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Where’s the Real Harm from Google, Amazon, Facebook and Apple?

June 18, 2019 in Economics

By Ryan Bourne

Ryan Bourne

If you use Facebook, Amazon, Google or an Apple iPhone, then
Congress and federal agencies fear you could be a victim of
anticompetitive business behavior. The House Judiciary Committee
has announced a “top-to-bottom review of the market power held by giant tech
platforms
.” The
Justice Department and the Federal Trade Commission
likewise
are divvying these companies up for their own investigations.

These inquiries will generate a host of claims and
counter-claims about supposed economic harms, or potential for
them, from these firms. But given current debates, politicians and
regulators risk making two huge mistakes in their analysis:
mis-defining the markets these huge firms operate in, and
overhauling policy based on highly speculative predictions about
the future.

Behind Microsoft, the four major tech firms are the biggest U.S.
companies by market capitalization. They operate across a range of
sectors, and most people interact with at least one of them on a
near-daily basis. As a result, they occupy “psychological
monopoly” status in our public discourse. So synonymous are
they with their primary industries — social networks, online
retail, search engines and phones — that it’s hard for
people to imagine meaningful competition to them.

Sloppy economic thinking
is behind the push for antitrust action.

But a first step in assessing whether the firms are actually
engaging anticompetitively is to define the contours of their
markets. This is surprisingly difficult. Is Google
GOOG, +0.11%
GOOGL, +0.02% competing
in the market for advertising revenue (given advertisers are its
paying customers), digital advertising revenue, or in search
engines?

Should Facebook FB, +0.20% be thought of
as an advertising space seller or a social network? Might we, as
Facebook’s Nick Clegg suggests, consider it
as competing in sub-markets, such as messaging, photo sharing,
contact storage and more? Is Amazon AMZN, +0.01% a retailer
in individual product lines, a digital retailer, or a marketplace
platform? Or all three?

And is Apple AAPL, +0.08% primarily
run as a phone company, or a platform for app producers?

How one answers these questions determines how
“dominant” the companies seem. Even then, the size of a
company tells us little about consumer welfare. Network effects
(the value of a service growing with the number of users),
economies of scale and extensive user data can create markets where
consumers actually benefit from one firm dominating for a time,
albeit with new technologies and firms offering competition over
longer periods.

Absent strong evidence these firms currently harm consumers,
proponents of breaking up or regulating them instead claim these
economic phenomena might create barriers to entry that give these
firms damaging monopoly power in future. In her …read more

Source: OP-EDS

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Hong Kong Launches Massive Resistance against China

June 18, 2019 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

After a week of massive protests in the streets of Hong Kong,
chief executive Carrie Lam has suspended action on a controversial
bill that would extradite Hongkongers to mainland China. But this
is clearly not enough for those rallying in the streets—after
a long fall, Hong Kong-Chinese relations are broken, and it’s
unclear whether they can ever be put back together again.

When the People’s Republic of China (PRC) regained
sovereignty over Hong Kong from Britain in 1997, Chinese officials
assured nervous residents that they would enjoy extensive
self-rule. Hong Kong was legally designated as a “Special
Administrative Region” of the PRC to emphasize its unique
autonomy. Beijing would be fully in charge of decisions pertaining
to foreign policy and national security, but on most other matters,
the people of Hong Kong would run their own affairs.

Unfortunately, the Chinese government has slowly but inexorably
eroded Hong Kong’s promised autonomy. Early on, Beijing
rebuffed efforts to implement democratic
reforms to replace the unelected imperial structure inherited from
the British. Only 50 percent of Hong Kong’s legislature is
directly elected; the remainder, along with the powerful post of
chief executive, are chosen by the Election Committee—a body
that Beijing appointees dominate.

By attempting to impose
its will, Beijing has now shown Taiwan, too, what’s in store. Has
it finally gone too far?

China’s jurisdiction has also gradually expanded over an
array of political, economic, and judicial matters. A growing
number of candidates for elective seats in the legislature have
been disqualified on charges of “disloyalty” for
declining to take an oath affirming the
PRC’s sovereignty over Hong Kong. Angry dissidents have
protested such encroachments, sometimes in noisy demonstrations,
but withlittle success.

