Good morning and welcome to the Heritage Foundation. I am the director of the center for free markets and regulatory reform. Here at the Heritage Foundation. I ask for you please, those in the audience to please make that last little check on your cell phone to make sure that they will not interrupt the proceedings today. And we will get started right now. The event today is really designed to celebrate the publication of a new heritage special report called Big Government policies that hurt the poor. And how to address them. United states is a very compassionate country and you have an awful lot of government activities that affect poor members of the population and in one way or another. We have welfare programs, welfare spending at one time or another that adds up to well over 1 trillion. That can be in things like healthcare, directing supports of one kind or another. We are not really here to talk about those policies today. We want to talk about another set of Government Policies, those put in place often for what seemed to be on the surface very well meaning purposes. And in fact they may in some cases be necessary policies of one kind or another for government. But all too often what they wind up doing if you look at the second or third order of the policies, is having a negative effect on poor people. The kind of policies where thinking about here, things that have two main impacts. The first is an impact on prices. And what that means is that the free market is not going to work. Not very well or at all. If the government is changing the relative prices of goods or labor or capital. And there are lots of programs and the government undertakes that have some sort of impact on prices. Unfortunately, because consumption is a bigger part of expenditures of poor people, those kinds of policies would raise the prices of consumer goods and hurt poor people more than rich people. The second set of policies are those that interfere with opportunities of people to work. These would be restrictions like occupational licensing or i supposing about minimum wages in this category also. Things that interfere with the ability of poor people especially to get into the workforce and take care of themselves. That is going to be the focus of our program today. I think youre going to be surprised at how many policies there are. We identified several dozen in the publication and i think we are just scratching the surface. Fortunately we have two very immanent people to start us off with today. Our keynote speaker for the event is doctor Donald Boudreaux and i would say, he is one of the leading economic educators in the United States of america. Im just going to find his actual resume and my list here because i want to tell you he is a senior fellow with the frederick transport for economics at george mason university. He is a board member, professor of economics, former chair of the Economics Department at george mason. He holds the martha and nelson chair for the study of freemarket capitalism. That is not a word you hear very often these days. We ought to hear more. Freemarket capitalism at the center. He specializes in globalization and trade law and economics and antitrust economics. He is also the author of one of the very few blogs online that i got to every day. It is called cafc hiyak. I recommended for those that want to know what is going on in the economic world. After donald we will have commentary and a conversation. Stephen moore is a distinguished fellow here at the Heritage Foundation. He runs what we call our project for Economic Growth. He focuses on a broad range of topics including tax reform, budget and energy policy. He is senior economic analyst for cnn and recently took a leave of absence from his duties here at heritage to join the Trump Campaign as a senior Economic Advisor to then candidate donald trump. Steve is the author of several books including his most recent, fueling freedom. Exposing the mad war on energy. Please join me in welcoming Donald Boudreaux. [applause] thank you jerry, good morning everyone i am wanted to be here. Especially with steve. Im going to start off with when people say that im an economic educator, among economists it means i no longer do economic research. I do not think that is true but i believe that economists, the world can better use Economic Education then using another journal article putting a curly cue at some point and i think that is revealed in the state of current public understanding of economics. The content of public debate during National Election or any sign of the state of the publics economic understanding. I think it is incontestable that the state of that economic understanding is pretty poor. It seems to be the worst in my lifetime. Which unfortunately was well along at this point. On the other hand this fact is understandable and forgivable. Economics even at the most basic level is a unique way of thinking about reality. It is not terribly difficult but it does take some effort. It does take some time, it does take willingness to learn a new way of thinking. Tease the great it does take willingness to see beyond what is immediately obvious to look at what is less obvious. And to wear those lenses requires to put them on inducing. It requires some effort. Once the effort is put forward, it is not difficult. He wanted seeing in reality that would otherwise remain out of vision. In one sense it is not appropriate to scald people for not understanding economics. We live in a world of, we are all busy, we have different jobs, a great deal of economic specialization. To spend time learning economics means that you spend taking time away from doing your job or being with family and taking care of personal matters. So i cannot scold anyone for not learning even basic economics. Maybe some work permit to do that than to say, scold an economist for not learning details of carpentry. I dont know anything about carpentry. The difference is that i do know anything that carpentry must most economists dont that does not affect carpentry. The problem with economics is if you dont understand economics, the lack of understanding when it is displayed through the voting process, it is displayed through the public commentary process. The results are bad economic policies. So my not understanding carpentry does not inflict bad carpentry on the rest of the world. Peoples lack of understanding of economics flips so i dont have any solution to the problem. But i do have a finger of blame to blame and with a very poor job in conveying and understand the basic economics to ordinary people. There are exceptions to this of course. Friedman being the most notable. A handful of others economists and very public communicators we have few of those. The basic truth is not out there in the public mind enough. I want to share, ive tried to instill the basic truths of in economics is irrelevant for todays Public Policy debate and i have distilled them down to a convenient number of 12. I could not quite fit it into 10 but i got it down to 12. So here are the basic truths of economics as i see it. These truths are better understood by the general public. The state of the public debate and the state of politics and policy would be better. It would not be perfect but it would be better. These are in no particular order except maybe the first one. Number one, theres no such thing as a free lunch. I like that phrase could you all know what it means. It means every benefit has a cost. Doesnt the benefit is not worthwhile pursuing or grabbing has a cost. It is not free. And most of these costs often are unseen. The flipside of that is a lot of cost has benefits. To be sound economically you cannot just focus on the benefits they see for the cost. You cannot just focus on the cost and ignore the benefits. You have to look beyond the first stage. Look beyond what the economist calls the first act. There are usually several acts in an economic plaintiff does not end after the first act. Number two, as a general rule, each of us spend there on many more carefully and productively than we spend other peoples money. This seems to me to be indisputably obvious but judging from the Public Policy that comes out of this town, it does not seem to be obvious to other people. A rainy presumption among many people, mostly people on the political left but not always. Is that if you take money from person a and give it to person b. Person b will spend person as money to the person a would spend person as money. I dont get it but it seems to me obvious that each person is a general rule spends our people more productively than others. And when the cost of taking actions rise people are less likely to take the action. In a moment you will see the relevance for the discussion this morning of this. It seems obvious as well. It is more costly for me to do something is less likely i will do it. Probably the most fundamental proposition of scientific economics is the law of demand. A fancy way of saying, when the cost to you taking actions go up youre less likely to take the action and more reluctant to do it. Youll find an alternative way of pursuing. Number