50 Years After Moon Landing: A Call for Even Greater Privatization in the Global Space Market

"That's one small step for man, one giant leap for mankind." Those words were uttered by Neil Armstrong fifty years ago on July 20, 1969 when he became the first person to land on the Moon. It was a great day for the United States not only because of what it meant for technological innovation, but it also meant that the United States now had a considerable advantage in the Space Race with the former Soviet Union. This anniversary made me realize something else: we have not been on the Moon since. It is not as if NASA hasn't done anything for fifty years. NASA has had 111 manned missions between 1981 and 2011. There have been space stations since 1969. We even had a rover on the planet Mars. And I'm sure that NASA has conducted research that has resulted in the advancement of space travel and exploration. While there have been accomplishments at NASA since 1969, I would argue that none was as iconic as the Moon Landing. It got me to think of the space exploration market now.

Before I continue, I admit that I am not well-versed in the history or public policy behind aeronautics. I have friends who either work at NASA or have degrees in aerospace engineering, and when it comes to topical expertise on the subject, I would defer to them. At the same time, I would like to take my functional expertise in public policy and market research to examine the global space market to see how NASA and the private space exploration market have been faring.

NASA Budgetary Spending Since the 1960s
Below is a chart of NASA budgetary spending in inflation-adjusted dollars since its founding at the end of 1958. As part of the Space Race, NASA spending increased substantially in the early 1960s, peaked at $34B (in current dollars). It declined to $22.7B (in current dollars) by the year 1969, which is close to the amount that NASA currently has allotted for its budget.  I bring this up in the first place is that I anticipate a counterargument of "We haven't made it to the Moon since 1969 because we didn't invest in NASA like we did in the 1960s." I will address this point momentarily, but first....

Source: Center for Strategic and International Studies

Global Space Market
Looking at general spending on research and development, federal spending plateaued in 2008, whereas private research and development boomed (American Institute of Physics). More specific to space travel, I was surprised to see the market segmentation when it came to funding. In 2018, the global space market was worth $414.75B (Space Foundation). I was more interested to see that 79.3 percent was in the private sector.

Why Privatize the Global Space Market Further
For a number of years, NASA has acted as a de facto monopoly in the U.S. space market, particularly with space travel (not so much with satellites). Maybe it is not a bad thing that the market is shifting to the private sector.

When a single player dominates a market, whether in a strict market or simply has a high market share, there is little incentive to control costs or improve quality. This has been a motif in NASA's history. Let's take a look at the initial Apollo 11 mission that finally landed U.S. astronauts on the moon. As the Cato Institute points out, there were other Apollo missions that were cancelled, aborted, or simply did not make it to the Moon. The pattern continued with Skylab, a space station that only saw three missions before crashing to Earth in 1979.

If you need a more modern example, how about International Space Station? That Station was supposed to be completed in 2002 at the cost of $17B. It ended up costing $64B and was not complete until 2011. The Constellation Program and James Webb Space Telescope are two more examples. In terms of current debacles, the rockets that are supposed to get astronauts to the moon by 2024 are also dealing with delays and cost overruns, according to the Washington Post.

This is not to say that NASA has never succeeded at anything because the Apollo 11 Moon Landing is but one example of NASA's success. This is also not to say that the private sector is not prone to error. In a cost-benefit analysis, it would be about who does a better job. At the same time, NASA has a history of being over-budget and behind schedule.

In recent years, the private sector has made its way into the space marketplace, whether it is Amazon CEO Jeff Bezos, Tesla founder Elon Musk, or billionaire Richard Branson. While the U.S. government accounts for 11.6 percent of the market, its footprint is a shadow of its former self. The private sector has an incentive to invest in space travel on top of the incentive to create satellites (Embry-Riddle Aeronautical University). Moore's Law will only make barrier to entry lower and capital costs cheaper for those who wish to enter the space market.

In summation, NASA already recognized the importance of shifting space travel over to the private sector a while back. Experts in space travel also recognize this reality: that privatization is the wave of the future in this market, and that commercialization will be the way to see this market truly launch.

