The FDA Is On A Quest to Snuff Out Tobacco Harm‐​Reduction

By Jeffrey A. Singer of Cato.

The Food and Drug Administration has dealt two deadly blows to tobacco harm reduction in the past two days. Yesterday the Biden Administration announced that the FDA will publish a proposed rule next year requiring tobacco companies to gradually eliminate practically all of the nicotine in cigarettes. Today, the Wall Street Journal reports the FDA plans to order all Juul menthol and tobacco flavored e‑cigarettes off the market in the U.S..

Juul has been the market leader in vaping products, but in recent years has slipped to number two, behind Vuse brand, marketed by tobacco maker Reynolds American. The FDA cleared e‑cigarettes made by tobacco makers Reynolds American and NJOY Holdings, who now don’t have to worry about competing with Juul. Cynics might think today’s move reeks of cronyism. But those of us concerned with reducing the harms from tobacco smoking can only conclude that the past two days’ moves signify the FDA is completely abandoning harm reduction.

First, consider the idea of reducing the nicotine in tobacco smoke. It is true that nicotine is the substance in tobacco to which one can become addicted, while the other components of tobacco smoke are responsible for smoking’s organic harms—from cancer to cardiovascular disease. But, aside from its addictive potential, nicotine is, according to Public Health England, “relatively harmless.” This is from Britain’s National Health Service “NHS Inform” website:

Although nicotine is a very addictive substance it’s relatively harmless. It’s the carbon monoxide, tar and other toxic chemicals in tobacco smoke that will cause serious damage to your health. Clean forms of nicotine are licensed to help smokers quit. These are much safer than smoking as they’re nicotine only, don’t have other additives or toxic chemicals, and are proven to be safe and effective.

Nicotine, like caffeine, is a stimulant that improves focus. Unlike caffeine, nicotine increases production of beta‐​endorphins that relieve anxiety, which may explain why some tobacco smokers light up when they want to calm down. Furthermore, nicotine might reduce the incidence of Parkinson’s Disease and has stimulated research into its potential therapeutic applications for this affliction. It also may be potentially useful to treat depression, Tourette’s Syndrome, Alzheimer’s’ Disease, and schizophrenia.

What’s more, many tobacco smokers mainly smoke to enjoy the nicotine effects more than the flavor of tobacco, much like drinkers of alcoholic beverages often enjoy the relaxing feeling and “buzz’ from the drink even more than its flavor. This explains why the government‐​funded research that led to the FDA’s nicotine‐​cutting decision found, “if cigarettes’ nicotine strength was reduced moderately, smokers would inhale more deeply or smoke more cigarettes to compensate and satisfy their nicotine cravings.” (Similarly, an alcohol drinker might consume more alcohol to achieve the desired effect if the alcohol content of the beverage is reduced.)

The research found that when the nicotine content of cigarettes was reduced by more than 95 percent, the smokers would tend cut back or quit—but the subjects were confined to hotel rooms, hardly a real‐​world experience. The real world, where black markets exist, might have many unintended consequences. And the researchers acknowledge that many of the study’s participants cheated by smoking regular cigarettes when they were only supposed to be smoking low‐​nicotine cigarettes. These stipulations to the study’s significant limitations apparently haven’t deterred the Biden Administration’s FDA from proceeding with plans to eliminate nicotine from cigarettes. A policy aimed at getting smokers to quit might easily wind up increasing tobacco consumption.

Next consider the FDA’s war on e‑cigarettes. Begun in the Trump Administration, the FDA has increasingly restricted the availability of this proven tobacco harm reduction tool. In the United Kingdom, Public Health England tells primary care practitioners to suggest e‑cigarettes to their tobacco‐​smoking patients as a cessation aid. PHE claims vaping is 95 per cent less harmful than smoking tobacco. Britain’s Royal College of Physicians advocates e‑cigarettes for nicotine replacement therapy (NRT), stating:

In the interests of public health it is important to promote the use of e‑cigarettes, NRT and other non‐​tobacco nicotine products as widely as possible as a substitute for smoking in the UK.

