What To Expect When The Minimum Wage Goes To $15

Late last week a reader named Bert wrote to ask a series of questions about what is likely to happen in places that raise the minimum wage to $15.  The questions are found in Bert's comment at this post.  Since Bert is interested in my thoughts, I thought others might be as well.

To summarize, Bert's questions are:

1. Won't raising the minimum wage also raise the wages of others up the pay scale, as employers seek to preserve the differentials between lowest paid workers and those next up the ladder?
2. Isn't raising the minimum wage a "cynical tax grab" by government, because the higher wages, both at the bottom and up the ladder, will generate more taxes?
3. Is there a "moral" issue involved in government preventing a voluntary economic transaction, even if that transaction involves paying for human labor at a wage so low that we find it distasteful?

To address these questions, I have to start with some basic economics; and by "basic economics," I mean what you learn in the first couple of weeks of an intro economics course.  Now unfortunately, you can't trust much of what you learn in an economics course, and the more "advanced" it gets, the more likely it is to be a total fallacy -- see, for example, the Keynesian "stimulus" fallacy endlessly promoted by the likes of Krugman and Blanchard.  But the stuff you learn in the first couple of weeks of the intro course has stood the test of time, particularly in its depiction of what to expect from price controls.  

So here's the basic summary:  A market is what we call a place where people come together to buy and sell stuff.  A market not subject to government price controls (sometimes called a "free market") will "clear," meaning that everybody who wants to buy can buy and everybody who wants to sell can sell; and, to reach the point of "clearing," the market will come to a "market-clearing price," that is, the price at which everybody who wants to buy can buy at that price, and everybody who wants to sell can sell at that price.  "Free" markets not subject to government price intervention rarely have shortages or surpluses.  A good example of such a market is the stock market, which determines prices that "clear" the market for each stock on a moment-by-moment basis.  If you want to buy or sell 100 shares of Microsoft, you can always do it in a matter of seconds.

Then there are markets where the government intervenes and tries to control the price.  Sometimes the government tries to control the price at a level lower than the market-clearing price (examples: rent control in New York; consumer goods in present-day Venezuela).  Other times the government tries to control the price at a level higher than the market-clearing price (examples: many agricultural commodities; the minimum wage).  When the government tries to control a price low, the result, always and everywhere, is a shortage -- the good or service becomes unavailable to many willing buyers.  Witness the empty store shelves and long lines in today's Venezuela.  When the government tries to control a price high, the result, always and everywhere, is a surplus -- there are people who would like to sell but cannot find buyers at the controlled price.  Witness the surplus corn and wheat and butter endlessly produced as a result of U.S and European agricultural price controls.  In the case of the minimum wage, the surplus manifests as unemployment or involuntary idleness for some segment of the population otherwise willing to work.

So do minimum wage laws actually lead to job losses and increased unemployment?  It's hard to believe that they wouldn't, and here are the results of a survey by the American Economics Association of labor economists showing that the large majority of that group believe that that would be the result.  But the effect may be hard to parse out of the very crude government statistics when the minimum wage is low as a percentage of the median income and few people are actually paid at the legal minimum (and therefore the effect of the minimum wage on the labor market is small).  That's been the case in the U.S. for some time, where the current $7.25 federal minimum is around 30% of the median wage nationally, and less than 4% of workers are actually paid at or below the $7.25 level.  

