism Yields a Bumper Crop with Farm Bailouts

By Veronique de Rugy.

"Stan Veuger of the American Enterprise Institute recently complained on Twitter that those who cared about cronyism when Barack Obama was president are suddenly very quiet about President Donald Trump's bailout of farmers. There is some truth to his complaint.

But first, it's wrong to say that everyone has been silent. The National Taxpayers Union, the Cato Institute and others have complained and written against the bailouts. It's also wrong to assume that those, like me, who haven't made the bailouts a central focus of their work in spite of their past opposition to cronyism are silent for political reasons. Many of us are simply overextended, fighting the multifront attacks against freedom launched by Trump, the Democratic House, the Republican Senate and the Democratic presidential candidates.

Cronyism is the unhealthy marriage between corporations, or other special interests, and the government. And farmers have been willing participants in this relationship for decades, at the expense of taxpayers and good economic policy. They've received subsidies and other government-granted privileges despite being relatively well-off and part of an industry that's not more subjected to adversity than many others. Conservative, free market and even left-wing advocates have used buckets of ink complaining about the handouts.

On closer inspection, it's obvious that these farm bailouts are the culmination of everything that is wrong with cronyism. They came about after the president imposed duties on steel and aluminum in order to protect those industries from competition, which is cronyism. Then China, the European Union, Canada and Mexico retaliated by targeting U.S. agricultural exports. From soybean to corn farms, from steel nails to bicycles, this trade war is hurting many businesses, some of which are closing their doors.

But none of Trump's trade war victims are as powerful and important a voting bloc as farmers, who secured two agriculture bailouts over the past two years, totaling $28 billion — so far. For perspective, Bloomberg reminds us that this "farm rescue is more than twice as expensive as the 2009 bailout of Detroit's Big Three automakers, which cost taxpayers $12 billion." Many Republicans at the time rightfully decried the auto bailout, yet most have nothing to say about the farm bailouts. Many have even joined in and demanded more for the farmers in their states.

Like regular farm subsidies, these bailouts are designed to shower largesse on the biggest farms. According to the Environmental Working Group, an outfit that has long opposed farm subsidies, one-tenth of the bailout recipients last year have received over half of the bailout payments, and 82 farmers have each received more than $500,000. Their report also notes that the top 1% of recipients of trade relief received $183,331 on average. The bottom 80% received less than $5,000 on average. It doesn't sound right, because smaller farms must be hurting the most. But it's naive to expect sensible policies from those who tried plugging a hole created by the trade war by paying out farmers rather than lifting the tariffs.

But that's precisely what's so disgusting about cronyism. It is, at its core, an exchange of government favors for loyalty in the voting booth. Nowhere is that more obvious than here. In fact, Trump almost seems proud of it, as he demonstrated during a recent call with farmers when he reminded them of the bailouts, saying, "I hope you like me even better than you did in '16." It's likely no coincidence that Midwestern states such as Indiana and Iowa, which backed Trump in 2016, will receive large payments just before the midterm elections. It could also explain why fruit growers in California or lobster farmers in Maine, both victims of the trade war but in Democratic territories, are receiving little to no bailout.

To recap: Trump started a trade war to protect his friends in the steel industry. That triggered severe retaliatory tariffs from our trade partners. Then the president, rather than lift all the tariffs, decided to extend two bailouts to farmers and farmers alone in order to ease their pain in time for the next election. And most Republicans now appear to be OK with — or silent about — this crony solution to protectionism. Paired with the fact that some of us haven't given the issue the attention it deserves, I can see why others, like Veuger, would think that conservatives are acting hypocritically. So much for principles."

Elizabeth Warren’s anti-drilling, anti-fracking scheme conveniently ignores policy trade-offs, fiscal realities, and even constitutional limits on presidential authority

See Elizabeth Warren Is Wrong on Fracking by Shawn Regan of PERC.

"If there were any doubts about the particulars of Elizabeth Warren’s energy-policy plans after the recent CNN climate town hall, she cleared them up in a single tweet. “On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands,” she wrote. “And I will ban fracking — everywhere.”

Throughout her campaign, Warren has made her plan to end new federal fossil-fuel leases well known. With that tweet, she also became one of only a few candidates — including Senators Bernie Sanders and Kamala Harris — to call for a nationwide ban on hydraulic fracturing, a technique, used to extract oil and gas from shale formations, that has revolutionized America’s energy industry.

Presidential candidates often put forward fanciful policy proposals knowing full well that Congress will be unable or unwilling to pass them. Behold, for example, the climate-policy arms race of the Democratic presidential primary. Nearly every candidate in the crowded field has proposed some form of a multi-trillion-dollar Green New Deal — including everything from carbon taxes and federal job guarantees to massive new spending programs — that almost certainly would not pass in the 117th Congress.

But executive action is different, which is why pledges such as Warren’s are cause for concern. For the moment, set aside that presidents lack the authority to single-handedly outlaw an entire industry such as fracking, which mostly occurs on private lands. Presidents do have significant authority to shift federal energy policy, especially on public lands and waters.

So let’s drill down on — er, gently ask — what Warren’s anti-fracking, anti-drilling plan would mean in practice.

First, consider Warren’s moratorium on new federal fossil-fuel leasing. Such a policy would mean no new drilling on the 97 million federal offshore acres and 113 million onshore acres that are currently available for leasing. It would also mean no new drilling on areas that are under existing leases, which have ten-year terms and require permits for each well drilled. It could also apply to export facilities and pipelines, such as those transporting new exports of liquefied natural gas, that cross federal streams and rivers deemed “waters of the United States.”

A moratorium would effectively end drilling on public lands and waters, which in 2018 produced more than 2 million barrels of oil per day and 4 trillion cubic feet of natural gas, generating nearly $9 billion in federal revenue. It would also handcuff America’s private energy sector by limiting its ability to deliver its products to market. “No country in the world has ever abandoned a natural resource of this proven value,” says energy-law professor James Coleman of Southern Methodist University.

Warren’s pledge illustrates just how far Democrats have diverged from the energy and climate policies of the Obama administration. President Barack Obama presided over, and often championed, a rapid increase in U.S. oil and gas production, driven primarily by the rise of fracking, which has enabled the United States to become the largest oil and gas producer in the world. This has led to cleaner air and lower carbon emissions, cheaper energy, less dependence on foreign imports, a manufacturing renaissance, and massive economic benefits to American consumers. By one estimate from the Brookings Institution, fracking has improved the economic well-being of U.S. consumers by roughly $75 billion per year.

“Everything has gone to 11,” Kathleen Sgamma, president of the Western Energy Alliance, recently told Politico in response to the Democrats’ aggressive climate plans showcased at the CNN forum. “You pick a topic and it’s like President Obama might as well have been a Republican.” Although most of the increase in oil and gas production was the result of fracking on private lands, Obama didn’t exactly shun fossil-fuel extraction on federal property. The amount of public land leased for oil and gas development was higher every year of Obama’s first term than it has been during the Trump administration.

Many experts doubt that Warren could use executive authority to issue an outright ban on new federal leasing — doing so would likely violate several laws governing the management of public lands. But administrations have significant ability to stymie leasing by making it more difficult to drill on public land and by rejecting permits to construct new pipelines. Short of a full-on moratorium, a Warren administration could impose layers of red tape, permitting requirements, and procedural delays that would have much the same practical effect.

Warren’s scheme to ban fracking everywhere is more radical and would clearly be unlawful if attempted through executive order. A Warren administration could try to increase regulations to make fracking less economically feasible, but even that would probably face legal challenges, and Congress is unlikely to go along with a nationwide ban.