four, there is no fixed number of jobs either in a country or globally. The socalled lump of labor fallacy is indeed a fallacy. People on the left, on the right, in the middle, up and down. Often fall for this fallacy. If these jobs are destroyed, what will people do . I think this is a grotesque fallacy. It is belied by history. One of my favorite statistics is looking at the Us Labor Force and the us number of jobs. Civilian labor force and the number of jobs. In 1950, some 67 years ago, Us Labor Force was roughly 60 million people. Today the Us Labor Force is roughly 155 million people. About 150 percent larger than it was just 60 or 70 years ago. And the amount of jobs listings today is about a little higher, percentage point or two as it was in 1950. So as labor forces, the number of people in the economy for seeking jobs has gone up. So also is the number of jobs that tracks the number of people in the labor force pretty carefully. Does the number of jobs. So we see women that do workforce, a Larger Population enters the workforce and jobs are created. As long as they employ the people. Number five, just as there is more than one way to skin a cat there is more than only to succeed economically. Ive never skinned a cat. I have heard this phrase. I will not want to do it. Other two academically theres more than one way to do it. But i do know from personal experience im sorry to say but from my reading of economics and economic history and Business History that there is obviously minimum wage succeed economically. If one way pursuing, the cost of one way pursuing business rises, competitive entrepreneurs find another way to pursue business. Theres not just one way to conduct the business and successful dynamic entrepreneurial Business People are always on the lookout for alternative ways to conduct their affairs. Number six, consumption and not production is the ultimate goal of economics activity. That is the ultimate justification. It is not to employ people, not to create businesses. The ultimate justification is to create goods and services that make peoples lives better as they judge them. Number seven, dont be misled by number six. Economic growth is caused by, driven by, increase production. It is not caused contrary to what they say by increased consumption. Increase consumption is a happy result of increased production. Number eight, nothing about a political border changes the nature of trade. Any problems that arise when nebraskans trade with koreans, arise when nebraskans trade with kentuckians. Any benefits that will arise number nine, when foreigners sell to us, they do so only because they wish to buy from us or to invest in our economy. Foreigners are no more willing than we are to accumulate lots of pictures, monochrome pictures of dead americanstatesman. But to listen to the trade debate today on people in the right and the left he would swear that the goal of most foreigners is to harm us by sending us things like steel and cars and textiles and in exchange for ever greater numbers of pictures of George Washington and Abraham Lincoln. As much as i admire George Washington and Abraham Lincoln and jefferson and Jimmy Franklin and ulysses s grant. None of us engage in Economic Activity to acquire these pictures. We do so because we want to spend those pieces of money or to invest them in the same is true for chinese and germans and mexicans and all of the foreigners. Number 10. A trade deficit is not for a symptom of poor domestic economic performance. Nor is it a source of poor economic performance. It is usually quite the opposite. I do not think there is any topic now that is more misunderstood. At least across the political spectrum than the topic of the socalled trade transmitted trade deficit as many of you i hope no in this room, but if you dont i will say the trade deficit, it, a better term is current account deficit. It is offset by a capital account surplus. When america runs a trade deficit means americas running a capital account surplus. Foreigners are in our country. I fail to see how that can be bad for us. Fantasy a trade deficit reflect economic performance. Usually when i invest, invest in companies and sectors i think has promise. Someone says that company has, it is on the growth, the company has a very poor future. I do not rush to invest in it. I tried to take money out of it. Number 11, a trade deficit is not necessarily debt. Economists are to blinkers because of the language we use. Incessantly describe increases in the trade deficit as increases in american debt. It is not the same thing. It can become deputy trade deficit is not identical with debt. Effective principal every cent of the trade deficit is indeed nondebt. So that does not necessarily mean or does not typically mean that americans are going further into debt. Can we not but does not necessarily mean that and the description that deficit as a source of increasing american debt i think is very dangerous because it leads to this apprehension and misunderstanding about the nature of the trade deficit is. Number 12, this should especially appeal to steve because it is bens great teacher. The most important and scarce resource is as julian simon taught, the human mind and free markets. Human creativity is what makes our life and our standard of living possible. Alexander we talk about Natural Resources all the time. Theres no such thing as Natural Resources. Resources are not naturally productive. There may productive by human creativity figure how to use them, how to transform them from goods and services to make our lives better. So these 12 simple points give enormous guidance for Public Policy. It steers us away from policies that while they may be meant to help people, especially doctor poor, they in fact hurt the poor. Especially if you dont talk quickly, one was mentioned briefly by terry, minimum wage. Minimum wage legislation i think is the poster child for such misguided policies. It seems so right. This person is pay less money and we think this person should be paid, lets order the employer. The trouble with that is that the cost of taking action rises and people are less likely to take action as the cost of low skilled workers goes up, fewer low skilled workers are employed. Until about 20 years ago there was widespread consensus among economists that minimum wage does have negative effects. By the way minimum wages can change in the nature of jobs. Even workers who keep the jobs and some employees will make them work harder. The employer becomes less willing to allow the worker to text or one way to employ fewer low skilled workers. But it knocks them out of a job. And getting paid zero per hour is worse than getting paid whatever, if you had a job in the absence of minimum wage. Even the loss of wages not a loss of income but it is the loss of the job experience. The job skills that you get when you are particularly a young person and an unskilled person. Also the distribution of the harm created by minimum wage is notable. I have a teenage son that is raised in Fairfax County. Nice wealthy suburb with good schools. My son has, when he was 16 he was an unskilled typical 16yearold knew nothing. Although he thought he knew a lot. But he never had trouble getting a job. But with the minimum wage does is not only strips some low skilled workers of jobs, the low skilled workers who are just harmed by this is minorities in the innercity. They are the teenagers who do not have their own personal means of transportation. There they was a need to stay home to help babysit their siblings be there the teenagers that have gone to failing Government Schools and so the employer for understandable reasons, that becomes, although more costly to hire kevin my son, the risk of hiring innercity teenagers is even greater in hiring teens from Fairfax County or montgomery county. And so is the teenagers from the innercity that are harmed the greatest by the minimum wage. There is a raging debate in economics today. Does it really destroy jobs or not . The bulk of evidence still shows that the minimum wage destroys jobs. The bulk of the job losses are among innercity especially poor families. There are people who dispute this and the empirical evidence i think is conclusive. There people that say the empirical evidence is not conclusive on the matter. If you read the New York Times you would swear that the empirical evidence is conclusive because eight say that the minimum wage has mysteriously no effect on the number of jobs who seek to find if you want evidence in the literature that low Skilled Labor among all goods and services in the world is the one service that is immune to the law of demand. The government pushes up the cost of using it somehow employers just go okay, we will just pay more and we will not attempt to protect the bottom line by adjusting by the way of economizing on the low skilled workers. The second policy, these are the two that upsets me. The first is minimum wage a second is trade restrictions. It is another example of unseen harm it is trite to say but it deserves repetition. Particularly given the debate that we had in the past election. You can