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Posts Tagged ‘Cost-Benefit Analysis’

For a multitude of reasons, I wasn’t a fan of Mitt Romney’s candidacy in 2012. But when supporters of Barack Obama accused him of somehow being responsible for a woman who died from cancer, I jumped to his defense by pointing out the link between unnecessary deaths and bad economic policy.

Simply stated, market-friendly policies produce more prosperity and wealthier societies enjoy longer lifespans. Indeed, even one of Obama’s top appointees openly acknowledged that wealthier is healthier.

Which is why folks on the left are failing to do proper cost-benefit analysis when they assert that we need redistribution and intervention to help people live longer.

This issue was hot in 2017 when Republicans briefly toyed with the idea of fulfilling a campaign promise and repealing Obamacare.

Defenders of the law said repeal would cause needless deaths.

In a column for National Review, Oren Cass debunked those assertions.

If you are going to claim that someone’s policy will cause upward of 200,000 deaths, I feel that you should have relevant supporting evidence. Maybe I’m just old-fashioned that way. Certainly, no such standards seem to hamper the editors at Vox. Instead, they’ve just published “208,500 additional deaths could occur by 2026 under the Senate health plan,” in which Ann Crawford-Roberts et al. assure readers that they are using “solid estimates firmly rooted in scientific evidence — unlike the dubious claim that the ACA has saved ‘zero’ lives.” Except here’s the thing: That claim about zero lives saved is supported by multiple independent lines of analysis. …There are the numerous studies showing that patients on Medicaid achieve worse health outcomes than those without any insurance. There is the “gold-standard” randomized controlled trial in Oregon that found no significant improvement in physical health from Medicaid coverage. …There is a paper from Yale researchers that found states achieve better health outcomes when they allocate less of their social spending toward health care. And now we even have data from the ACA itself. …the nation’s mortality rate stopped decreasing and actually increased when the ACA was implemented, and matters were worst in the states that accepted the ACA’s Medicaid expansion. …None of that makes Medicaid worthless. It does not mean that Medicaid, or the ACA generally, is killing people (though the evidence for that proposition looks as good as the evidence for the idea that it is saving many lives).

Max Bloom also wrote that year about the controversy for National Review.

Repealing Obamacare will kill 24,000 people a year! No, 36,000! No, 43,000! The tax cuts are blood money! There is more than a little hyperbole about the overhaul of Obamacare proposed by the House and the Senate, and the rhetoric about tens of thousands of deaths is not a bad example. …The only thing better than a natural experiment is a random experiment, in which people are randomly distributed into groups that, in this case, either receive health insurance or don’t. Exactly this happened in Oregon in 2008, when the state randomly selected 30,000 from a waiting list of 90,000 low-income adults to participate in a limited expansion of Medicaid. In theory, this should have produced a perfect test of the effects of insurance on health-care outcomes — indeed, as Peter Suderman notes, a bevy of liberal writers touted an early analysis of the experiment as a conclusive vindication of the effects of health insurance. Until they saw the final data, that is. The Oregon study found that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years.” …In short, the only problem with the estimate that Obamacare repeal will kill tens of thousands is that it cherry-picks one study out of several, ignores the limitations of that study, assumes that private insurance and Medicaid are equivalent, assumes that losing health insurance and gaining health insurance are precisely symmetric, uses implausible estimates of coverage loss, and relies on an idiosyncratic definition of the word “kill.” Otherwise, it’s fine.

By the way, these two articles didn’t even consider the “cost” side of cost-benefit analysis.

The columns simply noted that there’s no evidence for the notion that Obamacare-type subsidies help people live longer. In other words, the “benefit” side of cost-benefit equation is empty.

So imagine what we would discover about health outcomes if various Obamacare costs (job losses, tax increases, lower income, etc) were added to the analysis.

A similar debate is happening on the other side of the ocean.

In a column for CapX, Guy Dampier addresses the silly claim that spending restraint kills people.

…a November 2017 paper in the British Medical Journal…found a link between restrictions on health and social care spending – austerity – and 120,000 additional deaths between 2010 and 2017. The paper’s authors..reached this by extrapolating from an estimated 45,000 “higher than expected” number of deaths between 2011 and 2014 and then projecting that to cover 2010 to 2017. …although even they had to admit they had only captured association and not discovered causation. …The medical community responded to the BMJ paper with scepticism. …Others pointed out the many issues in the methodology. …the IPPR, a think tank with close links to Labour, published a report in June this year with a similar claim: that if trends in mortality between 1990 and 2012 had continued there “could have been 130,000 deaths averted between 2012 and 2017”. …When pressed the IPPR admitted that the apparent spike in mortality had started two years before austerity began… The years of austerity have been tough for many people, without doubt. But these issues show that neither claim – of 120,000 or 130,000 deaths – stands up to scrutiny.

Once again, the left’s numbers only look at one side of the equation.

There’s no attempt to measure the health benefits of a faster-growing, less-encumbered economy.

Yet even using incomplete analysis, they don’t have any persuasive evidence for bigger government.

Let’s now close by looking at a global example.

Last year, the Washington Post published a fascinating article on pollution and life expectancy, and it included analysis on which parts of the world are getting cleaner and dirtier.

University of Chicago researchers wanted to make air quality measurements less abstract and more relatable — and what is more relatable than years of life? The pollution most responsible for shortening lives consists of the tiniest airborne particles, called PM2.5. They are small enough to penetrate deep into the lungs and bloodstream, causing breathing and cardiovascular problems, cancer and possibly even dementia. They’re bad for healthy people and terrible for young children, the elderly and anyone who already has heart or respiratory problems. …The Chicago team started with satellite data that mapped the annual PM2.5 concentration in air all over the world, from 1998 to 2016. …Then they calculated how much longer people would live if the air they breathe had fewer — or none — of these particles. The result of the project is the Air Quality Life Index.

Here’s the accompanying map, which shows good news for most parts of the world other than China, India, and Indonesia.

The obvious takeaway from this article is that nations should strive mightily to reduce this type of air pollution. Especially in Asia.

And maybe that’s actually true.

But let’s consider both sides of the equation. These Asian nations are in the process of industrialization, which means they are getting much richer and therefore have the ability to enjoy much better levels of food, housing, and health care.

We also know that life expectancy has significantly improved in China. So the bad impact of pollution obviously is being offset by something.

And the article notes that China is now working to curtail pollution, which makes sense since nations become more environmentally conscious as incomes increase.

By the way, I’m not trying to identify the right tradeoff between pollution and growth. Or the ideal tradeoff between redistribution and growth.

Instead, I’m simply pointing out that tradeoffs exist, even if some of my friends on the left like to pretend otherwise.

If you’ve been diligent enough to get to this point, you deserve to enjoy this very topical Remy video.

