Women’s empowerment in many developing countries is in its early phases, but the right policies can set women everywhere on a path toward the same prosperity and freedom enjoyed by women in today’s advanced countries.
Amazon has chosen New York City and Arlington, Virginia, for new corporate headquarters after the cities ponied up more than $2 billion in subsidies to the retail giant.
Workers in the two cities will be winners as labor demand gets boosted, but business subsidies make losers of taxpayers, other businesses and good governance.
Fairness.Subsidies give Amazon an unfair edge other tech firms in New York City and Northern Virginia.
Alternatives.New York and Virginia would have generated more durable growth by cutting business taxes across the board by $2 billion. That would have boosted investment by many businesses, and thus created more balanced prosperity.
Diversity. Industry clusters such as Silicon Valley are successful not because they have big companies, but because they have a start-up culture that nurtures growth companies with venture capital. Rather than favoring big companies, state and local politicians would better spur growth by reducing tax and regulatory barriers to spawn a diversity of new companies.
Corruption. Allowing politicians to hand-out business subsidies at their discretion generates corruption because the hand-outs get swapped for campaign cash and outright bribes.
Bureaucracy. Amazon-style subsidy deals are jobs programs for accountants and lawyers.
Lobbyists. The high-profile Amazon win will inspire more companies to shake down politicians for subsidies.
Dependency.Just as welfare undermines individual productivity, corporate welfare undermines business productivity.
Bad Decisions. Subsidies induce companies to make bad decisions that backfire.
Politics. High-profile subsidy deals are politically risky.
Priorities. State and local governments face serious problems that may sink their economies in coming years such as large unfunded pension costs. They should fix those problems rather than trying to micromanage the economy.
Rather than subsidizing big businesses, the states should aim to create a diverse business ecosystem — an Amazon, if you will — by cutting taxes and regulations for all types of investment. If states adopt low tax rates and repeal unneeded regulations on zoning, licensing, and other activities, growth will take care of itself.
Companies such as Twitter and Facebook will sometimes make content moderation decisions that seem hypocritical, inconsistent, and confusing. But private failure is better than government failure, not least because unlike government agencies, Twitter has to worry about competition and profits.
Many have argued that banning or restricting use of cash will reduce criminal transactions within the underground economy. However, just how much underground economic activity constitutes truly harmful criminal acts, as opposed to productive activities that evade taxes or other regulations but nonetheless increase social welfare, is unclear. Further, the likely effects of a cash ban on genuinely predatory activities such as extortion, human trafficking, drug-related violence, and terrorism are extremely difficult to quantify.
Advocates of phasing out currency also see it as a means of allowing monetary authorities to implement negative interest rate policies. Negative rates could then be imposed on all money holders, acting as a direct tax on their money monetary balances. The necessity of this tool is questionable at best – there are only three instances in the past quarter century where negative interest rates could possibly have been helpful, hardly meriting the extreme measure of eliminating cash. Negative interest rates in a cashless economy end up giving an unelected regulatory body discretionary power to tax money and would require massive restructuring of financial institutions and norms.
It is the advocates of restricting hand-to-hand currency who bear the burden of proof for such an extensive reshaping of the monetary system, no matter how cautiously or slowly implemented and no matter whether all cash is eliminated or just large-denomination notes.
The agreement includes provisions that foreclose governments’ access to discriminatory protectionism and obligate the parties to refrain from backsliding. It achieves maximum market barrier reduction and enables the fullest expressions of market integration, while simultaneously preserving national sovereignty to legislate and regulate in ways that do not discriminate against imported goods, services, or capital.
Among the agreement’s many liberalizing features are provisions that:
Enshrine the “negative list” approach to liberalization across goods, services, investment, and government procurement, which is conducive to faster, broader, and deeper economic integration
Eliminate tariffs on nearly all goods upon entry into force
Permit free movement of British and American workers, conditioned on an offer of employment
Commit the parties to expedited customs clearance and administrative procedures
Mutually recognize professional qualifications and licenses
Mutually recognize the efficacy of conformity assessment, and equivalence provisions, which would allow companies to sell and operate in both markets by satisfying either Parties’ regulations in areas where there is agreement as to the objectives of the regulations
Are less restrictive on the use of inputs from third countries by lowering “rules of origin” thresholds that must be met to qualify for the agreement’s preferential terms
Preclude application of anti-dumping measures between the Parties
Preclude the use of investor-state dispute settlement
Provide for the accessions to the agreement of other Parties that can demonstrate willingness and capability to meet its market-liberalizing standards
The unemployment rate hovers around record-low levels, gross domestic product growth topped 4 percent in the second quarter, and consumer confidence is as high as it’s been since the late-1990s boom.
