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Archive for January, 2019

My favorite annual publication from the Heritage Foundation, the Index of Economic Freedom, has just been released.

Like the Fraser Institute’s Economic Freedom of the World and, to a lesser extent, the World Economic Forum’s Global Competitiveness Report, the Heritage Foundation survey is filled with interesting data on economic liberty in various nations.

We’ll start by sharing the global map. It’s good to be green, especially dark green. But it’s bad to be orange and even worse to be red.

Sadly, there are only six “free” jurisdictions.

Unsurprisingly, Hong Kong and Singapore are at the top, and I’m also not surprised to see New Zealand and Switzerland in the next two positions.

What’s especially impressive is that four of the six jurisdictions managed to increase their score.

Now let’s look at the “mostly free” nations.

Note how the Nordic nations all get reasonably good scores. As I’ve repeatedly explained, they have onerous welfare states, but they largely compensate by being very pro-free market in other policy areas (one interesting quirk is that Iceland ranks #11 in the Heritage Index but only #59 in the Fraser rankings).

The United States, for what it’s worth, improved its score but still doesn’t crack the top 10.

Since a majority of readers are from the United States, let dig into the details.

Here’s a breakdown of America’s score. I am befuddled at how the U.S. improved on government spending, but all the other variables make sense.

Pay special attention to the decline in trade freedom.

Now let’s look at a few other countries that merit special attention.

Here’s data for the past 15 years on Iceland, Taiwan, and Chile.

I include Iceland merely because I’m intrigued by the wide divergence in how the country is ranked by Heritage and Fraser.

And I include Chile because I’m worried about the decline in recent years.

Taiwan, meanwhile, deserves mention because it continues to slowly but surely improve – a process that hopefully won’t stop, thus allowing Taiwan to eventually converge with Hong Kong and Singapore.

Now let’s shift to the Baltic nations.

I’ve been a big fan of Estonia, Latvia, and Lithuania, but I’ve been worried about a recent drift in the wrong direction.

And that’s apparent in the Heritage data. This worries me since those countries should be further liberalizing and reforming to help counteract grim demographic trends.

By the way, I have similar concerns about Slovakia, though that nation’s drift in the wrong direction started several years sooner

Let’s close our discussion by looking at the unfortunate nations in the bottom category.

If you guessed the North Korea was the most repressed of the “repressed” nations, congratulations. It’s not just that it’s in last place, it wins that dubious distinction by a wide margin.

Though at least the North Koreans are trending in the right direction, albeit with an almost-too-small-to-measure improvement of just 0.1.

Cuba is #178 out of #180, yet still managed to go from absolutely awful to breathtakingly terrible with a -4.1 change in its score.

Speaking of awful and terrible, Venezuela is next to last. It remains even below Cuba, notwithstanding a small increase of 0.7.

P.S. I’m saddened, but not surprised, that there was a big drop in the score for South Africa. The only good news is that it still is nowhere close to being another Zimbabwe. At least not yet.

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The Congressional Budget Office just released it’s annual Budget and Economic Outlook, and that means I’m going to do something that I first did in 2010 and most recently did last year.

I’m going to show that it’s actually rather simple to balance the budget with modest spending restraint.

This statement shocks many people because they’ve read about out-of-control entitlement spending, pork-filled appropriations bills, big tax cuts, and trillion-dollar deficits.

But  the first thing to understand when contemplating how to fix America’s fiscal problems is that tax revenues, according to the new CBO numbers, are going to increase by an average of nearly 5 percent annually over the next 10 years. And that means receipts will be more than $2.1 trillion higher in 2029 than they are in 2019.

And since this year’s deficit is projected to be “only” $897 billion, that presumably means that it shouldn’t be that difficult to balance the budget.

By the way, I don’t even think balance should be the goal. It’s far more important to focus on reducing the burden of government spending. After all, the economy is adversely affected if wasteful outlays are financed by taxes, just as the economy is hurt when wasteful outlays are financed by borrowing.

In other words, too much government spending is the disease. Deficits are best understood as a symptom of the disease.

But I’m digressing. The point for today is simply that the symptom of borrowing can be addressed if a good chunk of that additional $2.1 trillion of new revenue is used to get rid of the $897 billion of red ink.

Unfortunately, the CBO report projects that the burden of government spending also is on an upward trajectory. As you can see from our next chart, outlays will jump by about $2.6 trillion by 2029 if the budget is left on autopilot.

The solution to this problem is very straightforward.