Beijing’s power play escalated again in recent weeks, and
this time the pushback from the people of Hong Kong was more
emphatic and intense. Exceptionally large demonstrations (including
two in mid-June) took place, despite protesters being met with
tear gas and rubber bullets. The catalyst was
the proposed extradition law that chief executive Lam initially
tried to push through on Beijing’s orders. That measure would
give the Chinese regime significant leverage over Hong Kong’s
ostensibly independent judicial system. It would enable Beijing to
“request” that Hong Kong authorities transfer certain
types of criminal suspects to the PRC for trial.

The menace behind such a change is evident. Hong Kong-based
critics of China’s government would be especially vulnerable.
Given the crackdown on human rightsadvocates and even respected economic reformers at home that
President Xi Jinping has orchestrated, Hong Kong would no longer be
a reliable haven for dissenters. At best, the …read more

Source: OP-EDS

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Mike Pence Is Not Donald Trump's Foreign Policy Successor

June 16, 2019 in Economics

By Doug Bandow

Doug Bandow

It isn’t too soon to start thinking about who will succeed
Donald Trump. Win or lose in 2020, attention will quickly turn to
who might pick up his populist/nationalist mantle. The question is
broader than who will be the GOP presidential nominee four years
hence. Who will lead and shape the conservative movement in the
future?

It is easier to say who should not try to step into the
president’s place: Vice President Mike Pence.

He is a “good guy,” as former vice president Joe
Biden put it, before turning tail and deciding that politics today
can accommodate no hint of civility. However, Pence is a
standard-issue hawk. He appears to have absorbed none of President
Trump’s reluctance to intervene militarily and keep America
in a perpetual state of war.

The vice president made that clear in his recent speech at West
Point. Much of what he said honored cadets for the unique education
they received and commitment they made. He also emphasized his
family’s connection to the military, as the son and father of
those in uniform.

However, when he laid out his foreign-policy vision it was of
constant conflict. Declared the vice president: “you are
taking up your duties at a time of growing challenges to freedom
all around the world… . And now you are going to join the
fight.” As a result, “It is a virtual certainty that
you will fight on a battlefield for America at some point in your
life. You will lead soldiers in combat. It will happen.”

Not just somewhere. But, well, just about everywhere. Explained
Vice President Pence: “Some of you will join the fight
against radical Islamic terrorists in Afghanistan and Iraq. Some of
you will join the fight on the Korean Peninsula and in the
Indo-Pacific region, where North Korea continues to threaten the
peace, and an increasingly militarized China challenges our
presence in the region. Some of you will join the fight in Europe,
where an aggressive Russia seeks to redraw international boundaries
by force. And some of you may even be called upon to serve in this
hemisphere.”

Pence is a standard-issue
hawk who appears to have absorbed none of President Trump’s
reluctance to intervene militarily and keep America in a perpetual
state of war.

Ironically, when spelling out the qualities that the
officers-to-be in front of him required to “lead
heroes,” Pence included humility. Yet the agenda he offered
is suffused with arrogance, the assumption that Washington is
capable and entitled to remake the globe. All of it.

This is quite an agenda. But it is not President Trump’s
agenda.

Instead, the vice president has combined the wish …read more

Source: OP-EDS

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Over-The-Counter Birth Control? Bring It On

June 13, 2019 in Economics

By Jeffrey A. Singer

Jeffrey A. Singer

Last week Rep. Alexandria Ocasio-Cortez, the New York Democrat,
tweeted that oral contraceptives should be made
available over-the-counter. A few days later, Sen. Ted Cruz, Texas
Republican, tweeted he agrees and offered to team up with Ocasio-Cortez on legislation to
make it happen. The American College of Obstetricians and
Gynecologists has called for making birth control pills available
without a prescription for years; The American Academy of Family
Physicians agrees.

Now that two prominent legislators of such divergent political
persuasions have expressed their concurrence with the medical
experts, perhaps the time is nearing when the U.S. will join
102 other countries throughout the world and
allow women to obtain birth control pills without a
prescription.

