Science Has a Major Fraud Problem. Here’s Why Government Funding Is the Likely Culprit

President Biden’s 2024 budget includes over $210 billion directed toward federal research and development, an approximately $9 billion increase from 2023 funding. That might not sound particularly bad—after all, who doesn’t like science and innovation?

But, although seemingly noble, the billions pumped into the US government’s National Science Foundation don’t always translate into finding cures for debilitating diseases, or developing groundbreaking technologies.

In recent years, although technology and peer-review techniques have become more widespread, fraud has remained a consistent issue. The problem has gotten so out of hand that world-class researchers and medical ethics analysts believe the public should be aware of the widespread inaccuracies plaguing medicine.

Dr. Richard Smith, the former editor-in-chief of the BMJ and cofounder of the Committee on Medical Ethics (COPE), details,

Health professionals and journal editors reading the results of a clinical trial assume that the trial happened and that the results were honestly reported. But about 20% of the time, said Ben Mol, professor of obstetrics and gynecology at Monash Health, they would be wrong. As I’ve been concerned about research fraud for 40 years, I wasn’t as surprised as many would be by this figure, but it led me to think that the time may have come to stop assuming that research actually happened and is honestly reported, and assume that the research is fraudulent until there is some evidence to support it having happened and been honestly reported.

Independent analysis done by J. B. Carlisle confirms Dr. Smith’s suspicions. As Carlisle analyzed dozens of government-funded control trials, he found a staggering 44% contained false data. These findings are swept under the rug by most mainstream news outlets, which is a problem in itself. If government-funded research produces such sloppy results, the taxpayers funding it at least deserve to know the outcomes of the experiments they paid for.

Getting to the Root of the Problem

To understand why government-funded research tends to be so inaccurate, it's crucial to look at history and remember how government involvement in research started.

It all ties back to the National Science Foundation (NSF), one of the first government agencies built for funding science. In the late 1940s, one of the most outspoken supporters of the NSF was Democratic Senator Harley Kilgore. His motivations were clear: the NSF was to provide the government with a pool of educated researchers that could be used for strategic purposes during the Cold War. Scientific inquisition was never the primary purpose of the NSF.

In addition to this, the system of “checks and balances” in scientific research is completely off-kilter. Private journals risk damage to their reputation if it is revealed that they have published fraudulent research. Privately funded journals compete to be the best among pools of hundreds of other publications. To maintain legitimacy in the eyes of future researchers and funders, publishing high quality research is in the private journal’s self-interest.

Academic institutions funded by governments, on the other hand, are motivated to shield their researchers, as researchers play a crucial role in securing substantial grant funding for the institution, often reaching into the millions of dollars. Government exists in a playing field outside the private sector—they aren’t competing against other specialized journals. Because they aren’t specialized and fund a wide array of projects, they can often afford to let “a few bad apples” through (unfortunately, at the expense of taxpayers).

The source of funding also undoubtedly (at the very least subconsciously) sways the research outcomes. There are several ways the government introduces bias into research. For one, the state often ignores certain scientific queries, forcing researchers to adopt different hypotheses or study different questions to gain any funding. Without any market forces guiding research and development, study objectives start aligning more with the interests of bureaucrats and less with the interests of patients.

Government agencies also don’t want to fund proposals that contradict the agency’s political ideas. If the research’s outcome even slightly threatens the government’s power, funding is likely to be cut off, often for extended periods. These outcomes are clearest when it comes to funding regarding the social sciences and economics, but also occur with life science research. 34% percent of scientists receiving federal funding have acknowledged engaging in research misconduct to align research with their funder’s political and economic agenda. Moreover, a mere 24% of these researchers have disclosed these ethically questionable research practices to their supervisors.

This incentive structure also explains why there is a limited amount of research into the accuracy of government-funded research. Many researchers are simply too afraid of the funding and reputational consequences that come with revealing problems with government funding. When there is research into federal funding bias, it is often concentrated on very specific and politically divisive topics (such as the use of stem cells). A team of researchers at the CATO Institute found just 44 Google Scholar articles from 2010-2014 that dealt with this type of government bias influencing research.

The Private-Sector Alternative

The government’s overpowering role in science simultaneously crowds out private sources of funding. Despite this, there is some good news: the private sector is getting more and more involved in scientific funding by the day.

Globally, 70% of science is financed privately. Charities like the American Cancer Foundation and Howard Hughes Medical Institute collectively contribute billions of dollars to spurring innovation in their respective fields.

For example, renowned neurologist Dr. Helen Mayberg’s research into deep brain stimulation as a depression treatment wasn’t supported by government grants. Instead, private sources funded her research. Yet, her discoveries led to additional trials and eventually breakthroughs in the way depression is treated.