Randomized controlled trials in the UK have demonstrated that e‑cigarettes are “significantly more effective” than other forms of nicotine replacement therapy, such as nicotine patches or nicotine gum.

The Trump Administration FDA started by banning flavored vaping products other than menthol and tobacco flavor, even while surveys repeatedly show that anywhere from 92% to 94% of former smokers who switched to vaping preferred the fruit‑, candy‐ or menthol‐​flavored forms.

The ban on flavored vaping is rooted in the fact that teen vapers seem to prefer the fruit, candy or menthol flavors over the tobacco flavor. But e‑cigarette sales to those under 18 have been prohibited since 2016, so the teens are already tapping the black or grey market in order to vape. And while teen vaping has been surging, teen tobacco smoking is at an all‐​time low. Yet research shows that fruit or candy flavored e‑cigarettes are not determinants of teen vapers moving on to tobacco. And a study published in the May 2021 issue of Nicotine and Tobacco Research by researchers at Brown and Harvard Universities finds, “E‑cigarette use is largely concentrated among youth who share characteristics with smokers of the pre‐​vaping era, suggesting e‑cigarettes may have replaced cigarette smoking.” Dr. Natasha Sokol, once of the study’s authors, told Filter journalist Alex Norcia, “The decline in youth smoking really accelerated after the availability of e‑cigarettes.”

Efforts to reduce teen vaping deprive adult tobacco smokers of a proven harm reduction strategy. It turns out that most adult tobacco smokers who wish to quit prefer flavored and menthol e‑cigarettes as more effective substitutes. The FDA has not yet decided if it will ban menthol flavored e‑cigarettes, which would further undermine tobacco smokers’ efforts to quit. A policy intended for minors is hurting adults. Now there is evidence that many who had switched from tobacco to e‑cigarettes are switching back to tobacco.

I have often said that Democrats think government prohibition works when it comes to cigarettes but not other drugs, while Republicans think government prohibition works for other drugs but not cigarettes. Sadly, the war on tobacco harm‐​reduction has been bipartisan, spanning Democratic and Republican administrations. We should not be surprised to see teen and adult smoking rates start back up, after years of decline."

Regulatory quality is declining

From Marginal Revolution.

"One example of such evidence-free regulation in recent years comes from the Department of Health and Human Services (HHS). In 2021, HHS repealed a rule enacted by the Trump administration that would have required the agency to periodically review its regulations for their impact on small businesses. The measure was known as the SUNSET rule because it would attach sunset provisions, or expiration dates, to department rules. If the agency failed to conduct a review, the regulation expired.

Ironically, in proposing to rescind the SUNSET rule, HHS argued that it would be too time consuming and burdensome for the agency to review all of its regulations. Citing almost no academic work in support of its proposed repeal — a reflection of the anti-consequentialism that animates so much contemporary regulatory policy — the agency effectively asserted that assessing the real-world consequences of its existing rules was far less pressing an issue than addressing the perceived problems of the day (by, of course, issuing more regulations).

Through its actions, HHS has rejected the very notion of having to review its own rules and assess whether they work. In fact, the suggestion that agencies review their regulations is an almost inexplicably divisive issue in Washington today. “Retrospective review” has become a dirty term, while cost-benefit analysis has morphed into a tool to judge intentions rather than predict real-world consequences. The shift highlights how far the modern administrative state has drifted from the rational, evidence-based system envisioned by the law-and-economics movement just a few decades ago.

Here is more from James Broughel at Mercatus."

Wonderful Consequences of Economic Growth

By David Henderson.

