In her first economic policy speech as the 2024 Democratic presidential nominee, Kamala Harris rightly criticized Donald Trump for favoring steep tariffs, saying her Republican opponent "wants to impose what is, in effect, a national sales tax on everyday products and basic necessities that we import from other countries." But in the same speech, Harris pitched a half-baked idea that is just as economically dubious, promising to crack down on "price gouging" by the grocery industry.

That proposal is so misguided that it provoked undisguised skepticism from mainstream news outlets such as CNN, the Associated Press, The New York Times, and The Washington Post, along with criticism by Democratic economists. It showed that Harris joins Trump in pushing populist prescriptions that would hurt consumers in the name of sticking it to supposed economic villains.

"If your opponent claims you're a 'communist,'" Post columnist Catherine Rampell suggested, "maybe don't start with an economic agenda that can (accurately) be labeled as federal price controls." Harvard economist Jason Furman, who chaired President Barack Obama's Council of Economic Advisers, was equally scathing.

"This is not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality," Furman told the Times. "There's no upside here, and there is some downside."

That downside stems from any attempt to override market signals by dictating prices. High prices allocate goods to consumers who derive the greatest value from them, encourage producers to expand supply, and spur competition that helps bring prices down.

Without those signals, you get hoarding and shortages. This is not some airy-fairy theory; it reflects bitter experience since ancient times with interventions like the one Harris proposes.

Consider what happened when President Richard Nixon imposed wage and price controls in the 1970s. "Ranchers stopped shipping their cattle to the market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets," Daniel Yergin and Joseph Stanislaw note in their 1998 book on the rise of free markets.

Or consider what happened more recently with eggs. Thanks to avian flu, Furman noted, "egg prices went up last year" because "there weren't as many eggs," but the high prices encouraged "more egg production." If federal regulators had tried to suppress egg prices, they would have short-circuited that market response.

Harris, of course, says she would target only unjustified price increases, the kind that amount to "illegal price gouging" by "opportunistic companies." But as she emphasizes, there currently is no such thing under federal law, and any attempt to define it would be plagued by subjectivity and a lack of relevant knowledge.

The fact that Harris pins the sharp grocery price inflation of recent years on corporate greed suggests that her judgment about such matters cannot be trusted. Economists generally rate other factors—including the war in Ukraine as well as pandemic-related supply disruptions, shifts in consumer demand, and stimulus spending—as much more important.

High profits, in any event, are another important signal that encourages investment and competition. By forbidding "excessive profits," Harris' proposed price policing would undermine the motivation they provide.

According to the most recent numbers, the annual inflation rate dropped below 3 percent as of July. With inflation cooling, this might seem like a strange time for Harris to resuscitate an idea that was already proving disastrous thousands of years ago. But as the Times notes, her message "polls well with swing voters."

The broad tariffs that Trump favors, which Harris condemns as "a national sales tax" that would "devastate Americans," also poll well in the abstract. But they are popular only until voters consider the consequences.

In a recent Cato Institute survey, for example, 62 percent of respondents favored a tariff on "imported blue jeans," but that number plummeted when they were asked to imagine the resulting price increases. Harris likewise is counting on voters who like what she says but do not contemplate what it would mean in practice.

© Copyright 2024 by Creators Syndicate Inc.

The post Kamala Harris' 'Price Gouging' Ban: A New Idea That Has Failed for Thousands of Years appeared first on Reason.com.

Amid all the competing headlines of the 2024 election, there may be no more bread-and-butter issue—literally—than how much Americans are paying to put food on their tables. The GOP is gearing up to attack the Biden-Harris administration for escalating grocery store bills, while presumptive Democratic nominee Kamala Harris has now responded with her own plan to fight higher food prices. 

One of the hottest items in this political food fight is unquestionably the ongoing litigation from the Federal Trade Commission (FTC) attempting to block the Kroger-Albertsons grocery store merger. A host of Democratic lawmakers recently joined the legal fight, arguing that any potential merger would raise prices, increase food deserts, and disproportionately hurt unionized labor. As part of her new food price plan, Harris included a call for aggressive antitrust crackdowns in the food and grocery industry, mentioning the Kroger-Albertsons merger by name in her speech this week.

None of the arguments against the merger make much sense on the merits, but the FTC—and the Democratic Party writ large—are stacking the legal deck to achieve a predetermined outcome that conveniently aligns with their policy priorities.

The saga started back in October 2022, when The Kroger Company and Albertsons Companies Inc. (the parent company for popular grocery chains like Safeway and Acme, among others) announced their plans for a $24.6 billion merger. The FTC promptly launched a 16-month investigation, culminating in a lawsuit in federal court to block the proposed merger.