All that’s needed is a bit of spending restraint to put the budget on a glide path to balance.

I’m a big fan of spending caps, so this next chart shows the 10-year fiscal outlook if annual spending increases are limited to 1% growth, 2% growth, or 2.5% growth.

As you can see, modest spending discipline is a very good recipe for fiscal balance.

Our final chart adds a bit of commentary to illustrate how quickly we could move from deficit to surplus based on different spending trajectories.

I’ll close with a video from 2010 that explains why spending restraint is the best way to achieve fiscal balance. Especially when compared to tax increases.

The numbers are different today, but the analysis hasn’t changed.

As I noted at the end of the video, balancing the budget with spending restraint may be simple, but it won’t be easy.

If we want spending to grow, say, 2% annually rather than 5% annually, that will require some degree of genuine entitlement reform. And it means finally enforcing some limits on annual appropriations.

Those policies will cause lots of squealing in Washington. But we saw during the Reagan and Carter years, as well as more recently, that spending discipline is possible.

P.S. The video also exposed the dishonest way that budgets are presented in Washington.

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Last November, I shared a one-minute video from Freedom Partners on the economics of trade.

Here’s a full-length (but still only four minutes) treatment of the issue from the Center for Freedom and Prosperity.

The first part of the video is a quick glimpse at some of the academic evidence for open trade, and I hope it helps make the case against protectionism.

I then cite some country-specific examples, including how Herbert Hoover’s protectionism contributed to the economic misery of the Great Depression.

Argentina is another bad example mentioned in the video. It used to be one of the world’s richest countries, but it plummeted in the rankings in part because of its protectionist policy of “import substitution.”

The video also mentions the examples of China and India. Since I think this point is especially compelling, I want to take this opportunity to briefly elaborate on my comments in the video.

First, let’s establish that both nations did liberalize trade. Here’s a chart from Economic Freedom of the World, and you can see that there was dramatic liberalization starting about 1990.

Both nations are still a long way from total free trade (Singapore and Hong Kong, for instance, respectively get scores of 9.29 and 9.32), but it goes without saying that there was considerable liberalization in China and India.

And how did that work out?

Trade liberalization was a slam-dunk success. Based on data from the World Bank, here’s a look at how China and India started converging with the United States after opening to the world economy.

To be sure, both nations still have a long way to go. And it’s highly unlikely that either nation will ever fully converge to American living standards unless there is a lot more pro-market reform. Not just in trade, but all facets of economic policy.

But as I mentioned in the video, the reforms that already have occurred – particularly trade liberalization – have contributed to huge reductions in poverty in China and India.

Given all this evidence, I’ll close with a version of my two-question challenge. Can anybody identify a nation that has prospered by moving to protectionism (h/t: the USA in the 1800s is not a good answer) or a nation that has suffered because of trade liberalization?

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I’ve periodically opined about why politicians should not try to control people’s behavior with discriminatory taxes, such as the ones being imposed on soda.

And I’ve cited some examples of how these taxes backfire.

If the following headlines are any indication, we can add Philadelphia to that list.

For instances, this story from the Philadelphia Inquirer.

Or this story from the local CBS affiliate.

These examples reinforce my view that it is not a good idea to let meddling politicians impose more taxes in an effort to control people’s behavior.

Some of my left-leaning friends periodically remind me, however, that there’s a difference between anecdotes and evidence. There’s a lot of truth to that cautionary observation.

To be sure, I could simply respond by saying a pattern is evident when a couple of anecdotes turns into dozens of anecdotes. And when dozens become hundreds, surely it’s possible to say the pattern shows causality.

That being said, it is good to have rigorous, statistics-based analysis if we really want to convince skeptics.

So let’s look at the results of some new academic research from scholars at Stanford, Northwestern, and the University of Minnesota. We’ll start with the abstract, which nicely summarizes their findings about the impact of Philadelphia’s big soda tax.

We analyze the impact of a tax on sweetened beverages, often referred to as a “soda tax,” using a unique data-set of prices, quantities sold and nutritional information across several thousand taxed and untaxed beverages for a large set of stores in Philadelphia and its surrounding area. We find that the tax is passed through at a rate of 75-115%, leading to a 30-40% price increase. Demand in the taxed area decreases dramatically by 42% in response to the tax. There is no significant substitution to untaxed beverages (water and natural juices), but cross-shopping at stores outside of Philadelphia completely o↵sets the reduction in sales within the taxed area. As a consequence, we find no significant reduction in calorie and sugar intake.

Here are some of their conclusions.

