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Some Non-Covid Links

My intrepid Mercatus Center colleague Veronique de Rugy decries Janet Yellen’s effort to create a global tax-collection cartel. A slice:

Under this cartel of countries, with foreign governments committed to refusing to compete for capital by cutting tax rates, the incentives for U.S. companies to avoid high U.S. taxes are seriously reduced. So are the incentives for governments to keep their own tax systems modest.

Inspired by a new collection of original papers from AEI, Richard Reinsch explores the prospects of reining in the monster that is the administrative state. A slice:

Those changes run deep, almost fundamental to the way the federal government operates now. John Hart Ely noted in 1981, “By refusing to legislate our legislators are escaping the sort of accountability that is crucial to the intelligible functioning of a democratic republic.” The problem is now so acute, the atrophy of legislative muscle so dramatic, that major congressional votes on budgets, healthcare, environmental, social, and family policies take place with little debate or compromise throughout the body, more in the manner of a rugby scrum than a deliberative republican body. Policies in the form of “legislation” composed entirely by staffers, spanning hundreds and thousands of pages are announced by congressional leadership of the majority party and voted on within hours or days.

(DBx: It’s worth pondering the potential value of a constitutional provision insisting on “due process of legislation.” This provision would enable courts to strike from the books legislation the passage of which fails to meet minimum standards of due legislative process. And legislation that cannot possibly have been read – forget meaningfully debated – by the legislators who vote on it surely isn’t enacted with due legislative practice.)

GMU Econ alum Gabriella Beaumont‐​Smith explains U.S. government-imposed tariffs on imported baby formula of course make baby formula more scarce in the U.S. A slice:

Absurdly, provisions were added to the United States‐​Mexico‐​Canada Agreement (USMCA) to restrict imports of formula from Canada, supposedly because China was investing in a baby food plant in Ontario, and this new production might eventually enter the U.S. market (heaven forbid!). Thus, the provisions in the USMCA’s agriculture annex establish confusing and costly TRQs on Canadian exports of infant formula, and the United States imported no baby formula from Canada in 2021.

Making matters even worse, infant formula is subject to onerous U.S. regulatory (“non‐​tariff”) barriers. For example, the FDA requires specific ingredients, labeling requirements, and mandates retailers wait at least 90 days before marketing a new infant formula. Therefore, if U.S. retailers wanted to source more formula from established trading partners like Mexico or Canada, the needs of parents cannot be quickly met because of these wait times. Businesses also have little incentive to go through the onerous regulatory process to sell to American retailers, given the aforementioned tariffs and the relatively short duration of the current crisis.

Writing in today’s Wall Street Journal, my former GMU Econ colleague Tom Hazlett warns the U.S. government against repeating “Mexico’s Wireless Spectrum Mistake.” Two slices:

The Trump administration surprised everyone in 2018 by pushing an industrial policy to win the race to 5G. Advocates called the proposed national 5G wholesale network a disruptive reform that would spur progress by challenging existing mobile carriers. Writing in the New York Times that year, Kevin Werbach, a Clinton and Obama telecom adviser, welcomed the idea: “Forward-thinking Democrats and public interest advocates have been pushing it for decades.”

Under the Trump plan, a private company would build and operate the system on a franchise basis. The U.S. government would supply the radio spectrum and impose an “open access” mandate—the network would have to host a range of wireless competitors. That would supposedly spur investment and promote innovation.

The plan has yet to be implemented in the U.S., but a similar plan was adopted in Mexico to establish a 4G network in 2013—and it has been a failure.


Meanwhile, 5G networks are spreading more rapidly in the U.S. than in any other nation, with 49% coverage in October 2021. (China was at 20% that month.) This rollout benefits from recent U.S. auctions for flexible-use spectrum rights, infusing networks with new capacity that lowers costs and spurs rivalry. Further liberalization should continue.

Regulators haven’t been able to divert frequencies to selected business models to increase competition. U.S. policy makers should avoid trying.

John Stossel explains that GMO’s are good for us.

“No, the Supreme Court is not going to reconsider the constitutionality of bans on interracial marriage” – so explains David Bernstein.

Andrew Stuttaford correctly describes the economics (if not the politics) of Nancy Pelosi’s recent call for government to punish merchants who raise the price of gasoline above the level approved by government mandarins as “utter stupidity.”