Kroger is the fourth-largest grocery store chain in America—behind Walmart, Amazon, and Costco—and Albertsons is the fifth-largest. Once merged, the combined company would rise to third on the list. On the surface, this may seem to provide some support for the FTC's position, but American shoppers would be wise to read the fine print.  

In truth, if the deal were to proceed, a merged version of Kroger and Albertsons would still only make up 9 percent of overall grocery sales. To put this in further perspective, consider that Walmart—the nation's largest grocery provider—would continue to operate more stores (including its Sam's Club outlets) than a Kroger-Albertson combo and maintain grocery revenue that is more than twice that of the merged company. 

One could easily argue, in other words, that far from being a monopoly, a Kroger-Albertsons joint venture would be the best hedge against potential monopolies forming among the even-more-dominant firms above it on the grocery store food chain. But incredibly, the FTC pretends that two of those larger companies don't exist in the marketplace at all simply by working with their own definitions.

The FTC contends that only local brick-and-mortar supermarkets (what one might think of as a "traditional" grocery store) and hypermarkets (such as Walmart or Target, which sell groceries alongside other goods) count in the market for groceries. This narrow definition completely circumvents wholesale-club stores (such as Costco) and e-commerce companies that sell groceries (such as Amazon). 

Given that Amazon and Costco just happen to be the second- and third-largest grocery retailers in the United States, the agency is blatantly gerrymandering the definition of the marketplace. The agency's longstanding position is that the only relevant market is stores where consumers can buy all or nearly all of their weekly groceries, which begs the question: Has anyone at the FTC stepped foot inside a Costco recently? Many Americans use club stores like Costco and BJ's Wholesale Club as their primary grocery stores, with around 15 percent of Americans ages 18–34 reporting that they do most of their grocery shopping at Costco.  

Pretending that the internet doesn't exist makes even less sense. As the International Center for Law and Economics notes, 25 years ago a mere 10,000 households took part in online shopping, whereas today 12.5 percent of consumers (or over 16 million people) purchase their groceries "mostly or exclusively" online. Amazon is also preparing to make its own big push into brick-and-mortar grocery retailing as well, with CEO Andy Jassy saying last year that the company must "find a mass grocery format that we believe is worth expanding broadly."

Beyond the FTC's tortured marketplace definitions, its arguments for the alleged harms of a conjoined Kroger-Albertsons are equal parts unconvincing and outdated. In its complaint, the agency points to escalating grocery prices in recent years, and Harris echoed this by stating that she would enact a "ban on price gouging on food and groceries" by directing the FTC to impose "harsh penalties" on grocers. She also pledged to continue aggressive antitrust enforcement in the food sector, going so far as to highlight the Kroger-Albertsons merger as an example of the type of deal that could increase prices. However, as many commentators have pointed out, food price increases likely have more to do with inflation than any lack of competition in grocery markets.

In addition to the consumer price harms the FTC alleges, over half of the agency's legal complaint focuses on the alleged harm the proposed merger would cause to the unionized workers at Kroger and Albertsons. Both companies are heavily unionized—in contrast to Walmart and Amazon—and the agency claims that a combined company would have more leverage over unions given that the unions would no longer be able to play one company off against the other as a negotiating tactic. This glosses over the fact that the demand for labor is particularly competitive in the retail sector broadly, and workers could easily just jump ship to a different employer in the face of any exploitative terms pushed by the merged firm.

A final concern highlighted by some Democratic lawmakers is that a merged company could result in more store closures that lead to geographical areas within which there are few or no grocery options. Once again, this ignores the rise of club stores like Costco and online/home delivery grocery options. These alternatives reduce the plausible areas within which such food deserts can take hold, showing once again a poor understanding of the modern grocery marketplace.

Despite the many dubious underpinnings of the FTC's challenge, it fits with the Biden administration's aggressive antitrust emphasis over the past four years. While some observers were holding out hope that a Harris administration might curtail overzealous antitrust enforcement, her new food price agenda has poured cold water all over that (already wishful) thinking.

The post Harris Joins the FTC's Food Fight Against Kroger-Albertsons Merger appeared first on Reason.com.

Robert F. Kennedy Jr. won applause at the Libertarian National Convention by criticizing government lockdowns and deficit spending, and saying America shouldn't police the world.

It made me want to interview him. This month, I did.

He said intelligent things about America's growing debt:

"President Trump said that he was going to balance the budget and instead he (increased the debt more) than every president in United States history—$8 trillion. President Biden is on track now to beat him."

It's good to hear a candidate actually talk about our debt.

"When the debt is this large…you have to cut dramatically, and I'm going to do that," he says.

But looking at his campaign promises, I don't see it.

He promises "affordable" housing via a federal program backing 3 percent mortgages.

"Imagine that you had a rich uncle who was willing to cosign your mortgage!" gushes his campaign ad. "I'm going to make Uncle Sam that rich uncle!"

I point out that such giveaways won't reduce our debt.