But, if you look closely at the data, you will find, even at the current $7.25 minimum, strikingly high levels of idleness among the very-least-skilled potential workers, particularly among young black males.  This idleness does not necessarily manifest in the government's numbers for "unemployment," because to be counted as unemployed you must say that you are looking for work.  Thus, many eminently employable people may be without employment, but not counted as "unemployed."  As an example, the demonstrations in Baltimore following the death of Freddie Gray about a year ago revealed to the audience large numbers of young black males with lots of time on their hands; and, as I reported in this post last April, even though Baltimore's official "unemployment" rate was only a couple of points above the national average, its employment-to-population ratio was a full 5 points below the national norm -- meaning that tens of thousands of people who would be employed elsewhere are without employment in heavily-minority Baltimore.  Others who have recently looked at the condition of young black males in major American cities have also found strikingly high rates of non-employment, not reflected in the official government numbers for "unemployment."  For example, a New York Times editorial on February 20 titled "The Crisis of Minority Unemployment," cited to a report from something called the Great Cities Institute for the proposition that about 30% of young black males (ages 20-24) in New York and Los Angeles neither work nor attend school; and in Chicago the comparable figure was said to be close to half.  (Being ever the skeptic, I would point out that the Great Cities Institute is an advocacy group and its numbers may well be exaggerated; but even if the correct figures are only half of what they claim, these would still be very striking numbers.)  

Now, how much of this idleness can be attributed to the current minimum wage?  Obviously, there could be other factors at work.  On the other hand, markets not subject to government price controls literally always "clear."  That means that, to attribute the idleness to something other than the minimum wage, you must believe that these young black men are somehow completely unemployable, or would refuse to work at any price.  Those things don't seem too likely to me.  I think that the minimum wage is substantially responsible, although I admit that it's a judgment call and others could differ.  

But there are other places where we can look for more data.  What happens when the minimum wage becomes much higher as a percent of the median income?  As it happens, we have an example of that in the United States, which is Puerto Rico.  And it's not pretty.  Puerto Rico is subject to the federal $7.25 minimum wage, but its median income is only about 40% of that in the 50 states, so that a full-time minimum wage job comes in at about 70% of median income, versus 30% in the rest of the country.  And here are some of the things we find in Puerto Rico:  its official "unemployment" rate is 11.8%, almost 7 full points above the national average; even more dramatically, its "labor force participation rate" (ratio of jobs plus unemployed to population 16 and over) is only 42% -- more than 20 full points below the national norm.  That 20 point differential represents something like 400,000 people who would be working if Puerto Rico met national norms for labor force participation.  And two more things about Puerto Rico:  (1) it is losing population hand over fist (down about 10% since 2000) as people leave for the mainland to find employment; and (2) 25% or more of its economy is said to be "underground" and not reported to the government.  Again, there could be other factors at work than just the minimum wage.  But it is very hard to assign principal responsibility for these things to anything other than the minimum wage.

So what will be the effect of a $15 minimum wage?  Here in chic Manhattan, probably not much at all.  The effective market-set minimum is around $15 right now.  The same may well be true in San Francisco and the wealthy parts of Silicon Valley.  But how about Syracuse, Utica, Fresno and Stockton?  I'm sorry, but I think you are in for the fate of Puerto Rico.  Maybe not quite so bad, but only because the $15 minimum is more like 50-60% of your median income versus the 70% that Puerto Rico experiences.  The people most harmed will be those at the very bottom of the labor skills scale.  They will be put completely out of business, and rendered idle.  Oh, there's always the underground economy.  Drug dealing, anyone?  

With all that background, I now turn to Bert's questions.

1. Yes, there could be some pay increases for people in the next tiers up the pay ladder from the very bottom rung, as the bottom rung moves up.  But remember, a business cannot pay out in wages more than its revenues and expect to survive for long.  Some raises can come out of former profits, but the marginal businesses that pay minimum wages don't have a lot of profits to play with.  It is hard to believe that the aggregate of raises will exceed the aggregate of lost wages to the lowest income workers from firings, downsizings, and company closures.
2. It is possible that politicians with zero mathematics skills (e.g., Sanders, Clinton) may actually think that a higher minimum wage will create vast new wealth out of thin air that can then be taken by taxes.  The reality of course is Puerto Rico, where a tenth of the population leaves the jurisdiction entirely and quarter or more of the remaining economy goes underground and stops paying taxes altogether, and the tax system goes into a death spiral.
3. Yes, there is a huge "moral" question in the minimum wage that somehow goes undiscussed in trendy progressive circles.  The correct way of looking at the minimum wage is that it is a device used by entrenched workers, often white and unionized, who have achieved above-market wages through cartelization, to protect themselves against price competition from minorities.  Should the young black kid be able to win a job against a competing white worker by underbidding on price?  After all, underbidding on price is how the Waltons became billionaires.  I personally find it morally repugnant that the government shuts young minorities out of the ability to get a first toe-hold in the labor market by competing on price, and renders them idle and often dependent on government hand-outs.  Why Hillary, Bernie, and all the other trendy progressives don't find this morally repugnant, is beyond me.     

