> there is no legitimate reason for preemption to apply to labeling laws (even as broken as California's labeling law is), as labeling a product a certain way is not a mutually-exclusive action.
That's not really what preemption is about. A major point of having "interstate commerce" -- actual products crossing state lines -- at the federal level, is to prevent states from enacting trade barriers.
Suppose California disproportionately has more organic food producers and other states make higher proportions of food products grown with glyphosate. California then passes a law requiring the latter (i.e. disproportionately out-of-state) products to carry a scary warning label based on inconclusive evidence. Are they trying to enact a trade barrier? It sure looks like one. Meanwhile if the stuff is actually dangerous then it's dangerous in all 50 states, so the warning label should either be everywhere or nowhere according to the evidence, right?
Relatedly, having dozens or (at the city level) hundreds of different sets of rules is also a kind of trade barrier. Some small business in Ohio is willing to ship nationwide but every state has different rules, they might be inclined to cut off everyone who isn't in the local area since that's where they get most of their current sales, but that's bad. So then there is a legitimate interest in being able to say the rules have to be uniform if the states start trying to micromanage too much.
The better way to do this would be to only apply the interstate commerce rules to actual interstate commerce. So they could preempt California from requiring labeling on products shipped from Ohio, or require specific federal labeling on the things that are, but only California gets to decide about the things that never leave California. A lot of states would then say you have to follow the federal interstate rules even if you don't cross state lines, but it would be their decision and some might not.
More importantly in this case, a commitment to federal preemption allowed Congress to come to an agreement on a more ambitious set of federal regulations than would have been obtainable without it.
My point was specifically in regards to labeling, for which it's an awful stretch to call a trade barrier. If a label is "scary" enough to dissuade a potential purchaser, then it seems like the purchaser wasn't really informed about what they might have bought in the first place.
> So they could preempt California from requiring labeling on products shipped from Ohio, or require specific federal labeling on the things that are, but only California gets to decide about the things that never leave California
In my ideal world I'd slightly adjust the framing here. California law should apply to products that are being sold within California, regardless where they may have previously been (yes, that would be a complete repudiation of Wickard v Filburn's declaration that a butterfly flapping its wings is interstate commerce). A California distributor or retail store that gets shipments from Ohio but then sells locally should be required to follow California law about what they're selling, as those sales are occurring wholly in California. Also if Ohio and California can agree on something that differs from federal, then that should also take it out of federal preemption territory. But of Ohio and California cannot agree, and someone in California orders direct from Ohio, only then federal law should step in with preemption.
> Meanwhile if the stuff is actually dangerous then it's dangerous in all 50 states, so the warning label should either be everywhere or nowhere according to the evidence, right?
Only if other states or the federal government give that much of a shit about food safety, which is not a guarantee, both in theory and in practice. They might, for instance, care more about agri-profits than California does.
> So they could preempt California from requiring labeling on products shipped from Ohio, or require specific federal labeling on the things that are, but only California gets to decide about the things that never leave California.
That's just a regulatory-arbitrage race to the bottom. You'd just have out-of-state producers that don't have to follow any of your laws out-competing local ones.
It's the opposite of a race to the bottom. The federal government sets a single standard for the country. The same logic you're advocating is also the conservative argument for health care regulation --- that is, allow the states to preempt the federal standards so they can offer cheaper insurance by lowering standards.
That's exactly how it currently works, though. Different states can and do set different healthcare standards, above some minimum floor.
I'm not sure why you think there's a problem with that. (I mean, I think it's a problem for the residents of a lot of states, but that's their problem, that they have agency to fix, not mine.)
If the Midwest likes using paint chips as food coloring, that's not my problem. And it should still not be my problem if they elect some brain-worm addled moron to a federal office who goes and raises the federally permitted amount of paint in my food.
> One time out of five, the consequence of that investment strategy is 'The market had a crash and I lose everything'.
Which is why that strategy doesn't actually beat the market. Keep using it for 30 years and you're bankrupt.
Whereas if you put your money in a major index 30 years ago and left it there, or even 50 or more years ago, what result? Are you even in a bad place if you put all your money into the market in 1926 and left it there for 100 years?
Yes, if a retirement fund had put all their money into a stock index in 1926, it wouldn’t have been able to pay out pensions throughout the 1930s and 1940s and would have been bankrupt before the market eventually recovered.