Warning: Trigger Warnings Are More Than Useless

If you have been in a college classroom these days or see what one of your friends on the Far Left post on Facebook recently, odds are that you have come across a trigger warning. A trigger warning is that prefatory disclaimer letting the reader or listener know that the material has the potential to trigger a post-traumatic stress reaction. Trigger warnings started in the 1990s with feminists writing on Internet message boards in discussions of sexual assault. What was meant to be used for a narrow range of topics, such as sexual assault or mental health (e.g., depression, PTSD), became more ubiquitous and widespread on the Internet and print media.

Before you know it, trigger warnings made their way to college classrooms. Those arguing for trigger warnings in the classroom said that without trigger warnings, students might be made quite uncomfortable with the topics discussed. Conservatives and libertarians argue that trigger warnings in college classrooms coddle students and stifle free speech on college campuses. I agree with that sentiment. Their usage on college campuses illustrates how trigger warnings are like other forms of political correctness in the sense that they are forms of thought and speech control under the guise of making the world a better place. Aside from getting a degree for job marketability, one of the main purposes of college is to expose students to multiple points of view in order to be able to think critically. If you need to silence discomfort with a trigger warning, what kind of person does that make you? But I digress.

There are multiple topics that could potentially trigger someone with PTSD or some other trauma. It is equally true that the triggers are "unpredictable and individually specific." Since they are not rational or universally foreseeable, it is unrealistic to be able to account for all triggers, especially in such a venue as a college campus.

This concept leads to one of the main issues with trigger warnings: they do not have positive effects. Last March, a paper in Clinical Psychological Science found that trigger warnings do not make anyone else worse off, but also that they don't help either (Sanson et al., 2019). Other research has found a negligible impact (e.g., Bridgland et al., 2019).

There has been limited research on the topic, but three Harvard professors released a groundbreaking paper on the effects of trigger warnings last week (Jones et al., 2019). This paper measured the effects of trigger warning on those with PTSD, the very sort of individuals that would theoretically best benefit from a trigger warning. The paper found that trigger warnings are not helpful for trauma survivors. Even worse than that, the authors found "substantial evidence that trigger warnings countertherapeutically reinforce survivors' view of their trauma as central to their identity." The conclusion of the authors was that there is no-evidence based reason to use trigger warnings. This latest study builds on their previous study (which did not focus on those suffering from PTSD) showing that trigger warnings undermine survivors' emotional resilience (Jones et al., 2018), as well as other work (e.g., Bellet et al., 2018; Wells and Kaptchuk, 2012). The 2019 Harvard study was convincing enough where writer Shannon Palus at the Left-leaning Slate changed her mind on the topic.

The best-case scenario for trigger warnings is that they are useless, although there is growing evidence showing that trigger warnings harms those it was intended to protect. Those who advocate for trigger warnings can no longer hide behind trauma survivors. If they want to help, there should be a larger discussion on mental health. In the meantime, trigger warnings should stop being used as a way to silent dissent.

CBO Puts In Its Two Cents in Debate on Federal $15 Minimum Wage

Upon examining the views of the Democratic candidates for the 2020 presidential election, we could find a number of differences. There is one issue where there is near unanimity: raising the federal minimum wage to $15. The Congressional Budget Office (CBO) brought this issue to the forefront of the news cycle by releasing its analysis on Monday regarding a $15 federal minimum wage and its effects. This is not the first time the CBO has conducted such research. In 2014, it came out with an analysis on what raising the minimum wage to $10.10 an hour would look like (see my analysis of that CBO report here). The federal government has not raised the minimum wage since the last CBO report; it still remains at $7.25 an hour. If passed, this new minimum wage increase would gradually increase to $15 by 2025. What did the new CBO report find with regards to what it would be like to raise the minimum wage?

The condensed version is above, but let's get into some of the details of the report...

