Bernie Sanders

Bernie Sanders is wrong on open borders: they’d help boost the economy

Bernie Sanders has come out against open borders, claiming they are a “right-wing proposal” that “would make everyone in America poorer.” He argues that, while we have a “moral responsibility” to “work with the rest of the industrialized world to address the problems of international poverty… you don’t do that by making people in this country even poorer.”

But there is a vast amount of literature showing that open borders could be the single best policy to alleviate global poverty. The free movement of people would enrich individuals by allowing them to move to where their specific skills and talents are most economically efficient and personally beneficial. According to Michael Clemens at the Center for Global Development, open borders could lead to a one-time boost in world GDP of 50 to 150%.

Contra Senator Sanders, a Democratic candidate for president, open borders is a moral imperative for those who truly wish to help the world’s poor. If Sanders wishes to challenge mainstream economists on this fact, he must provide empirical evidence to back up his assertions. Otherwise, he deserves to be dismissed as just another politician, playing to domestic, nativist sentiments, rather than pursuing the economic policies that will benefit Americans and reduce global poverty.

Read the rest on the Guardian US here.

Google

Can Government Fix Google?

The European Union’s antitrust office has floated a list of demands to Google as part of an ongoing case against the search engine giant. Antitrust laws are supposed to support consumers, but the EU’s demands would simply replace consumer preferences with government control.

The European Union’s antitrust commissioner, Margrethe Vestager, alleges that Google’s search results give priority placement to Google Shopping when people perform e-commerce searches. Competitors say that fewer customers find their service as a result, even when their service is better than Shopping. The EU is considering demanding that Google change its algorithm to eliminate this self-promotion.

Let’s assume that the allegations are true. Ms. Vestager argues that this decision is about championing “consumer choice” in the search engine marketplace. But the EU’s corrective actions promise to trample consumer preferences.

Google says that consumers appreciate the service. If Google Shopping meets searchers’ needs better than competitors like eBay, then it’s actually a good thing for users to see that service pop up first. The EU would be violating consumers’ revealed desires by demanding that Google change its product.

But what if consumers don’t like the practice? Here, too, government action would override consumer preferences in the long run.

Read the rest on FEE’s Anything Peaceful here.

White House

Graduate students hurt by the Affordable Care Act

The IRS is penalizing universities for providing healthcare to student employees, and it’s hurting the very people the Affordable Care Act was supposed to help.

In June Forbes reported that under new IRS regulations, starting in July 2015, small businesses and universities that reimburse employees healthcare premiums or pay their health costs directly will be fined up to $36,500 a year per employee. A penalty that is 18 times greater than the $2000.00 employer mandate.

As a result, graduate students around the country are being told that they will no longer be provided healthcare as part of assistantships.

This is a clear case where government intervention, far from improving the U.S. healthcare system, has actually made things worse. Universities were providing coverage for their graduate students prior to governmental intervention and now, under the Affordable Care Act, these same universities are being forced to cancel the insurance plans they provided to students.

The Affordable Care Act was supposed to encourage businesses to provide healthcare, not punish them for doing so.

Read the rest on The Hill Congress Blog here.

Scandinavia

Go Figure, Bernie: America Beats Scandinavia in Take-Home Pay

Democratic presidential candidate Senator Bernie Sanders (I-VT) frequently pines for the United States to be more like the Scandinavian countries of Norway, Sweden, Finland, and Denmark. He cites the northern European nations’ lower levels of income inequality, when compared to the United States, as justification. But there is one problem: although income in these European countries may be more equal, workers get smaller paychecks.

On paper, workers in Scandinavia appear richer than their counterparts in America. But to compare accurately life in the two regions, we need to make a couple of adjustments. The first is taxes: according to OECD data analyzed by the Tax Foundation, the “tax wedge”—the difference between what it costs to employ a worker and what he sees in his paycheck—is much higher in Scandinavian countries than in the United States. After taking out taxes, we also need to adjust take-home pay by the country’s price level, since goods and services cost more in some countries than others.

Read the rest on Economics 21 here.

Trade

Keep the Ex-Im Bank Dead

The Export-Import Bank, which aids U.S. exporters by loaning funds to foreign buyers of U.S. goods, could be resurrected from the dead by the end of the week.

Last month the bank’s charter expired after a nearly two-year fight to avoid reauthorization by free-market Republicans. However, their efforts could be for nothing because of Senate Majority Leader Mitch McConnell’s (R-KY) decision to allow an amendment that would reauthorize Ex-Im as part of an essential bill to fund the highway trust fund for the next six years.

The highway bill’s next stop is the House of Representatives, where Majority Leader Kevin McCarthy (R-CA) has vowed to block any amendment, including Ex-Im reauthorization. However, McCarthy’s promise should be taken with a grain of salt. Until a few days ago, McConnell was also promising his colleagues that a vote on the bank’s charter would not be tied to the highway bill. The House is a notoriously tumultuous body, and, by the end of the week, Ex-Im could have a vote.

Read the rest on Economics 21 here.