The Under-reported Disaster Of Renewable Energy Schemes

If you consume mainstream media sources in the U.S., you very likely have the impression that renewable energy sources like solar and wind are advancing smartly and soon will be providing half or more of the energy that is produced.  The reality is very much the opposite.  If you want to learn what's really going on, you will never find out from reading the New York Times or Washington Post, whose missions in this area are basically to suppress all information that is important to know.  What you need to read is the daily email put out by a guy named Benny Peiser of the Global Warming Policy Foundation in England.  You can go here to subscribe.

Although it has a number of prominent scientists on its Academic Advisory Council, GWPF does not itself dabble much in the quasi-scientific debate over whether global warming is occurring and if so by how much and from what cause.  Rather, its niche is government policies that are supposedly designed to address the global warming crisis, and particularly how much they cost and whether they work.  Each day they provide multiple links to sources that report on these issues, most often from national publications in particular countries or from relatively small-circulation outlets.  

If you haven't been reading the GWPF newsletter recently, here are a few things you may have missed just this week:

About a quarter of the windmill capacity in the Netherlands is operating at a loss and is threatened with near-term closure.  (What, you thought wind power was free?)  From Financieele Dagblad (Dutch language, translated) on April 13:

Due to the low energy prices wind turbines are making losses on a large scale. The maintenance costs are higher than the benefits of the energy generated. Windmills are now being demolished according to a survey by Financieele Dagblad. According to estimates Association of Private Wind Turbine Operators (Pawex) 'potentially 500 to 750 megawatts' are making a loss or are at risk of doing so. That is a quarter of the power generated by onshore wind energy in the Netherlands.

Britain recently cut subsidies for household solar installations, and the pace of such installations immediately fell by three-quarters.  From The Guardian on April 8:

The amount of household solar power capacity installed in the past two months has plummeted by three quarters following the government’s cuts to subsidies, according to new figures. The size of the drop-off will dismay green campaigners who want take up on clean energy sources to accelerate. The cuts were announced just days after energy secretary Amber Rudd helped agree the historic Paris climate deal, and have bankrupted several solar companies.   

SciDev.net on April 11 covered a new report out from something called the International Renewable Energy Agency, saying that many major developing countries are backing away from renewables and turning more and more to fossil fuels in light demand among their people for cheap energy.

Nicholas Wagner, an IRENA programme officer who helped prepare the report, says countries such as Brazil, Ethiopia, Kenya and Nigeria . . .  have . . . turned to fossil fuels to power greater demand for heating, cooling and transport, he says.  Renewables formed nearly 50 per cent of Indonesia’s energy mix in 2000, but this had dropped to under 40 per cent by 2013, the report found. China, India and Mexico have also seen their renewable share fall over this period.

You probably have read somewhere about the threatened closure of much of the remainder of Britain's steel industry caused energy prices that have been intentionally driven to high levels to limit fossil fuel use.  But did you read about the massive demonstrations by steel workers in Germany seeking to stave off a similar fate for their industry and their jobs?  From Die Tagesshau (German language, translated), April 11:

Tens of thousands of workers in the German steel industry have taken to the streets to demonstrate for their jobs. The IG Metall union spoke of 45,000 participants. . . . The steelworkers . . . fear the introduction of stricter climate policies by the EU. Federal Economics Minister Gabriel promised the steelworkers his support. He said, he would not agree to any climate policy that threatens the future of the German steel production. According to industry figures, the planned tightening of the EU emissions trading scheme would lead to additional annual costs of one billion euros for the German steel industry.    