• Effects on Income and Wages. By design, a major part of the premise of minimum wage is giving people an increase in their wages. The CBO found that 17 million workers would experience an increase in their wages (p. 1). 
• Per its supplementary data (Figure 4), the average wage increase is 21.2 percent (or $2.68). For those below the poverty threshold, it would mean an annual household income increase of 5.3 percent (p. 15). The discrepancy between the individual wage increase versus the household increase is due to the fact that many low-wage workers are in high-income households. 42 percent of low-wage workers live in households three times or more above the poverty threshold. Only 12 percent live in low-income households (p. 10).
• In net terms (including real income for employees, employers, and consumers), a $15 minimum wage would decrease net income by $8.1 billion annually (p. 3, 15). 
• Effects on Poverty Level. For those who have their wages increased, real income for the household increases, as well. The CBO puts the 2025 poverty level at $20,480 for a family of three, and $26,330 for a family of four.  If the proposed minimum wage increase passes, it would bring 1.3 million people out of poverty (p. 3). 
• Effects on Employment. With every policy comes a tradeoff. For raising the minimum wage, the tradeoff is 1.3 million unemployed, which would translate into a 0.8 percent reduction in overall employment (p. 2), as well as a 7 percent drop in employment for directly affected workers (p. 12).What this means is that for every person who escapes poverty under the minimum wage hike, a low-income individual loses their job and has even greater difficulty finding a job. 
• Effects on Consumer Prices. In response to the increase in labor costs, one of the ways that respond to the costs is by passing the cost of minimum wage to the consumer through higher prices of the good or service (p. 9). 

Yes, minimum wage does help some escape poverty. The CBO estimates that it would be 1.3 million that would escape poverty with a $15 minimum wage. But the CBO also estimates that approximately the same amount of people would lose their jobs, thereby being further trapped in poverty. On top of that, it costs $8.1 billion a year, thereby implying that minimum wage is not a stimulus of economic growth. Additionally, the minimum wage doesn't even properly target low-income households. Ultimately, the CBO report confirms that the minimum wage is far from alleviating poverty in this country, and if anything, causes harm to those who are not lucky to keep their job. We, as a country, can do better in helping the poor.


7-24-2019 Addendum: The Foundation for Freedom Education (FEE) had an interesting article on minimum wage and some empirical evidence on it. It highlights four additional was employers respond to minimum wage laws aside from laying off workers. Another way of saying this is that even if a low-wage worker still keeps their job, they could still either have their hours cut, work their employees harder, cut benefits, or hire less workers and turn to automation.

I Volunteer to Present an Argument Against Expanding National Service Programs and Making These Programs Mandatory

The Democratic presidential candidates are trying to gain support and distinguish themselves by coming up with "innovative policy alternatives," whether it comes in the form of Elizabeth Warren's wealth tax, Corey Booker's housing plan, or Bernie Sanders' latest idea to cap interest rates on consumer loans. South Bend Mayor Pete Buttigieg is throwing in his policy idea: expanding national service.

Buttigieg's national service plan argues that the demand for national service opportunities (e.g., Americorps, Peace Corps, Teach for America) exceeds supply. In hopes to bolster civic society and social cohesion, Buttigieg would not only like to increase funding for such organizations as Americorps, but would also like to start fund new service opportunities to address climate change, as well as help minority and rural communities. Buttigieg has not put a price tag on his program. However, Associated Press estimates that it would cost $20 billion over 10 years (or an average of $2 billion per annum), an amount that would be more than double what the government spends on national service. Per his website, Buttigieg's intent is to "create a pathway towards a universal, national expectation of service for all 4 million high school graduates every year." Buttigieg's plan brings up two primary questions: 1) Should high school graduates be conscripted into national service upon graduation?, and 2) Does the government have any business funding these service programs in the first place?

Should National Service be Mandatory?
In a free society, people own themselves, their property, and their labor. As George Mason University law professor Ilya Somin aptly points out, "Millions of people would be forced to do jobs required by the government on pain of criminal punishment if they disobey." Mandatory national service, whether military or civil, is an illiberal form of social engineering that goes against the American experience of "life, liberty, and pursuit of happiness."

If the goal is to shift the the United States towards greater social cohesion, why stop at national service? Why not stifle freedom of religion, speech, or press to foster national cohesion? Also, if this is such a wonderful idea, why stop at those who are age 18 to 24? Why not force everyone to do it every few years in order to revitalize that sense of social cohesion? After all, volunteer rates are arguably low for adults of all ages, not just those age 18 to 24 (BLS). Short of an exigent circumstance like Israel, a small country that is constantly being attacked, there is no moral justification for national service, regardless of whether it is military or civilian service.