Rather appropriate that Elizabeth Warren plays a starring role.

P.S. You can enjoy more Remy videos by clicking here, hereherehere, and here.

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Moral panics in Washington are not a recipe for good policy.

That’s why the current attack on vaping (the use of e-cigarettes) is so misguided.

Policy makers want to ban and/or restrict e-cigarettes (especially flavored varieties) for two reasons.

  • Consuming e-cigarettes may cause harm to users.
  • Vaping may lure some young people into using nicotine.

Both of these concerns are reasonable, at least from a utilitarian perspective.

But if we’re taking that approach, policy makers also should be looking at the other side of the cost-benefit equation (the Food and Drug Administration sadly does a lousy job of comparing costs and benefits).

And the under-appreciated benefit of e-cigarettes is that they reduce tobacco consumption, which is far more risky.

The Wall Street Journal opined recently on this issue.

A campaign against vaping products is moving at land speed records, with the Trump Administration announcing this week it will pull flavored e-cigarettes from the market. This is becoming a political pile on, and regulators risk foreclosing one of the best opportunities in public health, which is to reduce cigarette smoking. …Vaping devices include an array of products from pens to tanks. …The point is to offer the buzz of a cigarette without the combustion of tobacco that releases carcinogens and makes smoking so dangerous. …agencies like Public Health England have said such e-cigs are 95% safer than smokes. …No one wants kids addicted to nicotine, and the question is how to balance these competing equities. It is hardly obvious that banning flavors will keep teens from vaping. …A Juul executive told Congress this summer that a result of exiting convenience stores has been other actors exploiting the vacuum by selling illegal flavor pods. Expect more such unintended consequences. And if the flavor ban doesn’t reduce the number of teen vapers, then what? The next step looks like an even broader ban, which won’t be a net positive to public health. …The question is not whether vaping is healthy—it isn’t—but whether the frenzy against e-cigarettes is moving faster than the evidence. …forgotten in the rush are the 480,000 Americans who die each year from smoking.

In addition to his attacks on the twin scourges of salt and large-sized drinks, Michael Bloomberg is a leading advocate of vaping restrictions.

Jacob Sullum of Reason explains why, if successful, his efforts will cause more death.

Former New York City Mayor Michael Bloomberg, the billionaire busybody who can be counted on to oppose individual freedom in almost every area of life, is launching a prohibition crusade against flavored e-cigarettes. …The premise of Bloomberg’s $160 million campaign, which aims to persuade “at least 20 cities and states” to “pass laws banning all flavored tobacco and e-cigarettes,” is that flavored e-liquids are obviously designed to entice “children,” because only children like them. That is demonstrably false. ..Last year, Vaping360, a site aimed at former smokers who have switched to vaping and current smokers who are thinking about it, surveyed readers about their favorite Juul pod flavors. It got more than 38,000 responses, and the top pick by far was Mango (46 percent), followed by Cool Mint (29 percent), Crème Brulée (11 percent), and Fruit Medley (8 percent). …Surveys of former smokers find that flavor variety plays an important role in the process of switching to vaping. The Food and Drug Administration has acknowledged “the role that flavors…may play in helping some smokers switch to potentially less harmful forms of nicotine delivery.” …Bloomberg has “committed nearly $1 billion to aid anti-tobacco efforts.” Now he is committing $160 million to pro-tobacco efforts, lobbying for laws that will drastically reduce the alternatives to conventional cigarettes, resulting in more smoking-related disease and death.

Robert Verbruggen also explains cost-benefit analysis in his column for National Review.

The Trump administration’s Food and Drug Administration is gearing up to ban e-cigarette flavorings besides the ones that taste like tobacco. It’s unclear if this would have any benefits for public health. …Upstart products such as e-cigarettes, which deliver nicotine without all the tar and other nasty chemicals that cigarettes contain, and are estimated to be 95 percent safer as a result. …even for minors it’s far better to vape than to puff Camels, and it’s not as if no adult enjoys, say, strawberry flavoring. Better taste is one reason to vape instead of smoke for pretty much anyone who has to decide between the two, and if e-cigs are limited to tobacco flavoring, this rule could push some people back toward traditional cigarettes. And if real cigarettes are 20 times as dangerous as e-cigs, it doesn’t take much switching to cancel out the benefit of a reduction in vaping.

But I also like his article because he points out that this is another example of the “administrative state” in action.

…this is not a decision that Congress ever should have left in the executive branch’s hands. …in 2009 Congress, in its infinite wisdom, gave the FDA the authority to regulate tobacco products — except for all the products that were already on the market. This meant that the agency would have authority over upstart products competing with cigarettes, but the rules would not apply to cigarettes themselves. ……Congress should write laws, especially laws that ban entire product categories, not turn that power over to unelected busybodies who will opt for regulation over personal freedom every single time they encounter a choice between the two.

Best of all, he makes the libertarian argument that people should enjoy liberty.

What is clear is that it will be a disaster for personal freedom… Smoking cigarettes is one of those things that we allow adults to do even though it’s obviously bad for them, causing numerous cancers and other health problems. …It’s a free country. …One does not need to be a dyed-in-the-wool libertarian to be disgusted at this affront to personal freedom and responsibility. …Adults should be free to do what they want, so long as they take responsibility for the consequences of their actions. That includes smoking. And it definitely includes the far safer alternative of vaping fruit-flavored e-juice.

Amen.

I think the utilitarian argument for vaping is strong. As this visual from an anti-cancer group in the U.K. notes, it passes a cost-benefit test for savings lives.

But utilitarianism isn’t everything.

I can’t resist also unleashing my inner libertarian as we conclude today’s column.

The bottom line is that people should be allowed to take risks. They should even be allowed to make dumb choices.

That includes drug use, sugary drinks, gambling, over-eating, smoking, voting for socialists, hang gliding, alcohol usage, and standing between a politician and a TV camera.

It’s called freedom.

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While it’s very good to have a clean environment, many environmentalists don’t understand cost-benefit analysis. As such, they make our lives less pleasant – inferior light bulbs, substandard toilets, inadequate washing machines, crummy dishwashers, dribbling showers, and dysfunctional gas cans – for little if any benefit.

We can add recycling to that list.

To be sure, all the hassle and time of sorting our garbage might be an acceptable cost if something was being achieved.

Unfortunately, as Jeff Jacoby has explained, that’s not the case. Not even close.

Let’s explore the issue.

In an article for the American Institute for Economic Research, Professor Michael Munger explains that most recycling actually is a net negative for the environment.