Going full index is a great strategy for an individual person aged 20-50, but not a strategy for a pension fund which needs to continuously pay out.
During the Great Depression, the stock market stayed below 50% of its peak value for about 20 years. Imagine that the $600 billion turns into $300 billion overnight. It will only last 5-10 years without inflows, but the GDP has also dropped by 40% and inflows have plummeted.
It's still going back to the same assumptions that you're not only timing a depression but also
(a) don't have pre-funding (i.e., millions for an individual at the start of the depression),
(b) don't have CPPIB guardrails and auto-adjustment mechanisms,
(c) and it's not a partial income replacement scheme.
> It will only last 5-10 years without inflows
Without inflows? That's not realistic because people would still be contributing. In fact, CPPIB has triannual resets of contributions and in a recession, they'd up the contribution rate. In a recent actuarial audit, they found that if real returns dropped to 2.5%, then they'd only need to boost contributions from 9% to 11% to keep their 75-year sustainability target.
The advice that you need to taper off your investment portfolio risk as you get older doesn't really apply to people that have a nest egg. I know a lot of people that aren't necessarily living frugally and are told by their financial advisors that they might as well upgrade their cars, travel more, etc. They can cover their costs and don't have net worth > ~$3 million.
The gravitational field of indexes that large is one of the reasons why it works. The stock price of a company will generally increase when it's added to a major index because there are now so many more people trying to buy it as part of the index.
The risk is nominally that if you ever wanted to move a fund that large into some other investments, the act of selling would lower the price of the assets in the fund. But that's what happens no matter what you invest that amount of money in. But then widely distributed whole-market indexes would tend to mitigate that.
The real problem with this is that it disconnects what people invest in from the fundamentals of the companies. Promising companies don't get as much investment if they're not in an index, and mismanaged companies get too much if they are.
> The gravitational field of indexes that large is one of the reasons why it works
I'm confused because my question was whether a sovereign wealth fund could move an index by too much. Not about the issues with index investing (which IMO are mostly overblown).
Ponzi schemes always make current payments out of current inflows. The first 10 people get paid from the inflows from the next 100 people who get paid from the next 1000 people and so on, until you run out of people to sign up and the last group is left holding the bag. This is how Social Security works in the US because it started out by making payments to people who never paid in and was premised on the early 20th century fertility rate of >3.5 instead of the current ~1.6 to keep the system from collapsing, which is why the "trust fund" is running out of money -- it never had enough to cover future payments to begin with.
Whereas having individual years when the fund pays out more than it collected in interest is not a problem as long as that's not what happens on average.
The US is stuck in this weird irony where they recognize that Soviet-style central planning is a disaster but can't recognize that it's what megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.
In general productive economic activity generates a surplus and that surplus allows for slack. Human beings intuitively understand this. Hobbies are frequently de facto training for things that aren't currently happening but might later. Family-owned and operated businesses are much less likely to try to outsource their core competency for the sake of quarterly profits.
But regulatory capture and market consolidation causes the surplus to go to the corporate bureaucracies capturing the regulators instead of human beings with self-determination and goals other than number go up, and then the system optimizes for capturing the government rather than satisfying the people. "When you legislate buying and selling the first things to be bought and sold are the legislators." You throw away the competitive market and subject yourselves to the unaccountable bureaucracy, and then try to pretend it's not the same thing because this time the central planners are wearing business suits.
I wonder if it would work if top US companies implemented a system like the NFL draft, where companies competing for top engineers out of college get to pick from the best engineers inversely proportionally based on how they did before financially.
While it sounds counter intuitive, it maintains a good distribution of talent across the industry.
But that system would only work if healthy competition was the goal, not moneymaking.
The thing that sustains these companies isn't having the best engineers.
Suppose someone new made a better mobile OS than Android. What would happen?
Google has convinced a lot of third party apps to use their anti-competitive attestation system that has no real security value but makes it so those apps won't run on a competing operating system even if it implements all of the same APIs, so it immediately has a major barrier to gaining traction. That should be an antitrust violation.