Defenders of the status quo fear women may forgo necessary
preventive care visits if birth control pills are available over
the counter. But the ACOG states that “cervical cancer
screening or sexually transmitted infection (STI) screening is not
required for initiating OC [oral contraceptive] use and should not
be used as barriers to access.” In fact, there is currently a
debate among gynecologists regarding the need
and benefits of annual pap exams.

The confluence of views
among women of child-bearing age, medical experts, and now
legislators from both ends of the political spectrum provides a
great opportunity to liberate women from the paternalistic policy
that makes them pay a toll – a doctor’s office visit – to obtain
contraception.

Others paternalistically worry that women may misuse oral
contraceptives if they are able to obtain them without a permission
slip (prescription) from another equally autonomous adult. Yet
experience shows that when adults self-medicate, they
conscientiously perform due diligence, whereas they otherwise defer
to the judgment of authority figures if medications are prescribed.
For example, a 2006 report from Seattle found women’s
self-evaluation regarding whether or not they should take the pill
matched those of doctors about 90% of the time — and the 10%
of the time they didn’t match was mostly because the women were
more cautious.

Ten states have tried to work around the
FDA’s prescription classification by allowing pharmaciststo prescribe birth control
pills. While that’s an improvement over the status quo, it
still negatively affects women’s comfort and
privacy. As shown in a 2015 report in the journal “Sexual and
Reproductive Healthcare,” many women who seek emergency
contraception (the so-called morning after pill, which has been
available over-the-counter since 2006) prefer to purchase this kind of
medication discreetly and avoid unwanted discussion or counseling,
even if offered by a …read more

Source: OP-EDS

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Making Sense of the State Department's New Commission on Unalienable Rights

June 13, 2019 in Economics

By Roger Pilon

Roger Pilon

When Thomas Jefferson declared that we’re all born with
unalienable natural rights to life, liberty, and the pursuit of
happiness, little could he have known that more than 200 years
hence, another secretary of state (Jefferson later became our
first) would create a Commission on Unalienable Rights to provide the
secretary with “fresh thinking about human rights” and
propose “reforms of human rights discourse where it has
departed from our nation’s founding principles of natural law
and natural rights.”

The reaction to Secretary Pompeo’s
announcement late last month was swift, especially on the left. Was
this move a response to the U.N.’s obsession with so-called
economic and social rights—rights to jobs, housing, health
care and the like—which dominate international human-rights
discourse and practice today? Or was this talk of our
nation’s founding principles, natural law, and natural rights
actually code, signaling that in future the State Department would
focus less on protecting women’s and LGBT rights? Or was
it both? Let’s take those concerns in order, after a little
theory.

This endeavor to seat
human rights discourse in America’s founding principles is
important, but it must be done right, failing which it will
undermine those principles.

Although the secretary speaks indifferently of natural law and
natural rights, they’re not the same. True, natural rights
emerged historically from natural law. And consistent with a
prominent religious strain of natural law still evident, Jefferson
spoke in the Declaration of “the Laws of Nature and of
Nature’s God” and also of our rights as “endowed
by [our] Creator.” But those theological invocations were
exceedingly general, suited properly for the varied beliefs of his
day. In truth, a product of the Enlightenment—English,
Scottish, and continental—America stands basically in the
natural rights tradition.

Properly understood, our natural rights are grounded not in
prescriptive natural law, handed down by a lawgiver, much less in
any religious beliefs, but in universal human reason, as John Locke
and most of the Founders repeatedly held. And they held too that
liberty—the right to pursue happiness by our own subjective
lights, consistent with the equal rights of others—was the
very essence of our natural rights, as the Declaration’s
famous second paragraph makes clear. Rights come first: the equal
rights of all, no one bound to another; politics and law second, to
secure those rights.

That brings us to our first concern: Might this commission
question the modern social and economic rights? It might, for
they’re not natural rights. They’re created through
legislation, requiring redistributive schemes that bind some to
others. Unlike natural rights to freedom, they’re not
universalizable.