A fracking ban or leasing moratorium would also complicate — or, in some cases, directly contradict — several of Warren’s other stated policy priorities. For example, in her public-land policy, Warren calls for mandatory funding of the Land and Water Conservation Fund, a federal program that acquires land for conservation and recreation purposes, authorized at $900 million per year. Yet funding for the LWCF is derived entirely from federal offshore drilling — which, in the same plan, Warren says she would halt, on her first day as president, by issuing an executive order banning new leases.

How exactly she would fund the LWCF — along with any of the other items on her public-lands wish list, such as eliminating the National Park Service’s $12 billion maintenance backlog and making national parks free for all — is unclear. (The leading bipartisan plan in Congress to tackle the park-maintenance backlog, the Restore Our Parks Act, of which Warren is listed as a co-sponsor, would do so using federal oil and gas revenues.)

And that’s to say nothing of the broader consequences of a leasing moratorium or fracking ban on taxpayers overall, which could further undermine Warren’s policy agenda. The billions of dollars in federal royalties generated from onshore and offshore leasing are a significant source of funding for a variety of government programs, as well as for state and local coffers. Of the $9 billion generated from federal leasing last year, nearly $2 billion went back to the states, $1 billion to American Indian tribes, and $3.5 billion to the federal treasury, with additional amounts going to the LWCF and other federal programs. These revenues are the source of many of the public benefits and government services that Warren says she supports and wants to significantly expand.

Consider, for example, education. This month, New Mexico unveiled a plan to provide free tuition at public colleges for all state residents, regardless of family income, using the state’s revenues from oil production. Warren has likewise proposed to make public-college tuition free, although she has provided no plan to pay for it that comes even close to adding up.

Then there are the environmental consequences of a fracking ban. Natural gas emits far less carbon dioxide and air pollution than do coal-fired power plants, which are rapidly being displaced in an era of cheap and abundant gas. This has led to a reduction in U.S. carbon emissions from energy sources over the past two decades — the largest decline in the world since 2005. Trade partners are increasingly counting on this clean-burning gas. According to the U.S. Energy Information Administration, the United States is slated to become a net energy exporter in 2020, thanks to the recent boom in oil and gas production.
Comments   

If Warren is going to deliver on her bold progressive vision — free college tuition, student-loan forgiveness, universal child care, and a $3 trillion Green New Deal — she’ll need to pay for it somehow. Her catch-all answer to questions of public financing — a 2 percent wealth tax on the über-rich — would come nowhere close to funding such programs. Add in a federal leasing moratorium and a fracking ban, and her plans would be even more in the red. Moreover, by kneecapping America’s natural-gas revolution, she would almost certainly undermine her own climate goals.

Like many of her plans, Elizabeth Warren’s anti-drilling, anti-fracking scheme conveniently ignores policy trade-offs, fiscal realities, and even constitutional limits on presidential authority. It may excite progressive diehards in a crowded Democratic primary, but coming from someone who has been widely praised for her detail-oriented approach to public policy, it is hardly a serious proposal — or at least we should hope it isn’t."

Sanders wealth tax is a tax on widows and widowers

See The Trophy Wife Tax Credit by Greg Mankiw. 

"As I have pointed out, Elizabeth Warren's wealth tax, as described, involves a substantial marriage penalty. Now Bernie Sanders comes along with his own wealth tax proposal. He solves the marriage penalty problem by halving the thresholds for singles.  This approach introduces the opposite problem--a marriage bonus.

As I understand the plan, if a single man is worth $30 million, he pays $140,000 per year under the Sanders wealth tax. If he marries his assistant, who has a wealth of less than $2 million, their tax liability falls to zero.

For a single man with higher wealth, the marriage bonus is even larger. Under the Sanders plan, for someone worth $100 million, marriage reduces the tax liability by $410,000 per year.

Put another way, this plan can be viewed as imposing a tax on widows and widowers. A married couple worth $30 million does not pay anything. When one spouse dies, the surviving spouse then owes $140,000 per year."

There is essentially no change in concentration by the top firms in the economy as a whole

See Very real progress on the market concentration debate by Tyler Cowen. 

"As you might expect, it is coming from Chang Tsai-Hsieh and Esteban Rossi-Hansberg, here is their abstract:

The rise in national industry concentration in the US between 1977 and 2013 is driven by a new industrial revolution in three broad non-traded sectors: services, retail, and wholesale. Sectors where national concentration is rising have increased their share of employment, and the expansion is entirely driven by the number of local markets served by firms. Firm employment per market has either increased slightly at the MSA level, or decreased substantially at the county or establishment levels. In industries with increasing concentration, the expansion into more markets is more pronounced for the top 10% firms, but is present for the bottom 90% as well. These trends have not been accompanied by economy-wide concentration. Top U.S. firms are increasingly specialized in sectors with rising industry concentration, but their aggregate employment share has remained roughly stable. We argue that these facts are consistent with the availability of a new set of fixed-cost technologies that enable adopters to produce at lower marginal costs in all markets. We present a simple model of firm size and market entry to describe the menu of new technologies and trace its implications.

This is likely to prove one of the most important papers of the year, here is the pdf link.  The authors open with the example of The Cheesecake Factory, and also health care:

The standardization of production over a large number of establishments that has taken place in sit-down restaurant meals due to companies such as the Cheesecake Factory has taken place in many non-traded sectors. Take hospitals as another example. Four decades ago, about 85% of hospitals were single establishment non-profits. Today, more than 60% of hospitals are owned by forprofit chains or are part of a large network of hospitals owned by an academic institution (such as the University of Chicago Hospitals).

And:

…rising concentration in these sectors is entirely driven by an increase the number of local markets served by the top firms.

Here is a key point:

…we find that total employment rises substantially in industries with rising concentration. This is true even when we look at total employment of the smaller firms in these industries. This evidence is consistent with our view that increasing concentration is driven by new ICT-enabled technologies that ultimately raise aggregate industry TFP. It is not consistent with the view that concentration is due to declining competition or entry barriers, as suggested by Gutierrez and Philippon (2017) and Furman and Orszag (2018), as these forces will result in a decline in industry employment.

This is interesting too, and it departs from say what Amazon is doing:

…we show that the top firms in the economy as a whole have become increasingly specialized in narrow set of sectors, and these are precisely the non-traded sectors that have undergone an industrial revolution. At the same time, top firms have exited many sectors. The net effect is that there is essentially no change in concentration by the top firms in the economy as a whole. The “super-star” firms of today’s economy are larger in their chosen sectors and have unleashed productivity growth in these sectors, but they are not any larger as a share of the aggregate economy.

The paper is titled “The Industrial Revolution in Services.“"

Study by the New York Federal Reserve estimates the Trump tariffs will soon be costing U.S. households more than $800 a year

By Daniel Griswold. Excerpt:

"The Trump administration and China plan to resume high-level talks in October on the dispute over Chinese interests’ use of American intellectual property, but no one is optimistic that the escalating trade war will end anytime soon. According to President Trump, that would be just fine.

By all accounts China is feeling the pain of U.S. tariffs, and Trump points to the tens of billions of dollars in extra revenue that his tariffs are raising for the U.S. Treasury. “We don’t need China and, frankly, would be far … better off without them,” the president tweeted in August. But a growing number of Americans beg to differ, and members of Congress have already introduced legislation to curb the president’s use and abuse of current trade laws.