Then the incumbents would copy any innovative features the new OS has so it no longer has an advantage. On paper this is what the patent system is supposed to prevent, but in practice is does the opposite. If you as a practicing entity tried to sue a major incumbent for patent infringement, they would counter-sue and have an arsenal of thousands of patents that could keep you bogged down in litigation for years. Just the cost of litigation could bankrupt a smaller company even if they won, and there is enough ambiguity in the system that they're pretty likely to lose when the incumbent only has to find one patent out of thousands they were unintentionally infringing, or a court is willing to enforce one that ought not to have been granted. So then everyone has to file a bunch of patents for the purposes of mutually-assured destruction and can't really enforce them, which favors larger companies that can afford the overhead. It certainly doesn't protect the little guy and we would be better off without them.
Your suggestion is also essentially unworkable. NFL teams all have the same number of players and play the same game. Amazon and TSMC each have a very different business and largely aren't competing for the same people. Does Garmin get the same number of picks as Foxconn even though they don't employ nearly as many people? How many picks does a startup get? Do we count Apple as doing poorly because the gross margins on hardware are lower than they are on pure licensing, or Nvidia as doing poorly because they have higher margins but lower revenue? How are we accounting for engineers in other countries? What about engineers in China who work for companies in China who are contractors for international companies? What if a corporate contractor has more than one corporate customer? How do we account for open source? How do we distinguish engineers from IT staff or research mathematicians or prevent companies from giving willing workers a job description that doesn't match the work they're doing?
It's also probably worth pointing out that systems like that are essentially price fixing schemes by the industry to pay workers less than they would otherwise be able to get if other companies weren't prohibited from outbidding them for talent.
Yes - ultimately it's the same system. Far from being daring and innovatory, it's backward-looking, unimaginative, and bureaucratic.
Vision for the future is limited to grandiose fantasies straight out of 1950s pulps and the "heroic" creation of narcissistic corporations that are cynically extractive and treat employees and customers with equal contempt.
The differences which used to provide a convincing cover story - no single Great Leader, a functional consumer economy, votes that appear to make a difference - are being dismantled now.
What's left are the same mechanisms of total monitoring (updated with modern tech) and reality-denying totalitarian oppression, run for the exclusive benefit of a tiny oligarchy which self-selects the very worst people in the system.
> megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.
That's the end stage. The bigger problem is the companies rotting from the inside even though they're still alive, because they use their resources to suppress your alternatives to them while they're slowly dying on top of you.
Yes, many Americans and other Westerners believe that the so-called "socialist" economies, like those of the Soviet Union and of Eastern Europe were non-capitalist.
This is only an illusion created by the fact that the communists were careful to rename all important things, to fool the weaker minds that the renamed things are something else than what they really are.
In reality, the "socialist" economies were more capitalist than the capitalist economies of USA and Western Europe. They behaved exactly like the final stage of capitalism, where monopolies control every market and there is no longer any competition.
Unfortunately, after a huge sequence of mergers and acquisitions started in the late nineties of the last century, the economies of USA and of the EU states resemble more and more every year the former socialist economies, instead of resembling the US and W. European economies of a few decades ago.
Everyone wants to tag the evil with their opposition's name. The evil is concentration of power. But no one wants to call it that because then they can't pretend that it's something different when they're doing it themselves.
Witness the people who keep proposing to solve market consolidation with higher taxes. Higher taxes go to the government, and therefore the interests that have captured the government. Are we going to solve it by taking money from Warren Buffet and giving it to Larry Ellison? Do we benefit from increased funding for Palantir? No, you have to break up the consolidated markets through some combination of antitrust enforcement and peeling back the regulatory capture that prevents new competitors from entering the market.
Let's have a quick look at the federal budget. The big ticket items are social security, medicare, net interest and military/VA. Together those are more than half the budget.
Social security is the biggest of them. Older people have more wealth than younger people on net and social security is structured to make higher payments to people who made more money when they were younger, which is significantly correlated with having more wealth right now. So it's a massive transfer payment system that transfers money from the poor to the rich. Meanwhile it uses its own special tax which is significantly more regressive than the ordinary income tax and doesn't tax corporate income at all. Notice in particular that we could instead be solving "grandma doesn't starve" with a UBI that makes uniform payments to everyone and not disproportionate payments to the rich, and comes from a tax which is also paid by corporations.
Net interest is a naked transfer to people with enough capital to invest in government bonds.