"That's not a giveaway," Kennedy replies. "Every dollar that I spend as president is going to go toward building our economy."

That's big government nonsense, like his other claim: "Every million dollars we spend on child care creates 22 jobs!"

Give me a break.

When I pressed him about specific cuts, Kennedy says, "I'll cut the military in half…cut it to about $500 billion….We are not the policemen of the world."

"Stop giving any money to Ukraine?" I ask.

"Negotiate a peace," Kennedy replies. "Biden has never talked to Putin about this, and it's criminal."

He never answered whether he'd give money to Ukraine. He did answer about Israel.

"Yes, of course we should,"

"[Since] you don't want to cut this spending, what would you cut?"

"Israel spending is rather minor," he responds. "I'm going to pick the most wasteful programs, put them all in one bill, and send them to Congress with an up and down vote."

Of course, Congress would just vote it down.

Kennedy's proposed cuts would hardly slow down our path to bankruptcy. Especially since he also wants new spending that activists pretend will reduce climate change.

At a concert years ago, he smeared "crisis" skeptics like me, who believe we can adjust to climate change, screaming at the audience, "Next time you see John Stossel and [others]… these flat-earthers, these corporate toadies—lying to you. This is treason, and we need to start treating them now as traitors!"

Now, sitting with him, I ask, "You want to have me executed for treason?"

"That statement," he replies, "it's not a statement that I would make today….Climate is existential. I think it's human-caused climate change. But I don't insist other people believe that. I'm arguing for free markets and then the lowest cost providers should prevail in the marketplace….We should end all subsidies and let the market dictate."

That sounds good: "Let the market dictate."

But wait, Kennedy makes money from solar farms backed by government guaranteed loans. He "leaned on his contacts in the Obama administration to secure a $1.6 billion loan guarantee," wrote The New York Times.

"Why should you get a government subsidy?" I ask.

"If you're creating a new industry," he replies, "you're competing with the Chinese. You want the United States to own pieces of that industry."

I suppose that means his government would subsidize every industry leftists like.

Yet when a wind farm company proposed building one near his family's home, he opposed it.

"Seems hypocritical," I say.

"We're exterminating the right whale in the North Atlantic through these wind farms!" he replies.

I think he was more honest years ago, when he complained that "turbines…would be seen from Cape Cod, Martha's Vineyard… Nantucket….[They] will steal the stars and nighttime views."

Kennedy was once a Democrat, but now Democrats sue to keep him off ballots. Former Clinton Labor Secretary Robert Reich calls him a "dangerous nutcase."

Kennedy complains that Reich won't debate him.

"Nobody will," he says. "They won't have me on any of their networks."

Well, obviously, I will.

I especially wanted to confront him about vaccines.

In a future column, Stossel TV will post more from our hourlong discussion.

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post RFK Jr. Pays Lip Service to the Debt While Pushing Policies That Would Increase It appeared first on Reason.com.

America's most insane occupational licensing law is about to get a whole lot better.

Louisiana is the only state in the country that requires florists to be licensed by the government. A bill that is now on the way to Gov. Jeff Landry's desk sadly won't change that fact, but it will eliminate the mandatory test that prospective florists in Louisiana must pass before being allowed to earn a living by placing different types of flowers together in an arrangement. Going forward, obtaining a florist license will require only the payment of a fee to the state.

The bill cleared its final legislative hurdle with a unanimous vote in the state House on Wednesday. Landry, a Republican who has supported other licensing reforms, is expected to sign it.

Requiring any sort of government permission slip before someone can work as a florist is obviously ridiculous, and Louisiana's florist-testing regime was a uniquely perverse and protectionist scheme. This week's passage of state Rep. Mike Bayham's (R–Chalmette) reform bill is the culmination of a two-decade battle to eliminate it.

That effort began in the early 2000s, when the Institute for Justice filed a lawsuit challenging the florist licensing law. One of the plaintiffs in that case, a woman named Sandy Meadows, had been fired from her job at a Baton Rogue grocery store when state inspectors discovered she had been arranging flowers without the proper license. She tragically died, unemployed and in poverty, before the case could be heard.

Several subsequent lawsuits and legislative efforts have failed to kill the florist licensing law, although Louisiana lawmakers did adopt changes in 2012 that put an end to the practical portion of the licensing exam. Yes, before that, would-be florists were not only quizzed on their knowledge of the profession but also on their subjective skills at arranging flowers. The judges for the exam, naturally, were already-licensed florists.

Even after the exam was pared back to being only a written test, the requirements were still quite onerous, Sarah Harbison, general counsel for the Pelican Institute, a free market think tank that supported the reform bill, told Reason this week. The test would be offered only a few times a year, and would-be licensees had to travel to Baton Rouge to take it in person.