If this were a real war, we would call it a quagmire with mounting casualties. U.S. manufacturing output and employment growth have slowed sharply in recent months, while business investment slumped in the second quarter. A new U.S. Chamber of Commerce analysis found that 43 percent of Fortune 500 CEOs expressed concerns about tariffs or trade uncertainty in recent earnings calls.

First in the line of fire in the tariff war have been American importers and consumers. Trump tariffs will soon hit the clothing, shoes, furniture, household appliances and consumer electronics imported from China that make life better every day for tens of millions of American households, especially lower-income families that spend a higher share of their budgets on tradable goods. A study by the New York Federal Reserve estimates the Trump tariffs will soon be costing U.S. households more than $800 a year.

For U.S. companies, the tariffs on imported materials and components from China are disrupting long-established supply chains, raising production costs, and making their final products less competitive in global markets, with no quick or obvious alternatives available.

The trade war is also costing American exporters market share in the world’s second-largest consumer market. Last year, China was the fourth-largest market for U.S. exports of goods and services, behind only the European Union, Canada and Mexico. China is (or at least was until recently) a major purchaser of U.S.-made passenger vehicles, aircraft, semiconductors and chemicals, as well as U.S. farm products.

American companies are also at risk of losing market share for their operations inside China. In 2017, according to the Bureau of Economic Analysis, U.S. multinational companies sold $375 billion worth of U.S.-branded goods and services through their affiliates in China, returning $25.9 billion to the United States in profits. The next phase of the trade war could see China turning the screws on those companies with discriminatory regulations, forcing U.S. firms to cede further market share to their international rivals.

Another toll from the trade war could be higher interest rates as Chinese investment in the United States falls. The flip side of the bilateral trade deficit with China has been a steady inflow of Chinese capital that helps to finance the U.S. government’s insatiable appetite for debt. Whatever dollars the Chinese don’t spend on U.S. exports, they’ve spent buying U.S. Treasury bonds. That investment has reduced long-term interest rates in the United States, lowering the federal government’s borrowing costs while also reducing mortgage rates for millions of U.S. homeowners."

More evidence, from Chinese scientists, that the Modern Warm Period is just part of natural cycles that have been going on for at least 3,000 years

See The climate theory casting new light on the history of Chinese civilisation: Researchers say that when 500-year-long sun cycles brought warmth, communities flourished, but when the Earth cooled, ancient societies collapsed by Stephen Chen South China Morning Post.

"Scientists say they have found evidence beneath a lake in northeastern China that ties climate change and 500-year sun cycles to ups and downs in the 8,000 years of Chinese civilisation.

According to the study by a team at the Institute of Geology and Geophysics in Beijing published in the science journal Nature Communications this month, whenever the climate warmed, Chinese civilisation prospered and when it cooled, it declined.

While historians have used various social and economic factors to explain changes over the millennia, Dr Xu Deke, lead author of the paper, and his colleagues said that while people played their part, their study indicated that cycles in solar activity influenced human activity.

“We just point out there is a natural constraint on human efforts,” Xu said.

We are in a much more capable position than our ancestors with the help of technology and machines in face of global cooling, but preparation must start now Dr Xu Deke

Previous research linking Chinese history to climate relied on written records, but ancient texts contained only subjective descriptions of weather and social development. The records also go back only so far – writing in China was not invented until 3,600 years ago.

For this latest study, the team and its leader, Chinese Academy of Sciences professor Lu Houyuan, took plant and lake bed sediment samples to track climate change over the centuries and compared them with written records.

They visited Lake Xiaolongwan in the Changbai Mountains in Jilin province and studied the spread of plant life such as oak trees to map the transitions between warm and cold climate phases in northern China.

By comparing the records and their research, the scientists found that the warmer the climate, the more prosperous the civilisation in terms of grain cultivation, animal domestication and human settlement.

Over the decades, researchers have established more than 4,000 carbon dating databases for archaeological finds in northern China.

From these, the team obtained a benchmark for the intensity of human activity in different periods. Their study also found that 500-year cycles often ended with rapid climate cooling.
Hong Kong environmental activists join global ‘climate strike’

Whenever that happened, societies started to collapse and neither culture nor political systems could sustain them. This, Xu said, was a lesson for modern China.

“The most effective countermeasure is science and technology,” he said. “We are in a much more capable position than our ancestors with the help of technology and machines in face of global cooling, but preparation must start now.”

Citing this and earlier studies, Xu said that over the next few decades the Earth would enter 25 years of cooling, although greenhouse gases could slow the temperature drop.

Cooling would increase the size of polar ice caps and lower sea levels. Areas such as southern China could benefit as land would be reclaimed from the sea.

But overall, a cooling climate would continue to have a more negative effect on civilisation than warming, Xu said.
Chinese students discover topic of next class has been under feet for thousands of years

Dr Liu Yonggang, a Peking University scientist who studies ancient climate, said the researchers had provided important new information and perspectives.

Human societies have gone through temperature cycles such as the Medieval Warm Period (900- 1300) and Little Ice Age (1300-1870) Liu said, but most of that data came from Europe, not China.

The study left one big question. “Why do the sun’s activities vary every 500 years? Nobody can explain,” he said.

“We need to know more about the inner working mechanism of the sun, otherwise the future remains unpredictable.”"

Let’s Debate How Best to Measure Inflation

By Phil Gramm and John Early. 

"U.S. Bureau of Labor Statistics Commissioner William Beach’s response (Letters, Aug. 30) to our “Americans Are Richer Than We Think” (op-ed, Aug. 22) is instructive. He rightly notes that the Consumer-Price Index is widely used, that the BLS is impartial and transparent, that both measurement and operational errors are minimized, that the BLS conducts rigorous research and that many improvements have been made since 1978. We know all that because one of us was the assistant commissioner in charge of many of those improvements and even co-authored a paper in the Journal of the American Statistical Association with former Commissioner Janet Norwood analyzing them.

It is really striking that Mr. Beach’s response doesn’t directly address either of the two substantive points of our paper.

First, at no point does he contradict our conclusion that the chained CPI-U would be a better choice for inflation adjustments to all economic indicators, government transfer payments and taxes. This index was developed and published by the BLS and is a perfect example of the research he praises. We would have expected him to welcome the wider application of this important breakthrough from the BLS.

Second, he offers no evidence refuting the findings that significant research continues to show an upward bias from the introduction of new items. Much of the relevant research has been done by he BLS, and we urge the administration and Congress to support greater efforts to make improvements. Many researchers in academia, business and the BLS itself know how to do this. What is missing is the will and direction to get it done.

We welcome his invitation for detailed technical discussions and eagerly accept.

Phil Gramm
Helotes, Texas
John Early
Ridgefield, Conn.
Mr. Gramm is a former chairman of the Senate Banking Committee. Mr. Early is a former assistant commissioner of labor statistics for consumer prices and price indexes."

Long Live the Incandescent Bulb

The Energy Department will now allow you to choose your lighting.

WSJ editorial.

"Good news, Americans. If you like old-fashioned incandescent light bulbs, you can keep buying them. The Energy Department on Wednesday extended the lifespan of incandescents, which the Obama Administration in its twilight sought to extinguish.

Among Congress’s dimmer ideas was to create lighting efficiency standards in 2007 that effectively mandated the phase-out of incandescent bulbs. Americans were told higher-efficiency bulbs would save them thousands of dollars and reduce the nation’s carbon emissions. Where have you heard this before?