And did you know that Germany is in the process of backing away from massive subsidies for wind energy, leading many to predict the imminent "collapse" of its wind industry (which cannot survive without subsidies).  From Berliner Zeitung, April 7:

If the green energy plans by the German Federal Government are implemented, the expansion of onshore wind energy will soon come to a standstill and then go into reverse. In early March, German Economy Minister Sigmar Gabriel presented a draft for the amendment of the Renewable Energies Act (EEG). The new rules regulate the subsidy levels for renewable energy. The new regulations are to be adopted in coming months. A study by consultants ERA on behalf of the Green Party’s parliamentary group concludes that under these provisions the development of wind energy will collapse fairly soon.

The coming wind collapse is just a small part of Germany's disastrous "Energiewende" (energy transformation) that has made it so that Germans pay about triple what Americans pay for electricity, but they have recently had to turn to building coal plants to replace energy from closed nuclear plants and also to deal with the intermittency of solar and wind.  From the Wall Street Journal on April 14:

All of this—the job losses, the unreliable power supply, the astonishing amounts of spending that could top €1 trillion over the coming decades, and the rising coal emissions to boot—amounts to one of the more monumental blunders of modern governance.

And really, you could go on with this as long as you want.  Peiser puts up at least five of these every day.  Billions upon billions of dollars spent -- all going straight to the energy bills of the populace -- with essentially no noticeable effect on global CO2 emissions, let alone global warming.  You owe it to yourself to check this out.

"Land Titling" In South Africa And The Miracle Of Private Property

On Monday I was a guest of the Atlas Foundation at a lunch where the speaker was a guy named Temba Nolutshungu.  Nolutshungu is from South Africa, and is the Director of a group in that country called the Free Market Foundation, an organization that works to promote free market principles. The particular subject of Nolutshungu's speech was a program of the FMF called Khaya Lam, or "my home."

It seems that South Africa, like most everyplace these days, is subject to trendy progressive groupthink on how to raise the poor up from poverty.  So of course the South Africans have engaged in massive building of subsidized public housing for the poor.  All over the country, the government has built vast tracts of tiny homes, row upon row of them, on small plots of land.  In line with the typical socialist business model, the "beneficiaries" of the program cannot buy or own the homes, but rent them at subsidized rents from their government overlords.  The projects look clean, if modest, upon completion. However, over time they gradually deteriorate, and certainly the residents never make any significant investments in improving them as long as they are in public ownership -- which until now has been, indefinitely.  Here is an example of what these projects look like (this one in a township called Khyalitsha, on the outskirts of Cape Town):

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Nolutshungu estimated that some 5 million or more South Africans, almost all black, live in housing of this type.

Nolutshungu then described the idea of the Khaya Lam program as "land titling," that is, providing "title" to the land and building to the people living in it.  It was an interesting choice of words.  I would have described the program as giving away the public housing to the residents.  As Nolutshungu described it, when title to one of these homes is transferred to the residents, the government does not charge anything for the land or the building; however, there is a fee of the equivalent of about $150 for what he called "conveyancing."

And then Nolutshungu described what happens when the people get title to their homes.  Suddenly, they start investing in them.  They expand their size, put in plumbing, replace the roof, put up security gates and fences, put in better windows, and on and on.  Plumbers, bricklayers, roofers, ironworkers, welders, glaziers and others are suddenly in demand.  Economic activity greatly expands.  Who would have thought such a thing might happen?  I asked Nolutshungu to provide me with some "before" and "after" pictures, but I have not yet received them.  They will likely be the subject of a future post.

Of course, trendy opinion and bureaucrats looking to protect their fiefs try to slow or halt this initiative at every turn.  So far the Khaya Lam initiative is basically a pilot program in one town, called Ngwathe.  The number of homes transferred to the residents, according to Nolutshungu, is approaching 1000 -- but that is out of around 20,000 in Ngwathe alone, and many millions in all of South Africa.  Bureaucrats impose restrictions (like minimum residency time requirements and prohibition on renting out the home after title transfer) so that fewer people will qualify and those who do will not be able to maximize the value of their investments.  Why am I not surprised?