We draw several lessons about the effectiveness of local sweetened-beverage taxes from these analyses. First, the tax was ineffective at reducing consumption of unhealthy products. Second, in terms of revenue generation, the tax was only partly effective due to consumers substituting to stores outside of Philadelphia. Third, low income households are less likely to engage in cross-shopping, and instead are more likely to continue to purchase taxed products at a higher price at stores in Philadelphia. The lower propensity for low income households to avoid the tax through cross-shopping leads to a relatively larger tax burden for those households. In summary, the tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue.

If you’re wondering why consumers responded so strongly, here’s a chart from the study showing the price difference after the tax was imposed.

The bottom numbers in Figure 3 show that some sales still occurred in the city, but a persistent gap between city sales and suburban sales appeared.

And here’s what happened to sales inside the city (taxed) and outside the city (untaxed).

Wow. This data makes me wonder if suburban sellers will start contributing to the Philadelphia politicians who have generated this windfall?

Others have noticed how the tax is hurting rather than helping.

The Wall Street Journal opined about the failure of Philly’s soda tax.

When Philadelphia became the first major U.S. city to pass a soda tax in 2016, Mayor Jim Kenney said it would improve public health while funding universal pre-K. Two years in, the policy hasn’t delivered on that elite ideological goal. But the tax has come at the expense of working people… On Jan. 2, Brown’s Super Stores announced the closure of a ShopRite on Haverford Avenue. The supermarket is close to the city limit, and customers discovered they could avoid the soda tax by shopping outside Philly. …the once-profitable store began losing about $1 million a year. …That means fewer opportunities for workers with a criminal record. Mr. Brown’s supermarkets employ more than 600 of them, with the majority in Philadelphia. Some of the ex-cons have become his most-valued employees.

And Kyle Smith explained in National Review how the tax backfired.

Philadelphia’s outlandish soda tax is what Democratic-party politics looks like when it lets its freak flag fly. So many classic elements are there: (failed) social engineering and “think of the children!” on one side, paid for with a punitive tax on poor people and destroyed businesses, which means destroyed jobs, which in turn means lives upended. …Now that beer is, in some cases, cheaper than soda in Philadelphia, alcohol sales are up sharply. …the total loss attributable to the tax in sales of all items was $300,000 a month per store. Other, untaxed drinks also suffered sales declines within the city, suggesting people were simply saving up their shopping trips for when they left town.

I don’t feel compelled to add much to what’s been cited.

Though I will cite a headline from the Seattle Times to reinforce one of the points in the academic study about consumers bearing the cost of the tax rather than the soda companies.

And my one modest contribution to all this analysis is this comparison of the winners and loser from Philadelphia’s new tax.

For what it’s worth, similar comparisons could be developed for just about every action by every government. Academics call this “public choice” while ordinary people realize it’s just common sense.

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Maybe I’m just old-fashioned, but I don’t believe in using dodgy numbers or nonsensical analysis – even if that would help my side in a policy debate.

And it goes without saying that I also don’t like when the other side is dishonest. But I’m not talking about my left-leaning friends who have genuine (albeit misguided) views on things such as Keynesian economics or the minimum wage.

I’m talking about people who deliberately dissemble and prevaricate in hopes of advancing their policy agenda.

Consider, for instance, the new carbon tax that has been introduced by Congressmen Ted Deutch (D-FL) and Patrick Rooney (R-FL). The core features of the bill are:

  • A $15-per-ton carbon tax that increases $10 each subsequent year until it reaches $100.
  • A new entitlement program giving money to all legal American residents, including children.
  • A new tax on consumers who buy imports from nations without similar taxes on energy usage.
  • A supposed adjustment and easing of existing regulations governing carbon emissions.

There’s obviously a serious policy debate to have about both the general concept as well of the individual components of this type of legislation, and I’ve periodically added my two cents to the discussion.

But what irks me is that the sponsoring lawmakers are openly and deliberately lying about a key part of their plan. Here’s the relevant section from their talking points.

The claim about “revenue neutrality” is a stunning level of dishonesty, even by Washington standards.

At the risk of stating the obvious, if the government imposes a tax and then also creates a program to give money to people, that’s not revenue neutrality.

Was Obamacare “revenue neutral” because all the new taxes were balanced out by the handouts and subsidies that the law created for the big insurance companies?

Of course not.

And a new carbon tax doesn’t magically become “revenue neutral” because new revenues are matched by new spending.