protect certain jobs with higher tariffs for other import areas. You protect jobs. What is unseen are the jobs that are lost. When you raise tariffs on steel, foreigners earn less selling them to americans. Jobs are lost in a sector speed foreigners have less money to invest in america. Fewer jobs are created by foreign investments. Americans pay higher prices for steel and products made with steel meaning that americans spend less money therefore on products that do not have a lot of steel in them. So jobs are lost in other sectors. It is very difficult to find evidence of this in the empirical if youre looking for specific jobs. Because it is very difficult it is easy to because it is difficult to buy the evidence of this it is very easy to up a source of economic decline. The evidence on the prices that people pay for trade restrictions is pretty clear that trade restrictions raise prices and the bulk of those price increases fall on poor and middleclass families. Rich people pay them of course but the higher prices and the percentage of a familys income, the higher prices by trade restrictions fall as the Family Income rises. If you raise the price of imports with trade restrictions the percentage of the income that poor families will pay for Consumer Products and consumer durables would be much higher as a percentage of their income then will the percentage of my income or of really rich people income. I think im past my time but just keeping in mind those 12, or you can come up with a few more ranges. You can condense them a bit but some basic common sense principles about the way the world works. People better if they veterans to the principles they was better understand the Government Policies that appear on their face to help the poor. That appear on their face to promise a rejuvenation of americas middle class. In fact our likely to do the opposite. Thank you very much. [applause] hello everyone. I love your 12 laws of economics. I think they are fantastic. I want to post those on my wall. I think they are words to live by. I thought i would give you five or six examples of policies out there that are meant to help the poor that actually hurt them and bentleyville save if you by the way we will save some time for questions. The military budget and some reductions and some social spending programs. The last couple of weeks i have i like most of what is in the president s budget. I have been defending it every time i get caught by reporters as a how can you support these policies . Do you have any compassion for the poor . I mean this is going to repose in the safety net and dont you believe in meals on wheels and afterschool programs for people and so on . One of the things, i just wrote my weekly column on this. Government is not compassionate. Government cannot have compassion. You and i as individuals can have compassion. I am not compassionate if i take money and give it to poor people. Even with respective to meals on wheels. When i debate on tvr on the radio is a just dont feel any compassion for these people because you want to cut meals on wheels. And i said wait a minute i actually participate in the program. Once every few weeks we make sandwiches and i helped deliver meals on wheels to people who are elderly and its a great program. I love meals on wheels. But there is a sense out there that a government does not do it, it will not get done and is simply not true. There is no reason a meals on Wheels Program if it is successful as i think it is an incredibly sensible program cannot be done by charitable individuals. And in a lot of ways these programs would probably work better if government was not involved at all. Let me just mention a few examples of policies i think clearly are hurting poor people, not helping them. I will done this quickly. Then we will open up to questions. First an energy policy. I just recently read this book on the energy revolution. Liberals are against it. There against fracking, everywhere you go, fracking is horrible. Its going to destroy the planet and so on. They are trying to hold back this energy revolution. One of the things that we found in our book was that there is a program out there called the low Energy Assistance program. As i think we need to have a government subsidizing peoples air conditioning and heating but we have this program out there and it is because the poor cannot afford to heat their homes and airconditioners. Terms of the program is about 1 billion a year program. What we found was that because of fracking, which has substantially reduced the price of natural gas, used to be 10 and i was about three. This has caused a huge reduction in the price of electricity and utility bills for people. What we found was that the benefits of poor people from fracking and this huge increase in natural gas is worth about 4 billion a year. Fracking has done four times as much good for low income people as the low income Energy Assistance program. The one we just get rid of that and have policy that lowers prices . That is a good example. The second one i will mention is foreign aid. It is a program that is classic example of good intentions by liberals that would help poor people or those that are hungry and in the middle east or whatever it is. It turns out all of your friends in economics repression who have devised all these wonderful programs that there is zero evidence that they have had any effect on Economic Development. A good example of that the Economic Development aid to africa over the last years has, we dont know exactly it is 50 and 100 billion. That is a lot of money. And yet, when you look at the countries getting the aid, we find is that the countries that get the most aid actually fell further behind. They fell further behind and partly because the foreign aid programs create a dependency that is actually limits Economic Growth and does not help them. For twoathe most important policy to help poor people i dont think theres any question about it that the government run school and inner cities is probably the most devastating to people. And has created a cycle of poverty. You mentioned friedman, he stepped in with memories months before he died in San Francisco. As you all know, he always said that the civil most important thing to help poor people was Universal School choice. And we could, one quick example. In washington d. C. Where we are right now, the average poor resident of the state mostly blacks and hispanics. Could get a better education for half the cost in a Catholic School system. Responding when he thousand dollars per student in a Government School but if you give them 10,000 to go to a Catholic School they would get a better education. The next one i will mention is Social Security. It will probably be seconds. It probably you know Social Security helps poor people, right . Its a great program. Make sure that when people grow old they do not become destitute. It turns out we ran some of the numbers. My friend peter and i. We just ran these with the Social Security administration. Instead of having the Social Security tax taken from the paycheck of workers every paycheck, what if we just say take 10 percent of that paycheck will go into an ira account. And they just own it and accumulate the interest and so on over the 40 or 45 years that they work. What we found is if you did that compared to Social Security and just assume an average rate of return that the average poor person would not only get a higher benefit from having this individual account but they would actually be able to leave a Million Dollars for the kids. Social security has robbed every low income family of 1 million. That is not something you hear a lot that happens to be true. Let me make one more point and it is with respect to progressive taxation. Progressive taxation is also something that we say we need it because it helps poor people. We take people from wealthy and give it to low income people. Progressive taxation actually does not help people. We see that the states have highest amount of progressive taxation. States like california and new york and connecticut and massachusetts. We have had less progress for the poor than states that have no income tax or low taxes. My favorite example, this is something we will debate over the next several months. The Corporate Tax. Corporate tax, we are told it is just a tax on very rich people who are shareholders of companies and it is good way to redistribute income. It turns out that nobody ever the effect of this is just connecting the dots. When you have a Corporate Tax, the effect of the Corporate Tax is it reduces the amount of money that businesses invest. New machinery, equipment, building plants, hiring workers and so on. So there is some very good almost indisputable evidence by my friend of the American Enterprise institute. This is not duplicated by many others that in fact, the frontline victims of this Corporate Tax are not the shareholders of companies. They are luscious to get lower wages and salaries because when have less capital to work with they cannot command the high wages that they need. There are so many areas. I guess i will conclude