The arguments for maintaining the florist license strain credibility. During a Louisiana Senate hearing on the reform bill earlier this month, Agriculture Commissioner Mike Strain fretted about the risk of "pest and disease problems" if the licensing requirement was removed. Louisiana does not require a license to sell cut flowers—which would presumably carry the same, truly terrifying risks—but does require a license if you want to arrange different types of flowers into a bouquet. And if Louisiana is protecting the public from the danger of unlicensed floristry, why isn't there mass chaos in the 49 other states where florists can work without first passing a government-issued test?

"This will lead to greater sales of flowers. This will help people get jobs. This will expand opportunities for people to sell flowers, and this will get rid of a needless regulation," Bayham said last month when the House first approved his bill.

Good riddance to Louisiana's absurd florist licensing exams. But this week's reforms do leave one dilemma: What will be America's worst licensing law now?

The post Louisiana Finally Fixes America's Dumbest Licensing Requirement appeared first on Reason.com.

At a Republican presidential primary debate in January 2016, Sen. Marco Rubio (R–Fla.) succinctly explained why using tariffs as a foreign policy tool would backfire against Americans.

"We are all frustrated with what China is doing, but I think we need to be very careful with tariffs and here's why," Rubio said, directly challenging Donald Trump over his call for placing tariffs on goods imported from China.

"China doesn't pay the tariff. The buyer pays the tariff," Rubio explained. "If you send a tie or a shirt made in China into the United States, and an American goes to buy it in the store, and there is a tariff on it, [the tariff] gets passed on in the price to the consumer."

In an essay published this week at The American Conservative, Rubio argued for exactly the opposite. Trump's plan to place even more tariffs on China if elected to another term in the White House would be "good for the economy insofar as they counteract market inefficiencies created by adversarial trade practices," Rubio writes, adding that it will "prevent or reverse offshoring, preserving America's economic might and promoting domestic investment."

The economics of tariffs have not changed in the past eight years. Rubio has.

The once-independent-minded senator from Florida has recently gone all-in on nationalist economics—presumably in an attempt to flatter Trump, a man Rubio once called a "dangerous con man." The senator has authored other essays recently advocating for industrial policy (he supports the "right" kind of industrial policy, which would of course be very different from the wrong kind of industrial policy President Joe Biden is pursuing, even though it's unclear how they would actually differ) and has publicly pushed back at critics who have called out his economic fallacies.

But the current version of Rubio is bound to lose this debate with his 2016 alter ego, who has the facts firmly on his side.

Indeed, just as Rubio predicted in 2016, the tariffs imposed by former President Donald Trump have been overwhelmingly paid by American businesses and consumers. Those groups "bore nearly the full cost of these tariffs because import prices increased at the same rate as the tariffs," the U.S. International Trade Commission (ITC) found in its five-year review of Trump's tariff policies. While Trump's tariffs on steel and aluminum spurred a small increase in domestic production of those metals, the ITC found, the downstream costs of the tariffs swamped the modest benefits.

Other studies found similar results. Here's one authored by economists at the Federal Reserve, Princeton University, and Columbia University that found Trump's tariffs cost U.S. consumers $3 billion per month. Here's a study by economists at the University of Chicago that found Trump's tariffs on washing machines hiked consumer costs by more than $1.5 billion. A study from Moody's Investor Service that found American consumers paid roughly 93 percent of the tariff costs. Other studies have come to similar conclusions.

In his American Conservative essay, Rubio tellingly doesn't attempt to offer evidence to contradict these well-established facts. Instead, he flippantly declares that the "'experts' got it wrong" and adds that "economists simplistically declare 'The policy is very bad. Tariffs make consumers poorer. They shrink the economy.'"

Perhaps the economists say those things because they are true and because the past six years have confirmed as much. It's fine to be skeptical of experts, but Rubio is the one making simplistic declarations here.

And if tariffs were the solution to anything, wouldn't there be evidence to support that claim by now? Rubio is engaging in a rhetorical trick more commonly used by progressives by suggesting that the lack of evidence in favor of a government policy isn't indicative of failure but only means that it hasn't been tried hard enough. Conservatives used to roll their eyes at that tactic.

Perhaps Rubio will parlay all these mental gymnastics and pro-Trump sycophancy into a vice presidential nomination or some other plum gig. For now, however, he's provided a perfectly pathetic illustration of the current state of the Republican Party, which has abandoned principle and reality to swoon for Trump's silly notions about what makes countries prosperous.

"The best thing we can do to protect ourselves against China economically is to make our economy stronger," Rubio said during that same GOP primary debate in 2016, adding that the best way to boost economic growth would be to cut taxes on American businesses and consumers.

Eight years later, Rubio is advocating for raising taxes on Americans in order to combat China. It makes no sense and we know that Rubio knows better, even if he no longer has the cojones to say so.