"In a nine-minute video, Swedish statistician Hans Rosling, who died in 2017, shows just how dramatic the washing machine was to his family. It freed his mother to do other things and his grandmother found it so fascinating that she just sat and watched it perform its tasks. In one of my classes at the Naval Postgraduate School in the late 1990s, I was laying out the data on the entrance of women into the US labor force after World War II. A particularly curious student asked me why that had happened, and I pointed to washing machines, driers, automatic dishwashers, and a range of labor-saving devices that had freed up time mainly for married women. I also referenced a chapter of Robert Caro’s magnificent first book on Lyndon Johnson, The Path to Power. The chapter, titled “The Sad Irons,” told of the incredibly taxing work women in the Texas hill country did to wash laundry before they had electricity: hauling water uphill from a well, hauling wood to burn in a stove, firing up the stove in the middle of hot summers to heat water, and keeping it fired up to heat irons to press shirts. Washing machines were a huge boon to families, especially to women.

This is from David R. Henderson, “What Causes Economic Growth?” Defining Ideas, June 16, 2002.

Another excerpt:

An example of a more recent major breakthrough is Zoom. Zoom has made it so much easier for large groups to communicate remotely. Last fall, I gave a speech in Washington in which I asked the audience of about fifty to raise their hands if they used Zoom a fair amount. Virtually every hand shot into the air. I then asked them to raise their hands if they valued it a lot. Almost every hand stayed in the air.

On this point about Zoom, I didn’t put in the article, because it didn’t nicely fit, the reason I had raised the Zoom example. I was giving a talk to a number of Republican politicians and wanna be politicians who tended to be pro free market but at that point in the talk were pushing back on my pro-immigration views. I asked them if they knew how many times Eric Yuan, the creator of Zoom, had applied to immigrate to the United States before finally getting permission. Of course, they didn’t know. Why would they? I pointed out that it took him 9 tries. I asked if any of them would have wanted it to be easier for him and people like him. Some of them did.

One last excerpt:

What has been particularly important for poorer countries since World War II has been a substantial reduction in trade barriers. Moving toward freer trade causes people to produce the items in which they have a comparative advantage and buy other items from lower-cost producers in other countries. In “Does Trade Reform Promote Economic Growth? A Review of Recent Evidence,” a 2019 PIIE study, Dartmouth economist Douglas A. Irwin, arguably the leading trade economist in the United States, shows that between 1983 and 2009, developing countries dropped their average tariff rate from over 35 percent to about 10 percent. He reports on a range of studies whose answer to the question in the title is “yes.” In a table in the article, Irwin cites studies that find anywhere from a 1 percentage point increase in annual growth up to a whopping 2.7 percentage point increase in annual growth due to reductions in trade barriers. Either of those annual increases, over a decade, leads to a major increase in economic well-being.

Read the whole thing."

Restrictions to pawn shop access increases property crime

See Three Golden Balls: Pawn Shops and Crime.

"32 Pages Posted: 2 Jun 2022

Bryan C. McCannon

West Virginia University - College of Business & Economics

Zachary Porreca

West Virginia University, College of Business & Economics, Department of Economics, Students

Zachary Rodriguez

Union College - Department of Economics

Date Written: May 25, 2022

Abstract

We ask what the relationship is between pawn shops and crime. The dominant narrative is that pawn shops reduce the transaction costs of crime and, consequently, promote it. We explore the alternative where pawn shops address the financial distress of those in need, which reduces the incentive to engage in crime. We exploit two distinct policies affecting access to pawn shops − severe licensing fees implemented in London in the early 1800s and state variation in the classification of pawn shops as essential businesses during the Covid-19 pandemic in spring 2020. For each, employing a difference-in-difference identification strategy, we provide evidence that restrictions to pawn shop access increases property crime."

Gainful Employment regulations and student loans

See A Retrospective on Gainful Employment by Andrew Gillen. He is a senior policy analyst for the Next Generation Texas initiative at the Texas Public Policy Foundation and an adjunct professor of economics at Johns Hopkins University. Excerpts:

"Although colleges receive funds from student loans, they have largely escaped accountability for their role when students take on unaffordable student loan debt. One partial exception was a set of regulations called “Gainful Employment” that sought to hold some higher education programs accountable for excessive student loan debt. If a targeted program’s students had too much debt relative to their income, the program would lose access to the federal financial aid programs. Gainful Employment is no longer in effect, but some policymakers are considering reviving the regulations.