A majority of Americans aged 18 to 30 are against a mandatory national service, at 57 percent disapproving (Gallup). Would you realistically expect the quality of work to be at its finest if most of the people conscripted are against it? Much like we observed with the draft, conscription is bound to bring in unqualified and unmotivated individuals, thereby diminishing the quality of work and the spirit of volunteerism.

Somin additionally argues that not only is it immoral, but also unconstitutional because it would violate the Thirteenth Amendment. Additionally, it would require an unprecedented expansion of the Commerce Clause and Necessary and Proper clauses to make it work.

Should the Government Fund National Service Programs?
Let's say that Buttigieg removes the mandate from his plan, and it's simply the government allocating more funds towards service programs. It's still a problem. One issue is that "unmet social needs" (or let's be more blunt and think of much of them as human wants) are infinite because humans always want more. Labor supply, on the other hand, is limited and not free. How we allocate that labor is a matter of opportunity cost.

There is an implicit assumption that "public service" is more noble or even generates greater benefit than the private sector. People can be generous with their time and help out others without a national service program or serving "the general public," such as helping out friends, families, or neighbors (e.g., babysitting, contributing to family income, caring for sick relatives).

Also, there is an issue with a one-size-fits all mentality here. For some professions, such as professional athletes, a one-year delay at age 18 would be detrimental. Others would rather take on an apprenticeship or go to college. Others might have to jump in the workforce right away to support their family. Is a high school graduate conducting a public service project for a year worth delaying thousands of young adults from going to college or entering the workforce? Who is to say that national service is nothing more than a distraction from career or workforce development?

In terms of efficiency, how would the government use this free or low-cost, unskilled and inexperienced labor better than the private sector? Can the non-profit world realistically absorb these unseasoned, temporary workers? Even if you point to some success case studies of certain national service programs, there is still the matter of scale, not to mention the politicization of serving and volunteering. I have two additional concerns: a crowding out effect for private charity efforts and private capital (e.g., Sherlock et Gravelle, 2009) and whether the government could effectively manage such an expanded program, as is illustrated by the Government Accountability Office's 2017 report on the mismanagement of Corporation of National and Community Service (CNCS) grant management for national service programs. Another question about intended consequences that would have to be answered regards life events. People are putting off such events as marriage, buying a home, having children. What sort of effects would a one-to-two-year delay cause?

Conclusion
It doesn't matter whether this national service program is military or civilian, mandatory or optional. Expanding on national service programs has issues on moral, constitutional, and economic levels. Using the sentiment of trying to help out others should not be used for political gain or to advance a political agenda, regardless of how well its intentions are. It would be nice to see greater social cohesion. The thing is that we are individuals. As individuals, our circumstances and skill sets are unique, and as such, how we contribute to society does not fit neatly into a box. I would rather see such cohesion at a more local and tangible level than at a centralized, federal level. Especially without particulars from Buttigieg, we should have concern for pause before even considering such a proposal.

The Left Needs More Than Good Intentions on Helping the Poor to Justify Their Anti-Poverty Policy Preferences

I watched the Democratic presidential primary debates last week. Senator Bernie Sanders droned on about Wall Street and sticking it to the rich. Kamala Harris brought up meeting people on the campaign who work two to three jobs, implying that is more of a norm (which it is not). More of the candidates want to move to single-payer as a way to give healthcare to the poor. When watching this debate, I noticed a more overarching theme spanning over decades: the Democratic Party ( and by extension, the American Left) likes to portray itself as the "champion of the poor."Those who are Republican, conservative, or libertarian are portrayed as those who are callous to the "have-nots." It has become a stereotype increasingly engrained in American society that only the Left cares about the poor, as if they somehow acquired a monopoly on caring about the poor.

To perpetuate this stereotype, what I have noticed that is all too common on the Left is to rely very heavily, if not solely, on the emotional piece. "How dare you comment on minimum wage if you don't know what it's like to live on it?" "How can you be against Social Security? That's all some people have to live on when they retire."