…I was invited to a conference called Australia Recycles! …Everyone there, everyone, represented either a municipal or provincial government, or a nonprofit recycling advocacy group, or a company that manufactured and sold complicated and expensive recycling equipment. …Recycling requires substantial infrastructure for pickup, transportation, sorting, cleaning, and processing. …For recycling to be a socially commendable activity, it has to pass one of two tests: the profit test, or the net environmental-savings test. If something passes the profit test, it’s likely already being done. People are already recycling gold or other commodities from the waste stream, if the costs of doing so are less than the amount for which the resource can be sold. …The real question arises with mandatory recycling programs — people recycle because they will be fined if they don’t, not because they expect to make money… If you add up the time being wasted on recycling rituals, it’s even more expensive to ask each household to do it. The difference is that this is an implicit tax, a donation required of citizens, and doesn’t cost money from the public budget. But time is the least renewable of all resources… For recycling to make any sense, it must cost less to dispose of recycled material than to put the stuff in a landfill. But we have plenty of landfill space, in most of the country. And much of the heaviest material we want to recycle, particularly glass, is chemically inert and will not decompose in a landfill. …landfilling glass does no environmental harm… So, is recycling useful? As I said at the outset, for some things it is. Aluminum cans and corrugated cardboard, if they can be collected clean and at scale, are highly recyclable. …But for most other things, recycling harms the environment. …If you care about the environment, you should put your bottles and other glass in the regular garbage, every time.

Jon Miltimore explains, in a column for the Foundation for Economic Education, that hundreds of cities have repealed recycling mandates because they simply don’t make sense.

…after sending my five-year-old daughter off to school, she came home reciting the same cheerful environmental mantra I was taught in elementary school. “Reduce, reuse, recycle,” she beamed, proud to show off a bit of rote learning. The moral virtue of recycling is rarely questioned in the United States. …recycling is tricky business. A 2010 Columbia University study found that just 16.5 percent of the plastic collected by the New York Department of Sanitation was “recyclable.” “This results in nearly half of the plastics collected being landfilled,” researchers concluded. …hundreds of cities across the country are abandoning recycling efforts. …Like any activity or service, recycling is an economic activity. The dirty little secret is that the benefits of recycling have been dubious for some time. …How long? Perhaps from the very beginning. …there are the energy and resources that go into recycling. How much water do Americans spend annually rinsing items that end up in a landfill? How much fuel is spent deploying fleets of barges and trucks across highways and oceans, carrying tons of garbage to be processed at facilities that belch their own emissions? …It’s time to admit the recycling mania is a giant placebo. It makes people feel good, but the idea that it improves the condition of humans or the planet is highly dubious.

On a related topic, another FEE column even shows that anti-waste campaigns may actually increase waste.

To reduce waste, most governments run communication campaigns. Many try to make consumers feel guilty by telling them how much people like them waste (food, paper, water…). …The idea is that once people realise how much they waste, they will stop. Unfortunately, research has shown that when people are told that people like them misbehave, this makes them act worse, not better. In a June 2018 study, we confirm this backfiring effect in a series of studies on waste… Indeed, we found that backfiring effects of anti-waste messages happened because of difficulty. When consumer read that everyone wastes a lot, they think that it must be difficult to cut waste – so they don’t even try.

Let’s get back to the specific issue of recycling.

The fact that it doesn’t make sense is hardly a new revelation.

Way back in 1996, John Tierny had a very thorough article in the New York Time Magazine that summarized the shortcomings of recycling.

If you don’t want to read this long excerpt, all you need to know is that landfills are cheap, safe, and plentiful.

Believing that there was no more room in landfills, Americans concluded that recycling was their only option. Their intentions were good and their conclusions seemed plausible. Recycling does sometimes makes sense — for some materials in some places at some times. But the simplest and cheapest option is usually to bury garbage in an environmentally safe landfill. And since there’s no shortage of landfill space (the crisis of 1987 was a false alarm), there’s no reason to make recycling a legal or moral imperative. Mandatory recycling programs…offer mainly short-term benefits to a few groups — politicians, public relations consultants, environmental organizations, waste-handling corporations — while diverting money from genuine social and environmental problems. Recycling may be the most wasteful activity in modern America: a waste of time and money, a waste of human and natural resources. …Americans became racked with garbage guilt…  Suddenly, just as central planning was going out of fashion in eastern Europe, America devised a national five-year plan for trash. The Environmental Protection Agency promulgated a “Waste Hierarchy” that ranked trash-disposal options: recycling at the top, composting and waste-to-energy incinerators in the middle, landfills at the bottom. …Politicians across the country…enacted laws mandating recycling and setting arbitrary goals…, typically requiring that at least 40 percent of trash be recycled, often even more — 50 percent in New York and California, 60 percent in New Jersey, 70 percent in Rhode Island. …The Federal Government and dozens of states passed laws that required public agencies, newspapers and other companies to purchase recycled materials. …America today has a good deal more landfill space available than it did 10 years ago. …there’s little reason to worry about modern landfills, which by Federal law must be lined with clay and plastic, equipped with drainage and gas-collection systems, covered daily with soil and monitored regularly for underground leaks. …Clark Wiseman, an economist at Gonzaga University in Spokane, Wash., has calculated that if Americans keep generating garbage at current rates for 1,000 years, and if all their garbage is put in a landfill 100 yards deep, by the year 3000 this national garbage heap will fill a square piece of land 35 miles on each side. …This doesn’t seem a huge imposition in a country the size of America. …The millennial landfill would fit on one-tenth of 1 percent of the range land now available for grazing in the continental United States. …many experts and public officials acknowledge that America could simply bury its garbage, but they object to this option because it diverts trash from recycling programs. Recycling, which was originally justified as the only solution to a desperate national problem, has become a goal in itself… The leaders of the recycling movement…raise money and attract new members through their campaigns to outlaw “waste” and prevent landfills from opening. They get financing from public and private sources (including the recycling industry) to research and promote recycling. By turning garbage into a political issue, environmentalists have created jobs for themselves as lawyers, lobbyists, researchers, educators and moral guardians.

The bottom line is that most recycling programs impose a fiscal and personal cost on people for very meager environmental benefits.

Indeed, the benefits are often negative once indirect costs are added to the equation.

So why is there still support in some quarters?

In part, it’s driven by contributions from the companies that get paid to process recycled material.

But that’s only part of the story. Recycling is a way for some people to feel better about themselves. Sort of an internalized version of virtue-signalling.

That’s not a bad thing. I like a society where people care about the environment and feel guilty about doing bad things, like throwing trash out car windows.

But I’m a bit old fashioned in that I want them to feel good about doing things that actually make sense.

P.S. There’s a Washington version of recycling that is based on taxpayer money getting shifted back and forth between politicians and special interests.

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When I assess President Trump’s economic policy, I generally give the highest grade to his tax policy.

But as I pointed out in this interview from last year, there’s also been some progress on regulatory policy, even if only in that the avalanche of red tape we were getting under Bush and Obama has abated.