Most Americans treat government-funded science as the holy grail of scientific research, but it truly isn’t. Without proper market signals guiding the direction of research, millions of tax dollars are lost, and thousands of hours of scientific research are wasted. As Milton Friedman explained regarding government funding of science, “The scientific ability of really able people is being diverted from the goals they would like to pursue themselves to the goals of government officials.” It's up to the next generation to decide who they trust more: scientists, or the state?

Ulyana Kubini

Ulyana Kubini is a Ukrainian-American entrepreneur and political activist.

This article was originally published on FEE.org. Read the original article.

Science Has a Major Fraud Problem. Here’s Why Government Funding Is the Likely Culprit

Bitcoin Is a Great Counterpoint to Calls for Government Innovation Subsidies

Bitcoin Is a Great Counterpoint to Calls for Government Innovation Subsidies

Title: How Bitcoin Highlights the Problem with Innovation Subsidies

Subtitle: The story of bitcoin shows us that true innovation follows its own path.

Abstract: If bitcoin is a specific case that exposes the general flaw in innovation economics, what other opportunities are being suppressed or missed because capital is being misallocated by innovation subsidies?

Dave Birnbaum

Have you heard of “innovation economics?” This relatively new school of thought represents a shift away from traditional economic theories, and emphasizes entrepreneurship, technological innovation, and, you might have already guessed, government intervention as key drivers of economic growth.

Since one of the members of the Federal Reserve Board of Governors subscribes to the concept of innovation economics, understanding this school of thought may help us interpret or even anticipate policymaker’s decisions that will affect us all.

Rooted in the ideas of thinkers like Joseph Schumpeter, this framework seeks to recognize the importance of innovation to an economy, not just the management of resources, and provides a theoretical framework for how to encourage and accelerate the creation of new technologies, products, and services.

Unlike classical economics, which focuses on equilibrium, innovation economics sees economies as dynamic and continuously evolving. While it’s true that the economy is a dynamic system, its proponents take this a step further, arguing that targeted government support can stimulate technological advancement, productivity growth, and economic progress.

This approach has shaped policies in the United States over the past 20 years. Proponents point to the America COMPETES Act, STEM education initiatives, and technological research and development grants as notable outcomes.

However, when you strip back the jargon, it becomes clear that innovation economics is just a new veneer on an age-old concept: government picking winners and losers. It is centralized industrial policy making updated with the trappings of the 21st century, and nets out to yet another form of state capitalism. The clear evidence for this can be found in an unlikely place: bitcoin.

A decentralized digital currency that is radically improving the world economy, bitcoin’s story is remarkable. In 15 short years, a moonshot to create a universal honest ledger has been adopted by hundreds of millions of people, and even nation-states. It is sound money that can be sent anywhere in the world, and promises change that both sides of the political aisle could get behind, from healthy market competition in the financial sector, to protection from exploitation for the populations of poor countries.

Ironically, bitcoin would be an ideal candidate for an innovation subsidy, given the tremendous positive impact it could have once key technical problems are solved. Its potential to revolutionize the financial system, enhance privacy, and democratize finance makes it a game-changer. And, although there is a robust commercial and industrial ecosystem evolving naturally around bitcoin, there is no question that the ecosystem would develop faster if it were subsidized.

However, the benefits offered by bitcoin come at a cost to the power of state apparata, which depend on seigniorage (profiting from money-printing) as a key lever of power. Whatever you think of bitcoin and its long-term prospects, there’s no question that if it were to succeed, it would obviate the need for government-controlled fiat currencies and the central banks that issue them, and reduce the power of the state over the economy.

Hence, even though bitcoin subsidies would seem to be consistent with the stated objective of innovation economics of helping people, bitcoin would never receive government support precisely because it works against the government's interest in maintaining control over fiat currency. This exposes a congenital defect of innovation economics—it must be biased towards preserving the power and control of those who decide what to subsidize.

This leads to a broader question that the reader must ponder. If bitcoin is a specific case that exposes the general flaw in innovation economics, what other opportunities are being suppressed or missed because capital is being misallocated by innovation subsidies?

The story of bitcoin, an innovation that emerged and thrived without government support, serves as a sobering reminder that true innovation often follows its own path.

Furthermore, it is not possible for the government to pick winners and losers in the innovation race without prejudice or self-interest. While innovation economics has alluring promises and can point to specific successes, it fails to escape the biases and conflicts that inevitably arise from government intervention.

Despite its modern facade and claimed successes, the theory of innovation economics falls short of delivering an unbiased, effective path to technological innovation. The specific case of bitcoin, coupled with the general potential for missed opportunities due to biased capital allocation, calls into question the very foundations of this approach. Policymakers and economists would do well to carefully consider these flaws.