To be sure, supporters can argue that their plan is “deficit neutral,” and that would be legitimate (even though I would argue that this wouldn’t be the case in the long run because of the adverse economic impact of new taxes and new spending).

But “revenue neutral” is a bald-faced lie.

The Daily Caller reported on this amazing example of deceptive advertising, citing the good work of Paul Blair of Americans for Tax Reform.

The bipartisan House Climate Solutions Caucus claims it is pushing a “revenue-neutral” carbon tax, but legislation proposed Thursday would hike taxes by at least $1 trillion over the next decade… Florida Reps. Ted Deutch, a Democrat, and Francis Rooney, a Republican, reintroduced a bill Thursday that would place a $15-per-ton tax on carbon emissions in 2019. The tax would rise by $10-a-year increments until it hits nearly $100 per ton. …Though Rooney claims the tax is “revenue-neutral,” the plain text of the bill does not include any reciprocal tax cuts to balance out the burden of the added tax on emissions… “Historically and for anyone engaged in tax policy, the definition of ‘revenue-neutral’ is and always has been if you increase a tax, the amount of revenue it generates must be offset by an equal tax cut elsewhere,” Blair said. …Blair said…that the “apology checks” sent as carbon dividends will be treated as new spending and do not negate a new tax burden.

By the way, just in case anyone thinks I’m imposing some weird, libertarian-ish, meaning to “revenue neutral,” you may want to look at how the left-leaning Tax Policy Center defines the term.

Revenue-neutral. A term applied to tax proposals in which provisions that raise revenues offset provisions that lose revenues so the proposal in total has no net revenue cost or increase.

I often disagree with the folks at the Tax Policy Center, but I’ve never questioned their honesty.

So when we both agree on the definition of ‘revenue neutral,” this is slam-dunk confirmation that it’s preposterously dishonest to count new spending as an offset to a tax increase.

P.S. Some of my friends and allies who supported the Fair Tax sometimes played fast and loose with the truth. That plan would have required the government to send “prebate” checks to households to partly compensate people for the new tax, yet supporters would argue that this expenditure shouldn’t count as a new entitlement program. While my first choice for tax reform is the flat tax, I certainly think a national sales tax would be a far better way to tax than the mess we have today, but that did not justify mischaracterizing the plan.

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When I think about social welfare spending, I mostly worry about recipients getting trapped in dependency.

But I also feel sorry for taxpayers, who are bearing ever-higher costs to finance redistribution programs.

Today’s column won’t focus on those issues. Instead, we’re going to utilize new OECD data to compare the size of the welfare states in developed nations.

We’ll start with the big picture. Here it total redistribution spending, measured as a share of economic output, for selected countries that are members of the Organization for Economic Cooperation and Development.

Nobody will be surprised, I assume, to see that France, Finland, Belgium, Denmark, and Italy have the biggest welfare states.

The United States is in the middle of the pack. American taxpayers might be surprised to learn, though, that they finance a bigger welfare state than the ones that exist in Canada, Iceland, and the Netherlands.

The overall numbers are important, but it’s also educational to consider the various components.

And the largest chunk of social spending in most nations is for their old-age programs. The biggest burdens are found in Greece, Italy, France, Portugal, and Austria. The United States, once again, is in the middle of the pack.

By the way, keep in mind that there are many factors that determine why some nations spend more than others.

  • How generous are benefits? – This is often measured as the “replacement rate,” which compares retirement benefits to income during working years.
  • When can people retire? – Some countries allow people, or some classes of people, to get benefits while relatively young. Others are more stringent.
  • Does a country have an aging population? – Demographic changes already are beginning to have a large effect on the finances of some systems.
  • Is there a private savings system? – Nations such as Switzerland, Australia, Chile, and the Netherlands have significant private retirement savings.

Now let’s look at government spending on health.

Here’s the area where the United States is more extravagant than almost every other nation. Only France spends more money.

Actually, since per-capita GDP is significantly larger in the United States than in France, American taxpayers spend more on a per-person basis.

Some people will observe, with great justification, that the data for the United States may be a measure of the inefficiency of the American system rather than taxpayer generosity. This is a topic for another day.

Last but not least, let’s look at traditional welfare. In other words, cash assistance to the working-age population.

The fiscal burden of this spending is highest in Belgium, Finland, the Netherlands, Norway, and Luxembourg. The United States, meanwhile, is comparatively frugal.

P.S. Here are a couple of caveats for number crunchers and policy wonks.