But perhaps I need to be even more positive about the Trump Administration.

For instance, I shared a graph last year that showed a dramatic improvement (i.e., a reduction) in the pace of regulations under Trump.

For all intents and purposes, this means the private sector has had more “breathing room” to prosper. Which means more opportunity for jobs, growth, investment, and entrepreneurship.

To what extent can we quantify the benefits?

Writing for the Washington Post, Trump’s former regulatory czar said the administration has lowered the cost of red tape, which is a big change from what happened during the Obama years.

Over the past two years, federal agencies have reduced regulatory costs by $23 billion and eliminated hundreds of burdensome regulations, creating opportunities for economic growth and development. This represents a fundamental change in the direction of the administrative state, which, with few exceptions, has remained unchecked for decades. The Obama administration imposed more than $245 billion in regulatory costs on American businesses and families during its first two years. The benefits of deregulation are felt far and wide, from lower consumer prices to more jobs and, in the long run, improvements to quality of life from access to innovative products and services. …When reviewing regulations, we start with a simple question: What is the problem this regulation is trying to fix? Unless otherwise required by law, we move forward only when we can identify a serious problem or market failure that would be best addressed by federal regulation. These bipartisan principles were articulated by President Ronald Reagan and reaffirmed by President Bill Clinton, who recognized that “the private sector and private markets are the best engine for economic growth.”

But how does this translate into benefits for the American people?

Let’s look at some new research from the Council of Economic Advisers, which estimates the added growth and the impact of that growth on household income.

Before 2017, the regulatory norm was the perennial addition of new regulations.Between 2001 and 2016, the Federal government added an average of 53 economically significant regulations each year. During the Trump Administration, the average has been only 4… Even if no old regulations were removed, freezing costly regulation would allow real incomes to grow more than they did in the past, when regulations were perennially added… The amount of extra income from a regulatory freeze depends on (1) the length of time that the freeze lasts and (2) the average annual cost of the new regulations that would have been added along the previous growth path. …In other words, by the fifth year of a regulatory freeze, real incomes would be 0.8 percent (about $1,200 per household in the fifth year) above the previous growth path. …As shown by the red line in figure 3, removing costly regulations allows for even more growth than freezing them. As explained above, the effect, relative to a regulatory freeze, of removing 20 costly Federal regulations has been to increase real incomes by 1.3 percent. In total, this is 2.1 percent more income—about $3,100 per household per year—relative to the previous growth path.

Here’s the chart showing the benefits of both less regulation and deregulation.

The chart makes the change in growth seem dramatic, but the underlying assumptions aren’t overly aggressive.

What you’re seeing echoes my oft-made point that even modest improvements in growth lead to meaningful income gains over time.

P.S. My role isn’t to be pro-Trump or anti-Trump. Instead, I praise what’s good and criticize what’s bad. While Trump gets a good grade on taxes and an upgraded positive grade on regulation, don’t forget that he gets a bad grade on trade, a poor grade on spending, and a falling grade on monetary policy.

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Back in 2012, I shared a chart showing that workplace deaths declined substantially after the creation of the Occupational Safety and Health Administration.

But I then shared a second chart showing that workplace deaths declined just as much before OSHA was created.

The moral of my story was quite simple. Deaths primarily fell because America become much more prosperous. And there’s a lot of evidence that wealthier is healthier.

Today, let’s look at a similar example.

A study published by the National Bureau of Economic Research looks at the impact of public health measures in the early 1900s. They start by sharing some good news.

Since the mid-19th century, mortality rates in the Western world have plummeted and life expectancy has risen dramatically. Sometimes referred to as the mortality transition, this development is widely recognized as one of the most significant in the history of human welfare (Fogel 2004). Two features characterize the mortality transition. First, it was driven by reductions in infectious diseases and diseases of infancy and childhood (Omran 2005; Costa 2015). Second, it was concentrated in urban areas.

Do government policies deserve the credit?

There’s some evidence for that hypothesis.

…recent reviews of the literature emphasize the role of public health efforts, especially those aimed at purifying the water supply. For instance, Cutler et al. (2006) argue that public health efforts drove the dramatic reductions in food- and water-borne diseases at the turn of the 20th century. Similarly, Costa (2015) argues that clean-water technologies such as filtration and chlorination were “the biggest contributor[s] to the decline in infant mortality”

To be sure, there were huge public projects in the first several decades of last century. Here’s the data on sewage treatment facilities.

And here’s some data on milk purification efforts.

And the study has data on other aspects of public health as well.

The key question is whether all these efforts were successful. The three authors decided to investigate.

Using data on 25 major American cities for the years 1900-1940, the current study revisits the causes of the urban mortality decline at the turn of the 20th century. Specifically, we conduct a statistical horse race that attempts to distinguish the effects of ambitious, often extraordinarily expensive (Costa 2015, p. 554), public health interventions aimed at controlling mortality from food-and-water-borne diseases. Following previous researchers (Troesken 2004; Cutler and Miller 2005; Beach et al. 2016; Knutsson 2018), we explore the extent to which filtering and chlorinating drinking water contributed to the decline in typhoid mortality observed during the period under study and, more generally, to the observed declines in total and infant mortality. In addition, we explore the effects several other municipal-level efforts that were, at the time, viewed as critical in the fight against typhoid and other food- and water-borne diseases (Meckel 1990; Levitt et al. 2007; Melosi 2008) but have not received nearly as much attention from modern-day researchers. These interventions include: the treatment of sewage before its discharge into lakes, rivers and streams; projects designed to deliver clean water from further afield such as aqueducts and water cribs; requirements that milk sold within city limits meet strict bacteriological standards; and requirements that milk come from tuberculin-tested cows. Because the urban mortality transition was characterized by substantial reductions in infant and childhood mortality (Omran 2005) and because exclusive breastfeeding was not the norm during the period under study (Wolf 2001, 2003), improvements in milk quality seem a particularly promising avenue to explore.

But here’s the surprising result.

They did not find much evidence that public health efforts made a difference.

…our results suggest that the building of a water filtration plant cut the typhoid mortality rate by nearly 40 percent. More generally, however, our results are not consistent with the argument that public health interventions drove the extraordinary reductions in infant and total mortality observed between 1900 and 1940. Specifically, we find that efforts to purify milk had no appreciable effect on infant mortality and no effect on mortality from non-pulmonary tuberculosis (TB), which was often transmitted through infected milk. Likewise, neither chlorinating the water supply nor constructing sewage treatment plants appears to have been effective. …Our results point to other factors such as better living conditions and improved nutrition as being responsible for the sharp decline in urban mortality at the turn of the 20th century.

Here’s the chart showing that infant mortality consistently declined, largely independent of public health efforts.