Dave Birnbaum

Dave Birnbaum is the product director at Coinbits, where he leads a team that is making Bitcoin user-friendly for the next generation of Bitcoiners.

This article was originally published on FEE.org. Read the original article.

Bitcoin Is a Great Counterpoint to Calls for Government Innovation Subsidies/a>

Why Government Spending Is Bad for the Economy

On Monday, President Biden announced $42 billion in funding to build internet infrastructure across the country, with the goal of getting every American connected to the internet by 2030. This is the “largest internet funding announcement in history,” the White House proudly noted, comparing it to FDR’s Rural Electrification Act of 1936, which provided federal loans that helped bring electricity to rural areas of the US.

Officially known as the Broadband Equity Access and Deployment (BEAD) program, the initiative aims to bring high-speed internet to the roughly 8.5 million households and small businesses that are still lacking this infrastructure. “High-speed internet is no longer a luxury,” the White House said. “It is necessary for Americans to do their jobs, to participate equally in school, access health care, and to stay connected with family and friends.”

While it’s easy to see the benefits of increased internet access, the price for taxpayers isn’t exactly cheap. Doing the math, Rep. Thomas Massie pointed out that it will cost about $4,941 for each family that is connected to the internet. By contrast, Elon Musk’s Starlink can do the job for $599 per family, he noted.

Implementation questions aside, it’s worth asking, is this a good policy? Is it wise for the government to be spending money on these kinds of projects in general? Well, I suppose it depends on what we mean by “good.” If “good” means funneling money to special-interest groups—as pretty much all government spending is designed to do—then yes, it will do that quite well. But if it means beneficial for the welfare of the masses, there are good reasons to believe spending projects like this actually work against that aim rather than facilitate it.

To understand why, we need to discuss a bit of economics.

The ‘Miracle’ Unmasked

One of the most important concepts in economics is the idea of scarcity. Our wants exceed our resources, which means there will always be trade-offs. Money spent on one initiative is money that can’t be spent elsewhere. There is no such thing as a free lunch.

This is just as true for government spending as it is for anything else. Though it’s easy to focus on the benefits—in this case, the internet infrastructure that would be created—the good economist trains himself to see the hidden costs, the lost opportunities, the things that could have been funded and would have been built if only the money hadn’t been spent on the project in question.

Henry Hazlitt stressed this point in his book Economics in One Lesson. “Either immediately or ultimately,” he wrote, “every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.”

Though everyone would agree in principle that you can’t get something for nothing, it seems this truth gets completely forgotten the moment government spending comes up. “How could you be against internet infrastructure?” people might say. “Don’t you care about internet access?” Of course I do. But I also recognize that money spent on internet access is money that can’t be spent on food, healthcare, education, or housing. And unlike the proponents of these programs, I don’t presume to know what consumers most urgently need.

If people are managing fine without the internet but are desperate for more healthcare services, spending resources on more internet when those resources could have been used for more healthcare isn’t really helping. To take an extreme example, if I thought people really needed more pineapples, I could spend billions of dollars on pineapple infrastructure. And it’s true, there would be much better access to pineapples. But think of all the waste! So many more important things could have been created with those resources, but instead the most urgent wants are left unfulfilled because some politician thought pineapples were a higher priority for those funds than anything else.

The question, then, is not whether internet access is important. The question is whether it is more important than the alternatives. The mere existence of a benefit justifies nothing. The benefit must outweigh the cost. It must be more important than the opportunities that are foregone to achieve it.

So, how do we systematically determine which uses of resources are the most valuable to consumers? With the government, this is impossible. Politicians and planners are simply “groping in the dark,” as the economist Ludwig von Mises put it. Sure, they’ve got all sorts of statistics, but the statistics paint at best a blurry picture of the relative needs of consumers.

Fortunately, there is an alternative: the market. On the market, profits and losses signal to entrepreneurs the relative value consumers place on different goods and services. These signals lead to a remarkable coordination between the needs of consumers and what gets produced. It’s not perfect, of course, but at least there is a mechanism for rationally allocating resources to meet the most urgent needs of consumers as best as possible.

Government spending is at best a zero-sum game. It is taking resources that could have been used on one thing and using them on something else instead. But in practice it’s almost always worse than that, because market allocations tend to reflect the needs of consumers far better than government allocations. Thus, government spending inevitably wastes resources, directing them to the proverbial pineapple industry rather than the things consumers need most.

And it’s not like this issue can just be fixed with better managers. The managers aren’t the problem. It’s the system that’s the problem. As the economist Murray Rothbard noted in Power and Market, “The well-known inefficiencies of government operation are not empirical accidents, resulting perhaps from the lack of a civil-service tradition. They are inherent in all government enterprise.”