If you would like to donate to this initiative, you can do so at this link.  Believe it or not, it only takes about $150 per unit to transfer the unit to the residents.  

Meanwhile, my proposal to do the same thing in Manhattan and transfer title of the public housing to the residents continues to go nowhere.  Instead of taking tens of thousands of currently poor people and making them rich, we are building more "affordable housing" so we can keep more and more people in a life of permanent poverty.  It's the Manhattan way!

Obamacare: How Do We Know If It's In A Socialist Death Spiral?

There's every reason to think that Obamacare is in the early stages of a socialist death spiral.  After all, all you really need to know to predict a socialist death spiral is that people aren't stupid.  As soon as the government puts you on the "from" side of "from each according to his abilities, to each according to his needs," you start to spend your waking hours figuring out how to minimize or otherwise get out from under the confiscation.  

Still, the government and its press enablers are doing everything in their power to keep up the image that all is just fine.  Mainstream press organs like the New York Times have gone virtually silent on the issue.  The Census Bureau changed its methodology in 2013 to make its figures as to percent uninsured no longer comparable to figures prior to that year.  Numbers for government expenditures on Obamacare are well-hidden and difficult to segregate.

But then every once in a while along comes an article that gets into the weeds on how people push back to avoid getting caught in Obamacare's snares.  Such an article appears on page B-1 of today's Wall Street Journal, titled "Health Law Spurs Hunt For Cheaper Policies."   (In the online version, the title is "Sales of Short-Term Health Policies Surge.")

Now, you may have thought that a key element of Obamacare was to make all health insurance have all the coverages that were now to be mandatory.  But smart people got to work figuring out a way around that, and they have come up with one, known as "short term insurance."  Believe it or not, it seems that if you have a health insurance product that covers less than one year, then all the ACA coverage mandates that make things so expensive (e.g., can't exclude pre-existing conditions, can't have coverage limits, prescription drugs must be covered, plus long list of things that must be covered without deductible such as birth control for women) don't apply.  Can that really be true?  The WSJ checked with a spokesman for HHS, and got the following:

A spokesman for the Department of Health and Human Services said that under federal law, short-term plans aren’t considered individual health insurance, and thus aren’t subject to the ACA’s rules.

But:

Some short-term plans can last nearly a year, after which a policyholder must reapply.

So let's try to understand this.  Obamacare supposedly did away with the ability of an insurer to refuse to sell to someone with a pre-existing condition.  But with so-called "short-term insurance" outside the restrictions, what's to keep people from gaming this system and waiting until they are sick before buying an ACA-compliant policy?  The main control they supposedly have over that is restricting signing up for Obamacare to so-called "open enrollment" periods of only a few months a year, basically November 1 to January 31.  Thus, go without insurance, and you risk having up to a nine-month uncovered period when you are on your own.  Or at least, that's how it was supposed to work.

Ah, but now you can buy an 11-month policy to take you year by year from one open enrollment period to the next.  And, if you don't have a pre-existing condition, there are lots of advantages to these short-term plans over the ACA options:

• They are lots cheaper.  The WSJ article gives an example of a woman for whom coverage under a short-term plan costs "roughly one-quarter" of what ACA-compliant coverage would cost.
• They are "offered year-round" as opposed to just during the ACA open-enrollment period.
• Many of them offer "broad access to doctors" as opposed to the very narrow networks that many ACA-compliant plans have used to keep costs down.
• And, best of all, "if consumers develop health problems they can move to ACA plans that cover pre-existing conditions."

Really, could it be this easy to game Obamacare?  Just get a short-term policy to take you from one open enrollment period to the next for as long as you are healthy; and then when you get sick, jump over and get your pre-existing condition covered.  Voila!  Perhaps you had been wondering why last March CBO was predicting there would be 21 million people enrolled on the Obamacare exchanges in 2016, and now they are saying 13 million (a number which, by the way, will decline further as the year progresses and people drop out).  Now you know.  Really, as people figure this out, why will any sane person buy an Obamacare exchange policy before they are actually sick?  Oh, and the WSJ reports that sales of the short-term policies are "surging."