by saying that good intentions is not good enough. Most of what the left in most cases they have good intentions. But the results of their policies actually end up hurting the people they are supposed to help. I want to add 1 13 rule affected to the excellent list. This is one of my favorites. This is typical i think but it goes like this. Give a man a fish and he eats for a day. Teach a man to fish and he works for a lifetime. There are so lessons from that. No let me ask you a question. I was just doing something astray and this point was made. Trade is good, it raises but you are creating all of these losers. The people in pennsylvania ohio and michigan that translate they were not compensating the losers for trade. And i wondered how you were and respond to that point. Quest so ill have a few minutes but i could talk for an hour. Number one people dont talk about the losers from protectionist. You can save some still jobs and put tariffs on steel or on tires. And you can see the jobs that our savior but the tires will destroy jobs elsewhere. It is more difficult to see where the jobs are the stripper you can be sure there are jobs destroyed elsewhere. So i do not know why we should protect these people in the Steel Industry from the forces of economic competition at the expense of the people in other industries. Reductionism has losers. Second thing i would say is that there is nothing unique about trade that causes economic disruption. About interNational Trade. Any kind of change in Consumer Spending patterns causes some jobs to decline, destroyed and other jobs to be created. When people complain about job losses from trade with they are really complaining about is the job losses from economic competition from entrepreneurial innovation. My single favorite example is the polio vaccine. Which is one of the Great Success stories of humanity. Polio is no longer a problem for people that are vaccinated but think of all the jobs are destroyed. People used to work in wheelchair factories making crutches and making iron lung machines. Nothing particularly to do with National Trade but we do not look at that. We understand that is how societies and economies progress and it is the same thing with trade across international borders. It does of course destroy some jobs. Creates other jobs but in any economic change, any innovation destroys some jobs and creates other jobs. So if you really want to say we dont want any jobs to be destroyed and you cannot stop with trade restrictions present we want to freeze all Economic Activity where it is and of course that would, is a quick that is what hyde meant. Quest two quick questions. Hold on one second. Give two options and one is protectionism and protect is still jobs in the other is freetrade and maybe still jobs are lost but you can jobs somewhere else. It is a tradeoff. What does it matter . In fact, maybe it is a loss to force workers that have been in the Steel Industry and have skills for 20 years to now waste their time to learn new skills to get a new job in a new profession. Why should i refer freetrade over protectionism . Because trade does not increase the number of jobs as some mistakenly savior what trade does is shift jobs over time from industries in which we have a comparative disadvantage shows which we have a comparative advantage. Over time trade moves jobs a place where workers are more productive and when workers are more productive the wages and standard of living are higher. So who protected still jobs from competition than what we do is submit jobs in industries that over time or less productive. Then the jobs that we are preventing from being created, those industries are more productive. Let me add one thing to this. This is a good time to have this debate because we are with the new age of the intelligence and Automated Vehicles and so on, the structural changes of the economy coming in the next decade are going to be incredibly disruptive and i mean that in a positive sense not a negative sense. And the other night a few weeks ago i had to give a speech in philadelphia and i drove back late at night back to d. C. And there arent a lot of cars on the highway. As im driving what i saw, never seen this before. A caravan of about seven trucks. 12 wheelers that were all just like a train. Just one after the other. And it was in the far right lane. When i pass it i looked in the calves of the truck out of the seven trucks llama drivers there were . One. There are people in the cabs but they were just moving like a train. The 111 american men today is employed driving a vehicle. 10 years from now they will be close to zero americans driving a vehicle because everything will be automated. That is going to cause huge disruption. The interesting thing is that this is hardly the first time weve seen these kinds of Disruptive Technologies but probably most Disruptive Technology in history was one out of every three americans was growing food now today it is to have 100 grow more food than we can possibly eat. But i wonder if this is the big topic right now in economics. The Disruptive Technologies that robotics is going to change things and what you have to say about that . It is it something we should fear or embrace . It is something that we should embrace. The way to leave a better world for your children so that workers and other resources move into more dynamic and productive places. The way to handle this disruption i think is or some of the things he mentions lower Corporate Taxes, get rid of occupational licensing restrictions. Get rid of the minimum wage. Because that messes up creation of jobs. There are a lot of things we can make the economy more adaptive, more quick to absorb into new industries, resources release from ones that are being displaced by trade or by innovation. What we should not do is cement things in place. Event that we will see the end of work . No as long as human beings have unmet needs we will have the need for human beings to work. One last question and then we have to wrap this up. Writing you each ask a question. Then we will answer them both. How are we doing on time . We will answer these questions. Who in the republic looks out for the poor . Who represents the kind of policy that you just recommended . In my opinion one of the main fallacies that we hear today especially in the white house is buying american hires americans. Can you speak a little bit about that and about this, does made in america even matter . Okay on that last point. We see these labels, made in america. They dont mean anything anymore. The only correct label is made on earth. I still that from someone from the cato institute. What they made in label means knowledge is a final assembly occurred in but it does not mean that the product is made in china were made in america. The typical product, even things like clothing, they contain inputs and ideas from all over the world. The label slapped on the just tested be the place where your code or your cell phone or your glasses were left assembled. It is meaningless but it appears to have meaning that does not have. In terms of your question were you asking who and politics . I said a Single Person that comes to mind to me is rand paul. I think he gets this. He is more of a libertarian one of the things, and is a perfect example of government intentions run amok. Which is the two industries. I make this point a lot myself. The two industries in america with most rapid increases our healthcare and education. Those are the two industries that are where the price is not working because you have the government subsidizing or operating them. When you ask a liberal, why do we have government involved in healthcare and education . What is their answer . To make it more affordable. Theyre doing a great job, right i think the lesson here will conclude by this note. Government intentions are not enough. Good intentions are not enough. Theyre supposedly compassionate helping the poor and they had a part in them and end up, the left is obsessed. Economists are so obsessed with income inequality but some of the work we have done shows liberal policies actually increase in income and equality not the reverse. Thank you, that was a fantastic presentation. We will move forward with the second panel. [applause]. As we transition i will briefly set the stage. If we can set the slide up i will intro what we will mainly be focusing on. My name is tim doescher i work at the Heritage Foundation. Essentially what we are going to be doing is focusing on certain areas, specifically that affect the poor in terms of government what the intentions, to help. This chart demonstrate Household Spending as a percentage of aftertax income by income. You can see adjust, it really does hammer home the point that some of these policies really are just look at housing for instance. The lowest income households spent nearly 60 percent of their aftertax income on housing. That is compared to 26 percent for highest income earners. It is because of programs like rent control in various regulations against use of private property. As well as government takings for Economic Development. These are