Most of the military and VA budgets go to government contractors who work hard to sustain an uncompetitive bidding process with thick margins.
Medicare uses the same bad tax as social security and those dollars go to the healthcare industry which has thoroughly captured the government. The AMA lobbies to limit the number of medical residency slots and sustain a doctor shortage and healthcare corporations have established a thicket of laws to limit competition, impair price transparency and promote over-consumption.
That's where the majority of the government budget goes, and the remaining minority of the money is also going in significant part to government contractors and regulatory capture industries. The government takes tax money from the middle class and gives it to the rich and huge corporations.
We don't need any more "redistribution" like that. If you think you can get the government to stop doing that and instead give the money the poor and middle class then first prove you can do it with the existing money before even thinking about collecting more. You have a nutrient deficiency because you're infested with tapeworms, not because you don't have enough food.
And change in laws regarding the legalized corruption (Citizens United, ...). And fight for real freedom of speech.
This is very complex problem that needs to be tackled from all sides simultaneously, the entrenched interests are already well setup to defend themselves.
Citizens United was a pretty pro-speech decision and is unfairly maligned, and "money is speech" predates it by quite a few years. The real problem is when huge corporations control the flow of information.
Which is a bigger problem, that corporations can pay for political ads, or that one corporation has 90% search market share? That there are political ads on Facebook or Twitter, or that those corporations control what's in the feed of hundreds of millions of people because use of their algorithm is tied to the network effect instead of having a federated system like RSS or email?
Sorry, no. Both are problem. And it is not pro-speech at all, it is pro-$$$. It is a standard practice to drown the unwanted speech in the noise of the paid-for 'speech'. Nothing about pro-speech for ordinary people there.
Furthermore, Citizen's United makes it harder to make any necessary legislative changes. Including the anti-trust. Focusing only on one issue while leaving the other heads of the hydra intact just plays into its strengths.
Suppose you don't own a major media outlet or social media company and you have something to say that the major media outlets and social media companies don't like. What are your options for getting more than six people to hear what you have to say if you're not allowed to spend money?
> It is a standard practice to drown the unwanted speech in the noise of the paid-for 'speech'.
This is literally the opposite of what happens. The companies that own distribution channels can make speech they don't like disappear, or even just speech that doesn't drive sufficient "engagement", by putting it at the end of the feed behind six trillion lolcats and enough rage bait to keep everyone glued to the screen. Then the only way to be seen when your message isn't a dopamine hit is to pay money.
> Furthermore, Citizen's United makes it harder to make any necessary legislative changes. Including the anti-trust.
Citizens United has very little to say about anti-trust. What argument are you making that it would prevent e.g. laws requiring adversarial interoperability or break ups of large companies? For that matter, much of the interoperability problem comes from companies using laws like the CFAA and DMCA 1201, and then you don't even need laws to be passed, you need them to be repealed.
Plus a systematic way of keeping the Gini coefficient of wealth small in a sustainable way. I'm a fan of establishing sovereign wealth funds whose dividends are paid out equally per capita for this purpose.
A sovereign wealth fund has the government deciding what to invest in, which is both a magnet for corruption and a good way to get below-market returns through mismanagement. It also requires an extremely oppressive build-up period where the government is collecting money in taxes to seed the fund instead of providing services to the population, which is why the countries that have one are basically all countries that net export huge amounts of oil, and China which exports everything else.
Meanwhile you don't need the government to use tax dollars to buy stocks in specific companies. If you want a UBI then use VAT. Then it comes from every company instead of having government bureaucrats choose which ones, and gets paid out immediately instead of needing a generation of build-up.
The things amassing power to prevent antitrust are corporations, not individuals. It does nothing to make Bill Gates sell shares in Microsoft to pay taxes when the corporation stays the same size. If anything it makes it worse because then more corporations are controlled by Wall St rather than founders and they're significantly more inclined to turn the screws to juice short-term profits.
thought about this too - but not as expressively as you put it.
e.g in China - for early stage ventures - there's cut throat competition - then as Thiel would put it with heavy competition profits trend towards 0 - by then the tech is perfected or close to perfect - then the state uses its funds to back a monopoly. that's how you get a BYD.
