Rather than posting about anything directly connected to the election, I will write about things that will be with us regardless of who wins.
by Timothy Taylor, Conversable EconomistOctober 31, 2024.
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At least to me, it doesn’t seem like the 4th Industrial Revolution is this different. I have been reading for decades that the Third Industrial Revolution involved “skills-based” technological change, and in this way helped to generate income inequality since about 1980. In addition, very little evidence is currently available on the effects of artificial intelligence. tools at work suggest that they may be particularly useful for low-skilled workers, rather than high-skilled workers. The underlying reason is that AI tools can actually make existing technology more accessible to everyone, which is a huge improvement for those with less knowledge or less skill.
DRH’s comment: Tim’s reasoning, and the reasoning in the article he cites, makes more sense to me than the opinion of recent Nobel laureate Daron Acemoglu.
by Marc Joffe, Cato at LibertyOctober 31, 2024.
Once construction is started, there is no guarantee that it will be completed in six years. Indeed, some projects offer cautionary tales. Honolulu took 12 years to build its 10.75-mile Skyline. Maryland began construction of the 16-mile Purple Line in Washington, DC, in the suburbs of Washington, DC, seven years ago and is not expected to begin carrying passengers for another three years.
When Austin’s light rail begins operating, its impact on traffic congestion may not be as positive. Project sponsors expect 28,500 daily passengers by 2040, but past projections from some agencies have sometimes appeared overly optimistic. In Honolulu, for example, city officials expected 10,000 daily riders for the first phase of its Skyline service, but so far, actual ridership is about one-third of this projection. Rail projects in San Francisco and Southern California have also seen significant shortfalls to meet expected ridership.
Alternatively, many future light rail passengers may switch to the existing bus service. Cap Metro’s 801 Rapid bus occupies most of the route that will be served by the light rail project, and many passengers from this bus route are expected to be light rail passengers. As a result, even if light rail attracts 28,500 passenger trips by 2040, only half of those will replace car trips.
DRH Comment: The late George Hilton, who taught urban transportation through his Ph.D. students (the two in the class were Harry Watson and myself) and the undergraduates at UCLA in the winter quarter of 1973, would have loved Marc Joffe’s article. And Marc Joffe would have loved George’s course. I still remember George saying that, of the many urban mass transit projects of the 1970s (the three he singled out were San Francisco’s BART, which had opened a few months earlier, and Washington’s Metro and Atlanta’s MARTA, which were under construction), that they don’t support he admitted that the project would replace only one or two years of the country’s increase in traffic. What I don’t remember George mentioning is that when these projects were built, they slowed down traffic. And that happened for years. Any cost/benefit analysis should include the amount of people’s time lost over several years. Remember also that we discount the flow of benefits and costs using a reasonable interest rate. So those costs of lost time, done up front, will be huge.
by Timothy Taylor, Conversable EconomistNovember 1, 2024.
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[B]between $11,000 and $65,000 of our family receives no overall financial benefit from increased income. … [A]n an increase in income from $11,000 to $65,000 results in the total or partial loss of most social assistance programs and tax credits. Coupled with an increase in tax liability, these losses fully reduce income gains. …We see that at certain levels of operating income between $11,000 and $65,000 the range of net family resources. It means that the combined loss of social welfare programs exceeds the income gain, which means that the family is facing steep benefits. The first dip occurs at $22,000 when a family loses access to SNAP. The second benefit cliff comes at $27,000, when the family loses TANF. That’s followed by several smaller benefit cliffs that occur due to the loss of school meals, WIC, federal and state EITCs, Medicaid for Adults, and Medicaid for Children/CHIP. Finally, at $61,000 the last and largest benefit occurred, which included the loss of CCDF child care assistance.
The authors call this the “benefit rock.” I have sometimes called it the “poverty trap” (for example, here and here), because of the disincentive for work that provides poor and near-poor households. There is no easy way to deal with this situation. Reducing benefits for low-income families has an obvious impact on those families. Phased out benefits, as incomes rise, would mean providing benefits to more households and would be more expensive. Ultimately, I think our society ultimately relies on the fact that many low-income families would really like to be independent, work, and avoid or reduce their use of public assistance. But for some low-income families, doubting the work of the poverty trap will bite.
DRH Note: Read that first sentence and let it sink in. In a large population—tens of millions of households—there is little financial benefit to working, at least in the upper economies.
The late Hoover colleague Martin Anderson, in his writings about welfare, said that there are 3 goals that people usually want in a welfare system and that you can achieve at least 2: (1) a system with good incentives to get off welfare, (2) a generous system, and (3) ) and the least expensive system.
That’s why welfare reform in the mid-1990s made a lot of sense and actually worked until the federal government overturned the laws. It limited how long people could be on welfare at one time and for a lifetime. Of course, welfare in the narrow sense is only one part of welfare.
by Daryl James and Renee Flaherty, The reasonOctober 29, 2024.
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Certificate of need (CON) laws exist in various forms in 38 states and Washington, DC The stated goal of such laws is to keep costs down by preventing overinvestment in any one market. If regulators decide that an area already has enough of any type of service, they can block new construction.
As a result, no one in North Carolina can open or expand certain medical facilities without the approval of these regulators. Even buying an MRI scanner without their permission would be illegal. These restrictions prevent Singleton from using his clinic in New Bern for many of the surgeries he performs. He has to drive two miles down the road to the opponent’s office, as it belongs to a major health professional. This unnecessary red tape increases costs and reduces planning options, and patients suffer.
DRH Comment: The abbreviation CON is appropriate.
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