The Bob Zadek Show

Professor Ilya Somin has a new treatise on the case for voting with your feet.

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Hindu mythology holds that the whole world rests on the back of a turtle. What does the turtle rest on? According to legend, “it’s turtles all the way down.”

While many are pushing for one-world-government to address new challenges like Coronavirus, there is another approach that can be dubbed “Federalism all the way down.” In other words, why stop at devolving power from Federal Government to the states? The more we decentralize power, the more people can effectively “vote with their feet” and choose which turtle– er, jurisdiction– they will reside in.

This is one of the core premises of Ilya Somin’s vitally important new book Free To Move: Foot Voting, Migration, and Political Freedom. Somin, a Law professor at George Mason University and blogger at Reason’s The Volokh Conspiracy, has been on my show several times to discuss his work on eminent domain, rational voter ignorance, and most recently, court packing. These topics deal with the delicate balance of powers between majorities and minorities; the voting public and life-time appointed officials. His latest book looks at the most important balance of powers of all – that which exists among the various jurisdictions where people can chose to live.

He finds that the option to vote with one’s feet is often a more powerful lever than the ballot box for getting the political change that we all want, yet feel powerless to achieve.

Tired of calling your congressman or donating to your favorite politicians to no avail? Why not send a stronger message and withdraw your tax dollars from your city or state if you are so unhappy?

Ilya’s new book also contains a bold defense of more open migration from other countries. He takes objections seriously but answers them one-by-one. The right to move should trump the alleged rights of ethnic groups or individuals to exclude on the basis of national origin.

Ilya joined me this Sunday to discuss his new book and the prospects for Federalism in the aftermath of Coronavirus. Will states that innovate safe ways of re-opening their economy be beneficiaries of an exodus out of states that don’t? Could the U.S. relieve global poverty by opening its doors to more immigrants from countries stricken by looming famines?

The wisdom of crowds is an extension of the wisdom of markets – and it's better than most experts at processing information.

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John Tamny, Director of FreedomWorks’s Center for Economic Freedom, makes several important observations about the problem with lockdowns and bans on “non-essential” business that has eluded the so-called “experts”:

“Experts are routinely called on as the answer to ‘crises,’ when it’s more realistic to assert that the experts are the crisis,” he writes in a recent piece for Real Clear Markets.

In particular, the one-size-fits all diktats handed down from on high prevent the discovery of information from small-scale experiments. Individuals, acting freely as adults, possess local knowledge, which accumulates and multiplies across the millions of participants in society. This phenomenon has been called “the wisdom of crowds,” but perhaps the “wisdom of markets” would be a better term.

Thankfully, the crowds are beginning to wake up, and along with them, markets are coming back to life without any central planning required.

Two weeks ago, Randal O’Toole showed how government distorts incentives in transportation, and how that distortion has exacerbated the COVID-19 epidemic in New York City via mismanaged mass transit. Yet we continue to pour billions into these failing systems. When the market operates without intervention, mistakes tend to be limited – not subsidized – and the firms and individuals with bad judgment quickly go out of business.

Ideally, Tamny notes, the government wouldn’t need to declare an end to the shutdown – people could simply re-open as they see fit, taking into account the risks and rewards, and learning from each other’s experience.

Some will say that this situation is different because of the invisible nature of the coronavirus, and its infectious potential. Tamny is no stranger to this refrain that “this time it’s different.” He joins me this Sunday to debunk the central planning “one-size-solution” crowd and to discuss his article, “Don’t Plan to Reopen; Just Reopen,” for the American Institute for Economic Research.

We’ll dissect the recent stock market rally – is it a Fed-inflated bubble or something more sustainable? Tamny is an optimist, assuming people are allowed to go back to work on their own schedule, rather than on the governors’ fickle timing.

Finally, we will also discuss the possibility that states are exceeding their constitutional powers in continuing the lockdowns. Are we witnessing the kinds of “grassroots tyranny” that Clint Bolick warned of decades ago? And if so, should the Federal government step in as Trump seems to want to do, or is there another solution?

You won’t want to miss this episode of the show of ideas, not attitude.

“Only when the tide goes out do you discover who's been swimming naked.” -
Warren Buffett

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bobzadek.com/subscribe

Only when the tide goes out do you discover who's been swimming naked.” - Warren Buffett

Algorithm-backed high-tech finance has failed its final exam – the tough times brought about by COVID-19.

Learn how asset-based lending has continued to flourish and lend money even during the current downturn, and what's coming next. Bob was recently the guest on a webinar put on by Dare Capital, a factor and asset based lender. Join us for a conversation about lending after COVID-19.

"Bob Zadek is THE guy to talk to about factoring, lending, and regulation. Bob has seen a lot; the crash in 87, the dot-com crash, and the Great Recession."

“FOOD SHORTAGES ARE COMING” warns Rep. Thomas Massie.

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Since well before the current lockdowns, Kentucky Congressman Thomas Massie has been raising an alarm about the monopolistic and over-regulated meat processing industry, which leaves our food supply vulnerable to unexpected disruptions.