The post Marco Rubio Used To Know How Tariffs Work. What Happened? appeared first on Reason.com.

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

As Argentine President Javier Milei continues to slash government spending, he aims to limit state support for local film production too, sparking protests from the industry. But rather than hinder the nation's film industry, Milei's reforms could encourage innovation among Argentine filmmakers and lead to a domestic cinematic boom. 

Government intervention reaches every facet of Argentine culture, from radio and television to music and literature, but nowhere is it more visible than in cinema. Argentina follows the French model of cultural protectionism, where a government agency farms taxes from the film industry to fund domestic production.

Except for a few countries with large film industries, several nations—especially in Europe and Latin America—have adopted different variations of the French model, arguing that their domestic markets are not large enough to sustain private movie studios. The allure of the French model lies in its potential for governments to promote specific values through film. It's equally appealing to filmmakers who believe studio interference and mass market appeal compromise their artistic visions. Video essayist Evan Puschak claims the French model "support[s] an independent cinema that is bold in terms of market standards and that cannot find its financial balance without public assistance." 

But the French model is flawed, and nowhere are these flaws more visible than in Argentina, where the National Institute of Cinema and Audiovisual Arts (INCAA) carries it out.

The main issue with the INCAA is its fiscal voracity: Beyond its 10 percent cut of every movie ticket, the institute collects taxes from the entire telecommunications sector. More recently, it has begun seizing revenue from streaming platforms. As a result, prices have skyrocketed, rendering movie theater outings and home movie watching unaffordable luxuries for many Argentines.

What does the INCAA provide in return to taxpayers? Very little. 

Since its establishment, the organization has been plagued with inefficiencies. Argentina's cinema law allocates half of the INCAA's revenue solely to administrative expenses, leaving the other half for its purported function of film production. But in practice, as much as 70 percent of the INCAA's funds end up in the administrative sinkhole while the institute operates at a deficit, relying on subsidies from the national government.

When it comes to film promotion, rather than tying its grants to commercial success, the INCAA distributes subsidies without taking into account any audience feedback. The results speak for themselves: Out of the 241 Argentine movies released in 2023, less than 20 had over 10,000 viewers in theaters, and only three of those made a profit at the box office. Most Argentines choose to watch foreign productions instead, with only around 10 percent of ticket sales going to domestic films. 

Argentine movie critic Gustavo Noriega wrote that "an Argentine filmmaker who doesn't find success is equivalent to an unproductive public employee."

The French model has failed to bring innovation and profit to the Argentine film industry. Film journalist Leonardo D'Espósito tells Reason that Argentine cinema has become "stagnant within a few themes" and "inoffensive, innocuous." Instead, D'Espósito says filmmakers focus on "surface-level, minimal, folkloric accidents."

But things are changing. In prioritizing Argentina's socioeconomic emergencies, Milei plans to reduce the state's footprint in cinema and the arts. While the INCAA falls under the Ministry of Human Capital, Milei plans to limit INCAA spending, establish criteria of accountability and efficiency, and offer incentives to supplement the grants with private investment. Ultimately, these measures have the potential to transform Argentine cinema from a fledgling industry to a market ripe with potential. 

"They shouldn't be afraid of the market," Argentine filmmaker Ariel Luque tells Reason, referring to his colleagues. In Argentina, "film schools don't teach any other way of funding besides the INCAA. People tell me they were never taught how to do a market study or seek investors." Luque's support of Milei has led to hostility from within the film community, which he says has been co-opted "for Gramscian purposes" by Kirchnerism, the left-wing movement that ruled Argentina before Milei.

"Cinema stopped being about the public and became about propaganda," Luque says. "There's no cinema without an audience….The state as a producer doesn't work. State intervention in art is always self-serving."

Although skeptical of a withdrawal of state support for film, D'Espósito is optimistic about some of Milei's reforms. "Great works," he says, are those that show "'the local' touch on universal themes" and can "captivate other spectators" from different cultures. And those can be translated to other cultures, captivate other spectators," he said. He is hopeful that Milei's changes could lead to a realistic, market-friendly, and export-oriented film policy, citing South Korea as an example.

Milei's plans do not mean the demise of Argentine cinema. Instead, they offer filmmakers an opportunity to showcase their ingenuity and tap into the financial resources available in the global market.

The post Milei's Free Market Reforms Can Reshape Argentine Cinema appeared first on Reason.com.

Former President Donald Trump's decision to impose huge new tariffs on imported steel came with an explicit promise about resurrecting the American steel industry.

"We're bringing it all back," Trump told reporters in May 2018 as he ordered the placement of 25 percent tariffs on nearly all steel imported into the United States. In exchange for making steel prices "a little bit more expensive," Trump believed the tariffs would boost domestic production "like it used to be in the old days when we actually had steel," he said in August of that same year. And when campaigning for reelection a year later, he was eager to claim credit for taking the steel industry from "dead" to "thriving."