Regardless of topic, what this sort of argumentation comes down to is that if you do not agree with the Left's prescription or support a large welfare state, you hate the poor. I cannot speak for everyone, but I can tell you that I do not hate the poor. I believe that all individuals should have self-ownership, freedom of conscience, freedom of contract, essentially the right to life their life provided they are not harming others. I do not know if I would go as far as calling myself a "bleeding heart libertarian," but I can say that I believe the best way to help the poor is through high-growth, liberalized economies with fewer government regulations. My disagreement is not on whether the poor should be helped, but how. While there are exceptions, the predominant view for those on the Left is that the only way to help the poor is through the largesse of the government. What is irksome about the Left's prevailing view is that it focuses on process and intention:

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." -Milton Friedman

I take Friedman's quote to heart because it is valid and unfortunately all too relevant these days. If the American Left is going to argue that a certain policy should exist or be expanded upon because it helps the poor, they should argue for something that actually helps the poor. Rather than speak in theoretical terms, what I would like to do now is provide a list of examples illustrating how policies favored by the American Left all too frequently result in either harming the poor or preventing them from escaping poverty.

1. Obamacare. More officially known as the Affordable Care Act (ACA), this signature legislation of the Obama administration was intended to provide more affordable, universal healthcare. Its expansion of Medicaid to low-income households puts emphasis on how the ACA was supposed to expand coverage to the poor. What Obamacare ended up doing was increasing both premiums and deductibles, thereby making healthcare less affordable for the poor. Obamacare also provided fewer choices in doctors and insurance providers. The individual mandate penalty, which had been since removed by Trump, was affecting the poor because they had to make a tough choice between paying for expensive insurance or the mandate penalty. Many opted for the penalty. In short, Obamacare fell short of its goal to help the poor have better access to healthcare.  
2. Federal subsidies for college education. Education is the single most important indicator for one's success and wellbeing. Being able to have an education to acquire a job to adequately support yourself financially is vital. In the developed world, having a postsecondary education is the way to go about that goal. The problem is that college can be so cost-prohibitive, especially for young adults from lower-income households, that it de facto becomes inaccessible. Cost is one of the main reasons why the college dropout rate is so high. The thing is that college was not always so expensive. Since the early 1980s, college costs have been skyrocketing, and the primary culprit is federal subsidies. The very subsidy that is supposed to make college more affordable is actually making college more inaccessible for those coming from lower-income households.  
3. Social Security. Social Security was initially created to be a temporary safety net during the Great Depression. It later evolved into a supplemental source of retirement income. Social Security is not structured in a way to adequately replace retirement income, which partially explains its insolvency. Social Security helps the elderly with retirement, but only modestly so. Even with Social Security, there is still significant enough poverty among the elderly. Being able to invest privately provides a greater rate of return (see OECD paper; also see here, here, and here). If taxpayers were allowed to invest in their own private account instead of having to pay the payroll tax, retirement would not be as much of a strain. That is why the focus should be on making the 401(k), universal savings accounts, and other financial instruments in the private sector more accessible to the poor, as well as inculcating a savings culture.   
4. Minimum wage. Minimum wage is supposed to pull people out of poverty by providing a "living wage." Forgetting the effects on the economy or individual businesses for a moment, this narrative only tells part of the story. Yes, those who receive the wage increase often have an improved quality of life. But it comes at a price of greater unemployment in the labor market for unskilled workers. The tradeoff is that while some receive a higher wage, others are left without a job. For minimum wage workers, this work experience is a necessary step in professional development. Without that work, they stay in poverty for longer.
5. Occupational licensing. This is the legal requirement to acquire a credential before entering a certain career. The argument for such licensing is based on ensuring quality and safety. Occupational licensing has run amok and has exceeded reasonable concerns over health. If you want to be a hair stylist, interior decorator, or florist, for example, you need occupational licensing. Occupational licensing drives up the costs of goods and services while exacerbating income inequality. Additionally, it acts as a significant barrier of entry, which is another way of saying "occupational licensing makes it more difficult for poor people to pursue a lucrative enough of a career." 