all programs, another is energy. It is on the list as well. These are things that are really impacting prices as well. Often as it says in the report, families having to choose between not eating for a day, paying the energy bill or foregoing medical coverage. To pay the energy bill. So we what the panel talked about that and i will briefly introduce them. Our first speaker is going to be a senior fellow in environmental policy transport it is here in washington d. C. His Current Research interest includes areas in science, economics, law and the politics of Global Warming. He has been published in the washington times, forbes, national review, business daily, various other publications. He has appeared on various Television Programs including the Oprah Winfrey program. We have provided gender this is great. Counterpoints to al gores an inconvenient truth. I did not get to see it but i will go on youtube. [laughter] it is probably fantastic. Next we are going to have ronald utt. In economic consultant. Recently published a book the war of 1812. And the forging of the american navy. Previously he was the herbert and Joyce Morgan Research fellow here at the Heritage Foundation. When he wrote on housing, transportation, privatization, urban revitalization, landuse and Growth Management. In the 70s he was director of the Housing Finance division at hud, 1987 president reagan appointed him to leave his efforts on privatization of federal activities. He is the editor of several books, 21st centuries highways, how privatization can help solve americas infrastructure crisis and a guide to smart growth shadowing this, providing solutions. Finally, an allaround good guy. Just a wonderful guy here at the Heritage Foundation, daren bakst. Research fellow in Agriculture Policy and the senate for free market and regulatory reform. Before joining heritage, he worked as policy counsel for the United States chamber. Focusing on food and Agriculture Policy and regulatory reform. For nearly 7 years he worked at the john Walk Foundation where he worked extensively on Property Rights, environmental policy. He has appeared on cnn, quoted in national review, wall street journal, usa today, washington times, and he is an attorney. So we will forgive you for that. Thank you very much for the kind introduction and for judging of some ancient history. Of course i supplied that little data for you but it was a fun moment. And this is, we just recently passed the 10th anniversary of al gores inconvenient truth. So he is back. Although he has less power than he hoped to have only a few month ago for very obvious reasons. What im going to talk about is how a government Climate Policy helps hurts the poor. I am pleased to quote from someone here that was briefly with the Trump Administration who is coming back. It is david thing to understand the Climate Policy is that almost all Climate Policies are either explicit or implicit taxes on carbonbased energy. And what you can see on your screen there, i just bought these, david said this so appeared hydrocarbon fuels provide 85 Percent Energy in the United States. A tax on Carbon Dioxide would drive up energy cost. These Higher Energy costs worked their way through the economy raising costs of production, reducing income and reducing employment. And so david and nick and kevin and other folks of the Heritage Foundation have done numerous studies for cap and trade programs which is an implicit carbon tax or they have actually looked at the effects of carbon taxes set at various levels for example, one study they did was a carbon tax sit at the alleged social cost of carbon as calculated by the obama administration. Another study they did was, lets translate the Clean Power Plan of the Environmental Protection agency into a carbon tax or lets look at the Energy Information administrations analysis of the Clean Power Plan and then plug that into our own model, heritage has on model based on the Energy Information Administrations National Energy Systems model. And see with the effects are. In the effexor always the same. Any kind of carbon price that is being debated today, which is nowhere near as extreme as it could get. It will always have the same basic effects. That you reduce cumulative growth, gdp growth by Something Like 2. 5 trillion over the next decade and 1 2. Here is the cost of gasoline. By about 30 percent. You reduce the cumulative purchasing power of a family of four over a decade by about 28,000. You reduce employment growth, especially in the Manufacturing Sector by a cumulative, by about a million jobs over a decade. And so the people who are hurt the most obviously, the people who are, the first to lose their job and that is usually people at the lower end of the economic ladder. One of the most obvious points i guess, maybe this should be added as 1 14 law. Energy taxes are regressive. All of these Climate Policies people at the lower end of the economic spectrum spend a higher percentage of their income on necessities. Like energy and food. This is the chart they pulled out of a study that came out a few years ago by roger called the social benefits of carbon. It shows that if you are a family earning more than 50,000 a year, he spend typically only about four percent of your income on Energy Related expenses. But if you are only earning up to 25,000 a year, then now you are spending over 10 percent of your income on Energy Related items. If you are only making about 10,000 which may be, people who are just starting out, young people and so on, then all of a sudden it is nearly one third of your income, is income related. Gas, utilities and so on. One of the obvious points here is that if you really care about the poor people, you should want to ensure that government gets out of the way as much as possible so that energy is as cheap as possible. Not that you should subsidize energy because that distorts Investment Decisions but they shouldnt artificially increase the price of energy. He mentioned the fuel poverty problem. This is an enormous problem. It is usually thought to exist only in europe but it exists in the United States today. But literally millions of people because Energy Related expenses consume 10 percent or more of their income. They have to make these painful tradeoffs. As you said between heating and eating. This is one chart that tries to estimate how many people, how many low income families have to make these tradeoffs. That you go without food, skip a meal, in order to pay your utility bill for you skip healthcare that month. You do not go to the dr. Evenly fell sick. We failed to pay the rent. And so on. So these are real painful choices for millions of people and the folks who pretend that these Climate Policies are just a Great Big Business opportunity, they are you know if you are, if youre in the alternate Energy Industry and the state has just imposed a mandate which guarantees you a market but is not a Great Big Business opportunity for people who are on the edge. There was a wonderful that i read about. Yesterday it was a piece in the wall street journal. Im sure steve has read it. Anyway what they pointed out was that in germany, which is often left to as the model for what United States climate and Energy Policies it should be because they have this system called to subsidize solar energy and wind energy. Even though germany has been building more coal power plants in the United States, and the reason for that is that wind and solar are intermittent energies. The wind isnt always glowing in the sun isnt always shunning. So germany has had to build a lot of coal plants which is very hard for them to explain in terms of being good stewards of climate. In any event, what the system has done is increase the price of energy, increase the cost of electricity to about three times the us average rate. As a consequence of that, 330,000 people in germany last year, they had their electricity shut off because i cannot afford to pay the bill. One of the things that we hear about in the climate scare is that heat spells will become more frequent and severe and people are going to drop like flies. And to this extent with this is correct. When the average temperature of the planet increases, heat spells will become more frequent and severe. By how much . Who knows. Heres whats interesting from an actual Empirical Data standpoint. Over the last 30 years, even though us urban air temperatures have increased, and a lot of that is simply due to the growth of urban heat and actually people in the United States voluntarily expose themselves to much more climatic warming than Climate Change is producing just by moving from chapter to the sunbelt. Something like 12, millions of elderly people and they retired experience more climatic warming when they moved to sunbelt areas than the United States has experience as a whole in a century. So lets not get too worried about small changes and global temperature. But the point of the graph year, i am shunning this, the heat related mortality in the United States has declined decade over the last 40 years. The progress continues. And why is that . It is more more people have air conditioning. It is most of the population. Especially who live the kind of warm climate. Now have air conditioning. Air conditioning is probably the single greatest protection against Global Warming of any technology in the world. But if you raise the price of electricity, there are some people who will decide in the hot sweltering summer that they simply cannot afford to run the air conditioner. Because that is when electricity prices peak and when it is more expensive and so you do not want to have, you do not want to have people put in a position where they have to choose between air conditioning their homes and paying the rent. But that is what can happen if we get europeanstyle electricity prices. Now, there is a climate relating policy that you might think well, this can only benefit the poor. There can be no downside in that is fuel economy standards. Because after all, the point of fuel economy standards for one positive is to make driving less expensive. Because youre paying, you are stretching your fuel dollars. Instead of going 10 miles to a gallon youre going 20 or ultimately they want you to go 54. 