Conventional incandescents have already been supplanted by higher efficiency “halogen” bulbs that are virtually indistinguishable. But the Obama Administration in its waning days sought to ban halogens too and extend efficiency standards to certain incandescent lamps that were exempted by Congress.

The Trump Administration is proposing to rescind the Obama regulations. “More stringent standards are not economically justified,” the Energy Department concludes.

While high-efficiency lights like LEDs can reduce energy costs, their up-front costs are higher. Depending on the light fixture, consumers may not make up the purchase price for years if at all. The Energy Department calculates that the payback period for halogen infrared lights (which are more efficient than regular halogens) is three times longer than the product life.

The Trump Administration will allow consumers to do their own cost-benefit analysis including the functional and aesthetic trade-offs. A homeowner in New York where electric costs are among the highest in the country and utilities subsidize efficiency improvements may make a different choice than a renter in Dallas.

Liberal groups are predictably howling that this lighter regulatory touch will increase carbon emissions. But many consumers will probably still replace incandescents with LEDs as they become less expensive and more functional. The price of a 40-watt LED bulb has decreased to $2 from $50 in 2011 as the technology has improved. Consumers can now also adjust the brightness and color of LEDs.

Even the National Electrical Manufacturers Association, which supports giving consumers a choice, says this “will not impact the market’s continuing, rapid adoption of energy-saving lighting.” At least the Trump Administration is letting there be choice."

Mugabe Destroyed Zimbabwe’s Property Rights

It’s true that Robert Mugabe’s drive for a one-party state, his brutality and deep corruption were a significant part of Zimbabwe’s economic collapse. But the signature blow that brought Zimbabwe’s economy crashing down was the abandonment of property rights in 2000.

Craig J. Richardson.

"Regarding Jason L. Riley’s otherwise excellent “A Too-Comfortable End for Robert Mugabe” (Upward Mobility, Sept. 11): It’s true that Robert Mugabe ’s drive for a one-party state, his brutality and deep corruption were a significant part of Zimbabwe’s economic collapse. But the signature blow that brought Zimbabwe’s economy crashing down was the abandonment of property rights in 2000, which had previously been enshrined in its constitution.

Whatever Mugabe’s faults, his new government in 1980 gave most white commercial farmers a “certificate of no present interest” when his party came to power, meaning they would be free to hold on to their land or sell it to the government at the going market price. Both white and black commercial farmers enjoyed access to bank lending for capital equipment using their land as collateral, making them among the most productive in the world. Mugabe’s government nationalized farmland in July 2000, seizing commercial farms without compensation, ignoring Zimbabwe’s constitution. A disastrous domino effect then ensued. Without a property title serving as collateral, banks refused to lend to the new farmers and lost millions on existing mortgages. Zimbabwean companies that relied on the commercial farms’ output, such as textile companies, also went bankrupt. Foreign investors fled and new investors stayed away despite the country’s prodigious wealth in mineral resources. Disastrous hyperinflation, spiraling government deficits, continued reliance on food aid (never a problem before 2000) would define Zimbabwe’s unfortunate turn away from free markets, stable currency and secure property rights.

Economies can often survive corruption, price distortions, inflation and brutality, but they cannot survive the destruction of property rights and the resulting breach of trust."

Prof. Craig J. Richardson
Winston-Salem State University
Winston-Salem, N.C."

The Business Roundtable’s Recipe for Confusion

When companies try to do the government’s job, inefficiency and uncertainty result.

By Richard J. Shinder. He is a financial services executive living in New York. Excerpts:

"In elevating the concerns of other stakeholders above those of shareholders, the Business Roundtable has made an unfortunate mistake—one that will prove costly. No one can serve two masters.

In a modern industrial economy, commerce at scale is largely conducted through corporate entities, which shield shareholders from liability for company actions. The rise of increasingly large, operationally complex corporations allowed businesses to raise money more efficiently through capital markets and internalize components of their value and supply chains. This led, in turn, to further growth. As companies became larger and more complex, founders and owners enlisted professional managers to operate them.

Finance theory has long noted the existence of the “agency problem”: The objectives of managers and owners are not always aligned. The agency problem is exacerbated by the problem of asymmetric information. The CEO typically knows more about what’s going on in the business than shareholders do. Even the most engaged board of directors can provide only so much oversight. In recognition of these challenges, standards of corporate governance evolved toward a clear charge for managers: Maximizing shareholder value is your sole concern. 

This laserlike focus on shareholder value doesn’t eliminate the agency problem entirely, but it makes clear to managers that their only objective is to deliver a return for the owners of the enterprise of which they are stewards. The scorecard is relatively simple. Is the company profitable? Are its profits increasing? Is the share price going up? Are new customers being obtained on a profitable basis? If the answer to these questions is yes, everyone can rest assured that the people running the business are in sync with the people who own the business.

The Business Roundtable must no longer see the benefit of this arrangement. In addition to “generating long-term value for shareholders,” the organization’s statement offers four new objectives for corporations: delivering value to customers, investing in employees, dealing fairly and ethically with suppliers, and supporting the communities in which they work. While all are worthy objectives, they are either derivative of the objective to maximize shareholder value or a distraction from it. Either way, things aren’t likely to end well for any business that opts to please stakeholders over shareholders. 

A management team that doesn’t focus on and care for its customers, employees, suppliers and communities won’t be able to sustain a profit for long. And a company that sets aside profitability and focuses only on the Roundtable’s new objectives risks putting those objectives in conflict with one another. For a company in crisis, are suppliers more important than customers? Is community degradation a price worth paying for creating high-wage jobs? Companies facing these questions will be forced to make trade-offs that could ultimately cause them to go out of business.

Limiting themselves to a single question—Is what we do creating value for shareholders?—has the benefit of clarity. When businesses add social objectives to their missions, they muddy the distinction between the private and public spheres. Individuals and companies pay taxes to governments to fund collective action on issues that are in the common interest. 

People with altruistic motives can (and should) contribute their time and resources to charity, but that is (and should be) an individual choice. To have such choices made for shareholders by agents acting at a corporate level—and using investors’ capital—invites myriad opportunities for abuse, resource misallocation, malfeasance and inefficiency. 

As a capital budgeting exercise, is a $1 million charitable contribution more wisely spent than an investment in plant and equipment? What of corporations with attractive products and profitability that hold strongly partisan notions about what it means to “support the community?” JP Morgan, Nike and Gillette have all found themselves in the spotlight for charitable contributions and ad campaigns that put a seemingly greater focus on social-justice themes than either profit maximization or customer fulfillment.'

"private enterprise usurp public-policy functions risks further confusing society’s understanding of exactly who is supposed to do what. When people look to corporations to do what government should do—and vice versa—everyone will end up dissatisfied with all aspects of the political economy."

"Elevating other objectives—even with shareholder value maximization primus inter pares—risks failing to meet any of them."

Antitrust Can’t Catch Big Tech

Facebook, Google and the rest will change their ways before the feds can make a case.

By Andy Kessler. Excerpts:

"The first antitrust suit against IBM was filed in 1968. The U.S. government dismissed all antitrust cases against IBM as “without merit” in 1982. AT&T , an actual government-mandated monopoly, faced its first antitrust suit in 1974. It settled through a consent decree in 1982, with the Bell telephone system breaking into Baby Bells. Yet unlike Humpty Dumpty, the market put AT&T mostly back together again, with it and Verizon going strong in wireless—a field few foresaw at the time of the breakup."