First, there are methodological challenges when comparing OECD nations. Eastern European nations tend to be significantly less prosperous than Western European nations, thanks to decades of communist enslavement. So looking at this data does not really allow for apples-to-apples comparisons. Moreover, there are a handful of developing nations that belong to the OECD, such as Mexico and Turkey, so comparison are effectively meaningless. And Chile is on the cusp of becoming a fully developed nation so it’s in its own category.

Second, as I briefly mentioned above, nations have different levels of per-capita GDP. If we look at the last chart, Austria and Spain spend a similar share of GDP on welfare, but since Austria is a richer nation, its taxpayers actually finance a lot more per-capita welfare spending. The same is true if you compare Canada and Estonia, Sweden and Slovenia, and Germany and Greece.

P.P.S. There was virtually no welfare state in OECD nations prior to the 1930s and very small welfare states until the 1960s. For what it’s worth, the huge reduction in poverty in those nations occurred before the welfare state.

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My previous columns about the Transportation Security Administration have focused on bureaucratic inefficiency and incompetence (as well as laughable examples of “security theater”).

Today, let’s take advantage of the shutdown and focus instead on why TSA should be disbanded so that airports can use more efficient private security firms.

An article in Reason gives some important details on why privatized airport screening is the best way of making lemonade out of shutdown lemons.

…the Transportation Security Administration (TSA) reported that 10 percent of its agents were absent from their posts, up from three percent in the same time period last year. …The result has been longer wait times, closed security checkpoints… While it’s difficult to feel any sympathy at all for the professional privacy violators at the TSA… It’s also an unfortunate consequence of federalizing so much of crucial airport operations, says Baruch Feigenbaum, a transportation expert… There are already a number of airports in the country that have contracted out their passenger screenings to private companies through the TSA’s Screening Partnership Program (SPP), helping to immunize them from the effects of the shutdown. This includes San Francisco International Airport (the busiest airport to participate in the SPP program), where some 1,200 privately employed security screeners have continued to be paid despite all the budget drama in Washington. …Contracting out these services would ensure that they don’t come to a screeching halt every time the government shuts down. Putting that distance between the government and security and safety services would also improve oversight.

For all intents and purposes, the folks at Reason want to make a virtue out of necessity. The government shutdown is making air travel an even bigger hassle, so why “let a crisis go to waste” when this is a great opportunity to push for sweeping reform?

As a frequent flyer, I say Amen.

Here’s a good example. Because of my support for the Georgia Bulldogs, I have to endure the Atlanta airport several times each year. It is one of the worst airports I’ve ever experienced.

It’s so bad that the city’s politicians are exploring private security.

Atlanta Mayor Kasim Reed…said he wants to take a closer look at privatizing security screening at the Atlanta airport to address the issue of long lines. …Southwell…earlier this year sent a letter to the Transportation Security Administration, raising the idea of privatizing security screening at the Atlanta airport if long lines were not addressed. …Reed said Monday that the city has been in conversations with San Francisco International Airport, which privatized its security screening. “We’re going to explore that and see if it’s the best decision,” Reed said. “The lines are very concerning to me…. We’re going to do every single thing we can do, and it’s going to have urgency to it.”

It’s quite possible that Atlanta’s politicians are merely bluffing and that their real goal is to simply get more TSA bureaucrats, but I hope this is a serious initiative and that Atlanta escapes the TSA.

Experts who study this issue says private contractors are both more efficient and safer.

For those who want to understand the background on this issue, here are a couple of very good articles.

The first piece, from Skift, explain how we got to the current situation.

Airports could actually do something about the hated agency, and a few are weighing a radical option: firing TSA screeners and hiring private replacements. The frustration over queue times—which have topped two and three hours at airports in Atlanta, Chicago, Charlotte and Denver—has prompted new attention by airport executives to the TSA’s little-known  Screening Partnership Program, in which the federal agency solicits bids for a contractor to handle airport screening. The contractors must follow the same security protocols as federal officers, with similar wages and benefits. At Phoenix Sky Harbor International Airport, …administrators are “discussing a variety of options,” including replacing the TSA with a private contractor, said Deborah Ostreicher, assistant aviation director at the airport. Sky Harbor officials have considered their TSA service “less than satisfactory for many months,” she said. The Phoenix airport is a hub for American Airlines Group Inc., which has blamed the TSA delays across the country for causing more than 70,000 passengers to miss flights so far this year ….The former general manager of Atlanta’s Hartsfield-Jackson Airport  wrote a letter to the TSA in February warning that the world’s busiest airport was “conducting exhaustive research” into privatized security screening.