5, that is the goal of the administrations fuel economy standards on average, every wish be going 54. 5 miles an hour by 2025. Isnt that a great savings . Except that you know theres no such thing as a free lunch. As don said, and that goes for fuel saving technology as well. It raises the cost of vehicles by several thousand dollars. And here is the point. Low income households in order to buy a new car, typically need financing. They need to get a car loan. In the car loan is based on a formula that has to do with the price of the vehicle and therefore, how much money to pay each month to repay the loan and how much income you have per month. And all of these staples compete for customers and for land, and so when you raise the price of corn, you end up having repercussions throughout the whole global food system. This was just what i had was just a slide from a study by the center for Regulatory Solutions thats part of the Small Business and art notion of counsel. But they calculate, for example, that just in california, over a period of about 20 years, that the increases in food prices and also because ethanol and pears fuel economy the increases in fuel purchases, all right, so thats another cost. Would depress labor income by 18 billion. I dont think ive to go to the the rest of it. You could basically the point. Heres just a book that i think is wonderful. It also, read steves book which is, argues the same basic thesis, although in very different ways, but its the moral case for fossil fuels. Producing, people producing and using fossil fuels didnt take a safe climate and make it dangerous. Took a very dangerous climate and made dramatically safer. This is one of my favorite charts that alex seitz but it was actually put together by a researcher at the interior department. And basically shows that in the 1920s, 472,000 people in the world perished from famine because famine reduces peoples access to food and water. And since that time, over onethird of all the Greenhouse Gas emissions ever released into the atmosphere, the world warmed up by almost one degree, and yet famine related deaths declined by 99. 8 . If you look at it in terms of mortality rates, death per million compared with 99. 9 . This shows fossil fuelbased civilization is highly sustainable. If you went unsustainable as the other side claims discharge of the going in the other direction. Direction. You dont get a 99. 9 reduction in drought related deaths from an Unsustainable Energy system. But my point here is that this, and i guess im about to run out of time so i should wrap this up. My point here is the main reason for this is that affordable, reliable Plentiful Energy made the whole global Food Production system way more productive. Think of all the machinery thats used in farms today. They all run a fossil fuels. Think about Irrigation Systems all run on fossil fuels. Think about all the electrification and data management. A lot of that depends on fossil fuel generated electricity. Think about the transport of food from farms to cities or from food surplus areas to food deficit areas, or just think about wealth in general, Wealth Creation that allows for humanitarian assistance in the case of natural disasters. All of these capabilities and technologies are four to buy fossil fuels, if we want to keep progress like that continuing, we should want to make sure that energy as affordable as possible and not artificially raised the cost of it, which is what these policies are intended to you. I guess maybe one more crap i will show because this is really unbelievable. Draft. This is a chart put together by our good friend steve at the u. S. Chamber of Commerce Institute for 21st century energy, and it shows what we required to meet the Emission Reduction target for 2050 under the paris agreement, okay . And what it means is that an order to meet that target, todays developing countries will have to dramatically decrease their current consumption of fossil fuels. Not just their future projections, projected consumption but right now. So for example, if we assume that somehow miraculously the developed countries like the United States reduce their emissions to zero by 2050, in order for the world to meet the paris agreements goal in mid century, developing countries, todays developing countries will have to cut their current Carbon Dioxide emissions by 35 . If more realistically or less unrealistically developed countries only reduce their emissions by 80 by 2050, the developed, developing countries will have to cut their current emissions almost in half. We ar talked about an area of te world where more than a billion people dont even have electricity. So the potential for humanitarian disaster here, for harming the poor, if countries are serious but if lamenting this program is vast. And with that i will turn it over to ronald utt. [applause] thank you, marlo. And thanks for the introduction and thank you for inviting me. I was here for different times in the past, more times than you probably come steve. I highly got right into let me state and actually retire from the Heritage Foundation. What im going to talk about is Government Programs of the housing unaffordable. Let me begin, let me see okay. Am i up . There we go. Let me begin by a quote how do we get that there we go, wrong button. Anyway, let me begin from a a quote and desist from a cover letter of a report called not in my backyard that was submitted and created and written with the help of some heritage analysts in 1991. It was called that kept commission and in the cover letter to president bush, which was where the report was being submitted, jack kemp wrote the commissions disturbing conclusion is that exclusionary discriminatory and unnecessary regulation constitute formidable barriers to Affordable Housing, raising costs by 2035 in some communities. As a result, many low income young families cannot find housing near their places of work and elderly couples cannot afford to live close to their relatives. This was done 26 years ago on the camp Kemp Commission and if things get better since then . Absolutely not. Despite the fact that who could be opposed to affording housing, particularly that doesnt involve higher taxes and Government Programs . In fact, many people are opposed to Affordable Housing as we will see. And as i said it is only gotten worse, largely because of additional zoning in the United States that has occurred over that period. Now, the main reason it is not gotten any better and has gotten worse is in large part due to the embrace of the Environmental Community on sony, particularly restrictive zoning in what i call the war against the suburbs, the war against sprawl. Beginning about 20 years ago there emerged in the United States through the Environmental Movement or attached to the Environmental Movement what i i call the rise of smart growth and urbanists which assent to restore the sort of small panel feel of 1920s america where people live much more closer to each other, in small apartments. It walked were, bicycle to work or they took trolleys. Thats what the tragedy. Americans prefer to live somewhere else. Most americans want a singlefamily house, a little bit of space, a little bit of privacy and thats the American Dream use in the suburbs were safe, cleaner and the schools are better. This disturb the progressive in the Environmental Movement because people were behaving in ways that were irresponsible. They were confusing using a plan we could use for parks, agriculture. They were driving long distances to work. There were driving long distances to buy food at restaurants and are Wasting Energy and polluting the environment. And so they began to look for ways to restrict people into tighter communities, and probably doing this they use zoning essentially to discourage the expansion of suburban housing. Going back to could be opposed to Affordable Housing and be supportive of this, about 64 of the households in america who happen to be homeowners. The thing about restricting land is that