The Warsaw Enterprise Institute, a Polish think tank, makes the attempt.

Whenever the government acquires goods on behalf of and for its citizens, it acts as an agent in someone else’s cause. A good agent will make a good purchase, a bad agent – a bad one. The concept that was present from the very beginning when preparing the WNI was to apply already existing criteria of effectiveness to public expenditure. In the absence of an independent decision of the consumer, who would decide on the allocation of resources in the economy with his or her own wallet, the evaluation of the government’s decisions must be undertaken by an external body. Therefore, we take into account public expenditures in the WNI not by adding up their values, but according to the qualitative criterion. In other words, the higher the deterrent potential of a country’s armed forces, the greater the value of military spending. The better universities place in international rankings, the more expenditure on higher education is worth. The better the reputation of healthcare in a country, the higher the value of government activity in this regard – and so on.

GDP measures the value of government purchases at cost. It’s as if you cannot get more or less value than what you pay for. This sounds like a creative alternative.

ABC news reports,

[National economic council director] Deese’s wealth has also multiplied dramatically since 2009, when he took his first White House job as Obama’s special assistant for economic policy. In 2015, just a few months into his role as deputy director of the Office of Management and Budget, Deese reported owning between $81,000 and $215,000 in assets — but now, as a member of the Biden administration, he’s reported between $2 million and $7.2 million in assets. Prior to joining the Biden administration, Deese made $2.3 million in salary from the investment firm BlackRock as the Global Head of Sustainable Investing, compared to the $175,000 in salary he received during his last year as Obama’s deputy OMB director.

Blackrock is the firm that handles the Fed’s investments in private securities. Blackrock also is known for pushing progressive values onto corporations. If your goal is to get rich, there is no need to produce something of value, as long as your ideology and connections work for you.

Schematically, our exchange went like this:

1 (Cass). Masonomics sucks!

2 (Kling). Here is an outline of Masonomics.

3 (Cass). You have no idea what my article was saying!

4 (Kling). I am afraid that makes two of us.

The first three pieces appeared in print in the Claremont Review of Books, with (1) an article in the fall issue and (2) and (3) appearing in the correspondence section of the winter issue. All are presumably behind a paywall, but the link to (2) -(3) is here.

The full version of (2) is below. Continue reading →

The Biden Administration wants to replace the three major consumer credit reporting agencies with a public agency.

The proposal is still just that—a proposal—and it faces fierce opposition from industry lobbyists. The Consumer Data Industry Association, for example, a trade group that represents the credit bureaus, wrote in a September article that a new credit bureau was “a dangerous idea” and that “a government-owned credit bureau would create a volatile and unstable lending environment, riddled with inconsistent policies, swing back and forth from election to election, leaving consumers with higher prices and limited options for credit” among other criticisms.

That is the least of it. Here are just a few other objections.

1. The credit reporting process works really well. It would cost the taxpayers billions of dollars to set up a government-run system, and then it might be faulty (Obamacare web site rollout? vaccination appointment systems?).

2. The objections of the “consumer credit justice advocates” have more to do with how the credit data is evaluated than with how the data is reported and stored. To get the change that they want, they could have the government develop its own credit scoring system, which would be less risky and much less costly.

3. In fact, those advocates are wrong about credit scoring. Yes, credit scores tend to be lower for disadvantaged populations. But a low credit score is just as predictive of default for a black person as for a white person. You cannot make someone with a low credit score a good risk any more than you can make a person who is under 6 feet tall an NBA superstar.

4. The “consumer credit justice advocates,” if they get there way, will set up more disadvantaged people to fail by taking on too much debt. Then when these loans go bad, these same advocates will blame the banks for “predatory lending.”

5. It’s a darn shame that the money going to these advocacy groups and that is going to pay lobbyists to fend them off could not instead be given to charities that really do help people in need.

Happy Valentine’s Day.

Daniel Herriges writes,

The biggest problem with “Make developers give something back to the public” is that a city’s efforts to do so end up ramping up the cost and complexity of development until the game is even more stacked in favor of the biggest projects and the deepest pockets. And that, in turn, even more dramatically raises the incentive to shout “Make them give something back!”

Let the community be heard in the abstract about what its zoning and development vision ought to be—let them hash it out in the zoning code and the comprehensive plan. But let’s not let each individual project become an existential battle. When we do, Goliath tends to stomp all over David.

Pointer from Scott Sumner.

I noticed the same phenomenon in Montgomery County. The county nominally has a “master plan” that governs development. But in practice the County Council gets involved in approving every project. We have the rule of men (and women), not the rule of law.

The net result is that we get none of the “livability” that supposedly comes from planning. All we get is a de facto requirement that to do real estate development around here you have to be a big-time Democratic donor. In the bootleggers-and-baptists model, the baptists are all the anti-development Progressives, who end up not really getting what they want, and the bootleggers are the big crony developers, who do.

Approving development processes by having elected officials decide on a case-by-case basis is unfair and harmful.
But as Glenn Reynolds would say, it does create opportunities for corruption and graft.

And of course requiring developers to add “affordable housing” manages to subsidize demand and restrict supply at the same time.