6. Consumer Loan Interest Rate Cap. Senator Bernie Sanders and Congresswoman Alexia Ocasio-Cortez recently introduced legislation to limit interest rates for credit cards at 15 percent. Their goal was to help poor people not be exploited by credit card companies. What happens with such caps? One of the main outcomes is that poor people have less access to the mainstream credit system. As a result, they either find payday loans or a pawn shop, thereby worsening their financial predicament and making them poorer. 
7. Housing Policy: Mortgage Interest Deduction and Land Use Regulations. This could be divided into two bullet points, but I combine them into one. Having a roof over one's head is one of the necessities for survival. Being able to afford housing is thus important. There are at least two government policies that get in the way of such affordability. 
• The first policy is that of land use regulations. The purpose of these regulations is to restrict the development of private land for public policy goals. What happens when you artificially restrict supply? Prices go up, and the same thing happens in the housing market. These higher prices disproportionately hit lower-income households harder. Consulting firm McKinsey found that lightening up on land use regulations could lower housing prices 8 to 23 percent, thereby improving equity and housing access for the poor.
• The mortgage interest deduction (MID) is a tax deduction that allows a taxpayer to reduce the taxable income base by the amount of the interest paid on their mortgage. Not only is the MID one of the most expensive tax deductions, but it disproportionately benefits the rich. More to the point, the MID drives up housing prices, which makes housing less affordable for lower-income households.
8. Charter schools versus public schools. I return to the theme of education, but this time, it pertains to K-12 education. Not everyone has the luxury to send their child to private school. At the same time, there are those who would like an alternative to public schools. This is where charter schools come in. Charter schools are schools that receive at least some government funding, but are privately and independently operated. Charter schools are an important alternative because they disproportionately admit disadvantaged students. While their success rates are more variable than public schools, they tend to perform better than public schools, especially when it comes to serving disadvantaged students. Those who want better schooling for children from lower-income households should encourage charter schools instead of keeping children trapped in an underperforming public school. 
9. Employer-sponsored health insurance. Employer-sponsored health insurance is like it sounds: it is a health insurance policy employers purchase for their employees. This tax break dates back to World War II. While about 60 percent of Americans are on employer-sponsored health insurance (and most are happy with it), it creates a number of problems. I went as far as calling it the worst tax break back in 2015. It is costly to the American taxpayer. It also drives up healthcare costs because it artificially inflates the demand for medical goods and services in a way we do not see in other countries, which is one of the main reasons why U.S. healthcare is more expensive than it is in other countries. More to the point, it exacerbates income inequality because lower-income households are less likely to have jobs that provide employer-sponsored health insurance. I would go as far as arguing that this tax break has done more damage to Obamacare, which says a lot considering how much damage Obamacare has done to the U.S. healthcare market. 
10. Foreign aid. Foreign aid is the allocation of government funds to a developing nation in order to alleviate poverty there. The problem is that foreign aid is an overall ineffective way to alleviate poverty in developing countries. What works better? Trade liberalization.  
11. Renewable Fuel Standard (RFS) and Food Prices. The RFS was a mandate created to increase renewable fuel. Aside from being a subsidy to the ethanol industry, what the RFS ended up doing was driving up food costs not only for the people in this country (which affects the poor because they pay a higher percentage of their income towards food), but for those in developing countries. 

Postscript

This was not a complete list, but these examples still cover so many of the major expenses for lower-income households. This was merely a list of policy examples based on pieces I have written for this blog over the years. It should nevertheless illustrate my overall point: no matter how well-intentioned it may or may not be, government intervention all too often either keeps poor people trapped in poverty or makes the situation of poor people even worse and more precarious.

Rather than focus on good intentions or whether the government was part of the solution, those on the Left should ask whether the policy in question actually helps the plight of the poor first or if it harms those it was meant to help, which is something that too few people on the Left ask these days. We can get into arguments about economic efficiency, political feasibility, cost-benefit analysis, or unintended consequences afterwards. The problem is that if those on the Left cannot even answer the question of "Does this policy actually help the poor, or is it merely feel-good, misguided policy solely built on one's good intentions," then it becomes difficult to take the American Left seriously when they say they want to help out the poor.