There are 22 airports that already have opted out.

The power to replace TSA employees with private screeners dates to the birth of the agency in 2002, shortly after the Sept. 11th terrorist attacks. Congress designated five airports at the time to offer screening by private firms as a way to compare the federal approach. Another 17 smaller airports have since joined the original five. The most recent to make the switch to private security screeners, Punta Gorda Airport in Florida, expects to finish the transition next week. San Francisco International is the largest U.S. airport with private screeners. Now other large airports are researching private-sector alternatives.

One of the benefits of privatization is that contractors have more flexibility to do a better job.

…airports that have switched to private firms say they consider the contractors more responsive and better able to adjust staffing to address traffic surges and lulls. …said Brian Sprenger, director at Bozeman Yellowstone International Airport in Montana, which began private screening in 2014. “We now have a little bit more say in ensuring that the customer service side is a little more elevated in the process.”

Though TSA is reluctant to allow more airports to escape.

Christopher Bidwell, vice president of security for Airports Council International-North America, faulted the TSA in the past for making it difficult for airports to switch to private screeners, regularly denying airports’ applications for the program. …Any airport wishing to switch must be pass a security and cost analysis by the TSA to demonstrate that hiring private contractors will not harm the agency’s budget or compromise security.

A column in City Journal adds some more historical background, noting that the failures on 9/11 were the result of government guidelines.

Even by Washington standards, the creation of the TSA was a blunder of colossal proportions. Experts from around the world warned at the time—in 2001—that federalizing airport security would be ruinously expensive, inefficient, and unsafe. Israel and many European countries had already rejected similar systems. …Democrats who controlled the Senate were especially eager to gain campaign contributions from tens of thousands of new federal employees. …Legislators and bureaucrats scapegoated the private security companies that had been screening passengers for the airlines. Citing the lapse in security on September 11… It was the federal government, not the private screeners, that set the policy allowing small knives and box cutters to be brought onto planes. Federal guidelines prevented airlines from arming pilots and reinforcing cockpit doors. The feds also stopped the private security firms from using an existing system to identify high-risk passengers, which would have singled out some of the hijackers for special screening.

Here’s some great data on the superiority of private airport screeners.

…the TSA blames its failures on lack of funding. But it’s already spending way too much, as demonstrated in a congressional study comparing TSA screeners in Los Angeles with non-TSA screeners in San Francisco, one of the few airports allowed to run its own system, contracting with a private company. If LAX switched to the San Francisco model, the study concluded, it could cut its screening costs by more than 40 percent. The San Francisco private company’s screeners received the same salary and benefits as TSA screeners, but they were so much better trained and deployed that each one processed 65 percent more passengers than a TSA screener in Los Angeles. They apparently enjoyed better working conditions, too, because they were much less likely to quit their jobs. And in tests by federal investigators, they were three times better at detecting contraband.

Unfortunately, TSA has institutional hostility to private screeners.

Those results, as well as other research showing that private screeners get better ratings from passengers and airport managers, inspired congressional Republicans to pass legislation giving more airports the option of switching to private contractors. But, as anyone could have predicted in 2001, it’s not easy to get rid of a federal monopoly, especially now that unionized screeners can intimidate local politicians—as they did in blocking an attempt to replace them at Sacramento’s airport. Even if local officials stand up to the union, they still need to get permission from the TSA.

And, as noted in the Wall Street Journal, many politicians don’t care about the private sector’s superior performance because they’re more intreested in expanding bureaucracy.

TSA runs a Screening Partnership Program, which in theory allows an airport to “opt out” of TSA and bring in a certified private security firm. In a 2011 report, the House Committee on Transportation and Infrastructure compared Los Angeles data with a private operation running San Francisco’s airport. A contract screener in San Fran moved through 65% more passengers than TSA employees in L.A. But only a handful of airports participate, as TSA chooses the security company and micromanages the contract. That isn’t a partnership. Congress could stipulate that an airport manage its own bidding and operations; the government would remain a safety regulator. …Congress nationalized airport screening after 9/ll, as Democrats saw a political opening to add thousands of new union workers. But after nearly a decade and a half, TSA’s legend of incompetence grows.

Sadly, growing incompetence is not matched by growing pressure for privatization.

But hopefully that will change.

Let’s close with a rather humorous Venn diagram.

P.S. For more TSA humor, see this, this, this, thisthis, and this.

P.P.S. In addition to letting airports escape the TSA, we should copy Canada and achieve better results at lower cost by privatizing air traffic control

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