Capitalists: Informed Humanitarians

When free-market proponents push back on government spending initiatives like the recent internet access program, we are often accused of being “against” whatever that initiative is trying to achieve. In this case, people will probably say we are “against internet access.” Here Biden is trying to do something nice to improve the welfare of American citizens, and we just want to stop him, presumably because we are heartless souls who hate paying taxes and don’t care about other people’s well-being.

But this is simply a leftist narrative, one that has little basis in reality. Frédéric Bastiat called out this kind of thinking in his 1850 book The Law.

“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

The fact is, free-market proponents do care about human welfare. In fact, it is precisely because we care that we are against government spending! The question is not whether to have government-funded initiatives or let people suffer, but whether to have the government or the market allocate resources.

A proper understanding of economics, we believe, leads to the conclusion that market allocations tend to be better for the well-being of everyone than government allocations. Thus, far from being an act of misanthropy, our opposition to government spending actually stems from the very concern for human welfare that the left erroneously thinks they have a monopoly on.

This article was adapted from an issue of the FEE Daily email newsletter. Click here to sign up and get free-market news and analysis like this in your inbox every weekday.

Patrick Carroll

Patrick Carroll has a degree in Chemical Engineering from the University of Waterloo and is an Editorial Fellow at the Foundation for Economic Education.

This article was originally published on FEE.org. Read the original article.

Why Government Spending Is Bad for the Economy

The Real Reason State Farm Won’t Sell Home Insurance in California Anymore

State Farm announced last week it will no longer accept homeowner insurance applications in California , where it has long been a leading insurance provider.

In a press release , America’s largest property insurance company cited various reasons for its decision, including the high costs of doing business in California, macroeconomic factors such as inflation, and increased catastrophe exposure.

Media seized on this last item to declare the official arrival of the climate apocalypse.

“Climate shocks are making parts of America uninsurable,” The New York Times observed following State Farm’s announcement.

While climate change might be in the zeitgeist, there are better explanations for State Farm’s exit.

Though State Farm said nothing about climate change in its press release, there’s no question that California has struggled mightily with wildfires in recent years. Data collected by Policygenius show California experiences more wildfires than any other U.S. state (9,280 in 2021) and the most acreage burned (2.2 million acres).

Worse, California’s wildfires tend to be the most destructive. The Golden State suffered $14 billion in insured wildfire losses in 2017, the most in history. The worst years for other states don't even come close: The next closest is Texas, which suffered $530 million in insured wildfire losses in 2011, followed by Colorado ($450 million in 2012) and Arizona ($120 million in 2002).

Many have seized on California’s struggles with wildfires to perpetuate the myth that wildfires are at historic highs in the United States—they are not—because of climate change. The truth is wildfires are not a serious problem in most parts of the U.S., and it’s not because the climate change gods are fickle, but because these states practice better land management.

In a 2020 ProPublica article, journalist Elizabeth Weil pointed out that California officials have turned the state into a tinderbox through years of fire suppression.

“The pattern is a form of insanity,” Weil wrote. “We keep doing overzealous fire suppression across California landscapes where the fire poses little risk to people and structures.”

The New York Times noted California’s approach is a stark contrast to the Southeast, where “fire is widely accepted as a tool for land management” and millions of acres are allowed to burn each year.

Property rights also play a role. In Texas, 95% of the land is privately owned , which has resulted in better stewardship and fewer megafires. This is a stark contrast to California, where roughly 48 million acres , nearly half the state’s land area, are owned by the federal government, which is so bad at land management that it managed to lose some 15 million acres of public land .

The authorities have shown they are far less competent than the indigenous tribes who managed the land far more effectively through prescribed fire.

“We should be empowering the people who know how to do this,” Crystal Kolden, a fire scientist at the University of California, Merced, told the New York Times after wildfires ravaged the state in 2020.

Privatizing these lands would be more effective than any federal climate policy — ever hear of the tragedy of the commons ? — but government officials will never concede that their own mismanagement is to blame.

"The factors driving State Farm’s decision are beyond our control, including climate change," a statement from the California Department of Insurance said .

It’s a tempting fiction to believe, to be sure. But the truth is California’s own policies are to blame, and not just fire suppression.

I spoke to Rex Frazier, president of the Personal Insurance Federation of California, who cited several policies that no doubt contributed to State Farm’s decision to stop issuing policies, including various price controls that prevent insurers from raising prices to meet surging costs without the written approval of the California Department of Insurance.

“California is the only state in the country that doesn’t allow insurers’ rates to be based upon actual reinsurance costs,” Frazier said. “California’s regulations employ a legal fiction that each insurer uses its own capital to serve customers. As reinsurance costs go up, insurers cannot have their rates reflect those higher costs.”