But nearly six years after those tariffs were announced, government data show that America's annual steel output has fallen below the level recorded in 2017—the last full year before Trump's tariffs were imposed.

America produced 80 million metric tons of raw steel in 2023, according to new data from the U.S. Geological Survey (USGS), which tracks the annual output of iron, steel, and other industrial commodities. That's down from 80.5 million metric tons of steel produced in 2022.

Both figures ring in below the 81.6 million metric tons that were poured out of American steel mills in 2017.

The USGS data show that Trump's tariffs may have helped goose domestic steel production in the first few years after they were implemented. Production rose to 86.6 million metric tons in 2018 and 87.8 million metric tons in 2019, before cratering in 2020 as a result of the COVID-19 pandemic. Production bounced back in 2021, as American steel mills produced 85.8 million metric tons of raw steel that year.

Those modest gains in the immediate aftermath of the tariffs seem to have faded away over the past two years—despite President Joe Biden's unwillingness to remove the Trump tariffs, which have hammered steel-consuming industries and have added to inflation.

That pattern—a short-term boost in production followed by a decline later—is exactly what economists would expect to happen after tariffs are imposed, wrote Ed Gresser, a former assistant U.S. trade representative and vice president and director for trade and global markets at the Progressive Policy Institute.

Gresser noted that large new tariffs typically create a four-stage chain of events: First, an increase in prices; then, a shift toward domestic production as buyers try to avoid paying the new tax; next, a decline in consumption by domestic industries that consume the tariffed product as they fall behind competitors elsewhere in the world; and finally, that decline in domestic demand rebounds onto the protected producers who see fewer orders for their products—in this case, steel.

When the Commerce Department formally announced Trump's tariffs in 2018, it waved away concerns about the last step in that process.

"If a reduction in imports can be combined with an increase in domestic steel demand" that would result from military and infrastructure spending, then the Trump tariffs "will enable U.S. steel mills to increase operations significantly in the short-term and improve the financial viability of the industry over the long-term," the department predicted.

That plainly hasn't happened. The short-term boost provided by the tariffs has faded and the artificially higher price of steel that American industries (and consumers) now must pay appears to be sapping demand for steel.

The two-year decline in steel output (during a period of robust economic growth, too) makes it easy to assess the Trump steel tariffs as their sixth birthday approaches. There is no need to weigh the benefits of the tariffs against their costs—even though the costs overwhelm the benefits—and no need to be distracted by the theoretical debates about how tariffs supposedly improve American national security.

Tariffs were supposed to resurrect the steel industry. Instead, America now produces less steel than it did before the tariffs were imposed. The debate is over. Trump's steel tariffs have failed.

The post American Steel Production Has Fallen to Pre-Tariff Levels appeared first on Reason.com.

The government and private companies spy on us.

My former employee, Naomi Brockwell, has become a privacy specialist. She advises people on how to protect their privacy.

In my new video, she tells me I should delete most of my apps on my phone.

I push back. I like that Google knows where I am and can recommend a "restaurant near me." I like that my Shell app lets me buy gas (almost) without getting out of the car.

I don't like that government gathers information about me via my phone, but so far, so what?

Brockwell tells me I'm being dumb because I don't know which government will get that data in the future.

Looking at my phone, she tells me, "You've given location permission, microphone permission. You have so many apps!"

She says I should delete most of them, starting with Google Chrome.

"This is a terrible app for privacy. Google Chrome is notorious for collecting every single thing that they can about you…[and] broadcasting that to thousands of people…auctioning off your eyeballs. It's not just advertisers collecting this information. Thousands of shell companies, shady companies of data brokers also collect it and in turn sell it."

Instead of Google, she recommends using a browser called Brave. It's just as good, she says, but it doesn't collect all the information that Chrome does. It's slightly faster, too, because it doesn't slow down to load ads.

Then she says, "Delete Google Maps."

"But I need Google Maps!"

"You don't." She replies, "You have an iPhone. You have Apple Maps…. Apple is better when it comes to privacy…. Apple at least tries to anonymize your data."

Instead of Gmail, she recommends more private alternatives, like Proton Mail or Tuta.

"There are many others." She points out, "The difference between them is that every email going into your inbox for Gmail is being analyzed, scanned, it's being added to a profile about you."

But I don't care. Nothing beats Google's convenience. It remembers my credit cards and passwords. It fills things in automatically. I tried Brave browser but, after a week, switched back to Google. I like that Google knows me.

Brockwell says that I could import my credit cards and passwords to Brave and autofill there, too.

"I do understand the trade-off," she adds. "But email is so personal. It's private correspondence about everything in your life. I think we should use companies that don't read our emails. Using those services is also a vote for privacy, giving a market signal that we think privacy is important. That's the only way we're going to get more privacy."

