Lianeon Weekly Topics | How Bad, Really, is US Infrastructure

Week of April 5th

The Essential Three

Biden’s innovative idea for tackling skyrocketing housing prices

A dozen pages into the fact sheet for President Joe Biden’s infrastructure plan, he marks a growing shift in Democratic orthodoxy and a new plan for zoning reform:

Eliminate exclusionary zoning and harmful land use policies. For decades, exclusionary zoning laws — like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing — have inflated housing and construction costs and locked families out of areas with more opportunities. President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.

It is well established that housing prices are artificially inflated by local zoning rules and ordinances that restrict the supple of housing. Local codes general reflect the preferences of the wealthier homeowners and do not often serve the interests of those who do yet own property, pricing them out of the market. In fact, instead of raising the minimum wage, which is a blunt instrument that is unlikely to work, we’d be better off deregulating housing so that people can afford homes on lower salaries.

The State of U.S. Infrastructure

Experts say that U.S. infrastructure is both dangerously overstretched and lagging behind that of its economic competitors, particularly China.

Lawmakers offer a number of proposals to fix what many see as a broken financing system, including more public-private partnerships, a federal infrastructure bank, and increased federal spending.

President Biden has put forward an ambitious $2 trillion plan to overhaul U.S. infrastructure in the midst of the economic shock caused by COVID-19.

Very good piece on infrastructure and worth a read. It’s not that US infrastructure is terrible, the problem is that it is dated and aging. The US has become a country trapped in the 1960s, and is failing to invest in modernization efforts. In short, US infrastructure is fit for a superpower of the 20th Century, not the 21st. China on the other hand…

A carbon tax is a great limited-government policy

The Washington Examiner recently ran an op-ed which argues that almost all the “revenue-neutral” carbon tax proposals are actually “budget-neutral” and would inevitably increase government revenue and, thus, the size of the government. However, the amount of revenue the government collects does not provide the whole picture of the size of the government. This metric should not be used to dismiss a carbon tax.

A carbon tax is a pigouvian tax that could help internalize the negative externalities of burning fossil fuels. It is a simple solution to climate change that too many in the United States are overlooking.

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Healthcare/Society

Biden To Announce Actions On Firearms, Tap Gun Safety Advocate To Lead ATF

Biden will announce that the Justice Department will pursue two new regulations: one to curb the proliferation of so-called ghost guns, weapons that lack serial numbers and, in some cases, can be constructed at home; and a second that would regulate stabilizing braces, accessories that can be used to make pistols more like rifles.

Should Colleges Require COVID-19 Vaccines For Fall? More Campuses Are Saying Yes

Duke University in North Carolina has announced that it will require students to have a COVID-19 vaccine when they return this fall. And the list of campuses with such policies is growing.

Rutgers University in New Jersey was the first, and since then more than a dozen residential colleges have followed. Notre Dame; two Ivy League schools, Brown and Cornell; and Northeastern University in Massachusetts are among those requiring the vaccine for fall. Cleveland State University will do so for all all students living on campus.

While there is established legality for this, the grey area here is that the current Covid-19 vaccines are not technically fully approved by the FDA yet, they have only been approved for emergency use. This may be resolved by summer anyway, so the issue may end up moot.

Education/Science/Technology

Moderna says its booster shot against COVID-19 variants is on the way

Moderna may be able to provide booster shots for protection against COVID-19 variants by the end of the year.

Reuters reports Moderna’s Chief Medical Officer Tal Zaks on Wednesday said the company should be able to supply booster shots by the end of 2021, adding that testing shows the boosters provide a confident level of protection against coronavirus variants.

One of the advantages of mRNA vaccines is that it will be quite easy and quick to modify them. Their potential is far from fully realized.

Economy/Business

Yellen makes case for a global minimum tax on multinational corporations

Treasury Secretary Janet Yellen on Monday urged a global minimum tax rate on corporations in a push to assert U.S. leadership in ongoing international tax negotiations.

The goal is to prevent companies from relocating wherever they find lower taxes.

“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth and prosperity,” Yellen said in her first major speech since becoming Treasury secretary.

What the Great Recession can teach us about the post-pandemic housing market

It is difficult to overstate the extent to which the COVID-19 pandemic has wreaked havoc on housing markets. Millions of renters have fallen behind on their rent, fearing eviction while accumulating debts they cannot pay. Missed payments are putting pressure on the nation’s already fragile affordable housing supply. And prices for owner-occupied housing have soared while the inventory of for-sale homes has plummeted. These disparate outcomes in housing market segments mirror the pandemic’s uneven impact on labor markets, with college-educated professionals working from home while low-wage service workers experience the highest rates of job loss.

In some ways, the current economic situation is the inverse of the Great Recession…..

Biden’s Infrastructure Plan Faces New Hurdle in Senate Rules

WASHINGTON—Some Democratic policy goals in President Biden’s wide-ranging $2.3 trillion infrastructure plan could soon face a familiar obstacle: arcane Senate rules that limit what type of legislation lawmakers can approve along party lines.

While Mr. Biden and top Democrats have said they are hoping to approve the legislation with bipartisan support, many Republicans have sharply criticized the plan’s proposed tax increases on companies. The Republican opposition to the plan has left Democrats preparing to advance the package through reconciliation, a process that allows lawmakers to skirt the 60-vote threshold required for most legislation.

Democratic aspirations for approving legislation along party lines received a boost on Monday when the chamber’s parliamentarian indicated that lawmakers could use the procedure multiple times in one fiscal year. But even if Democrats can employ the process more frequently, measures passed through reconciliation will still need to comply with a number of Senate rules, including that they have a direct impact on the budget.

I think most Americans are sick and tired of the political gridlock. Americans would be better off if politicians voted on hearts and minds and not on party. I am sure you could get over 50 votes to pass most legislation of partisan concerns were not at the forefront.

Policy/Politics

Biden’s child tax credit has a fatal flaw

Joe Biden hasn’t been in the White House for three months, so it’s way too soon to justify the claim that he has already joined the ranks of transformational presidents. But one Biden initiative that really could be game-changing is his plan to give U.S. households a monthly check based on the number of children they have.

Progressives celebrate the program as an antidote to child poverty. Conservatives fret that it will give low-income parents the opportunity to avoid work.

Those views are worth discussing, but both miss the real problem with Biden’s plan.

I am not sure that I would call this a “fatal” flaw.

Biden’s Missteps on Gun Policies

In outlining steps his administration would take on gun regulations, President Joe Biden misstated the facts on three existing policies:

Biden falsely said that “you can buy whatever you want” at a gun show with “no background check.” Federal firearm dealers at gun shows must run background checks. Private sales between nondealers are exempt from federal law.

He said states with “red flag laws” have seen reductions in suicides. But a review of research on whether the policies caused a reduction in total suicides found the evidence is inconclusive.

The president said gun manufacturers were “exempt” from being sued. They do have protections from civil lawsuits, but there are exceptions.

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