Jones Act supporters still justify the law under the guise that it is vital to U.S. national security. To the contrary, however, the law has led to a maritime sector that is uncompetitive, diminished in size, and increasingly unprepared to play a helpful role in times of war or national emergency. Since the 2003 Iraq War, the Jones Act fleet has declined from 151 ships to 99, and a senior Pentagon official was forced to admit this year that the United States may “need to rethink policies of the past in order to face an increasingly competitive future.” Moreover, in recent natural disasters, such as Hurricane Maria, rather than serving as an asset, the Jones Act functioned as an impediment by disqualifying ships for providing relief.
High economic costs resulting from Jones Act restrictions are robust, and trickle down through numerous industries. While the law’s most direct consequence is to raise transportation costs, which are ultimately reflected in higher retail prices, it also generates enormous collateral damage through excessive wear on the country’s infrastructure, time wasted in traffic congestion, and the accumulated health and environmental toll caused by unnecessary carbon emissions and hazardous material spills from trucks and trains.
Despite these considerable costs, repealing the Jones Act will not be easy. After nearly 100 years, incumbent interests, regulators, and politicians have become used to the privileges of a system that benefits a concentrated few. If Congress is unable to fully repeal the law, the authors offer three important reforms that would help lift the burden of the Jones Act on the U.S. economy. First, the federal government should grant limited cabotage rights to non-Jones Act compliant vessels. Second, permanent exemptions should be granted for Alaska, Hawaii, Puerto Rico, and Guam, which are located many miles from the U.S. mainland. And lastly, Congress should eliminate the burdensome U.S. build requirement.
This announcement comes on the heels of one made earlier this week regarding the “trade war” with China, which is back on 10 days after Treasury Secretary Steve Mnuchin declared it to be “put on hold.” (I guess it was just a rain delay.) On June 15, the administration will publish the final list of Chinese products—about 1,300 products valued at about $50 billion—that will be hit with 25 percent duties. The Chinese government has published its own list of U.S. exports that will be hit with retaliatory duties in China.
In one particularly egregious case from 2014, Michigan amended its franchise auto dealer statute specifically to exclude Tesla from the Michigan market. This amendment was introduced on the eve of the adjournment of the legislature, and it was passed with no debate, no legislator input, and no committee process. In response, and after multiple unsuccessful efforts to gain the cooperation of Michigan regulators and legislators, Tesla finally sued Michigan in order to be able to sell its cars in that state.
In Michigan, the original auto dealer law forbid manufacturers from selling vehicles directly other than through its franchised dealer. Tesla set up shop in the state under the rationale that since the company had no franchised dealers the statute, as written, did not apply. However, bowing to the pressure of auto manufacturers and dealers desperate to protect their market share, state senator Joe Hune quickly moved to introduce and pass, without comment or debate, an amendment to the law, updating the language to essentially bar Tesla’s operation.
Tesla’s current legal actions in response to Michigan’s protectionist legislation asserted first, that the amendment to the auto dealer law is a violation of the dormant commerce clause; and second, that it fails rational basis review under the due process and equal protection clauses of the Fourteenth Amendment.
However, the current statute does not explicitly discriminate against out-of-state commerce and is neutral enough in its wording that the court may take a relaxed view towards its legislative intent. The bigger problem Tesla faces is the precedents coming out of other courts in regards to the dormant commerce clause. The Sixth Circuit has a favorable precedent for Tesla originating from Craigmiles v. Giles, but others set in the Fifth and Ninths circuits do not appear as advantageous.
Tesla and other innovators currently face long odds in courts. Still, the court system is the surest remedy against market incumbents working to inhibit competition. Rather than introduce new federal statutes or more regulations, courts should apply more rigorous rational basis review.
If courts adopted the rigorous rational-basis analysis of Craigmiles, companies such as Tesla, Uber, and Airbnb would stand a fighting chance of enriching consumers with new services, products, and goods—and legislatures could focus their efforts on governance for the benefit of all citizens instead of the established few market incumbents.
A D.C.-based public policy research organization (or "think tank") dedicated to the values of individual liberty, limited government, free markets, and peace.