Many will cling to the theory that climate change is the real culprit. Those who favor this theory should be asked why California is particularly prone to the externalities of climate change.

This article originally appeared on The Washington Examiner.

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. (Follow him on Substack.)

His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.

Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times. 

This article was originally published on FEE.org. Read the original article.

The Real Reason State Farm Won’t Sell Home Insurance in California Anymore

Occupational Licenses Are Killing Minority Entrepreneurship

Ashley N’Dakpri runs Afro Touch, a hair-braiding salon in Louisiana. She wants to hire more stylists to meet demand, but Louisiana’s strict occupational licensing regulations prevent her from doing so.

Ashley legally isn’t allowed to hire new stylists unless they have a cosmetologist’s license, a certification that requires five hundred hours of training and thousands of dollars in fees to obtain. She notes that many potential employees are no longer interested in working for her once they discover the onerous occupational licensing requirements.

State-level occupational licenses are a major barrier to minority entrepreneurship. These licenses prevent many minorities from starting their own businesses in fields across the economic spectrum.

The beauty industry is perhaps the most egregious example of a field whose occupational licensing requirements prevent minority entrepreneurship, but these licenses are also found in many other industries popular with minority entrepreneurs, including construction, childcare, and pest control.

Cosmetology licenses are often far more difficult to get than licenses for professions that deal with life and death. In Massachusetts, for instance, cosmetologists must complete one thousand hours of coursework and two years of apprenticeship before they are allowed to ply their trade in the beauty industry. Emergency medical technicians, by contrast, must only take 150 hours of courses to be allowed to work.

What are these occupational licenses protecting consumers from? A bad hair day? These permits present an enormous entrepreneurial barrier to mostly minority women. According to a study by the Institute of Justice, Louisiana has just thirty-two licensed African hair braiders. In stark contrast, neighboring Mississippi, which has approximately four hundred thousand fewer black residents but doesn’t regulate hair braiding, has 1,200.

California is the worst occupational licensing offender, according to IJ, putting up “a nearly impenetrable thicket of bureaucracy.” Basic trades such as door repair, carpentry, and landscaping require potential entrepreneurs to devote 1,460 days to supervised practice and spend up to thousands of dollars for a license before they can legally work.

Nearly one-quarter of American workers hold a license, according to the Labor Department, up from about 5 percent in the 1950s. Unsurprisingly, a Federal Reserve Bank of Minnesota report concluded that minorities are significantly less likely to hold a license than whites.

Research by economist Stephen Slivinski indicates that licensing requirements reduce minority entrepreneurship. He finds that states that require more occupational licenses have lower rates of low-income entrepreneurship.

It’s already difficult enough for minority entrepreneurs to find a product that fills a gap in the market and outcompete established players without simultaneously worrying about the government hamstringing them through bad policies like excessive occupational licensing.

With fewer government hurdles, minority entrepreneurs can more readily overcome racial economic gaps through their own inspiration and ingenuity.

This column is adapted from the author’s new book, "The Real Race Revolutionaries: How Minority Entrepreneurship Can Overcome America's Racial and Economic Divides.”

Alfredo Ortiz

Alfredo Ortiz is the president and CEO of Job Creators Network.

This article was originally published on FEE.org. Read the original article.

Occupational Licenses Are Killing Minority Entrepreneurship

Young Americans Have Good Reasons to Dread Biden’s Plan to Expand the IRS

Millennials and Gen Z have grown up watching politicians saddle them with economic hardships and make a mockery of their right to privacy. Now, the Biden administration wants to double down and rob young Americans of their economic privacy.

Alongside the $3.5 trillion reconciliation bill is a provision that would force banks to report the transaction details of all accounts with over $600 to the IRS. But the thought of government agents breathing down one’s neck is vexing for young people, who already account for a sizable portion of the $1.7 trillion in student loan debt and have an unemployment rate twice that of older Americans. Whether it’s investing in cryptocurrency, buying a firearm, or giving to charity, this measure will only dissuade young Americans from making financial decisions that best serve their interests and values.

Like any monopoly, the government has a vested interest in shutting out competition, including currencies that compete with the ever-devaluing dollar. Biden’s recent announcements of a national cryptocurrency enforcement team and consideration of increased regulations on digital currency are clear signals that this administration is no friend to the crypto market, where more and more young people are putting their money. On top of Uncle Sam taking a big chunk of their crypto profits through capital gains taxes, the threat of the IRS monitoring each time a young person invests in a currency frowned upon by DC will increase buyer hesitancy, creating yet another barrier to getting out of debt and securing financial stability.