Of course, socialist death spirals move slowly.  And the government will do everything in its power to hide this one, at least until the change of administration next year.  But it's hard to see how Obamacare can survive such an obvious avoidance strategy for the long pull.  

Unauthorized, Unregulated, Foolproof, Lawless Government Coercion

The title comes from a November 2015 opinion by Judge Posner of the Seventh Circuit in a case between the website backpage.com and Thomas Dart, Sheriff of Cook County, Illinois (the county that includes Chicago, and is the second most-populous county in the country after Los Angeles County).  Judge Posner's decision has been hailed as a landmark vindication of the First Amendment.  The problem is that the government has dozens of ways to avoid judicial review of its "unauthorized, unregulated, foolproof and lawless coercion." 

Backpage is known principally for running ads for people euphemistically known as "sex workers" (although backpage also runs numerous other types of ads).  In June 2015 Sheriff Dart sent letters to Visa and MasterCard, from which the following is the key quote:

As the Sheriff of Cook County, a father and a caring citizen, I write to request that your institution immediately cease and desist from allowing your credit cards to be used to place ads on websites like Back- page.com. . . .   [I]t has become increasingly indefensible for any corporation to continue to willfully play a central role in an industry that reaps its cash from the victimization of women and girls across the world.  

Notice that although Dart peppered his missive with legalistic sounding law enforcement talk ("cease and desist," "your institution," "willfully play a central role"), there was nothing illegal about Visa or MasterCard using their networks to facilitate payments to backpage.  (Dart did throw in a reference to the federal money laundering statute -- something he had no jurisdiction to enforce, and which was in any event inapplicable, at least in any reasonable reading of the ridiculously vague statute.)  Nevertheless, after receiving Dart's letter, Visa and MasterCard cut backpage off completely from their payments systems -- even as to the many activities of backpage that had nothing to do with the sex trade.  And now, it is Sheriff Dart who has been enjoined from taking any "actions, formal or informal, to coerce or threaten credit card companies, processors, financial institutions, or other third parties with sanctions intended to ban credit card or other financial services from being provided to Backpage.com."  

It's a good result in one case.  But of course there are hundreds of cases of the government engaging in unauthorized, lawless coercion and then maneuvering to get itself in a position where there can and will be no judicial review.  Consider, for example, the subject of so-called "corporate inversions" -- U.S. companies selling themselves to foreign entities in order to get out from under the only-in-the-U.S. rule that U.S.-based companies must pay (highest in the world) U.S. corporate income tax on income earned abroad.  Nobody can point to anything in the U.S. tax code that makes one of these inversions illegal -- it's just how the tax code works.  Indeed, I'm not the only one who thinks this.  Perhaps you may recall the interview conducted by CNBC's Jim Cramer with Treasury Secretary Jack Lew back in 2014.  Lew was complaining about the wave of corporate inversions, and Cramer asked him why the IRS did not use rulemaking to address that.  Lew responded: "We do not believe we have the authority to address this inversion question through administrative action. If we did, we would be doing more."

Yup.  Well, that was 2014.  Then Pfizer announced its $160 billion deal with Ireland-based Allergan, and suddenly the IRS came up with a rule to block the deal.  (Essentially, the new rule says that the IRS going forward will take the position that a deal like the Pfizer-Allergan deal will still subject the combined entity to U.S. corporate income tax on worldwide income.)  A few days later, Pfizer and Allergan called off their deal.  They weren't willing to subject their shareholders to the risk of having to pay a few tens of billions of dollars of extra income tax to the IRS and then fight for decades to try to get it back.  I guess there won't be any judicial review there.  Who says the government needs actual legal authority to get its way with its subjects?