Were that to happen, it would be good. Found in the U.N.’s
Universal Declaration of Human …read more

Source: OP-EDS

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Britain's Unexplained Wealth Orders Give the State Too Much Power

June 13, 2019 in Economics

By Walter Olson

Walter Olson

Authorities in Britain have begun trying out a new police power
called unexplained wealth orders under a law that took effect last
year. The police go to a court and say you’re living way above any
known legitimate income. The judge then signs an order compelling
you to show that your possessions (whether a house, fancy car, or
jewelry) have been obtained honestly and not with dirty money. In
the meantime, the boat or artwork or other assets get frozen, and
you can’t sell them until you’ve shown you obtained them
innocently.

The kicker: The burden of proof falls on you, not the
government. If you don’t prove the funds were clean, Her Majesty
may be presumed entitled to keep the goodies.

It’s like, “Your papers,
please,” but for things you own.

The asset must be worth at least £50,000, but it doesn’t
have to be located in Britain so long as you yourself fall under
its laws. The law was a response to London’s popularity as the
favorite place for overseas oligarchs (nicknamed “McMafia” in a
popular TV series) to stow ill-gotten funds, with convenient
flights, luxury shopping, and a hot property market.

The first person named as a target of the law was Zamira
Hajiyeva, whose story could make even an oligarch blush, assisted
by a small fortune in purchases from Harrods cosmetics and perfume
counters. Hajiyeva’s husband is serving time after being convicted
of extracting at least $100 million from Azerbaijan’s
state-controlled bank, of which he was chairman. She’s fighting
extradition to that country herself.

In the meantime, her possessions include a £12 million
London house and a golf course on the outskirts. Details of
Hajiyeva’s wild Harrods spending sprees were neatly captured for
authorities and readers by the store’s loyalty card program. They
included a £1,190,000 Cartier diamond ring and tens of
thousands at a Godiva chocolate shop, adding up to $20 million over
a decade. The high-end London store reserved two bespoke parking
spots for her. She used at least 54 credit cards, many issued by
the state-controlled bank her husband ran.

By the way, don’t stories like these make the idea of a
state-controlled bank, as has been floating in New Jersey and
elsewhere, sound just swell?

The new British law doesn’t allow the police to seize just
anyone’s assets. The target has to fall into one of two categories.
The first is those a judge finds to be reasonably suspected of
involvement in serious crime, or connected to such a person. That
doesn’t sound so bad, but remember that “serious crime” can mean
lots of things, not just being the next Bernie …read more

Source: OP-EDS

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Joe Biden: A 'Good Guy' Without Principle or Backbone

June 13, 2019 in Economics

By Doug Bandow

Doug Bandow

Joe Biden, the crazy uncle that many people try to hide in the
attic, so to speak, is a “good guy,” even if he
didn’t have enough backbone to defend his use of that phrase
to describe Vice President Mike Pence. When the left-wing mobs came
calling, Uncle Joe scurried for the exit.

Of course, the former senator already had run from his record in
the Anita Hill hearings, during which he apparently privately
acknowledged the inconsistencies of her story. Now, seeking the
Democratic presidential nomination in an era when truth and
consequences are of no account, he apologized for not arming the
anti-Clarence Thomas mob with pitchforks and torches.

His latest craven surrender is on abortion funding.

Uncle Joe’s principle strength is his longevity. He comes
from an era before the Democratic Party had turned into a left-wing
hothouse. The party always included a lot of big spenders, but on
culture and foreign policy many Democrats were to the right of many
Republicans. Across America’s heartland many Democrats
supported gun rights and opposed abortion.

In the short-term his
reversal on abortion might help insulate him from his opponents’
attacks. In the long-term it is likely to sap support from those
who no longer see anything that sets him apart from his younger,
brighter, tougher, and more vigorous opponents.

Indeed, the Hyde Amendment, which prohibits public funding of
abortion except when the mother’s life is in danger and in
cases of rape and incest, was first passed in 1976 by a
Democratic House and Senate
. Democratic President Jimmy
Carter, elected in that year, defending the prohibition. Belief in
the eternal value of the human person was not limited to the
right.