Speaking of items frowned upon by DC, it’s not difficult to imagine how increased IRS scrutiny into young people’s bank accounts will deter them from buying firearms. Over the last several years, state and local governments have started violating gun owners’ privacy in unprecedented ways with Emergency Risk Protection Orders (otherwise known as “red flag” laws), which are currently on the books in 19 states and Washington, D.C. The Biden administration supports expanding these laws, even as police have used them to kick down young Americans’ doors and—in the case of Maryland resident Duncan Lemp—kill them in their sleep.

A blow to the young philanthropic spirit would be another piece of collateral damage of the IRS provision. A recent study showed only one-third of young Americans give to charity, due to high costs of living and unfavorable markets. Whereas the IRS can easily weaponize itself against ideological enemies—as seen with the IRS’ admitting to targeting at least 40 conservative groups in the early 2010s—economic barriers combined with the stripping of donor privacy will discourage young people from investing in the change they want to see in the world.

Millennials and Gen Z came of age as the surveillance state came into existence, starting with the passage of the Patriot Act in 2001. Now, the government’s oft-spoken mantra “if you've got nothing to hide, you've got nothing to fear” is coming for young Americans’ bank accounts. But neither the IRS snooping on their Venmo transactions nor demanding 37 percent of your Dogecoin gains will solve the problems that America faces.

This economic tyranny will only continue to build the case for young people that the government is working against their interests, not for them.

Sean Themea

Sean Themea serves as chief of staff for Young Americans for Liberty (YAL). A recovering progressive, Sean has appeared on Fox Business, Newsmax, The First TV, and OAN.

This article was originally published on FEE.org. Read the original article.

Young Americans Have Good Reasons to Dread Biden’s Plan to Expand the IRS

The Government’s War on Pipelines Made Us Vulnerable to Attacks on Our Infrastructure

Vickie Phillips received an unpleasant surprise when she stopped in for a fill-up at the Pop Shoppe in Greensboro, North Carolina on Monday.

There was no fuel.

“I can’t believe that we’re here and can’t even get gas,” Phillips told a local TV station. “People are tired of sitting in the house and they just want to get out and try to resume something of normality with their life and they’re definitely going to need fuel and gas to do that.”

Phillips was just one of thousands of people who saw their travel plans disrupted in the wake of a cyberattack on Friday targeting the Colonial Pipeline, a vital network of pipelines that run some 5,500 miles from the US Gulf Coast to New York Harbor.

The New York Times reported that many stations in southeastern states have placed caps on the amount of fuel consumers can purchase, while many stations have run out of fuel altogether.

In the wake of the disruption, North Carolina Gov. Roy Cooper declared a state of emergency, while Georgia Gov. Brain Kemp suspended the state’s gas tax. The Biden administration, meanwhile, lifted environmental regulations on the sale of gasoline in several states and the nation’s capital.

Following the attack, fuel futures jumped to $2.217, a three-year high.

Hackers: We Didn’t Mean to Cause Problems

There’s no question that the Colonial Pipeline is a key piece of infrastructure.

Analysts have described the pipeline as one of the most vital energy arteries in the country, one capable of carrying up to 3 million barrels of fuel—gasoline, diesel and jet fuel—per day to the East Coast.

"This is as close as you can get to the jugular of infrastructure in the United States," Amy Myers Jaffe, research professor of the Climate Policy Lab, told Reuters. "It's not a major pipeline. It's the pipeline."

Still, the widespread disruption seemed to surprise even the hackers responsible for the cyberattack.

"Our goal is to make money and not creating [sic] problems for society," DarkSide, the group the FBI confirmed is responsible for the attack, wrote on its website.

This invites an important question: how was a single cyberattack able to derail an entire region of the most prosperous country in the world, disrupting the lives of millions of Americans?

Pipelines Under Attack

One answer is that we simply don’t have enough oil pipelines. The Colonial Pipeline provides nearly half—45 percent—of the fuel consumed on the East Coast. As other astute commentators have noted, “one pipeline network shouldn't be serving half of the East Coast's fuel needs.”

The reality is regulatory hurdles have made it all but impossible to build new pipelines, which has placed a great deal of pressure on existing energy infrastructure. And it’s getting worse. Indeed, politicians are now actively scrapping pipelines that are instrumental to meeting future energy needs.

One of President Biden’s first initiatives was to scrap, by executive order, the Keystone Pipeline, a 1700-mile pipeline that could have carried roughly 800k barrels of oil each day from Alberta to the Gulf Coast. (Instead, the bulk of that fuel will be transported by railways, which are less environmentally friendly and more dangerous.)

Biden’s scrapping of the Keystone Pipeline received a great deal of attention, but it’s worth noting the action was part of a trend that has been largely overlooked. Across the US, pipelines are being targeted by politicians, regulators, and courts with great zeal.