This study explores the approach used by Gainful Employment to help policymakers develop the next iteration of accountability for higher education. We use new U.S. Department of Education College Scorecard data (U.S. Department of Education, n.d.) and an updated approach called “Gainful Employment Equivalent” to help policymakers envision better accountability mechanisms for higher education by building on Gainful Employment’s successes while avoiding its flaws."

"Federal and state policymakers should hold programs accountable for their role in excessive student loan debt. The most important federal attempt to do so is known as the Gainful Employment regulations. Gainful Employment pioneered two improvements to the accountability landscape that should be used in future accountability approaches: focusing on program-level rather than institution-level accountability and including labor market outcomes such as earnings.

But policymakers should also avoid repeating Gainful Employment’s mistakes. Gainful Employment was only selectively applied, targeting for-profit colleges almost exclusively. Yet if Gainful Employment were applied today and restricted to for-profit colleges, it would miss 89 percent of failing programs and 73 percent of student borrowers graduating from failing programs."

What John Oliver Gets Wrong About Rising Rents

The comedian largely ignores laws against new supply while arguing we should declare housing a federally funded, government-provided human right

By CHRISTIAN BRITSCHGI of Reason.

"High housing costs are no laughing matter, as John Oliver's latest monologue confirms.

On Sunday, the comedian devoted a 22-minute segment of his HBO show Last Week Tonight to the issue of rising rents and all the attendant problems of housing unaffordability and instability that those can cause.

"Rents are skyrocketing, and that is the last thing you want to hear is on the rise, along with COVID cases, murder rates, and Henry Kissinger's life expectancy," quipped Oliver. "You or someone you know may be struggling to find a place right now or being priced out of where you currently live by your landlord."

Rising rents are a very real phenomenon driven by a mismatch in many cities between the number of homes that are being built and the number of people who would like to live in them. The wedge between supply and demand is created by cities' elaborate zoning codes, price regulations, and permitting processes that all combine to reduce housing availability and raise prices.

It should be no surprise that rents are high when a majority of land in major cities is off-limits to new development, it takes years to approve whatever new housing is allowed, and some of those new units have to be given away at below-market rates.

The details of these restrictions are a wonky topic, to be sure. One expects only so much depth or insight from a comedic explanation of it all. But even allowing for that handicap, Oliver's treatment of the housing supply issue proves to be superficial, brief, and confused.

Oliver either misunderstands or fails to explore the link between government regulation, housing supply, and housing market outcomes. His perfunctory explanation of it serves only as a brief prelude to his attack on the real villains in his story: greedy private landlords with carte blanche to raise rents and evict tenants.

The solutions he puts forward, therefore, have little to do with eliminating needless, harmful regulatory barriers to new supply. Instead, he calls for legally constraining landlords' ability to raise rents and evict tenants and declaring housing a federally funded, government-provided right.

Oliver starts off his segment well enough.

"You'll often hear that high rents are a supply and demand issue; basically: too many renters, not enough units. And that is partially true because there are not nearly enough affordable units in the U.S," he says.

Things go downhill fast, however, as Oliver adds that the supply narrative is "a little weird because… you probably see new buildings cropping up all the time."

"Apartments are being built, but the problem is, thanks in part to local NIMBY opposition to more affordable multifamily housing, it's mainly been at the high-end," he says. "This serious lack of affordable housing has enabled landlords to charge higher rents for the units that exist."

The above statement demonstrates an easy-to-make but very serious misunderstanding of how housing markets work.

A lack of affordable housing doesn't enable landlords to charge higher rents on existing units. Rather, a lack of housing per se allows landlords to charge higher rates for the units that exist, which makes them unaffordable.

The corollary is that building new housing, even high-end housing, improves affordability for everyone by absorbing the demand of high-income renters, who are no longer bidding up the costs of older, naturally cheaper housing units. A growing body of empirical research shows this is a fact, not a free market fantasy.