In 1980 Democrats purported to be the party of diversity and
tolerance when they attacked the Reagan campaign for creating an
abortion “litmus test” for judicial nominees. To be
sure, most Dems backed the 1973 ruling in Roe v. Wade, but
they said they would never, ever impose that belief on judicial
nominees.

By the late 1980s and 1990s fealty to the principle of unlimited
abortion was becoming a requirement for Democratic presidential
nominees — which was a problem because so many leading
Democrats had unclean hands, from the Left’s perspective. As
a result, Richard Gephardt, Al Gore, and Bill Clinton all tossed
aside measured records on the issue in their campaign for the top
political prize. Still, the latter felt the need to claim he wanted
the procedure to be “rare” as well as safe and legal.
Scores of congressional Democrats continued to vote pro-life.

However, over the years the two parties increasingly divided
along abortion. Ironically, as the …read more

Source: OP-EDS

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End America's Illegal Occupation of Syria Now

June 13, 2019 in Economics

By Doug Bandow

Doug Bandow

Washingtonians pretend to be shocked by what President Trump
does, but it’s Americans who should be shocked by what
Washington does—such as illegally intervening in
Syria’s civil war and occupying a third of that country.
It’s time for Donald Trump to do the right thing and bring
our troops home.

The fabled “Arab Spring” hit Syria in 2011. And as
the Middle East’s autocracies wobbled, the Obama
administration initially tagged President Bashar al-Assad as a
reformer. But he refused to yield political power in the face of
popular demonstrations.

Not everyone saw the protesters as harbingers of democracy. One
Alawite with whom I spoke while visiting Syria last year said
Assad’s opponents chanted, “Christians to Lebanon,
Alawites to the grave.” The demonstrators’ desire to
oust Assad evidently didn’t mean they desired a liberal
Western-oriented democracy. Earlier in Beirut, I’d spoken
with an anguished Christian aid worker from Syria who exclaimed,
“You Americans have no idea what you are doing!”

Our presence there is a
violation of domestic and international law that’s made a horrible
civil war even worse.

Nevertheless, Washington decided that Assad had to go. And his
regime, beset from every direction, tottered on the brink.
Insurgents gained control of Damascus’s Eastern Ghouta
suburbs, from which they bombarded Syria’s capital.

Despite pressure to actively intervene against Assad, the Obama
administration focused on aiding supposedly moderate insurgents,
with little success. One program spent a half billion dollars to
train fewer than threescore fighters. Radicals hid their views in
order to receive arms from America; supposedly democratic forces
fought with and sometimes surrendered to Islamists, along with
their equipment.

Moreover, reported the New York Times: “Most of
the arms shipped at the behest of Saudi Arabia and Qatar to supply
Syrian rebel groups fighting the government of Bashar al-Assad are
going to hard-line Islamic jihadists, and not the more secular
opposition groups that the West wants to bolster, according to
American officials and Middle Eastern diplomats.”

One of the indirect beneficiaries of U.S. aid was Jabhat
al-Nusra, Syria’s al-Qaeda affiliate. Noted National
Review
’s Michael Brendan Dougherty: “We also
funded a group called Nour al-Din al-Zenki, until its members
showed up on YouTube beheading a child, at which point the
‘moderate’ label no longer quite fit.”

With the war largely over and the much-weakened Assad government
mostly in control, roughly 2,000 U.S. personnel occupy about a
third of the country, mostly in the north working with Kurdish
forces. At first, President Trump ordered the Americans home, but
now hundreds or more will stay, according to his aides.

But for what? The goal of shielding civilians was undercut all
along by fomenting civil war and the underwriting of insurgents.
The …read more

Source: OP-EDS

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What if Vouchers Came with More Freedom for Public School Leaders? Our Research Shows They Still Wouldn’t Go Along

June 12, 2019 in Economics

By Corey A. DeAngelis, Lindsey Burke

Corey A. DeAngelis and Lindsey Burke

In 2005, NBC premiered a show called Deal or No Deal. Contestants could win big money — up to $1 million — if they selected the one briefcase out of 22 (which ranged in value from 1 cent to $1 million) that contained the big bucks. Along the way, different monetary amounts would be revealed one by one in the briefcases, providing the contestant with more information about the amount of money that might be inside.