"So has Big Tech squashed competition? Hmmm, let’s see. From 2014-18, global venture-capital funding has tripled to almost $360 billion. More than 40,000 startups launched in 2018. There are almost 12 million technology jobs in the U.S. while Apple , Amazon, Google and Facebook combined employ fewer than a million, world-wide."

Complaints about Airbnb are deeply misplaced

Airbnb Offers a Property-Rights Opportunity by Christina Sandefur.

"Masada Siegel’s complaints about her home-sharing neighbors (“The Airbnb Hotel Next Door,” op-ed, Sept. 3) are deeply misplaced. City hall, not Arizona’s home-sharing law, is to blame if nuisance ordinances are not enforced.

Though websites like Airbnb and HomeAway are relatively new, offering one’s home to paying overnight guests is centuries old. The vast majority of home sharers are respectful to neighbors. True, there may be times when guests are discourteous, but cities already have ordinances to crack down on noisy neighbors. The law Ms. Siegel complains about—Arizona’s 2016 Home-Sharing Act—in no way diminished that authority. Instead, it blocks cities from imposing across-the-board bans on home sharing—bans that punish the innocent for the wrongs of a few. We don’t outlaw all backyard barbecues just because people sometimes get rowdy. Arizona’s law rightly takes the same view: It simply says cities must use existing laws to crack down on bad actors, rather than stripping all property owners—the great majority of whom are law-abiding—of their fundamental private property rights.

Home sharing is an important opportunity for millions of homeowners across America to make extra income to help pay their mortgages, maintain their properties and invest in local communities. Home sharing boosts small businesses by bringing visitors into local communities, and it creates an incentive to fix up properties that otherwise would have fallen into disrepair. All that economic growth is destroyed when city hall imposes one-size-fits-all bans instead of enforcing existing nuisance laws.

Christina Sandefur
Goldwater Institute
Phoenix" 

The Koch Foundation Is Trying to Reshape Foreign Policy. With Liberal Allies.

Charles Koch has spent a fortune pushing the American government to the right. Now his foundation is promoting a vision of U.S. power shared by many progressives: restraint.

By BEVERLY GAGE. She is is a professor of American political history at Yale. Excerpt:

"When it comes to foreign policy, though, the agenda of the foundation — which supports education and research and constitutes a relatively small part of the Koch network — does not line up quite so neatly with partisan politics. In keeping with Charles Koch’s libertarian shrink-the-state imperative, the foundation has set out to bring an end to America’s age of endless wars and to reduce the nation’s military footprint around the world — a vision shared by many progressives, some of whom count themselves among the Koch grantees.

Since 2015, the foundation has committed more than $25 million to this effort. It has seeded academic programs at universities like Tufts, Notre Dame, the Catholic University of America, Texas A&M and the University of California, San Diego, in addition to Harvard and M.I.T. This summer, it also granted $460,000 — about a quarter of the start-up budget — to the Quincy Institute for Responsible Statecraft, a new think tank that intends to challenge the “intellectual lethargy and dysfunction” of the foreign-policy establishment and to argue on behalf of greater military restraint. The left-leaning billionaire George Soros gave money through his foundation to the Quincy Institute as well, a strange-bedfellows arrangement much emphasized during the think tank’s rollout in late June — and a sign of how seriously the Trump presidency has shaken up traditional enmities and alliances."

The Secret of a Charter School’s Success? Parents

Low-income families ‘self-select’ for Success Academy’s demanding program, with remarkable results

By Robert Pondiscio. He is a senior fellow at the Thomas B. Fordham Institute. Excerpts:

"Parents who win the lottery, and even those whose children are only on the wait list, must attend a series of mandatory meetings and complete various administrative steps for their applications to remain “active” between the April lottery and the start of school in August. Those who falter fall away.

At every step, school leaders aggressively preach to prospective parents about their no-nonsense culture and the expectation that parents come with eyes wide open, fully committed to Success Academy’s program and policies, including strict behavior codes, school uniform compliance, supervising homework, reading with children every night and recording what’s read in a log. Parents are warned repeatedly in unsparing language, “Success Academy may not be for you.” Significantly, the schools offer no transportation or after-school programs, a potential deal breaker for working single parents or those without the support network to pick up and drop off their children every day. 

This process, whether by happenstance or design, yields a parent body comprised largely of the most motivated parents and those with the organizational skills and resources to meet Success Academy’s high bar for parental engagement. This sets the stage to strive for—and mostly achieve—consistent and high levels of academic achievement “at scale” among low-income children of color, who would otherwise be lost to the dull hum of mediocrity in zoned neighborhood schools.

This seems unfair—except for the fact that the ability to self-select into a well-run, high-performing school is unremarkable and unquestioned among affluent Americans. When well-off parents pay for their children to attend a private or religious school, or when they move into high-income ZIP codes where inflated home prices and eye-popping property taxes are de facto tuition for excellent “public” schools, they are making the same decision as the low-income parents drawn to Success Academy. Both groups are voting with their feet and committing their own resources—money or time—to ensure that their children go to school with the children of similarly engaged and motivated parents.

To deny low-income families of color the ability to self-select into safe and well-run schools with high expectations is to impose mediocrity on them, ostensibly for the public good. It is a burden that no affluent family is asked or expected to bear. Ms. Moskowitz insists that even if she were allowed to, she would not screen and handpick applicants instead of admitting families by lottery. “I wouldn’t do it,” she told me, “because I don’t think I could tell who they are.” Perhaps not, but she has created a mechanism for those families to identify themselves.

Ms. Moskowitz’s many critics will look at the small but non-trivial hurdles parents must clear as proof that she is not running great schools, merely a sorting mechanism. But this ignores what’s most remarkable about Success Academy: Its schools don’t just match those of affluent suburban districts but easily outperform them. Working with self-selected families under careful conditions, Ms. Moskowitz hasn’t merely closed the achievement gap. She has reversed it."

School culture and parent buy-in matter. The brand of education pioneered by Success Academy may indeed be “not for everyone,” but its schools are well run, not the joyless and militaristic hothouses critics imagine. They serve much the same role as Catholic schools did for previous generations of striving New Yorkers. Success Academy suggests the upper limits of what is possible when a critical mass of active and engaged families of color, who happen to be poor, are given permission to exercise the same degree of choice as affluent families." 

Progressive movements pushed for “equality,” but mostly shunned black Americans

See ‘The Second Founding’ and ‘Equality: An American Dilemma, 1866-1896’ Review: Replanting Democracy. Fergus M. Bordewich reviews The Second Founding by Eric Foner and Equality: An American Dilemma by Charles Postel. Excerpt:

"As all three movements challenged vested interests and often heroically pushed for “equality,” they mostly shunned black Americans, a story that Mr. Postel unpacks in compelling and disheartening detail. The Grange, he writes, steadily became “a refuge for rural white power across the former Confederacy,” while one of its successors, the Farmers’ Alliance, maintained a strict “whites only” rule for membership and endorsed segregation. Although the Knights included some African-American affiliates, as a matter of policy it held “that the Southern people are capable of managing the negro,” as Terence Powderly put it. Frances Willard, who was raised in an abolitionist home, declared upon her return from an organizing tour through the former Confederacy that the trip had “reconstructed” her toward a posture of fraternity with the old slaveholding elite. Willard later blithely announced to the press that former slave owners who supported the WCTU’s doctrine of alcohol prohibition understood that “a tame Negro is better company than a wild one.” None of the movements addressed the epidemic of lynching that engulfed the South during the Jim Crow era with anything more than boilerplate disapproval."

The Real Cure for Inequality

Income gains are now rising faster for low-wage workers.