Oliver doesn't really grok this point. Instead, he heaps a lot of blame on the greed and avarice of landlords who unscrupulously can raise prices because of a lack of capital-A affordable housing—where low rents are subsidized by the government or mandated through rent control.

That misidentified starting point leads him to support a lot of counterproductive solutions. Evidence of those solutions' failure is treated as a need for more government intervention still.

Oliver argues that we need rent stabilization—a form of rent control that caps price increases at a certain percentage per year—in order to improve affordability.

Despite Oliver's misleading statement that only two states (California and Oregon) and D.C. "mandate rent stabilization," it's actually a common policy in America's most expensive cities.

In San Francisco, a synonym for housing unaffordability and dysfunction, about 40 percent of the city's housing stock, and nearly two-thirds of its rental housing stock, is covered by the city's decades-old rent stabilization program. In New York City, another epicenter of the country's housing affordability crisis, close to half of the city's 2.1 million rental housing units are rent-stabilized.

One criticism of rent stabilization is that rents are permitted to grow at a slower rate than operating costs, forcing building owners to cut back on maintenance and other expenses. Oliver acknowledges the reality of deferred maintenance but attributes it to loopholes in rent stabilization law that are exploited by devious landlords.

"Even when protections exist, landlords can find ways around them. For instance, they might try to force rent-stabilized tenants out by allowing a property to fall into disrepair or by harassing them with incessant construction," he says. The odd implication is that landlords try to force out tenants by both repairing a unit and not repairing a unit.

Oliver also heaps criticism on landlords for not accepting housing vouchers and discriminating against tenants who've previously been evicted.

I think good faith people can disagree on how rational or fair it is for landlords to take past evictions into account when considering whether to rent to a tenant or whether or not to accept housing vouchers.

Surveys of landlords find that many landlords don't accept vouchers because the inspections and paperwork that come with the program raise costs and delay their ability to rent out units. The federal government's own research has found landlords' willingness to accept vouchers falls in tight rental markets, where supply is limited and tenants are easier to come by.

In a world of housing abundance, more landlords would likely be willing to take a chance on a once-evicted tenant or put up with the bureaucracy that comes with a housing voucher than let a unit sit vacant and unproductive.

Oliver doesn't explore either possibility much. He does, to his credit, say we should make housing vouchers easier to accept.

Then, he speeds toward a grand conclusion: "We need to agree housing is a human right," he says, assuring the audience "that is not actually just some empty slogan."

To guarantee that right, Oliver suggests massively increasing federal rental assistance and federal funding for affordable housing construction. That would be coupled with expunging tenants' eviction records, guaranteeing tenants' a right to a lawyer in eviction proceedings, and ending the mortgage interest deduction.

The trouble is that the former two solutions aren't going to do much good if one doesn't repeal the same restrictions that prevent new, private housing from being built. In fact, they'll likely make problems worse.

Dumping a bunch of housing vouchers into supply-constrained housing markets will only raise prices. If there are not enough units already, and it's difficult to build more, landlords can easily raise prices to capture the value of the new vouchers without fear that they'll lose customers.

People that don't receive a housing voucher will see their housing costs go up. The government will have to perpetually increase voucher funding to try and stay ahead of the higher prices they're causing.

Meanwhile, the same regulations and approval processes that stop developers from building "luxury" high-rises also prevent the construction of "affordable" high-rises. No amount of federal money is going to change the fact that your city takes multiple years to approve a new multifamily development on one of the few properties where it's even legal.

Indeed, throwing a bunch of federal money into affordable housing construction will just crowd out private construction. A number of studies show that new, price-restricted affordable housing raises nearby home prices. The people who qualify for the affordable housing benefit. Those who don't are back to fighting each other for an even more limited supply of market-rate units.

Oliver concludes his segment by saying, "I would argue what we really need to do is fundamentally change our mindset away from simply hoping we can tinker around the edges of housing policy and the private market will sort the rest of this shit out. We have tried that for decades, and yet, here we are."