For lots more examples of the government improperly attempting to coerce the citizenry, check out this article from Sarah Jeong in the Atlantic.  Jeong discusses at length the program of the Obama Justice Department known as Operation Choke Point.  The basic idea of that operation is to identify businesses designated as "high risk" and then lean on financial institutions not to do business with them.  But what is "high risk"?  Are these businesses legal, or illegal?  A list of businesses said to be "high risk" was then put out by the FDIC.  And when you go through the list, you find that some are illegal, some are just unsavory, and others are things that the government just doesn't like.  Mixed in with "ponzi schemes" and "pyramid-type schemes," we have everything from "ammunition sales" to "coin dealers" to "firearms sales" to  "tobacco sales" and on and on and on.  And, as Jeong points out, in a world of no cash and of highly-regulated financial institutions dependent for their every move on government acquiescence, all it takes is one word from the regulator to get anyone the government does not like cut off from the financial system.  Political dissidents, anyone?   

Annals Of Government Orwellianism

Back in the late 90s, for several years running, I wrote a series of articles titled "Top Ten Federal Government Efforts To Suppress Free Speech."  A couple of those articles are here and here.  And I must say there were plenty of good instances to choose from.  Well, things haven't gotten any better.

You may be thinking that the biggest threats to free speech today are on university campuses, where chalked words like "Trump 2016" can bring outraged cries from offended students for a crackdown, which cries then get a sympathetic ear from the university administration.  It's ugly, but there is no actual legal requirement that a private university give free rein to dissenting opinions.  

Governments are a different story.  Can a government in the United States, state or federal, actually seek to suppress speech that dissents from an official government line?  I mean, don't we have a First Amendment?  Government-backed speech suppression efforts are of course far more pernicious than any similar private efforts because they come backed by the government's coercive powers.  But, equally of course, such suppression is everywhere.  For today, I'll give just a couple of examples.   As always with the government, the speech sought to be suppressed contravenes the official government line on some subject.  And the official government line as always is part of the "main project" of the government, that is, the ongoing effort to use government resources to propagandize the people into supporting, or at least not opposing, the ongoing growth and expansion of the government and its powers.

Up in Westchester County (the first county immediately north of New York City) they have a long-running dispute with the federal housing bureaucracy (HUD) over whether and where to build subsidized low-income housing.  As readers here know, I have long characterized subsidized low-income housing in wealthy areas as "the worst possible public policy," because it costs enormous amounts of money for small numbers of "beneficiaries," and then traps those beneficiaries in poverty for life.  HUD's core business is foisting the "worst possible public policy" on more and more places in the U.S., and of course it needs more and more subsidized housing in more and more places in order to grow its mission and its budget.  In 2006 they sued Westchester to force it to provide more subsidized housing in wealthy areas, and in 2009 then-County Executive Andy Spano (a Democrat) settled that case with an agreement to do so.  Part of the settlement imposed a "monitor" on Westchester, supposedly to be sure it is complying with its obligations under the agreement.  The "monitor" is a guy named James Johnson, a partner of the Debevoise law firm who previously held various positions in the Clinton administration in the 90s.  After the settlement, Spano promptly lost the next election to a guy named Rob Astorino, a Republican, who then became County Executive in 2010 and continues in that job.  You won't be surprised to learn that Astorino has been in a continuous tussle with Johnson ever since.

A couple of weeks ago Johnson filed a 55 page "report" with the Judge supervising the case, who is Denise Cote.  Oh, she also held positions in the Clinton administration before being appointed to the bench by Clinton.  The gist of the "report" is that Astorino has been repeatedly speaking out in opposition to HUD and its agenda for Westchester, and this somehow constitutes a violation of the settlement; and therefore the court must order Astorino and Westchester to stop their opposition to HUD's agenda for Westchester and speak in accordance with the HUD party line. 

Stanley Kurtz of National Review has been all over this story, including a comprehensive recent article on March 30.  Here is Kurtz's take on the "monitor"'s latest gambit:

The Federal Monitor wants to force Astorino, the man who has led public resistance to Obama’s de facto takeover of local governments, to repudiate his own claims and parrot the administration’s line instead. In effect, they want a court to order Astorino to stop criticizing Obama’s HUD and start advertising HUD’s own views. This is truly Orwellian stuff, a frightening demonstration of how the expansionist regulatory state ultimately chokes off political speech itself.