She also warns that even apps like WhatsApp, which I thought were private, aren't as private as we think.

"WhatsApp is end-to-end encrypted and better than standard SMS. But it collects a lot of data about you and shares it with its parent company, Facebook. It's nowhere near as private as an app like Signal."

She notices my Shell app and suggests I delete it.

Opening the app's "privacy nutrition label," something I never bother reading, she points out that I give Shell "your purchase history, your contact information, physical address, email address, your name, phone number, your product interaction, purchase history, search history, user ID, product interaction, crash data, performance data, precise location, course location."

The list goes on. No wonder I don't read it.

She says, "The first step before downloading an app, take a look at their permissions, see what information they're collecting."

I'm just not going to bother.

But she did convince me to delete some apps, pointing out that if I want the app later, I can always reinstall it.

"We think that we need an app for every interaction we do with a business. We don't realize what we give up as a result."

"They already have all my data. What's the point of going private now?" I ask.

"Privacy comes down to choice," She replies. "It's not that I want everything that I do to remain private. It's that I deserve to have the right to selectively reveal to the world what I want them to see. Currently, that's not the world."

COPYRIGHT 2023 BY JFS PRODUCTIONS INC.

The post Government Is Snooping on Your Phone appeared first on Reason.com.

Jakarta, Indonesia—The central business district of Indonesia's 11 million-person capital has the social contrast found in many other developing world megacities. Modern skyscrapers accommodate Indonesia's elite, while shabby informal villages spread from the base of such buildings. I wanted to experience this latter, more common, style so one morning my translator Julya and I walked a few minutes from my upscale French hotel chain across a dirty canal and into a village.

The standardized First World planning aesthetic of square buildings and engineered roadways quickly yielded to clustered huts organized along a twisty network of alleys. This village style is common in the Third World, a bastion of organic, market-oriented development that often withstands the modernization plans of city officials, even in central areas. It bears a striking resemblance to a popular concept in the Western urban planning world: the "superblock."

In superblocks, wide roads and streets are spaced far apart rather than allocated frequently on a grid pattern. The area in between, too condensed to accommodate cars, is reserved for pedestrians, motorbikes, buildings, and courtyards, with alleyways connecting it all.

Such blocks were the historical default before cities were planned for automobiles and before machines made clearing rights of way much easier. Paths would extend along routes that were topographically easy and would be cleared just wide enough for needed pass-throughs.

European villages with their hilly outdoor staircases fit the superblock stereotype, but the style has even deeper roots in Asia, with the oldest known example in China. In their contribution to the book Governing Cities: Asia's Urban Transformation, scholars Daixin Dai and George R. Frantz describe the ones planned in 1036 B.C. for the ancient city of Chengzhou. The pattern persisted through the millennia; 1400s Beijing, according to urbanNext, consisted of "blocks of houses on 150-meter hutong nested in 1,000-meter superblocks," themselves found in larger structures called "megablocks."

Superblocks were common in the colonial and industrial-era U.S., with Philadelphia, for example, growing into a maze of tight alleyways for horse carriages. Savannah, Georgia, was planned for superblocks—still partially intact today—and there are still scattered examples throughout the Northeast and Midwest.

Modern planners increasingly recognize the benefits of superblocks and want to bring them back. Cutting off large residential segments of the city to cars reduces traffic deaths, air pollution, and other negative externalities. The idea has been proposed in Los Angeles, where the City Council hopes to implement a pilot superblock in the city center, and in Seattle, where one is proposed for the Capitol Hill neighborhood.

Urban planners tend to be progressives, and superblock promoters think their idea will be achieved through government planning. The most successful First World superblock retrofit was pushed through that way, in Barcelona. There, the government prohibited automobile traffic through several thoroughfares in the 2010s, allowing pedestrians to move through freely; the authorities hope to create 500 such blocks. Beyond just alleys, a number of blocks have shops, courtyards, and parks.

The effort caused car storage in one Barcelona neighborhood to fall 82 percent. The change has plenty of fans: The World Health Organization reports that in one converted district, residents experienced "a perceived gain in well-being, tranquility and quality of sleep." And it was clearly a government project. As David Roberts wrote in Vox almost five years ago, Barcelona "has always been an intentional city, closely conceived and constructed by central planners." Unsurprisingly, it was planners, in turn, who undid the city's grid and instilled superblocks.

But across the developing world, the opposite is true. In Africa, Asia, and Latin America, superblocks remain the de facto market-driven development pattern, for much the same reasons they were in the ancient world. Most of the population doesn't own cars and is not in an economic position to afford more space. So they maximize the space they have, causing superblock shantytowns to pop up on hillsides, farmland, or even infill urban areas that are being illegally "invaded." The poorer the area, the more devoid it will be of setback requirements, parking minimums, and similar regulations—and the likelier it will be to yield the superblock vernacular.