in time to restrict the supply of something, the price rises. If you are an existing homeowner, was happening is the government regulations are in reaching you. Your equity and that home prices. Pretty soon people begin to realize that these restrictions are worth a lot of money to them, and so anybody who has an existing home is opposed to competition, new homes. What you have is the people who are essentially largely voting, the property owners, are the ones who are content to keep the system going. Thats what its been so difficult to alter it because again, seeking 4 of american households already homeowners. What do we care about the other people . People have not moved into the community yet actually, that youre keeping up dont get to vote in that community anyway. You have a real problem and as i said its getting worse. What i call antisprawl or land use regulations that have become increasingly popular in the last 2030 years are both about it. Portland, oregon, in the 1970s drew essentially lines about every one of their cds in the state and said no growth can take place outside his boundary. Any building must be limited to agricultural purposes. All residential and commercial had to be within the growth boundaries. You can imagine portland from being a very affordable place to being a very unaffordable place over that time. People finally realized and referendums which are popular in the Pacific Northwest were used to undo and modify the growth boundaries so theres now some relief. Another way of restricting land is through service areas. Stafford county limits growth around i95 corridor because they are not extending the sewage or the water system which our government owned beyond a certain what they call the Growth Management area. Virginia is a strong property tax, Property Rights state, so they cant really prevent people from building outside, and what we have is by right to development but that has to take place on a minimum lot size of five acres. You have to have a septic system and will so essentially people that can, they can buy their way out of these restricted regulations and those who cant are stuck with the quarter. Another way to do this is, let me move to the next is through simple zoning, large lots. In western Loudoun County, again Loudoun County was getting again existing resident in Loudoun County to what already gotten to Loudoun County were getting upset or more people want to come to Loudoun County. They were not really happy with this because they wanted a certain level of privacy and lack of congestion but more people were following them because it was a Pleasant Place to live. So Loudoun County went and observed, essentially reserved the western portion of the county going out towards West Virginia with large lot zoning. That meant places limited to unified lot, fiveacre lots, te. So essentially they protected the wealthy horsey set in western Loudoun County from the others who want to move there. Interesting thing about this is people talk about agitated consequences, while again, you cant stop people from getting married and wanting to have a family and having children who then want their own house in the future, so population growth is inexorable and so is housing. So people were still looking for Affordable Housing is what theyve done instead is they have leapfrogged into West Virginia. One of the fastestgrowing washington suburbs is berkeley county, West Virginia. These other people are moving their are literally working in Northern Virginia or washington, d. C. , or that area. And so they are now driving probably 40 miles further to commute to work than they were before. Weve had the opposite effect. Other ways of again limiting housing growth elevating it just to the people who can by the way out is that you also determine what amenities must be in the house. You have some communities where all the housing must be brick facade or solid brick which makes it more expensive, lawns must besotted, not seeds. You must have sidewalks regardless of whether theres any pedestrian traffic or not at all and square footage. There some communities where you are limited to a house that cant be any spot than about 4000 square feet. And another popular form of limiting housing growth and raising prices and deterring sprawl is impact fees. In many communities Stafford County, virginia, have proffers pixel anytime somebody wants to rezone the land for development they say okay, whats the deal . So in many cases in Stafford County you that instances where the price to get land rezone for lets say older acre housing would be 25,000 which of course the developer and build a going to pass along to whoever is the buyer. Again making housing more unaffordable. Now, how unaffordable have things become . We do this by measuring what we call the median multiple. This is the ratio in any community of the median home price to the Median Income. My colleague insula synthetic quite a bit of work in Heritage Foundation, considers anything over a multiple of three as unaffordable. That is Affordable Housing is, if you can buy a house, the meetinghouse, you can be the person can buy the median house at three times or income which is traditionally what it has been in the United States. What has happened is that the National Average which had been up until recently about 3. 0 is now 3. 9 throughout the country. It varies dramatically from one community to another, and if you can see we had some examples of california. California is probably being a very progressive state, has the most severe land use regulations and they it had been since the 1960s and 1970s. To discourage growth, or at least to force people in the cities and prevent them from going into the suburbs. So we look at, talking about Affordable Housing as a multiple of three, incentivize a come for example, in san jose, the meetinghouse cost a Million Dollars and the median multiple, that is almost ten times the Median Income in that very prosperous community. Think about all the young people who have learned coding at mit, theyre all excited to get a job at google or someplace there and theyre getting 120,000, they realize they can get, rent an apartment that was about the size of what they had as a graduate student someplace. We see the same thing in los angeles and san diego. In portland and seattle which have strict landuse regulations but not as bad as california, we can see them beating multiple is 5. 5 times your income which means i didnt many people of modest incomes are priced out of the market. Let me just wrapped up, we are encouraged to stop, close the circuit with a quote. 26 use later, a professor at mit, who is now at northwestern, did a study of this. What he found in conclusion was the literature studying records with high housing costs find that these calls are driven in large part by artificial scarcity through landuse regulation. Thank you. [applause] thank you. Thanks for coming today. This is a really important project for us, this report. I work and a lot of these regulatory areas that have been discussed, environment and also put an agricultural policy. And it became clear each time i was working on these issues ares areas was that there are so many policies and regulations that drive up the price for consumers. And the reality is anytime a policy drives up the price for consumers, especially when it comes to meet items need items like housing, gasoline and other energy and, of course, food and agriculture is going to be, you can save assume its going to be the case and guess what, its going to have a disproportionate impact on the poor. Thats one of the themes of this particular panel. I want to focus on food and ag and there are three policies want to talk about, two of them are kind of classic example of cronyism and another one is just think the class example of arrogance. So cronyism, first, is a program that would make a soviet central planner blush. Is of the federal Sugar Program. Central planning one owe one. Every thing you can imagine the central planners toolbox is, flies to the federal Sugar Program. It limits, actual limits how much sugar can be sold to get limits the imports into the country for sugar. The purpose of the program is to reduce the sugar supply and, of course, to then drive up the price of sugar. Now, let me clarify, this is not an unintended consequence of the program. Its actually the goal of the program, which of course it will have an aggressive impact on the poor and all of us. So why do we have this federal Sugar Program . Why would you want to artificially drive up the price of sugar . Well, too up a very small number of Sugar Growers and harvesters that exist. So policymakers are helping these cronies at the expense of consumers and so consumers pay about, the cost to consumers envious about 3. 5, 4 billion every year. They call it Sugar Programs because its a nocost program. 3. 