HUD is upset that Astorino keeps saying that it is trying to override Westchester's zoning and force Westchester to build not just the 750 subsidized units that are part of the 2009 settlement, but thousands of additional units at a cost of a billion dollars and more.  As part of getting HUD grants (you should never have taken that money, Westchester!) the county has to submit a periodic report called the "AI."  In its reports, Westchester keeps saying that its zoning is not racially discriminatory.  And HUD keeps "rejecting" the reports, and demanding more and more "analysis" of a long list of additional factors.  Astorino believes that they will keep "rejecting" the reports until Westchester confesses that its zoning is discriminatory and agrees to build vast additional amounts of HUD housing.  So, should Astorino, an elected official, be allowed to express his views on what HUD is really trying to accomplish with this?  

Here is an excerpt from what the "monitor" proposes as the remedy that he wants the court to order:

[T]he Monitor recommends that the Court and County take steps to ensure that the public is accurately informed about the terms of the Settlement and that the public receives an education campaign that honors the letter and spirit of Paragraph 33(c) [of the settlement agreement].  Those steps include . . .  (e) hiring, within 30 days of the issuance of this report, a public communications consultant that will craft a message and implement a strategy sufficiently robust to provide information broadly to the public that describes the benefits of integration, as required by Paragraph 33(c). Within 30 days of the hiring of a public communications consultant, the County should submit a plan for a public education campaign to the Monitor for approval. 

Orwellian indeed!  You must conduct a public relations campaign in your name, and it must say what we want it to say, and you must submit what you plan to say to us, and we get to approve or disapprove.  Sorry, Westchester, but it's time to get away from this HUD thing entirely and stop taking their money.

In the whole affair, I do have one criticism of Astorino, which is over how he pitches his message. Rob, instead of focusing only on oppressive federal overreach and the overriding of local zoning, why don't you also point to your neighboring county Manhattan (just about 4 miles away at the closest point) and ask how HUD-supported public housing there is doing at promoting HUD's supposed goals of increasing integration and lessing income inequality.  If subsidized housing led to more racial integration, why are the HUD-supported projects in Manhattan islands of racial segregation?  Why is the private housing in Harlem today far more integrated than the HUD-supported projects?  And if subsidized housing led to lessening of income inequality, why does Manhattan, with far more than its share of public housing, have the highest income inequality in the country?  And why are the HUD-supported projects, 40 and 50 and 60 years after their construction, still islands of poverty in the midst of the wealthiest county in the country?  Rob, you are right on this and they are wrong.  Keep fighting!

And, if you think it would be hard to top that one in the annals of government Orwellianism, then consider the current efforts of the climate campaigners to silence any dissent from the orthodoxy that government must take over at least the entire energy sector of the economy, if not the whole economy, in order to "save the planet."  Back last spring, Senator Whitehouse of Rhode Island embarked on a campaign to try to get the Justice Department to prosecute (criminally!) so-called "climate deniers" (dissenters from government-backed orthodoxy) under the RICO statute.  Then, at a Senate hearing last month, under questioning from the same Senator Whitehouse as to why the Justice Department hasn't done anything about "the climate denial scheme," AG Loretta Lynch responded that the matter had been "discussed" and referred to the FBI for consideration.  Meanwhile last week, even as the Manhattan Contrarian was pointing out that the government was relying on altered data in its brief to the DC Circuit seeking approval of an EPA plan to shut down the coal industry, AG Eric Schneiderman of New York was announcing the newfound support of 15 other AGs for his "investigation" of Exxon Mobil over insufficient obeisance to climate orthodoxy.   So where is this one going?  As far as I know, at least since the days of Eliot Spitzer, no company even remotely near the size of Exxon Mobil has ever been investigated for anything by the New York AG without paying at least $100 million in protection money and issuing a mea culpa.  There is no reason to think that this one will end any differently.

So welcome to the new world, where everyone must toe the government line, and say only what the government wants said.