It took the COVID-19 crisis to get his colleagues in the House of Representatives to take the issue seriously, but a bill to address looming meat shortages with a local, free-market solution is finally making headway with bipartisan support.

Massie joined the show with an urgent message for all Americans, as the common-sense reform in his PRIME Act challenges special interests who want to keep a lockdown on smaller-scale meat processing.

Urge your representative to vote for the PRIME Act, and listen to my full conversation with Congressman Massie on his new bill:

“Remember when the AAA killed 1 million hogs a day? Instead of hogs it’s men today. Plow the fourth one under.” – The Almanac Singers

During the Great Depression, the Agricultural Adjustment Agency — one of the forerunners to the USDA — paid farmers to euthanize and “plow under” millions of livestock to prevent a price drop. This was ostensibly to support farmers and balance supply and demand, but historians of the Depression view this one of the greatest policy errors of the time.

Today, we see the same senseless, wholesale killing of millions of perfectly healthy chickens and pigs. Cattle are next in line. This time, the livestock are being prevented from reaching the market by a bottleneck in the heavily-regulated, crony-controlled meat processing industry.

Since 1967, the Federal government has required all meat raised for “public consumption” to go through a small number of central facilities, which must be overseen by a full-time USDA inspector.

Rep. Thomas Massie (R-KY), a small-scale cattle farmer himself, has a plan to avert the looming shortage by simply allowing smaller state-regulated-and-inspected facilities — such as the ones he uses to process and sell his cows locally — to make up for the demand shortfall within each state. These Small-scale processors are still inspected regularly by the USDA, but are not large enough to warrant a full-time inspector. While the current regulation is justified in the name of consumer protection, in reality it smothers competition from smaller producers who can’t afford to comply with the high regulatory barriers — effectively creating an oligopoly.

The “cartelization” of Big Agricultural dates back to the Depression, when lobbyists and federal regulators formed an unholy alliance that gave rise to agencies like the AAA. Even local food production got swept up in the dragnet of New Deal-era laws under the guise of interstate commerce regulation. This continued with the 1967 passage of the Wholesome Meat Act, when there were still 10,000 slaughterhouses nationwide. Today there are less than 3,000 slaughterhouses — many of which are now closing due to COVID-19.

In this classic example of “regulatory capture,” the powerful meat lobby has authored inspection requirements to favor big firms, and limited small-scale processing plants to selling only to family and employees. Massie’s bill would expand these sales to the local community — exempting them from the federal requirements so long as sales remain within the state, hence the “intrastate meat exemption” in the fitting PRIME Act acronym.

Safety Concerns & Food Federalism
So far, the PRIME Act has gained support from both Democrats and Republicans. Small-scale production is often more environmentally friendly and safer for the consumer, since it depends on localized knowledge and trust within the community rather than bureaucracy and red tape.

Naturally, the powerful National Pork Producers Council opposes the bill, since it threatens to break up their monopoly once and for all.

While...

Randal O'Toole on Rethinking Public Transit post-COVID

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The words “never let a good crisis go to waste,” spoken by then-Chicago Mayor Rahm Emmanuel, are seared into many libertarians’ minds as a concise formula of the central planner’s mindset.

We’ve seen massive stimulus rammed through with little deliberation, including fat subsidies for transit agencies. Randal O’Toole, aka “the Antiplanner,” has shown how central transportation planning epitomizes the misguided use of federal funds – diverting resources to expensive, energy-inefficient, underutilized “mass transit.” As if that weren’t bad enough, it’s looking like mass transit is a key vector in the spread of mass disease.

In his April 17 Cato at Liberty post, ‘Why Are Transit Systems Still Running?’, O’Toole observes, “I don’t think it is a coincidence that 44 percent of all transit rides in 2019 took place in the New York‐northern New Jersey urban area and, at last count, 45 percent of all COVID-19 fatalities were recorded in this same area.”

So why is the disease vector known as mass transit running while many other industries have been deemed “non-essential”? Once again, the contradictions in the government’s response are revealing what most of us already knew – that science always takes a back seat to special interests.

Randal “Antiplanner” O’Toole returned to the show this past Sunday to step back from the emotional arguments surrounding COVID-19 and discuss whether it’s time to re-assess the role of public transportation in American life. His brand-new report identifies transit as an “urban parasite,” sucking up more and more resources despite declining ridership, and a growing maintenance backlog. The report shows the growing irrelevance of transit to most Americans’ lives everywhere except NYC, where it is proving relevant but deadly.

As transit systems begin to hemorrhage in the wake of even further reduced ridership from fears of contagion, the taxpayer will have to bear more of the burden. Randal suggests privatizing transportation and letting the services stand on their own two legs. While this may seem radical, many have noted how the Coronavirus shutdown has expanded the “Overton Window” - making previously impossible reforms more likely.

Perhaps Rahm was right, and we libertarians shouldn’t let a good crisis go to waste either.