***

We got a sense of the economic reasons why when walking through the Jakarta village, called Kebon Jahe. This is one of central Jakarta's many urban villages—a neighborhood format known to locals as perkampungan. Kebon Jahe literally is a superblock, in that the entire boundary is one big block of a dozen or so square acres, flanked by big arterial roads but with no significant through roads.

We entered the village wanting to learn how it got planned (or unplanned) to look this way. Julya, a native to the Jakarta area, knew we must first talk to the neighborhood chief.

After veering down one alley and asking around, we were taken down an even smaller alley and introduced to Budi Aprianto. A middle-aged man, he is one of 15 village chiefs, all democratically elected by the block's roughly 1,500 residents.

Kebon Jahe, he explained, was colonized in the 1700s by the Dutch, who built a cemetery there. When Indonesians got back control of the land during the 1940s revolution, the area was converted into farmland and a livestock market. The buildings that exist now began rising in the 1970s, to accompany population demands in central Jakarta. The village has not grown through the efforts of a master developer. A collection of families, many of them in the area for generations, had erected their own homes.

How, I asked, did a sophisticated alley network get built in such a decentralized growth system? After I paid a small bribe, he agreed to show me around.

The network, he explained, is as coordinated as it looks, forming a U shape that lets residents access the whole village. But there are three right-of-way categories.

The first consists of the relatively wide roads that form the entry of Kebon Jahe before hitting up against alleys. These were built by the government, allow cars to park (haphazardly), and have formal retail, such as the popular Alfamart chain.

The second, and primary, form of right of way is the alleys. They're 6 feet to 12 feet wide, meaning they can only handle pedestrians and motorbikes, and they accommodate most of the retail, with merchants setting up stores along or even into the alley. The government paves them and manages them for safety and clearance, but they follow a market logic. They began as private clearances for farmers who were seeking the easiest transport path. Development grew along them, and only later did the government take over. This is why they zigzag along land curves rather than fitting the straight lines common in a grid.

Third are the extremely narrow alleys that veer off these main ones. These are still private. Any given acre in Kebon Jahe has hundreds of small houses so scrunched together it's hard to tell them apart. Most homes don't front the street but, in a pattern atypical in even America's densest cities, go deep into the lot—meaning almost every last square foot of land is covered.

The only parts not covered are the alleys, which allow inside-outside access for these further-back houses. The alleys are also places for hanging birdcages, drying laundry, and running small commercial stands. They're created through negotiation between homeowners, all of whom benefit from the access. But they're extremely narrow—I had to turn sideways while walking through some—and that just boils down to economics.

"Jakarta is a very crowded city," Aprianto explained through my translator. "People use every bit of space they can for themselves."

Some of the extremely narrow alleys actually began as the wider formal public ones. But when adjacent homeowners want to expand their dwellings, they build additions into the alley, unintentionally similar to the invasive favela-style growth seen in Brazil. These households leave just enough alley space that they themselves can get out.

While building onto public alleys is illegal, enforcement is loose, given that Kebon Jahe is a mostly self-governing slum. (Aprianto is an elected leader, but he is not a government official.) In the rare cases when city inspectors appear, residents just pay them off.

***

Before visiting Kebon Jahe, Julya and I explored some superblocks in Tangerang, the working-class Jakarta suburb where she grew up. Many more exist there—unsurprisingly, given that it's an industrial city where factory workers need places to live. Tangerang superblocks are often centered around small mosques (Indonesia is the country with the world's largest Islamic population) or around dirty canals that nonetheless meet certain economic needs.

The same order can be found across the Global South: Large factories are built on city outskirts and quickly get surrounded by informal slums, virtually all of which adopt some variation of the superblock layout. Again, this is not because people there share the ideals of Western planners. Nor do these superblocks have the bells and whistles of the Spanish ones. It's simply the most logical layout in societies defined by economic and spatial scarcity.

Superblocks are more vulnerable in central areas, thanks to pressure to wipe them out and build to higher-end uses. That is not usually a market process. As our Kebon Jahe tour was ending, we passed the more formal area at the village exit, which had a wider alley and larger buildings.

"By next year, all of Kebon Jahe might look like this," Aprianto said.

The city has already started harassing the village's street merchants, and it's planning a program to raze Kebon Jahe homes and replace them with towers. Residents will receive payments from the government that, while large to them, won't be enough to buy replacement units in central Jakarta. Instead, they must find comparably priced units further out, meaning they're effectively being displaced through eminent domain. Such slum clearance is common across the Global South, as it once was in the United States.

It might surprise America's professional planners to hear it, but governments don't usually create superblocks—they destroy them.

The post How Third-World Countries Build Walkable Cities Without Central Planning appeared first on Reason.com.