A year ago, Michigan Gov. Gretchen Whitmer took legal action to force the shutdown of the Line 5 Pipeline, which links Lake Michigan and Lake Huron and carries about 500,000 barrels of crude each day.

"Here in Michigan, the Great Lakes define our borders, but they also define who we are as people," said Whitmer, who gave Enbridge Energy a deadline of May 2021 to stop the oil.

As of Tuesday, with the deadline rapidly approaching, the oil was still flowing. And news reports say Enbridge Energy and the Michigan governor are likely heading for a legal showdown.

Then there is the Atlantic Coast Pipeline. Last year Duke Energy and Dominion Energy announced the cancelation of the 600-mile project—which would have piped gas from West Virginia to eastern North Carolina—because delays and regulatory uncertainty had threatened “the economic viability of the project.”

The 1,200 mile-long Dakota Access Pipeline, which has been flowing since 2017, currently carries hundreds of thousands of barrels of crude through the Dakotas to Iowa and Illinois. While the Biden administration has announced it will not shut down the pipeline, a US district court judge did in July 2020. That ruling was overturned by a federal appellate court, but the pipeline’s fate hangs in the balance pending an environmental review.

Reminder: Oil Is Still a Vital Resource

For many, the lesson of the recent gas shortage is that we need more cybersecurity oversight.

"This pipeline shutdown sends the message that core elements of our national infrastructure continue to be vulnerable to cyberattack,” Mike Chapple, a professor in University of Notre Dame’s Mendoza College of Business, told Reuters. “Securing our energy infrastructure is a national security issue that involves several different federal agencies and requires centralized leadership.”

Anyone who understands the “knowledge problem” will be rightly skeptical of solutions based on “centralized leadership,” especially when it comes to a “national security issue that involves several different agencies,” given the track records of the NSA, the TSA, the CDC, etc. What we really need is, not more, but less government oversight getting in the way of more pipelines.

The current disruption should serve as a reminder that fossil fuels are an essential part of human prosperity.

No one has made this point better than Alex Epstein, the author of The Moral Case for Fossil Fuels, who noted that cheap, plentiful fossil fuels—when married with human ingenuity—allow humans to improve the world around them.

“Fossil fuel technology transforms nature to improve human life on an epic scale. It is the only energy technology that can currently meet the energy needs of all 7+ billion people on this planet,” wrote Epstein. “Ultimately, the moral case for fossil fuels is not about fossil fuels; it’s the moral case for using cheap, plentiful, reliable energy to amplify our abilities to make the world a better place – a better place for human beings.”

The other side of that coin is that when energy is made needlessly expensive, scarce, and unreliable—whether by cybercriminals or politicians—it makes the world a more frustrating and unhappy place for human beings, as Vickie Phillips and many other Americans discovered this week.

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.

Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times. 

This article was originally published on FEE.org. Read the original article.

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Government Can't Count Ballots. How Can It Possibly Manage a Pandemic or Our Health Care?

Elections are a nasty business, but sometimes they can be clarifying.

We don’t yet know who won the US presidential election, and we may not for days or weeks to come. This stems largely from the ineptitude Americans witnessed on Election Tuesday.

It wasn’t just the fact that pollsters once again failed disastrously, or that networks fumbled their election coverage.

The bigger issue is that America’s governing bodies look incapable of managing something as simple as a vote, something Americans have managed to do efficiently for centuries without the benefit of computers, digital communication, and mass transportation.

As an American, I find this a tad embarrassing. As the journalist Glenn Greenwald observed Wednesday, countries with far fewer resources and less advanced technology regularly manage to hold speedy, efficient elections. This is something the US failed to do on Tuesday, Greenwald noted.

The richest and most powerful country on earth — whether due to ineptitude, choice or some combination of both — has no ability to perform the simple task of counting votes in a minimally efficient or confidence-inspiring manner. As a result, the credibility of the voting process is severely impaired, and any residual authority the U.S. claims to “spread” democracy to lucky recipients of its benevolence around the world is close to obliterated.

At 7:30 a.m. ET on Wednesday, the day after the 2020 presidential elections, the results of the presidential race, as well as control of the Senate, are very much in doubt and in chaos. Watched by [the] rest of the world — deeply affected by who rules the still-imperialist superpower — the U.S. struggles and stumbles and staggers to engage in a simple task mastered by countless other less powerful and poorer countries: counting votes. Some states are not expected to [finish] their vote-counting until the end of this week or beyond.

This, to be blunt, is unacceptable.

The most prosperous country in the world cannot manage to do something as simple as collect and count ballots. Think about that for just a moment.

Unfortunately, this incompetence carries consequences that are quite real. Americans are beginning to lose faith in the integrity of elections. I’m not just talking about voters in the fever swamps of Twitter.

