
What Obamacare Hath Wrought
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.
Trump Issues Executive Order Dealing Blow to OECD Global Tax Cartel
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.
The Ultimate Guide to Trump’s Day 1 Executive Orders
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.
Javier Milei Deregulates Food Imports and Exports
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.
Protectionism Fails to Achieve Its Stated Goals
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.
READER COMMENTS
Richard W. Fulmer
Jan 26 2025 at 1:44pm
Only about 7.7% of American workers are employed in manufacturing, yet both the socialist left and the MAGA right are fixated on manufacturing jobs. The left dreams of worker-owned and democratically directed factories, while the right longs for high-paying union jobs that require no more education than a high school diploma.
Both nostalgic for simpler times. The left, because structured, repetitive work is relatively easy to manage and centrally control, and the right, because they believe that real wealth stems only from producing tangible, physical things.
Neither understands that technology has advanced from a hardware-centric to a software-centric world – a world in which production can no longer be measured like widgets coming off an assembly line, and ideas can move mountains.
Alan Goldhammer
Jan 27 2025 at 8:20am
David,
I read the article on Obamacare and did not come to the same conclusion that you did. I’ve had experience with the program for two young family members who have been on Obamacare at different times when they were in school and needed health insurance. Once they got over the hiccups of the initial launch, the website is easy to navigate and there are price and coverage alternatives to choose from. Isn’t this what the desired outcome should be? Like most legislation passed by Congress, the details get delegated out. Do you expect Congress to set up a standing committee to implement a particular law? Most of the time they can’t even pass a budget and appropriation on time.
Troy complains about the use of budget reconciliation but that’s something that has been abused by both Democrats and Republicans and will be abused yet again this year under President Trump. Troy also never addresses the key issue of providing affordable health insurance to those who might not otherwise be able to afford a policy. If he does not like this, let him propose a solution. It’s tiresome reading pundits’ complaints without seeing how they might address the problem they are writing about.
steve
Jan 27 2025 at 6:45pm
I guess I dont understand the drill, baby, drill thing. We are already pumping record amounts of oil/gas. Unless there is some unmet demand I am not aware of, why would oil companies start pumping a lot more oil and drive down prices? Is the plan to demand that the oil companies pump more oil and cut profits?
Steve
Ahmed Fares
Jan 27 2025 at 10:15pm
Shale oil has high decline rates. You have to keep drilling just to keep the same level of production. I used to analyze oil companies years ago, so I knew this, but I asked DeepSeek for a more exact analysis. The answer is long with numbers, so I’m posting a few paragraphs and the conclusion:
DeepSeek question: “forecast us oil production levels absent new shale drilling”
Try DeepSeek yourself with the above query. You can sign in with a Google account. Also, make sure to enable “DeepThink (R1)” in the search box.
DeepSeek
steve
Jan 28 2025 at 11:40am
Thanks Ahmed. I think I understand that. However, the stated goal is actually to greatly increase US oil production so that prices will decrease. Trump claimed that high gasoline prices were a major cause of inflation so if we produce more prices will drop. However, most drilling now is done by fracking and production costs average about $45, conventional drilling about $20-$30 IIRC. (Saudi Arabia can produce at about $10 per barrel.) Current price for oil is close to historical average at about $73 per barrel. So it’s pretty clear I think that more production will cut margins, hence profit.
Why would oil companies do that? My understanding is that oil companies are already sitting on plenty of leases, they produce the huge majority of oil on private land which AFAICT, is not limited. Oil drillers already claim they are pretty well topped out on the ability to drill for that matter.
Steve
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