I’m not suggesting, by the way, that public health spending is bad. Nor am I asserting that it’s a waste of money.

Notwithstanding some of the jokes that target libertarians, the goal isn’t to abolish every regulation or program governing safety and health. Maybe I’m a bad libertarian, but I’d pick a city with sewage treatment over one without.

But my main point is that I don’t need to make that choice. Nobody does.

The data strongly suggests that economic growth and rising levels of prosperity are the real drivers of improved health outcomes. Market-driven prosperity is what generates the wealth needed to improve public health, whether the actual delivery takes place via public or private action.

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Too much government can be hazardous to your health.

Instead, this is a column about the wonky issue of cost-benefit analysis. Specifically, we’re going to look at whether some regulations can be sufficiently onerous that the resulting economic damage actually produces needless death. This insight can even apply to regulations that are designed to save lives!

It’s quite common, when I first suggest this hypothesis, for people to think I’m nuts. But they begin to see the light when I share this example from an article I wrote 25 years ago for the Journal of Regulation and Social Cost.

People in wealthier nations, on average, live longer and better lives than residents of poorer nations. …government policy makers should consider the adverse effects on health and mortality of economic policies that impose costs on the productive sector of the economy. …it is quite possible that regulations designed to reduced mortality and morbidity, if they impose sufficiently high costs on the economy, actually can result in premature deaths and a less healthy population. Banning the use of motor vehicles, for instance, would save…lives lost annually in traffic accidents as well as preventing whatever number of premature deaths can be attributed to auto emissions. …It would be absurd, however, to…support the elimination of motor vehicles… The higher living standards made possible by fast and efficient transportation clearly must result in reduced mortality…rates over time for the general population.

I don’t know if they accept that society would be so much poorer that – on net – more people would die. But they definitely grasp that there’s a tradeoff.

And that’s a big victory. After all, people are much more likely to accept cost-benefit analysis when they understand that a decision can have both good and bad consequences.

I wrote about this topic back in 2012 because supporters of President Obama basically accused Mitt Romney of contributing to the death of a woman who lost her health insurance. So I looked at the academic data on the relationship between economic prosperity and lifespans to measure Obama’s body count.

Looking over much of this research, it appears that $14 million is a reasonable middle-ground estimate of how much foregone income is associated with a needless death. Now let’s do some simple math to get an estimate of the total number of preventable deaths caused by the economy’s sub-par performance during Obama’s reign. …divide $836.6 billion (our earlier estimate of foregone growth) by $14 million and we get an estimate that Obama’s policies have caused 59,757 deaths.

In that column, I warned that my back-of-the-envelope calculations were not very unreliable, and I also pointed out that it would be wrong to hold Obama personally accountable for any premature deaths.

I simply wanted people to understand that a weak economy has serious consequences (I also thought that Obama’s supporters were making a very dodgy attack on Romney, particularly since there were so many other reasons to criticize the GOP candidate).

But I’m beginning to digress. The purpose of today’s column is to further explain why we should be concerned about the economic damage of excessive government. But not just because of lost income and reduced prosperity. We also need to recognize that a weaker economy translates into needless deaths.

So let’s look at some additional research.

A study prepared for the Environmental Protection Agency provides a dispassionate analysis of this form of cost-benefit analysis. The report starts with a couple of specific examples.

The essence of risk-risk analysis, as it will be referred to here, is the assertion that regulations seeking risk-reduction benefits may also unintentionally increase risks, and by enough in some cases to outweigh the intended benefits. …One such situation currently of concern is the possibility that parents with young children might elect the more risky option of driving a long distance instead of the less risky alternative of flying if the latter alternative is rendered much more expensive by a requirement to purchase a seat on the aircraft for the child instead of sharing a seat with the parent. Similarly, if regulations governing small drinking system quality are sufficiently costly, individuals might elect to use private wells, which could pose even more risks to their health than the public water supply in the absence of the costly rules.

It then puts forth the sensible hypothesis about the economy-wide implications of onerous red tape.

A slightly different version of risk-risk analysis is predicated on the observation that people’s wealth and health status, as measured by mortality, morbidity, and other metrics, are positively correlated. Hence, those who bear a regulation’s compliance costs may also suffer a decline in their health status, and if the costs are large enough, these increased risks might be greater than the direct risk-reduction benefits of the regulation. Advocates of risk-risk analysis emphasize its use as an important commonsense screen… It does seem eminently reasonable not to promulgate costly rules that actually increase risks rather than decrease them.

The study looks at some of the past academic literature.

Lutter and Morrall (1994) attribute to Aaron Wildavsky, see for example Wildavsky (1980), the general proposition that government programs tend to reduce economic growth, thereby interfering with the primary mechanism by which human health has improved over time. According to Lutter and Morrall, the first to apply this principle quantitatively was Keeney (1990), who calculated that an additional death occurs for roughly each $3.14 million to $7.25 million of income lost (1980 dollars). OMB on several occasions has brought health-health analysis to bear both in its review of OSHA regulations related to worker safety, and in examining regulations of other agencies, such as EPA and FDA. For example, using a finding that $7.5 million of costs induces one additional statistical death, OMB argued that although OSHA’s proposed permissible exposure limits for a large number of workplace air contaminants would offer the benefit of preventing 8 to 13 deaths per year, the regulatory costs of $163 million per year would indirectly cause some 22 deaths annually. On that basis, OMB suspended its review of the proposed regulation and OSHA agreed to study the issue further….researchers continue to further refine this estimated relationship between income and mortality risk. For example, Viscusi (1994) reports various estimates of the lost income that induces an additional statistical death ranging from $1.9 million to $33.2 million, and indicates that his own research (in press at the time) places this number at about $30 million to $70 million.

Keep in mind that the Environmental Protection Agency is not a hotbed of free market radicals. So it’s noteworthy that at least some people at that bureaucracy realize that there should be some cost-benefit constraints on regulation.

The Institute of Energy Research also explored the issue.

…in practice we all make decisions that increase the risk of death, and in that sense, we trade off our own longevity for other goals. In this context, economists can estimate the implied value of a human life, judged by the choices of the individuals themselves. One surprising implication of this approach is that costly government regulations not only reduce Americans’ standard of living, but they also indirectly lead to more deaths. In a modern economy, wealth is health, and so an inefficient regulation doesn’t merely reduce GDP—it also reduces average lifespans. …By analyzing consumer behavior, economists can come up with rough estimates of the implied “value of a statistical life” (VSL) that this behavior exhibits.

Here’s an example.

…suppose a very stringent rule on the emission of soot from smokestacks theoretically would reduce deaths by 2,000 lives, but at an aggregate cost to the economy of $80 billion in forfeited GDP. With these numbers, even on its own terms, such a regulation would save lives at a price of $40 million per life. This is much more than typical Americans spend with their own money to reduce risks and prolong their lifespans, and thus it indicates that the proposed regulation is inefficient because it implicitly forces Americans to “spend” much more on reducing a particular risk, rather than on other goods and services that they value more.