Many impressive journalists, thinkers, and students of various political stripes have expressed alarm at what they witnessed in the last 24 hours.

Many readers can probably relate to some of these concerns.

The reality is, the inability of election authorities to do something as simple as gather and count votes is undermining Americans’ faith in the constitutional system. As Greenwald notes, this is dangerous; but it’s also rational.

Because of the power and breadth of the federal government, there is a great deal at stake in presidential elections—too much at stake. Americans sense this, and when they see mail-in ballots missing, precincts that can’t get votes counted, voting delays, errors in data feeds, and other problems it naturally creates a feeling of uncertainty. Uncertainty in turn breeds distrust.

One could argue that this year’s election was unique. Turnout was unprecedented (at least in raw numbers), perhaps in part because of the coronavirus pandemic and the record number of mail-in ballots.

Perhaps that’s true. But the fact remains: how hard is it to collect and count ballots? I don’t wish to disparage the people working these elections. The process is probably far more complicated than many Americans realize. But this is true of most systems, which brings me to a key point.

Is collecting and counting ballots more difficult than running a vast health care system that involves pricing, insurance, medication, billing, and the very lives of individuals? The answer is no.

Is collecting and counting ballots more difficult than attempting to manage the spread of an invisible virus without ruining the livelihoods, spirits, educations, and very lives of hundreds of millions of people? Again, the answer is no.

In some ways, we should not be surprised to see governing bodies fail to manage something as elementary as an election. For decades we’ve watched the United States Post Office bungle something as simple as collecting and delivering mail. The USPS bleeds billions of dollars every year doing something a private company would make a profit doing, while delivering substandard service. (This is why libertarians have been arguing for more than a century that the Post Office should be subjected to competition.)

It’s no coincidence that the election debacle of 2020 happened in the year the Post Office played its largest role ever. It was bound to happen.

As the economist Ludwig von Mises observed in his 1944 book Bureaucracy, government agencies can never be anywhere near as efficient as private businesses. The competitive market compels entrepreneurs and their employees to competently and efficiently serve the buying public or go out of business. And profit-and-loss accounting enables them to figure out exactly what’s working and what’s not. In contrast, as Mises wrote:

“Public administration, the handling of the government apparatus of coercion and compulsion, must necessarily be formalistic and bureaucratic. No reform can remove the bureaucratic features of the government’s bureaus. It is useless to blame them for their slowness and slackness. It is vain to lament over the fact that the assiduity, carefulness, and painstaking work of the average bureau clerk are, as a rule, below those of the average worker in private business. (...) In the absence of an unquestionable yardstick of success and failure it is almost impossible for the vast majority of men to find that incentive to utmost exertion that the money calculus of profit-seeking business easily provides. It is of no use to criticize the bureaucrat’s pedantic observance of rigid rules and regulations. (...)

All such deficiencies are inherent in the performance of services which cannot be checked by money statements of profit and loss.”

That isn’t to say that bureaucracy is inherently evil. Mises clarified that, “bureaucracy in itself is neither good nor bad.”

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“There is a field,” he continued, “namely, the handling of the apparatus of government, in which bureaucratic methods are required by necessity.”

Elections, for example, are necessarily a bureaucratic affair, even if that means they often get bungled.

The big problem is when governments bureaucratize things that don’t need to be bureaucratic. The evil lies in, as Mises said, “the expansion of the sphere in which bureaucratic management is applied.”

For example, health care does not need to be bureaucratic. It can and has been provided through the market. To the extent that it has been, market forces and signals have made it better.

But if health care were to be socialized—as in a single-payer scheme—it would have to be managed bureaucratically and would inevitably suffer all the deficiencies of a bureaucracy: ineptitude, slowness, neglect, etc.

Just imagine having to depend on the DMV or the USPS for your medical treatment. (If you’ve ever had to deal with the Veterans Administration, perhaps you don’t have to imagine.)

One may object that our health care system already suffers from those failings and is already quite bureaucratic. But that is because the government is already so heavily involved in it. As Mises wrote, “Every kind of government meddling... breeds bureaucratism.”

It is the absence of market forces and signals that makes governments inefficient. The normal mechanisms in markets that lead to efficiency, productivity, and prosperity simply cannot be replicated in a government system. Ever.

This is not to say some government systems cannot be managed more effectively than others. Naturally, they can. Just as many countries manage to hold elections and quickly get reliable results instead of the fiasco Americans witnessed this week.

The point is bureaucracy is inefficient by nature. We saw that Tuesday night.

And we should all be asking ourselves an important question: If government cannot manage something as simple as an election, how can it possibly make rational decisions about health care and pandemics that affect hundreds of millions of people?

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.

Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times. 

This article was originally published on FEE.org. Read the original article.