Highlights from My Week's Reading
Natalię Dowzicky, “How Florida Beat California to High-Speed Rail,” Reason, September 20, 2023.
Not only is Brightline the first privately funded intercity rail line in the U.S., but it’s also the fastest train in the country outside of the northeast corridor. Topping out at 125 mph in Florida, it will travel from Miami to Orlando in about three hours. For comparison, the Amtrak in the area takes about six and a half hours to complete that same trip.
Mike Reininger, CEO of Brightline, told Reason that passenger rail makes commercial sense under specific conditions, such as the case in Florida, where it connects two populous, tourist-friendly cities that are about 250 miles apart. At that distance, Reininger says, “It is too far to drive and too short to fly. You can approximate the time of flying significantly, improve the time of driving, and you can offer it at a price point that makes it an economic proposition.”
Not surprisingly, though, Brightline has become a subsidy sucker.
Romina Boccia, “Social Security Benefits are Growing Too Fast,” Cato at Liberty, September 21, 2023.
When a Social Security‐eligible worker’s benefits are first calculated, this worker’s past wages are indexed to bring them to the same level as today’s earnings. This is called wage indexing and is based on the growth in average wages in the economy. When the Social Security Administration (SSA) first indexes a worker’s lifetime covered earnings, it does so using the SSA’s Average Wage Index (AWI). The AWI includes all wages that are subject to federal income tax, including wages in excess of the taxable Social Security maximum payroll tax threshold.
Wage indexing gives retirees a benefit amount that reflects the increase in the standard of living over their working careers—even if they didn’t earn commensurate wages. It’s like giving workers retroactive credit for improvements in the economy, including for wage improvements among the highest income earners.
Definitely worth reading carefully.
Christopher Wilcox, “Truck This: Why I’m Leaving the Long-Haul Industry,” American Institute for Economic Research, September 21, 2023.
More recently, environmental regulations requiring manufacturers to reduce emissions gave us the diesel particulate filter (DPF), an exhaust treatment system that replaces a standard muffler. While there is no current federal mandate requiring a DPF, the filters are required by the 2008 California Statewide Truck and Bus Rule, which has incentivized many nationwide fleets to adopt them. The problem with DPFs is the filter system clogs. A lot.
When DPFs go down, trucks roll to a stop. Truckers report having to have a DPF serviced as often as every 5,000 miles, which means lots of lost productivity and stranded cargo. I’ve had four breakdowns over the past two years, and three were due to my DPF. A tow truck driver I spoke to on one of those occasions told me half of his business comes from malfunctioning DPFs. Repairs are a specialized affair, and replacements can cost up to $2,000. When my truck isn’t moving, I’m not earning. And these regulators have required that my truck stand still far too often.
Of course California is in the forefront of regulation.
Fiona Harrigan, “Biden Administration Announces New Measures to Get Migrants to Work,” Reason, September 21 2023.
Yesterday, the Biden administration announced new actions to help get recent immigrants to work, including offering almost half a million Venezuelans a status that will let them live and work in the U.S. legally for the next 18 months. The new measures come at a critical time, as labor shortages persist and cities struggle to provide for newcomers.
Certain Venezuelan migrants are eligible for temporary protected status (TPS), a designation offered to migrants who can’t safely return to their home countries due to armed conflict, environmental disaster, or another temporary safety hazard. Venezuela was first designated for TPS in 2021 due to a severe political and economic crisis perpetuated by Nicolás Maduro’s regime. Under that designation, Venezuelans who came to the U.S. before March 2021 qualified for protection; now, the status will apply to Venezuelans who arrived before the end of July this year. There are currently 16 countries designated for TPS.
If I understand the program correctly, it sounds good: let them work instead of forcing taxpayers to subsidize their living expenses. It’s win-win-win for immigrants, employers and consumers, and taxpayers.
James Herndon, “Keep the Washington Consensus,” Law & Liberty, September 21, 2023.
Despite those deliberate omissions, synergies still allowed the Consensus to exceed the sum of its parts. Opening up foreign direct investment eased privatization. Privatization enabled balanced budgets. Balanced budgets limited inflation, which encouraged foreign direct investment. The common denominators were respect and restraint: leaders had to trust that firms and citizens knew better than the bureaucrats how best to allocate their own labor and resources. That’s why the Consensus’ first beneficiary was always likely to be the poor. After all, funding for primary education and basic healthcare does far more to reduce poverty than subsidies for diesel fuel and national airlines.
In short, Williamson promoted policies that enabled sustainable growth in developing countries with respect for their autonomy and an emphasis on raising prospects for the least fortunate. The Left never forgave him.
It’s the nicest treatment of the Washington Consensus that I’ve read. Lots of good nuggets.