WSJ editorial. Excerpts:

"in 2018 . . .Worker earnings increased by 3.4% while the poverty rate declined 0.5 percentage points to 11.8%, the lowest level since 2001."

"According to the Census Bureau, the number of full-time, year-round workers increased by 2.3 million in 2018, and employment gains were biggest among minority female-led households. The share of workers in female-led households who worked full-time year-round increased by 4.2 percentage points among blacks and 3.6 percentage points among Hispanics."

"real median earnings for female households with no spouse present jumped 7.6% last year. The poverty rate among female households declined 2.7 percentage points for blacks, four percentage points for Hispanics and 7.1 percentage points for their children."

"The jobless rate for black women last month fell to a historic low of 4.4% and neared a nadir for Hispanic women at 4.2%."

"The share of households making less than $35,000 in inflation-adjusted dollars has fallen 1.2 percentage points since 2016 while those earning between $50,000 and $150,000 and more than $200,000 have both increased by 0.8 percentage points."

"no significant increase in real median household incomes last year, but this is probably because a decline in transfer payments and investment income offset wage and salary increases."

"Seniors are also retiring in greater numbers, which usually results in an income drop. But, notably, real median incomes increased in households between the ages of 15 to 24 and 25 to 34 by 9.1% and 5%, respectively."

"higher taxes, hyper-regulation and income redistribution resulted in slower growth and more inequality during the Obama Presidency. The Federal Reserve’s policy of lifting asset prices also favored wealthier Americans with financial assets rather than lower-income workers who received smaller wage gains."

Between 1970 and 2016, the inflation-adjusted cost of educating a student in US public schools increased by 150% but there was basically no change in academic achievement

See Animated chart of the day: Public school enrollment, staff, and inflation-adjusted cost per pupil, 1970 to 2016 by Mark Perry.

"My latest animated “bar chart race” visualization above shows the growth over nearly the last 50 years in: a) the number of students (K-12) enrolled in public schools, b) the number of public school teachers, c) the number of non-teaching staff (administrators, principals, assistant principals, support staff, librarians, guidance counselors and instructional aides), and d) the inflation-adjusted cost of public school education per pupil, all from 1970 to 2016. All of the figures shown in the animated chart are the percent of 1970 values. Here are some observations:

1. Over the 1970-2016 (most recent year available) period, the increase in the number of students attending US public schools has increased only 10.3% from 45.9 million to 50.6 million. From 1970 to the mid-1980s, public school enrollment decreased by nearly 6.5 million students (and by 14%) before rebounding by 1997 to the 1970 level of about 46 million students and then increasing steadily to more than 50 million by 2013.

2. In comparison, the number of public school teachers increased by 57% between 1970 and 2016 from about 2 million to 3.17 million, which reduced the pupil-to-teacher ratio by 30%, from almost 23-to-1 in 1970 to below 16-to-1 in 2016.

3. Over the same period, the number of non-teaching staff at public schools more than doubled, increasing by 147% from 1.4 million in 1970 to 3.3 million in 2016. Interestingly, while the number of public school teachers was flat between 1996 and 2016, the number of non-teaching staff continued to grow and by 2015 there were more non-teaching staff than teachers and that gap grew even larger in 2016 (see chart below).

4. As a direct result of public school staff (both teachers and non-teachers) growing so much greater (57% and 157% respectively) than the increase in public school students (10.3%) between 1970 and 2016, the inflation-adjusted cost of educating a student in US public schools increased by 150% between 1970 and 2016, from $4,934 to $12,220.

5. With the 150% inflation-adjusted increase in spending per public school pupil and the 30% reduction in the pupil-to-teacher since 1970, have there been any demonstrable educational improvements in student test scores? Unfortunately, No. While not shown in the animated chart above, this Department of Education report found that “Average reading and mathematics achievement for 17-year-olds did not change significantly between the early 1970s and 2012 or between 2008 and 2012.” (Although the National Assessment of Educational Progress (NAEP) achievement results are for both private and public schools, private school enrollment represents less than 9% of students in grades 9-12.)  For example, the NAEP average reading score of 285 in 1971 was not significantly different from the 287 average score in 2015. Likewise, the 304 average score for the NAEP math assessment in 1971 was not significantly different from the 306 average score in 2015.

Bottom Line: Despite the significant increase between 1970 and 2016 in the number of public school teachers (57%) and non-teaching staff (147%) relative to the 10.3% increase in students, the significant 30% decrease in the pupil-to-teacher ratio in public schools and the significant 150% increase in inflation-adjusted spending per pupil attending public schools over that period, there was basically no change in academic achievement. More spending + more teachers + more administrators + no change in education outcomes = a failing public school monopoly that benefits entrenched unionized teachers who vigorously try to squash competition from charter schools and educational choice at the expense of taxpayers, parents and students."

Even Swedish Socialism was Violent

By Phillip W. Magness.

"Few subjects are more taboo among self-described socialists than the historical track record of socialism in action. 

Bernie Sanders recently bristled at the suggestion of any commonality between the government of Venezuela and his own platform, even though less than a decade ago he was touting the country along with other leftist governments in South America as exemplars of the “American dream.” 

When Anderson Cooper presented Alexandria Ocasio-Cortez with a similar question, she scoffed at the suggestion. It is unfair to link their ideology to its violent forebears, they insist, because the “democratic socialism” they envision is a Scandinavian-style welfare state, modeled after the economy of Sweden.

There are many problems with this comparison. Sweden’s government has actually been trending away from the centrally planned economic approach favored by Sanders and Ocasio-Cortez. The country reined in public spending with a system of budget caps in the 1990s, scrapped its wealth tax in 2007, and has generally followed a path of privatization and deregulation over the past two decades.

But there’s also a neglected dark side to the Swedish welfare model that its “democratic socialist” admirers seldom mention. That same welfare system developed in explicit conjunction with a violent and coercive eugenics policy, intended to ensure its fiscal solvency and prevent abuses of its programs by persons who were deemed genetically “unfit” by the state.

Both policies trace their modern origins to the 1930s with the political ascendance of the Swedish Social Democratic Party (SDP). Following an SDP victory in 1932, Swedish premier Per Albin Hansson organized his government around a principle he dubbed “folkhemmet,” roughly translated as “the people’s home.” This new philosophy sought to bring private industry into economic and political partnership with the state, subject to socially progressive regulatory guidance as an alternative to a more rigid centrally planned approach, as seen under Soviet socialism.

Along with egalitarian measures intended to tax and redistribute wealth, Hansson also envisioned a greater role of government involvement in daily economic life to achieve a sweeping set of social goals. His prescription entailed taking a hands-on approach to the social safety net, wherein poverty alleviation, public education, health care, public housing, old age pensions, and child care formed a comprehensive package of state-provided “social well-being.” 

The folkhemmet platform would dominate Swedish politics until the 1970s, overseeing the design and implementation of the welfare state that Sanders, Ocasio-Cortez, and other “democratic socialists” celebrate today.

Although politically popular, the SDP’s programs created new economic strains on the government. They imposed unprecedented expenses on the public treasury. In addition, Sweden was experiencing a declining birth rate, which portended fiscal insolvency as an aging population left the workforce and became public pensioners. If 1930s birth rate trends continued, the population of the elderly would surpass the income-generating workforce by mid-century, eventually resulting in the fiscal collapse of the entire system.

