NEPA compliance is costly. If a project is likely to have significant environmental impacts, the relevant agency must produce a full environmental impact statement (EIS). An EIS is usually required for major infrastructure projects. Agencies must solicit public input, coordinate with other stakeholders, and often extensively revise documents based on feedback. Although modest in the 1970s, a typical NEPA review now takes over four-and-a-half years and is over 600 pages long. The overall process for an infrastructure project can now regularly take over a decade to complete.
NEPA-related litigation is costly for several reasons. First, litigation has high direct legal costs. Second, litigation leads to both delays and time uncertainty (and thus increased costs) for infrastructure projects. In a process called “judicial review,” citizens and stakeholder groups who believe the federal agency’s environmental study did not sufficiently meet NEPA’s procedural requirements can challenge the permit in federal court. Courts may prevent agencies from taking the action under study until all identified defects are addressed.
There are many competitors for craziest court decision this year, but the Montana Supreme Court may take the prize. A 6-1 majority this week effectively declared—get this—a state constitutional right to protection from climate change. What’s next? A right to sunshine?
Chris Edwards calls for privatizing air-traffic control in the U.S.
GMU Econ alum Dave Hebert has a great letter in today’s Wall Street Journal:
Much like the dinosaurs in the op-ed’s cover art, mercantilism is an idea best left in the past. Mercantilists would have us believe that what makes us wealthy is the amount of money we have. But this can’t be the case. Tom Hanks’s character in “Cast Away” would have fared worse, not better, if a crate of money had washed up on shore instead of a volleyball.
Mercantilists have the relationship between imports and wealth backward: Imports are the benefit of production, not a cost to it. Mr. Jensen understands this perfectly fine in other contexts. He exports investment advice to his clients each day. In return, he imports food from the grocery store, electricity from the power plant and internet from the cable company. It isn’t the exporting that makes him wealthy; it is the ability of his household to import goods and services that makes him so.
If we want to see Americans continue to flourish, we need to increase their access to goods and services, not hinder it. To do this, we must lower barriers to trade, not erect new ones.
David Hebert
American Inst. for Economic Research
Scott Winship explains the importance of getting the measure of inflation correct. A slice:
The second way that improvements in inflation measurement have been important for policy is more subtle. By altering our assessment of how the economy has served Americans, better measures have staved off calls for bigger government. Let’s assume the improvements to the CPI have reduced bias by 0.4 percent every year since 1998. Imagine that these improvements did not occur and that the Census Bureau continued using the CPI in its annual reports to adjust income trends for inflation. In that case, the Bureau’s estimates would have indicated that the typical family income in 2023 was barely higher than in 2000. (After adjusting for two breaks in the series between 2013 and 2014 and between 2017 and 2018, the 2023 median would have been $99,028, compared with $98,964 in 2000.) Instead, today’s Census Bureau figures, which use the research series and chained CPI, indicate the median is higher by almost $14,000.
Policymakers can imagine how different the new year would look if they were facing claims that the nation has endured “25 years of stagnation.” That those claims would be incorrect—the result of measurement problems—would hardly make a difference. The measures are, for all intents and purposes, reality. (Unfortunately, the Census Bureau publications featuring poverty trends continue to update poverty thresholds for inflation each year using the CPI. This has the effect of grossly understating our progress in reducing hardship over time.)
This alternate history, in which the national debt is much higher today even as Americans are convinced the country’s economic engine is broken—all because of overstated inflation measures—isn’t just of retrospective interest. It represents our potential future if policymakers do not act. The CPI remains a biased measure of inflation, and it continues to be the basis for annual spending increases in the federal budget. Even the much-improved chained CPI overstates inflation.
In a new working paper, I describe in detail the biases plaguing our inflation measures. I summarize the literature on these biases and use it to estimate their magnitude. I then introduce a new inflation measure I call the “More Accurate Consumer Price Index,” or MACPI, which considers these biases. My figures imply that the CPI still overstates inflation by 0.7 percentage points per year, and the chained CPI is upwardly biased by 0.4 points.
“A decaying Joe Biden underlines the need for a less powerful presidency.”
The one serious attempt from within the medical profession to propose an alternative approach was the Great Barrington Declaration, authored by three prominent epidemiologists, one each from Harvard, Stanford, and Oxford; they proposed that, since mortality rates were serious only for the most vulnerable part of the population, principally the old, they should be isolated and the disease allowed to spread through the rest of the population until enough had been infected, making them resistant to reinfection, for herd immunity. The proposal was ferociously attacked by supporters of the policies being followed.