5, 4 billion a billion dollars a year is a cost. Just because it may not always cost taxpayers money, doesnt it doesnt cost us as consumers money. With the same people. They dont care. Apparently at the expense of the poor. We will help these cronies come have disproportionate impact on the poor, but thats okay. Also it comes at the expense of the much larger sugar using industry, and certainly thats the confectioners but its also many other food manufacturers, including stable products like bread. Generally speaking, we pay about double the price of sugar compared to the real price. At least manufactures and it gets passed on to consumers. Now, the other thing it also does it a rest jobs as well. In a department of commerce report came out in 200 in 2007,a little old but it captures the point still, its this scene, unseen issue discussed before. So for everyone sugar growing and harvesting job that you say to hire sugar prices, you lose three confectionery manufacturing jobs. So thats your federal Sugar Program and it helps a very small interest group. My second cronyism program is one of my favorites, usda catfish inspection program. Stick with me on this. You never look at catfish the same way again if you in fact, do look at catfish. The fda as a general inspects seafood. But in 2008 and the farm buildings and special provision in the farm bill where catfish are going to be inspected by the usda. So why was this the case . Well, its cronyism. Again, it was too great a trade protection scheme took the catfish farmers who are getting beat up by competition from foreign competition. Theres a pretext it was a safety reason. In 2008 as far as i recall there was no catfish crisis in 2008. The reality is, catfish is considered by the cdc and the fda as a low risk food. Theres a reason, no evidence on the city side at all. The Government Accountability office which is not accept a note for ever using Strong Language has repeatedly issued reports criticizing this program. This may be, may have Given Congress a hint of what to do. Seafood safety responsible for inspecting catfish should not be assigned to usda. Thats probably an indication maybe not a good idea. Their quote i in one of the reports is this program is shifting inspection to usda is going to cost, resulting duplication, increase costs and guess what, it will not improve safety. So why is this a trade protection scheme . Well, a way it works is that you have these companies, you know, providing catfish to the u. S. But whats going to happen is these other countries are going to have to create a regulatory scheme as equivalent to the usda new regulatory scheme. And it takes years to do this. Some countries may not even bother to create that type of regulatory scheme, and if they do its going to take a long time. So for that time theres going to be a monopoly for the domestic catfish farmers of america. Look, the Senate Passed legislation last year, a Congressional Review Act resolution, in fact, it did pass the senate, the house did not pass the Congressional Review Act resolution even though 220 members begged a leadership to pass the resolution. To the resolution would have in effect killed the program. 220 by the way wouldve been more than enough to pass the resolution. Leadership, they can explained themselves, why they decided to protect the cronyism and not allow for a vote when youre that many legislators. By the way, bipartisan, wanting a vote on that resolution. President obama in the 2014 budget actually called for dismantling this program. Pretty much everybody hates this program. I dont think catfish like the program. This program hurts the poor. It drives up prices as well and its worse, you reducing the supply of a protein which is extremely important, and again hurting the poor. And then getting to my third example is the arrogance example, and it is soda taxes. Really to be more precise if the tax on sugar sweetened beverages. So the far left havens like berkeley and San Francisco and boulder colorado have passed some soda taxes recently. They filled out the city council, those voters, Philadelphia City Council Approved a sugar sweetened beverage tax and actually that tax covers diet sodas. The whole point of the soda tax is to reduce consumption. They reduce consumption by driving up prices, as the whole concept. They will say a tax is not on the consumer but its really a tax on the distributor in these soda tax. Guess what, that distributors are going to pass on the cost to the retailers who are pass on the cost to the customers. As people in the city of philadelphia know very well this year, thats exactly what happens. Theres incredible sticker shock going on in philadelphia. One of the things about this is not simply regressive but what happens is the lower income populations tend to drink sugar sweetened beverages more than other households. Furthermore it is arbitrary not to mention who tells us what is healthy and what is not it is not as if they dont have enough information to make a full decision on their own through private means if you know a the diet industry is pretty big in this industry and i will run a and this right here but it cronyism is a common theme some of the beverage is taking a small winner everybody elses pour. [applause] we have a few never questions. With the corruption of a better word to use to describe a program like this i cannot sugar coat that it is part of a process with free speech in a Campaign Speech what happens is is contrary to benefits the politicians know that they care about the program to adopt policies within the narrow interest so that three by 5 billion and we buy cornflakes so somebody like me with the agriculture interest and they really care about getting their handout and then spreads across the board and to have power or influence to dissuade those legislators to act accordingly. What you included in your piece is the of give the economy may be with a low or middle income person to utilize the of website that allow them to make significant money by renting out their space. Can you touch on the municipalities or state or federal policies are infringing on somebodys right to do that . Especially with housing the Hotel Industry feels the effect that people are you wanted vintage they have is that theyre not paying the occupancy tax and we are between those big cities is substantial between 10 and 15 there arguing airbnb are offering the same Service Without the same tax and now many are requiring airbnb people to register and cracking down because they want to know who is doing is so it is easy to find out who should be paying taxes. So this is happening they are taxing it if this is out of business i dont know. But it has been so successful they are now thinking moving to longterm rentals instead of weekend rentals so that becomes a boarding house effectively also that is a regulatory issue because most communities in the suburbs with those in related households you can have all your Adult Children live there but you cannot have a bunch of adults that are not related to you that to be the next regulatory battle. So this does have enough home sharing issue. Really a time for one more question. The new administration placed a great deal of emphasis on American Manufacturing and products and the importance of observing american jobs. To that policy do you want to address if you could the potential effects on lowincome consumers to crack down on imports. I wish you had been here for the billion and destruction of the policy so i hesitate to try to summarize what he said but it is quite evident it is a tax and then it is more costly than this will harm consumers also the manufacturers to imports of the production of other goods and a that reduces the sale of goods means they have less money to spend and invest indigested have its job creation because they are not slowing to those who use them the most efficiently so there are some of visible winners along with invisible losers even though he, oneonone even though it tells us that this is no way to reduce. So with the Infrastructure Program soon to be announced 1 trillion over 10 years or some amount they invariably become a part just like by american and nobody makes trolley cars but they are disassembled then reassemble the becomes the american trolley car. To especially with all of the pipeline is being built. That was covered yesterday with the premier of saskatchewan pointed out the approval of the pipeline and as he warned other countries will retaliate the trade wars are selfdestructive. I really loved you living in philadelphia only drinking diet coke but going back to the sugar subsidy were probably the only to how the whole thing got started during the Reagan Administration administration and it is a very good paper by the way but though whole caribbean nations Basin Initiative was a notion to try to make the islands in the caribbean selfsufficient and we ended up with reasons and not of the sugar market so that we had to give them foreign aid. C were attacking all american taxpayers and also by increasing the cost of sugar. So we will create a black market. [laughter] [applause] [inaudible conversations]. Next online lists is a fantastic book everything i have heard about it is wonderful with the joint Economic Committee talking about the struggles with appellation of the and the rest of the country
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