These issues became the subject of the influential 1934 book Crisis in the Population Question by the husband-and-wife team of Gunnar and Alva Myrdal. To this day the Myrdals remain intellectual giants in Scandinavian social democratic politics, and their economic beliefs are occasionally invoked as a model for Bernie Sanders to follow in the far-left press. An economist and member of the Swedish parliament, Gunnar went on to win the Nobel Prize in economics in 1974. Alva, trained as a sociologist, held a number of prominent diplomatic appointments and was awarded the Nobel Peace Prize in 1982. Their book became an intellectual blueprint for policy under the SDP’s Ministry of Social Affairs, especially as it concerned the need to stimulate population growth.

The Myrdals prescribed a state-ordered natalist policy to boost the birth rate. Child rearing assistance, public health care provision, paid medical leave after childbirth, housing assistance and rent subsidies for parents, and robust expenditures on public education could all be deployed to incentivize fertility, as well as socially engineer a working population that would be able to sustain its pensioners. The SDP politicians saw a double-edged sword in this approach however, as it also incentivized the poorer classes to reproduce — and at a faster rate than the wealthy. On the surface this chafed with the SDP’s emphasis on social equality. If new births disproportionately came from the lower classes, the Myrdals feared, they could become additional drains on the public treasury by becoming lifelong dependents on the very same welfare state.

To counteract the perceived risk of welfare dependence, the SDP government consciously paired its new welfare policies with a complementary system of eugenic laws — intended to prevent or dissuade “unfit” persons from reproducing. These included a narrow compulsory sterilization program, applied to persons with hereditary “defects,” and a much larger “voluntary” sterilization program targeting behavioral considerations. As part of the latter program, the government could induced lower-class citizens to submit to the procedure by using the suasion and levers of the new welfare state itself.

The “voluntary” measures went far beyond involuntary sterilization, which was restricted by law to explicit eugenic reasons. As a 1997 study of the program documented, government officials are known to have used submission to “voluntary” sterilization as a condition for release from mental institutions and public hospitals, for continued access to certain forms of public housing, and even marriage licensing among the poor. In total, an estimated 63,000 Swedes were sterilized between the 1930s and the expiration of the main eugenic law in 1976.

Coercive policies also extended beyond eugenic sterilization, forced and voluntary. As part of the same effort to limit the fiscal strain of welfare dependents, Sweden adopted a parallel system of “environmental” policies where children were forcibly removed from parents and households that the government deemed unsuited for a child’s social development. Swedish authorities used poverty, alcoholism, perception of mental disorders, and a multitude of other discretionary diagnoses to forcibly remove an estimated 250,000 children into state-supervised foster care during this period. According to the theory, this socially engineered change in environment would reduce the child’s likelihood of becoming a dependent.

Elements of both approaches — eugenic and environmental — may be found throughout the Myrdals’ writings, even though some of their modern enthusiasts have tried to rehabilitate the couple by downplaying their commitments to explicitly racial variants of the policy. After the adoption of Sweden’s eugenic laws in the 1930s, both continued to espouse the state-sanctioned social engineering as a necessary and complementary component of the Swedish welfare model. They remained central figures in Swedish politics for the next half-century.

While their Swedish population studies usually took the form of dry academic works, Alva Myrdal laid out the policy implications more explicitly in a little-studied but remarkably candid article from 1939. As its opening line revealed, she sought to delineate a “democratic population policy” as Sweden’s “enlightened” alternative to the “contemporary fascist and communist population experiments.” After outlining the case for using the welfare state to stimulate the birth rate, Alva summarized the paradoxical situation that Sweden faced: “quantity should not be bought by sacrificing quality.”

She explained that Sweden’s racial homogeneity and mobile social structure gave its model advantages over other countries, and stressed a “practical value premise that the main social groups be considered of equal hereditary worth.” There remained however “a small bottom layer of society [that] could rightly be regarded as biologically inferior” and that “should not be classified within any of the large socio-economic classes.” This premise limited the scope of “negative eugenics,” but among the affected, involuntary “sterilisation, however, is utilized against a residuum of all social classes whose perpetuation is considered least desirable.”

Pointing out the narrow scope of the measure, Alva then touted a proposed voluntary sterilization law that the SDP government would soon enact in 1941:

Sterilization is considered to be indicated when the defect of which there is risk of perpetuation by heredity is a grave one (mental or bodily illness, deformity, psychopathy or genuine epilepsy). Carriers who do not show the trait may be sterilized under this law but not under the previous one. Further recognized reasons for sterilization are found in cases in which persons would be incapable of caring for, or rearing children, social and economic insufficiencies being also taken into consideration as adding weight to other reasons for sterilization. Having thus given the legal provision for excluding from procreation the decidedly undesirable group, a border-line group has next to be considered. This group is probably the most difficult to handle in any eugenic program, its heredity values being doubtful, though not enough so to indicate sterilization, but its social capacities being unfavorable to child rearing. It is officially planned, though as yet scarcely put into practice, to influence this group to severe family limitation by direct propaganda and instruction in contraceptive methods.

These measures only applied to the “bottom” strata of Swedish society, whereas the welfare state’s benefits encompassed the class of poor persons who were not “biologically inferior to the rest of the population” but faced economic strains. At this point, Alva explained, the welfare state became a supplementary mechanism of environmental improvement through state-managed education, health care, housing, and nutrition.

Far from being paradoxical on account of their budgetary implications, a eugenic policy and the welfare state could be designed to operate as direct complements. Birth control would serve as a further bridge between the two, yielding a social system of consciously engineered “quality” improvement within the population. As Alva explained:

Together they form a new system of prophylactic social policy, safe-guarding the quality of the population in advance and not merely partly curing its ills. Such a policy is considered to be to a much higher degree an "investment," and an investment in the human capital of the country, fully equal to or more profitable than investment in factories and machines and other property which “rust can corrupt and the moth consume.”

This eugenic pairing remained a conscious theme of the Myrdals’ work, even after the events of World War II revealed the horrors of the fascist variant that Alva juxtaposed against the Swedish model in her 1939 article. She continued to advise the implementation and expansion of the new system for several decades after the war — the period when the majority of the “voluntary” sterilizations were carried out.

The effects of these policies quickly spread abroad. Other Scandinavian countries copied the Swedish model in conjunction with their own welfare states, often citing the “scholarly” studies of the Myrdals. Denmark, for example, sterilized approximately 11,000 people between the early 1930s and the end of the policy in 1967. Norway and Finland adopted similar models, but remain far less studied.

Gunnar also strongly hinted at the adaptability of his system to the United States in his 1944 book An American Dilemma. The study of racial discrimination is still touted by academics today, who applaud its criticism of segregation laws. Yet its pages are also littered with eugenic content, drawing upon the Swedish experience. One notorious chapter outlined “The Case for Controlling the Negro Birth Rate.” In Gunnar Myrdal’s mind, many southern blacks were “so destitute that from a general social point of view it would be highly desirable that they did not procreate.” Despite the clear implications of his argument, he strangely enjoys a reputation as a racial egalitarian on the modern political left.

In terms of atrocity, the Swedish welfare state’s eugenic component seems minor compared to the violence found in other varieties of socialism (not that falling short of Mao and Stalin is anything to be proud of). The number of sterilization victims attains alarming perspective when compared to Sweden’s small population size. Other countries including the United States dabbled in sterilization during this era, but few approached the scope found in Sweden. The United States, for example, is believed to have sterilized a nearly identical total — 60,000 people in the same period out of a 1940 population of 132 million. Sweden’s 1940 population was just 6.3 million.

