by Tevi Troy, Commentary, 2025.
Excerpts:
The Obama team held a series of internal meetings to discuss what to do after the loss of the Senate supermajority. Most aides, including Chief of Staff Rahm Emanuel, suggested that they work with Republicans at this point on a compromise “skinny” plan that Pelosi derisively called “kiddiecare.” Pelosi told Obama, “We’re in the majority. We’ll never have a better majority in your presidency in numbers than we’ve got right now. We can make this work.”
Obama sided with Pelosi. He told his team, “We are this close to the summit of the mountain. We need to try one more time.” Democrats redoubled their commitment to the partisan approach—and began the process of crippling the effectiveness of Washington governance for a generation.
And:
By excluding the input and oversight of the vast majority of the nation’s elected representatives, the bill turned the American system inside out. The legislation would rely on the administrative state to write and execute much of the policy details of Obamacare. For instance, the law contains more than 1,000 mentions of the phrase “the secretary shall”—the secretary in this case being the unelected head of the Department of Health and Human Services. In other words, to avoid negotiation and controversy, the authors in Congress effectively took power away from Congress and gave it to the executive-branch bureaucracy. This passing of the buck from Congress to the administrative agencies would have multiple negative ramifications.
This is one of the best articles, possibly the best article, I’ve read on how the Obamacare experience reduced the role of Congress, not just for Obamacare but also long-term. The whole piece, which is very well written, is worth reading.
HT2 Don Boudreaux.
by Adam N. Michel, Cato at Liberty, January 21, 2025.
Excerpt:
President Donald Trump issued a flurry of Executive Orders (EOs) on January 20, his first day in office. One of the orders instructed government officials to “notify the OECD [Organisation for Economic Co-operation and Development] that any commitments made by the prior administration on behalf of the United States with respect to the Global Tax Deal have no force or effect within the United States.” The notice is a welcome relief from the Biden Treasury Department’s relentless advocacy for a global tax system that would raise taxes on and depress investment by American businesses.
Here’s what I wrote about the issue back in 2009. Forbes titled it, “Will Obama and Gordon Brown Cook Up a Tax Cartel,” Forbes, May 2, 2009.
And while they’re at it, they might discuss a global tax cartel. Various European governments want to “harmonize taxation,” their euphemism for agreeing to keep tax rates high so that high-income workers and investors have less incentive to seek out countries with low tax rates. This high-tax strategy is hampered by small countries, often former British colonies, that have the gall to keep tax rates low. In the past few years, the OECD has pushed vigorously to blacklist such countries, with the idea of imposing sanctions on them. In their book, Global Tax Competition, Cato Institute economists Chris Edwards and Daniel J. Mitchell write that Gordon Brown “has a long track record of undermining the interests of the U.K. territories that are on the OECD blacklist.”
Edwards and Mitchell also point out that in 2000, when Lawrence Summers was President Clinton’s Treasury secretary, he claimed that tax competition among governments was “the dark side to international capital mobility.” Fortunately, with the Clinton administration on its way out, Summers put little effort into supporting the OECD’s anti-tax-competition agenda. But now Summers is President Obama’s main economic adviser. In case you think Summers has forgotten his agenda, he hasn’t. In a paper published in January, Summers and co-author James Hines recognized that the increasingly global economy makes people and capital more mobile and, therefore, will make government hesitant to increase corporate and individual tax rates. But they identified a way to avoid this problem: reduce tax competition between countries.
by Richard Hanania, Richard Hanania’s Newsletter, January 21, 2025.
Excerpt:
There are few things that abundance agenda types hate more than National Environmental Policy Act (NEPA) review, which requires mountains of paperwork and years of litigation before federal and federally-funded projects can be built if they are expected to substantially impact the environment. Here’s an article on just how bad things have gotten. Groups file lawsuits demanding more paperwork, even though they have no interest in what the resulting reports actually show. The entire point is delay and making building things more difficult and expensive.
The Council on Environmental Quality (CEQ) was created to oversee NEPA and ensure agency compliance, coordinating efforts across the federal government. Section 5 of Trump’s main energy EO is called “Unleashing Energy Dominance,” in which the president instructs the CEQ to focus on revising NEPA regulations to expedite the permitting process. Agencies must emphasize speed and certainty in permitting over other considerations. They are also directed to limit environmental considerations to legislated requirements, removing additional elements that introduce delays. This is important, as most laws that get out of hand do not actually require all that much in the underlying legislation. Rather, their mandates end up expanding through actions taken by courts and the executive branch. The new executive order has the potential to scale back environmental review by narrowing the scope of impact assessments and accelerating timelines for project approvals.
by Katarina Hall, Reason, January 21, 2025.
Excerpt:
In a sweeping move to overhaul Argentina’s food trade policies, Javier Milei’s administration officially deregulated food imports and exports on Monday. The reform, outlined in Decree 35/2025, seeks to boost foreign trade, cut bureaucratic red tape, and lower consumer prices.
Federico Sturzenegger, head of the Ministry of Deregulation and State Transformation, explained in a post on X that the measure “seeks cheaper food for Argentines and more Argentine food for the world.”
Under the new policy, food products and packaging certified by countries with “high sanitary surveillance” can now enter Argentina without any additional registration or approval processes. These items will be automatically recognized under the Argentine Food Code, cutting down on administrative delays and costs for importers.
The legislation identifies countries such as Australia, New Zealand, Canada, the United States, Israel, Japan, Switzerland, and the United Kingdom, as well as the European Union, as having similar or higher sanitary standards than Argentina.
I have long advocated doing the same with drug approval: require the FDA to approve a drug if any of the countries identified above has done so. This would occasionally cut years off the approval process and save lives.
by Timothy Taylor, Conversable Economist, January 23, 2025.
Excerpt:
First, here’s a graph showing manufacturing jobs as a share of total US employment since 1939. There’s a boom-and-bust in manufacturing jobs looking at World War II production, but after that, the line drops steadily until the last decade or so. In particular, the share of manufacturing jobs is falling well before the forces of globalization take hold in the 1970s or 1980s, and well before China joins the World Trade Organization and enters global markets in force in the earyl 2000s. A similar pattern of decline in the share of manufacturing jobs holds all over the world. The key underlying factors here over the decades seem to be steadily growing productivity in manufacturing (think automation and robotics, along with just-in-time inventory), along with a general shift to an economy more oriented around services than around goods. Those productivity gains flattened out for a few years after the Great Recession of 2008-09, and the decline in the share of US manufacturing jobs correspondingly eased off for a few years. But lower productivity growth isn’t a path to future prosperity.
Don Boudreaux often points this out, as do I when I give talks.