Enter the banker. With additional information came additional temptation. The banker would offer to buy the briefcase for some amount of money. When the contestant would refuse to be bought out (in hopes the suitcase contained a higher amount), host Howie Mandel would enthusiastically exclaim: No Deal!

Traditional public school employees tend to shout No Deal! and oppose private school voucher programs. This could be explained by risk aversion, concerns over equity and inclinations to stifle competition. Whatever the reason, opposition to school vouchers is explained by expected costs exceeding expected benefits in the minds of public school employees.

But is it possible that private school choice would have a better chance of passing if enacted alongside additional benefits for public school leaders? And would school choice advocates and opponents actually be able to strike such a deal?

Our just-released study suggests that deal would be unlikely.

In theory, giving public school leaders more autonomy alongside enactment of private school choice programs might make them more inclined to support the change. After all, deregulation of public schools would allow them to more effectively compete with nearby private schools. As the superintendent of the Los Angeles Unified School District recently said, “[If] it’s the flexibility of charter schools that’s allowing them to excel, let’s bring that flexibility into the traditional school classroom.”

We conducted a survey experiment to examine the effects of public school deregulation on actual public school leaders’ support for a hypothetical private school voucher program in California. We randomly assigned one of four types of deregulation to leaders of 7,127 traditional public schools in California in early 2019 and then asked whether they would support a hypothetical voucher program in their state.

The survey asked, “Would you support a new private school voucher program in California (available to all students in the state) next year?” The control group received a note saying state requirements of their public schools would not change. The experimental …read more

Source: OP-EDS

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Education Professors Ignore the Evidence on School Choice

June 10, 2019 in Economics

By Corey A. DeAngelis

Corey A. DeAngelis

Here we go again. Just a few days ago, two education professors
released a shockingly misleading piece on the private school choice
evidence.

Here are the facts.

The authors claim that the “latest evidence” shows
that the Washington, D.C., voucher program has “large,
negative impacts on academic achievement.” The only problem
is that the most recent federal evaluation of the D.C. voucher program
does not show any negative effects on student test scores
after
three years. In fact, the study finds statistically significant
positive effects on reports of safety, satisfaction, and
attendance. What’s more, the D.C. choice program produces
these benefits at about a third of the cost of nearby public schools.

There are a lot of
disagreements in the school choice debate. But we should all be
able to agree on one thing: At a bare minimum, we should be able to
trust academics to responsibly report (and engage with) the
scientific evidence. Yet, here we are.

How could anyone get these findings so wrong?

The authors irresponsibly cited the first-
and second-year evaluations of the D.C. voucher program
which found negative effects on math test scores, but no effects on
reading, while completely omitting the most recent third-year results finding no effects on test scores.
In other words, students that won the lottery to use the voucher
program caught up to their public school peers on math achievement
after three years.

But by omitting the most recent D.C. evaluation, the authors
were able to further (falsely) claim that other researchers were
wrong to think that initial test score losses would disappear since
“more recent follow-up studies show that the harm is
significant and sustained.” Obviously, citing the most recent school voucher study, showing just that,
would contradict their own claim.

Of course, it’s entirely possible that both education
scholars missed the most recent school choice results. After all,
the study had only been public for a little over three weeks by the
time their piece came out. But overlooking such important results
when summarizing the “latest research” would be
negligent of “researchers who study school choice and education policy.”

The authors cite just three other evaluations (two of which are
nonexperimental) to support the notion that “vouchers harm
student learning.” But researchers should cite all of the
most rigorous existing studies to avoid unintentional
cherry-picking. Here’s the entire picture.

Sixteen random assignment studies link private
school choice programs to student test scores in the United States.
The majority (11) of the 16 gold-standard studies find
statistically significant positive …read more

Source: OP-EDS