And here’s the key takeaway.

…there is a well-established causal connection between wealth and health. Costly federal regulations make Americans poorer and thus indirectly lead to more deaths, because poorer people are less able to take advantage of private methods of prolonging their lives. If regulations are particularly inefficient, this indirect effect might overwhelm the direct benefit of the regulation, meaning that it not only makes Americans poorer, but actually kills them on net.

Here are some excerpts from a study published by the AEI-Brookings Joint Center for Regulatory Studies.

Many forms of regulation have grown dramatically in recent decades—especially in the areas of environment, health, and safety. Moreover, expenditures in those areas are likely to continue to grow faster than the rate of government spending. Yet, the economic impact of regulation receives much less scrutiny than direct, budgeted government spending. We believe that policymakers need to rectify that imbalance. …We should judge regulations by their individual benefits and costs… One study found that a reallocation of mandated expenditures toward those regulations with the highest payoff to society could save as many as 60,000 more lives per year at no additional cost. …the costs of compliance with regulations pose risks. Compliance typically reduces the amount of private resources that people have to spend on a wide range of activities, including health care, children’s education, and automobile safety. When people have fewer resources, they spend less to reduce risks. The resulting increase in risk offsets the direct reduction in risk attributable to a government action. Moreover, if that direct risk reduction is small and the regulation is very ineffective relative to its cost, then total risk could rise instead of fall.

The AEI-Brookings report also looks at some of the existing research.

Dozens of articles in economics and public health journals substantiate the claim that richer people live longer.10 Simple correlations of annual death rates and income suggest that a community whose income rises by about $10 million can expect about one fewer death. …Sunstein argued that courts should find that regulations that raise risks rather than lower them are arbitrary and capricious. … Lutter, Morrall, and Viscusi…estimated that an increase in income of about $15 million in a large U.S. population reduces mortality risk by one statistical death.

The authors look at regulations from the 1980s and 1990s and calculate which ones saved lives and which ones cost lives.

By the way, allow me to interject by pointing out some specific examples of regulations that are on the books and are causing needless deaths.

Now let’s close with a look at a very recent analysis from the Mercatus enter.

…many regulations result in unintended consequences that increase mortality risk in various ways. These adverse repercussions are often the result of regulatory impacts that compete with the intended goal of the regulation, or they are direct behavioral responses to regulation. As examples, fuel efficiency regulations can encourage automobile manufacturers to produce smaller cars that are more dangerous in an accident (Crandall and Graham 1989). Increased airport security measures after 9/11 made air travel more inconvenient, which has led to increases in estimated car accident deaths as individuals substituted driving for flying (Blalock, Kadiyali, and Simon 2007). …Finally, regulatory efforts reduce individual expenditures on health, both because risk reduction achieved through regulation is a substitute for private risk reduction and because the costs incurred by regulations reduce private health-related expenditures. It is this last item that has been the focus of health-health analysis (HHA).

The authors look at potential ways of conducting this type of cost-benefit analysis.

Despite a robust academic literature that spans decades, HHA has not become widely used by policymakers… HHA relies on an estimate of what is known as the cost-per-life-saved cutoff (the “cutoff”), which is a threshold cost-effectiveness level beyond which life-saving regulations will be counterproductive in that they can be expected to induce more fatalities than they prevent. …There are two competing ways of identifying the cutoff, a direct approach based on empirical observation and an indirect approach grounded in economic theory. …The indirect approach, which is our preferred method, relies on a theoretical model of the income-mortality relationship that is calibrated using data on the value of a statistical life (VSL) and the marginal propensity to spend on health (MPSH). …Employing the indirect approach has led to a cost-per-life-saved cutoff value closer to $85 million for the United States. We employ the indirect approach here as well, estimating a cutoff range from $75.4 million to $123.2 million (2015 dollars). A reasonable rule of thumb might be to assume that regulations costing more than $100 million per life saved will be counterproductive in that they can be expected to increase mortality risk on net.

Like the other studies, there’s a look at previous research.

Ralph Keeney developed the first formal model for estimating fatalities induced by income losses, finding that for every $7.25 million (1980 dollars) in costs, one statistical fatality will be induced (Keeney 1990). Chapman and Hariharan’s (1994) study, published in a special issue of the Journal of Risk and Uncertainty devoted to HHA, develops a similar empirical model but controls for initial health status as a means to account for reverse causality (i.e., poor health causing lower income). The study’s authors estimate the cutoff at $12.2 million (1990 dollars). Keeney provided an update of his model in 1997, estimating the cutoff at between $5 million and $14 million (1991 dollars), depending on the distribution of costs.

Including some foreign studies.

Elvik (1999) is a Norwegian study that estimated the cutoff in Norway at between 25 million and 317 million NOK (1995 prices), which translates to US$3.8 million to US$47.5 million (1995 US dollars). Gerdtham and Johannesson (2002) used longitudinal data (tracking individuals for between 10 and 17 years) for a sample of randomly selected Swedes. After controlling for initial health status, they estimated the cutoff at between US$6.8 million and US$9.8 million (1996 US dollars), depending on how costs are distributed. More recently, Ashe et al. (2012) examined fire prevention regulations in Australia. These authors estimate the cutoff at between AU$20 million and AU$50 million (2010 Australian dollars), again depending on how costs are distributed across the population.

The Mercatus study then contemplates the indirect approach, which utilizes the “value of a statistical life” approach, or VSL.

…the empirical evidence from the United States and other countries, as well as the evidence from labor market estimates of the VSL and revealed preference studies, indicate a positive income elasticity of the VSL and a greater income elasticity at lower income levels. This economic mechanism is also consistent with the common conjecture that the mortality effects of regulatory expenditures will be greatest for the poorest members of society. …When a binding government regulation affects risk levels, there will be two effects. First, because health expenditures and job safety levels are substitutes, regulation will decrease the private incentive to invest in health. Second, because the individual bears regulatory costs, there will be decreased investment in health. Whether a regulation reduces risks on balance depends on the sum of three components: the direct effect of the regulation on safety, the indirect effect on risk through a substitution toward safety achieved through regulation and away from personal health expenditures, and the indirect effect on risk as personal health expenditures fall from reduced income as a result of compliance with regulations.

And the authors come up with a range.

According to our estimates, the cost-per-life-saved cutoff is in the range of $75.4 million to $123.2 million (2015 dollars). Any regulation with a cost-per-life-saved that exceeds this range can be expected to increase mortality risk on net. There is a great deal of uncertainty surrounding a number of factors that produce this estimate, however, including the fraction of income spent on risk reduction, the income elasticity of risk-reducing expenditures, and the VSL.