I agree with that. Unfortunately, his solution of housing subsidies, government-funded housing supply, and tenant protections are the definition of tinkering around the edges—even if they come with an astronomically high price tag.

A more radical solution would be to declare building housing as a human right subject to no arbitrary restrictions on residential density from city hall and no inherent veto from the neighbors. If you own a property, you can build as many homes as you want on it.

That would force the greedy landlords Oliver demonizes into lowering their rents. It would force the private equity firms he criticizes to invest in housing construction instead of just housing ownership and management.

Better yet, it wouldn't subject housing investment to the whim of budget writers in Washington, D.C., Albany, or any of the other capitals that caused the housing affordability crisis to begin with."

Secure Communities: Broad Impacts of Increased Immigration Enforcement

By Chloe East of University of Colorado Denver. Excerpts:

"The impacts of increased immigration enforcement can extend beyond the direct effects on the immigrants deported and their immediate families. Qualitative studies show that in addition to direct effects on immigrants detained and deported, Secure Communities had broader “chilling effects” due to fear induced by the policy. For instance, people reported being less likely to interact with authorities for fear of being asked about their immigration status or about the status of people they know. This could be due to mistrust of local law enforcement and government more broadly, possibly due to the lack of targeting serious criminals and to certain demographic groups being over-represented. For example, over 40% of Latino immigrants living in several large cities in the U.S. reported thinking that police officers stop Latin American immigrants without reasonable cause, that they are afraid to leave their home, and that they feel more isolated because local law enforcement is involved with immigration enforcement (see here)."

"A policy that aims to remove undocumented individuals could be expected to decrease the participation of these workers in the labor force. Indeed, the implementation of Secure Communities in a location significantly reduced the availability of less-educated immigrant men in the local labor force — and this had negative consequences for high-skilled male citizen workers. Specifically, Annie Hines, Philip Luck, Hani Mansour, Andrea Velasquez and I find that the number of male non-citizens with a high- school degree or less (characteristics that make them most likely to be undocumented) who were employed decreased by an average of 7 percent when Secure Communities was implemented in a local area. This decline could be due to both direct removals, as well as potential “chilling effects” reducing labor force participation among those remaining in the U.S. But, the reduction in employment was not limited to immigrant men. Secure Communities exposure in a local area also reduced high-skilled citizen men’s employment in sectors that have historically relied on undocumented labor. This is likely operating through decreases in demand for high skilled workers when the supply of low skilled workers shrinks: for instance, when the supply of construction workers decreases, there is also less need for construction managers, who are more likely to be high skilled citizens. We calculate that a 1 percent decline in the employment share of likely undocumented male immigrants is associated with a 0.12 percent decline in the employment rate of male citizens. Secure Communities may have increased employment for low-skilled Hispanic citizen men who are closest substitutes for likely undocumented men, however we find that the net effect of Secure Communities on all male workers in a local area is negative.  

Another pathway through which Secure Communities negatively impacted high-skilled citizen workers is through the change in the price of household service workers. Female undocumented immigrants are over-represented in household service work (such as housekeeping and childcare), and my research with Andrea Velasquez shows that Secure Communities also reduced labor supply of female immigrants in household services. Given that women were for the most part not deported under Secure Communities, this effect is potentially due to chilling effects—specifically, immigrant women remain working in the U.S., but reduce their hours worked due to fear of leaving their house and putting themselves or their family at risk of deportation (see here for anecdotal evidence of these responses). By increasing the cost of these household services, increased immigration enforcement also reduces the labor supply of high-skilled citizen mothers, who are most likely to outsource household production. The largest impact we observed was among college-educated citizen mothers with children under age 6 (before children are likely to enter school): mothers of young children experience a 0.8% reduction in the likelihood of working and a reduction of 1.2% in hours worked by as a result of the implementation of Secure Communities in their area. Importantly, being exposed to Secure Communities around a child’s birth has long-run negative effects on mother’s labor supply, with no effects on long-run father’s labor supply, so immigration enforcement may worsen the gender wage and employment gap."