It would be unfair to claim that the Swedish welfare state today is dependent on perpetuating the violence of its sterilization programs. The policy was abandoned in 1976, and the Swedish government has since taken steps to make amends to its surviving victims. At the same time, however, the historical link between eugenics and the Swedish welfare state was clear and intentional, and took place within living memory. 

Sanders, Ocasio-Cortez, and today’s “democratic socialists” might legitimately disavow such a policy today (although Sanders has gotten into hot water recently with his own comments about population control, specifically invoking the poor). But they should not perpetuate the illusion that the historical Swedish welfare state was some democratically attuned and victimless alternative to the more notorious socialist regimes of the 20th century. As with other more extreme variants of socialist ideology, it too has a violent historical legacy to account for."

Veronique de Rugy busts the myth that capitalism harms women

See The Motherhood Pay Gap.

"Does capitalism help or hurt women? I recently participated in a debate on the topic at the Cato Institute. While preparing for the event, I learned many fascinating facts that may interest feminists who claim the best way to help American women is for the U.S. government to do what other governments have done: spend a lot of money on so-called "pro-family" programs.

Consider Nordic governments, often praised by modern feminists and socialists alike, as models America should emulate.

It's certainly true that, for years, these countries have been hailed for being at the forefront of gender equality with programs such as paid family leave for both men and women and generous child care handouts to help women balance home life with work life. The policies are also supposed to help slay that favorite leftist unicorn — the "pay gap" — and elevate women to positions of power traditionally occupied by men. These entitlements certainly look fantastic on global gender equality indexes.

While it's true that Nordic women participate in the labor force at higher rates than women in other countries, academic studies show that higher taxes on labor income — which are used to fund these generous policies — encourage women to work not full time, but part time. More generally, higher tax rates reduce the amount of time women work and increase the amount of time they spend doing unpaid household work. A Cato Institute study on "The Nordic Glass Ceiling," by Nima Sanandaji, explains that "Nordic professors and other workers are more inclined than their lower-taxed American counterparts to devote unpaid time to domestic work rather than work longer hours in their paid work."

Studies by the European Commission and others find that broad-based welfare policies also create incentives for women to work part time rather than full time. Ironically, paid maternity leave policies make working fewer hours more attractive relative to working full time, which in turn hinders women's abilities to reach the top executive positions.

This phenomenon is particularly pronounced in Scandinavian countries where the benefits are more generous. For instance, while the share of female managers is 43% in the United States, it's 28% in Denmark, 30% in Finland, 32% in Norway, and 36% in Sweden. These countries also have, relative to other developed nations, very low rates of women working in science, technology, engineering and mathematics fields.
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Now let's look at the impact that generous pro-family benefits have on the gender pay gap:

When measured properly, the pay gap in the United States is small. It certainly isn't the 19 cents per dollar often advertised by the left, including some Democratic presidential candidates.

The work of Harvard economist Claudia Goldin demonstrates that this gap has almost nothing to do with discrimination. Instead, it has to do with what Goldin calls the need for "temporal flexibility." That is, women choose to work in positions that allow them the flexibility to take care of their children. What little there is in the way of a pay gap reflects women's choices and not employers' discrimination.

This "earning" rather than "wage" pay gap is driven by women choosing to be moms, and it exists in every country, including Scandinavian ones. In fact, economic studies show that this gap is as big or larger in European countries with huge amounts of social spending. For instance, a well-cited paper by Henrik Kleven, Jakob Sogaard and Camille Landais explains that although the United States and Sweden or Denmark "feature different public policies and labor markets, they are no longer very different in terms of overall gender inequality." Other studies show that to the extent the gap is slightly smaller in Nordic countries than other big welfare states, it has more to do with these countries' wage structures than with pro-family benefits.
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The economic literature refers to these findings as the "Nordic paradox." The lesson here is that we should not justify social policies like mandated paid leave and generous child care benefits with the idea that they will close this gap, because they won't. American feminists should also be careful what they wish for: More generous policies might bring more women into the workforce, but they could also hinder women's rise in the workplace by incentivizing them to work part time and, as a result, never make it to the top."

In Its Stores, Walmart Behaves the Same Way Amazon Does and No One Cares

By Patrick Hedger of CEI.

"This week, The Wall Street Journal published an exclusive story detailing how Amazon uses its algorithms to prioritize its brands and products that are more profitable for the company. Amid the flurry of antitrust scrutiny and investigations into big tech, this seems like a big deal. Yet outside of big tech, prioritizing your own products and the products that make you the most money is called the basics of staying in business.

All technology policy debates fall victim to the same general fallacy—that Internet-based businesses are fundamentally different than those with four walls and a front door and therefore ought to be held to different standards.

We increasingly take the wonders that tech companies have given us for granted. The convenience and endless selection provided by businesses like Amazon are so incredible that our expectations of these firms have become completely detached from reality.

Yet Amazon is a business that faces the same fundamental challenges that brick-and-mortar stores like Walmart face. Let’s look at the parallels. Walmart and Amazon are retailers that sell products made by other companies as well as products under their own brand. The complaint against Amazon is that it structures its algorithm to prioritize certain products that are either its own brand or generate the most profit. Yet Walmart does the same thing in how it decides to physically structure its store.

If there were no rhyme or reason to the inside of a Walmart, it would just be a giant pile of unorganized products. Yet a great deal of resources have been dedicated by brick-and-mortar retailers in studying how to position and stock products inside of their stores. Around certain holidays, products related to those holidays, such as hot dog buns around the Fourth of July, can usually be found right as you walk in the door. Throughout the year, the stores are constantly reorganizing.

Different products are put on display while some are left on the shelves or in the warehouse.
Brick-and-mortar stores also prioritize products through pricing. Generic or store-brand products are usually cheaper. Stores will also provide you with discount cards and coupons. These prioritize the purchase of certain products over others.

This is all to say that Walmart and all other retail stores want you to see certain products in certain places at certain times at certain prices. For example, there might be a certain brand of jeans that makes Macy’s more money than others. Those jeans are likely to be the ones put on a mannequin in the store window tagged as on sale. How is this any different than when Amazon uses its algorithm to put certain products near the top of the search results?

Following this logic, one ought to realize that Amazon’s business model is decidedly more pro-consumer and pro-competition than that of brick-and-mortar retailers. Amazon doesn’t face the kind of shelf-space limitation that a physical Walmart location does. So if a certain brand of product doesn’t make Walmart as much money as another, it may choose not to carry that product in its stores at all. Yet on Amazon, the accusation is not that the less profitable and non-Amazon brand products are unavailable, but rather are (*gasp*) two clicks on the mouse wheel down.

With Amazon and other online retailers having this enormous selection advantage, Walmart and other brick-and-mortar retailers are well along the way to ramping up their online businesses as well. This is all great news for the consumer.

Not long ago, if the local retail store didn’t have the specific product you wanted, you’d likely go without it or be forced to buy the substitute product or brand that the store determined made the most business sense for them to stock. Today, Amazon, Walmart, and all other retailers are vigorously competing to stock as wide of a selection as possible to best satisfy consumers. In short, the individual consumer experience has gone from a limited selection to a near limitless selection, but certain products might show up a few tiny movements of your hand away from the one you may actually want.

As my colleague Jessica Melugin recently pointed out on CNBC, the standard for antitrust violations under U.S. law is consumer harm. To suggest consumers are somehow worse off because their preferred selection is a mere click away, when it used to be in the back of the store or not available at all, is both a damning indictment of the weak cases being pursued against big tech and a credit to the incredible conveniences these companies have provided."