I don’t have the competence to judge which approach is best. The part of me that is worried about excessive red tape hopes the direct approach is more accurate since a lower “cutoff” means we can argue that a greater share of regulations fail to meet the threshold.

On the other hand, the part of me that is resigned to ever-expanding amounts of red tape hopes the indirect approach generates more accurate numbers since a higher “cutoff” means that the net cost of regulation is not as onerous.

Regardless, my only point is that there should be some form of cost-benefit analysis before bureaucrats churn out new rules, and the impact of red tape on overall economic performance should be part of the equation.

P.S. Speaking of economic impact, a study from the European Central Bank had some very sobering data.

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I’ve called for the abolition of the Department of Transportation. On more than one occasion.

So I was very excited to see this new video about infrastructure from Johan Norberg.

Very well put. As Johan says (channeling Bastiat), we should remember that jobs are destroyed when money is taken out of the private sector to build infrastructure.

So it behooves us to make sure that any new project isn’t a boondoggle and instead will increase the economy’s productive capacity.

Which is why we should strive for decentralization and shrink Washignton’s footprint. If a state or local government is paying for its own projects, presumably it’ll have a greater incentive to avoid wasteful pork. When the federal government pays, by contrast, that’s a recipe for waste.

Veronique de Rugy explains the issue in a column for Reason. She starts with some economic analysis.

Economists have long recognized that roads, bridges, airports, and canals are the conduits through which goods are exchanged, and as such, infrastructure can play a productive role in economic growth. But not all infrastructure spending is equal. Ample literature shows, in fact, that it’s a particularly bad vehicle for stimulus and does not, in practice, boost short-term jobs or economic growth. …Publicly funded infrastructure projects often aren’t good investments in the long term, either. Most spending orchestrated by the federal government suffers from terrible incentives that lead to malinvestment—resources wasted in inefficient ways and on low-priority efforts. Projects get approved for political reasons and are either totally unnecessary or harmed by cost overruns and corruption.

And she concludes by arguing for market forces rather than federal involvement.

[Trump] should put an end to the whole idea that infrastructure should be centrally planned, taxpayer-funded, and the responsibility of the federal (as opposed to state or local) government. The current system obliterates the discipline that comes from knowing a project needs to pay for itself to survive. User fees should become our preferred option for funding infrastructure. That change kills two birds with one stone: It lessens the need for massive federal expenditures, and it gives the private sector an incentive to spend money on crucial but not exactly sexy maintenance tasks. …If Trump wants the United States to have “world-class” infrastructure, the surest way is through market-based reforms that increase competition while reducing subsidies and regulations. Embrace real privatization, not federally directed private investments.

Writing for U.S. News & World Report, Tracy Miller similarly argues that decentralization is the best approach.

Highways as well as public transportation are currently funded with money from the federal Highway Trust Fund, and by state and local governments. …Money from the fund has strings attached that raise costs and limit state and local governments’ ability to choose which projects have priority. These strings include prevailing wage laws, which require contractors receiving federal money to pay unionized wages even if they could attract qualified workers willing to work for less. High-profile projects chosen by politically powerful congressmen can easily take priority over projects that would generate greater benefits for their constituents. From an administrative standpoint, it would not be very difficult to reduce or eliminate the federal government’s role in highway and transit funding. Instead of gas taxes going to the federal government before being returned to the states, as is presently the case, each state could collect all taxes on fuel sold within its borders and decide how best to spend it. This would make it possible to downsize the U.S. Department of Transportation, saving taxpayers billions of dollars.

He explains why reform will lead to better – and cheaper – transportation.

Local governments – with greater awareness of the local needs of metropolitan areas, small towns or rural areas – can do a better job of funding and managing roads, highways and public transportation that serve primarily local residents. State governments or private firms, meanwhile, can best manage interstate and other major highways that cater mostly to long-distance travelers, especially if they could cover expenses with user fees. …Many drivers object to the idea of paying tolls for the use of currently “free” interstate highways, whether they are managed by private firms or state governments. But highways aren’t free – the costs are hidden within our fuel taxes. If mileage-based user fees are applied to all highways and set at the correct levels, they can become a much more efficient (and ultimately cheaper) replacement for fuel taxes.

Professor Edward Glaeser of Harvard summarizes the issue nicely in an article for CNBC.

Our current system of federal funding for transportation means that taxpayers in New York fund highways in Montana and drivers in Utah pay for New York’s airports. If President Trump wants to seriously improve American infrastructure spending, he should champion a new federalism for transportation, in which infrastructure is funded by states, localities and especially the users themselves. …The best decisions are made when decision-makers bear the costs and reap the benefits. When companies invest, they agonize about whether future customers will pay enough to cover the production costs. …Having lived through Boston’s Big Dig, I am well aware of how the promise of federal funding skews local decision-making. Local leaders stop asking themselves whether the benefits cover the costs because it’s somebody else’s nickel. …Detroit would have never built its absurd People Mover Monorail without federal encouragement and funding.

He elaborates on some of the implications for different types of infrastructure.

If new automotive infrastructure is meant to be self-financing, then the decision to build is a straightforward business investment and there is little need for large-scale federal funding. …The beneficiaries of metro systems are the businesses and commuters within a state. They could be funded with local property or sales taxes. My favorite metro funding model is in Hong Kong, where the city’s private mass transit system funds itself by building high-rises atop new train stops. …More federal funding for dysfunctional airports just perpetuates the status quo. They would be far healthier if they were split apart from the larger agency and allowed to operate, compete and charge higher landing fees, either as independent self-funding public airports, as in the U.K., or as private entities.

Amen. I’m not surprised to see Hong Kong as a role model. And I’ve already written about the U.K.’s success with privatization.

Speaking of privatization, a column in the Wall Street Journal points out that this is the way to improve airports in America.

Why do American passengers pay so much to get so little? Because their airports, by global standards, are terribly managed. Cities from London to Buenos Aires have sold or leased their airports to private companies. To make a profit, these firms must hold down costs while enticing customers with lots of flights, competitive fares and appealing terminals. The firm that manages London’s Heathrow, currently eighth in the international ranking, was so intent on attracting passengers that it built a nonstop express train to the city’s center. It’s also seeking to add another runway, as is the rival firm running Gatwick Airport. American airports are typically run by politicians in conjunction with the dominant airlines, which help finance the terminals in return for long-term leases on gates and facilities. The airlines use their control to keep out competitors; the politicians use their share of the revenue to reward unionized airport workers. No one puts the passenger first.

The author cites the San Juan airport as an example of what can happen under privatization.

If you want to see how much better American airports could be, take a plane to Puerto Rico. Until four years ago, the main airport in San Juan was run, and neglected, by an unwieldy bureaucracy, the Puerto Rico Ports Authority. The terminal was a confusing jumble of dim corridors. On rainy days, the ceilings leaked; on hot days, the air conditioning faltered. The stores were tacky and the restaurants greasy spoons, often rented at bargain rates to politicians’ friends or relatives. …Airlines switched operations to other Caribbean hubs. In 2013 the Ports Authority leased the airport for 40 years to Aerostar, a partnership operating airports in Cancún and other Mexican cities. The new managers agreed to make capital improvements, reduce landing fees and pay the Ports Authority $1.2 billion—half up-front. The result, three years later, is an airport nobody would call Third World. The redesigned concourses are sleek and airy, and revenue from new retail and restaurants has doubled. …Airlines no longer control the gates, but they’re reaping other benefits. “We’re paying lower fees for a much better airport,” says Michael Luciano, who runs Delta’s operations in San Juan. “Almost every area has been renovated. You go into any restroom, and it’s bright and clean—things like that are really important to our customers.” Passenger volume has been growing 4% annually, well above the industry average.

I can personally vouch for this. Because of all my travel in the Caribbean, I’ve used the San Juan airport extensively over the years, including just last week for the Liberty International conference.

The difference between today’s airport and the dump that used to exist is like the difference between night and day.

By the way, let’s also dismiss the notion that there’s some sort of infrastructure crisis.

I’ve already shared data from the World Economic Forum’s Global Competitiveness Report, which shows that the United States actually ranks relatively high compared to other nations.

And I’ve also shared solid numbers making the same point from Chris Edwards, one of my colleagues at the Cato Institute. Michael Sargent of the Heritage Foundation has a tweet that nicely shows that there isn’t a crisis.

Oh, and let’s also consider the example of Japan, which thought infrastructure spending was some sort of economic elixir. That didn’t work so well, as pointed out by the Wall Street Journal.

The U.S. economy isn’t growing at merely 2% because of potholes or airports… The prime illustration is Japan, which since the 1980s has tried to build its way out of stagnation. The country now boasts perhaps the world’s most spectacular suspension bridges, maglev trains, elevated highways and man-made islands, but the cost was trillions of yen of debt (now 230% of GDP) and no better growth. Nor could a monorail save Detroit. Projects make economic sense only to the extent they clear rigorous cost-benefit tests.

And if you want to know the infrastructure that is least likely to pass a cost-benefit test, just look at mass transit.

A good place to start is the Wall Street Journal‘s recent editorial on a subway line in New York City.

New York City opened a new subway line—about a century after the project was proposed and merely decades after ground-breaking in 1972…by far the most expensive train track in the history of the world. The story is an example of what not to do… This first phase of the new line—amounting to 1.6 miles in a single neighborhood, with three new stations and a renovated stop—cost some $4.451 billion. …The next leg of the Second Avenue subway, which would extend the train 29 blocks north into Harlem starting in 2020, is projected to cost an astonishing $6 billion, and that is surely an underestimate.

Gabriel Roth, writing for the Washington Examiner, has the right idea.

…abolish the subsidies. The federal government forces road users to spend some $10 billion a year on non-road assets of little or no benefit to them. Those payments are not only wasteful in themselves; they also encourage states and local governments to squander money on mass transit, whose costs users are not prepared to cover — not even the operating costs. If local communities consider such expenditures important, they should pay for them themselves.

By the way, just to show my libertarian bona fides, I think decentralization is just part of the answer. In my fantasy world, the private sector plays a bigger role.

And the good news, as I wrote back in 2014, is that my fantasy is reality in some instances.

Here’s another example from Hawaii.

Their livelihood was being threatened, and they were tired of waiting for government help, so business owners and residents on Hawaii’s Kauai island pulled together and completed a $4 million repair job to a state park — for free. …The state Department of Land and Natural Resources had estimated that the damage would cost $4 million to fix, money the agency doesn’t have, according to a news release from department Chairwoman Laura Thielen. …So Slack, other business owners and residents made the decision not to sit on their hands and wait for state money that many expected would never come. Instead, they pulled together machinery and manpower and hit the ground running March 23. And after only eight days, all of the repairs were done, Pleas said. It was a shockingly quick fix to a problem that may have taken much longer if they waited for state money to funnel in. “We can wait around for the state or federal government to make this move, or we can go out and do our part,” Slack said. “Just like everyone’s sitting around waiting for a stimulus check, we were waiting for this but decided we couldn’t wait anymore.” …”We shouldn’t have to do this, but when it gets to a state level, it just gets so bureaucratic, something that took us eight days would have taken them years,” said Troy Martin of Martin Steel, who donated machinery and steel for the repairs. “So we got together — the community — and we got it done.”

Reminds me of the guy who built some stairs at a park for $550 because the Toronto government was taking too long and planned to spend $65,000 to do the same thing.

And here’s another case study from Portland.

Portland Anarchist Road Care (PARC) is a community collaboration of skilled workers who volunteer their services to fix the damaged roads around Portland, Oregon. Citing concerns about governmental bureaucracy, the current political climate, a lack of funds and a seeming lack of care, the members of PARC decided to take things into their own very capable hands.

I have no idea whether these people are libertarian-minded anarcho-capitalists or deeply confused left-wing nihilist anarchists, but kudos to them for steeping up and doing a job cheaply and efficiently. The very opposite of what we expect from government.

P.S. Since Nazis are in the news and since I’m writing about infrastructure, here are some blurbs from an academic study on how Germany’s National Socialists used autobahn outlays to generate political support.

The idea that political support can effectively be bought has a long lineage – from the days of the Roman emperors to modern democracies, `bread and circus’ have been used to boost the popularity of politicians. A large literature in economics argues more generally that political support can be ‘bought’. …In this paper, we analyze the political benefits of building the worldʹs first nationwide highway network in Germany after 1933 – one of the canonical cases of government infrastructure investment. We show that building the Autobahn was highly effective in reducing opposition to the Hitler regime. …What accounts for the Autobahn’s success in winning “hearts and minds”? We discuss the economic and transport benefits. In the aggregate, these have been shown to be minimal (Ritschl 1998; Vahrenkamp 2010). …we argue that the motorways…increased support because they could be exploited by propaganda as powerful symbols of competent, energetic government. …Our results suggest that infrastructure spending can indeed create electoral support for a nascent dictatorship – it can win the “hearts and minds” of the populace. In the case of Germany, direct economic benefits of pork‐barrel spending in affected districts may have played a role.

Seems that politicians, whether motivated by evil or run-of-the-mill ambition, love spending other people’s money to build political support. Is it any wonder that we hold them in such low esteem?

P.P.S. Fans of “public choice” doubtlessly will be amused by the IMF’s 2014 flip-flop on infrastructure.

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