And to complete the reversal what is now referred to as the "golden age of capitalism" i.e the post WW2 USA was actually very socialist. Strong social movement and unions and social spending that created a wealth working/middle class with a bunch of spending power.
Inequality society producea inequal economy (and vice versa) which is the economy of any developing country. Few rich,. miniscule middle class and lots of poor people in slums snd poverty.
> My hometown is now 20% AirBNB, they ran illegally for many years, and this completely prices out normal folks trying to live near their families.
If people are getting priced out, that implies that either the cost of a unit is more than the cost of construction, or that the cost of construction is unreasonably high. If it's the first one the higher demand should just lead to more construction instead of higher prices, because units that sell for more than they cost to build are profitable to build and supply expands until the price falls below the cost. If it's the second one, the actual source of your problem is high regulatory costs and NIMBYism rather than AirBNB.
> In fact, here's a much better get-rich app / scheme: use AI to find regulatory situations that are both easy to break and profitable to break and where enforcement is usually just done to poor people.
How about a less cynical alternative: Use it to find ways to defeat regulatory capture so that you can enter a large market which is currently locked up by incumbents, or make more in an ancillary market from doing "commoditize your complement" on the one which is currently captured.
> However, part of doing that is facing the consequences of breaking those laws; being arrested, etc.
This form of civil disobedience is effective against bad laws that nevertheless assign punishments proportional to the nominal offense. If "demonstrations without a permit" is punished by a week in jail and they won't give you a permit then you do the demonstration and spend the week in jail. A week later you're back out there demonstrating again. MLK Jr. was arrested 29 times in a span of 11 years.
It doesn't really work in the modern system which is tuned for coercing plea bargains and full of three strikes laws, because then "pissing off the government" is an aggravating factor that causes them to stack more charges until you're facing years instead of days. Then you're not making a point through a willingness to spend a few nights in a cell before your next press conference, you're getting taken off the board.
It also never really worked against bad economic rules because the nature of bad economic rules is to make good economic behavior uneconomical, like converting units to types in higher demand or funding new construction. The deleterious effect of the rule is that instead of it costing $50,000 to add a housing unit, it costs $500,000. But doing civil disobedience by building it anyway would catch you >$500,000 in fines and penalties, or carries penalties like demolition of the structure. So the bad law acts as an extremely effective deterrent against doing the good thing by making it uneconomical regardless of whether you follow the law or you don't. A bankrupt company can't continue to advocate for change or serve as an example of doing something good.
And if they actually did pay the fines then instead of people saying "that's not real civil disobedience" they would be saying "look at these lawless corporations paying token fines as a cost of doing business" and arguing for the penalties to be increased to a level that would bankrupt them wherever that isn't already the case.
So the remaining option is to break the law and then argue that the law is harmful and shouldn't be enforced.
If gambling is legal but using violence against debtors is illegal then the legal casinos out-compete the illegal ones but cut you off when the banks won't extend you any more credit instead of giving you a loan with a lien against your kneecaps, and the money goes to companies that aren't using it to fund the expansion of protection rackets etc.
If gambling is illegal then the profits go to organized crime and they don't follow any of the other laws either.
> but in the Fentanyl age I see people dropping like flies all around me
Fentanyl is a response to prohibition. If you have to smuggle something it's a lot easier to move 10 kg of fentanyl and cut it with something near the point of sale than to move 10,000 kg of codeine from the point of manufacture.
But then you have street dealers cutting it with who knows what in who knows what amount. They may use a 1000:1 ratio of unspecified hopefully-inert powder to fentanyl but don't mix it evenly so some customers get a 10000:1 ratio and others get 100:1 and become addicted or overdose. Or a dealer has one supplier who was already cutting it 50:1 so they were used to only cutting it another 20:1 so their customers don't complain, but then they start wanting larger quantities and find a new supplier without realizing they just bypassed the one who was pre-cutting it and are now getting uncut fentanyl.
None of that happens if anyone can buy codeine at Walmart. Or for that matter if they can buy fentanyl and know exactly how much they're getting.
That's not really what preemption is about. A major point of having "interstate commerce" -- actual products crossing state lines -- at the federal level, is to prevent states from enacting trade barriers.
Suppose California disproportionately has more organic food producers and other states make higher proportions of food products grown with glyphosate. California then passes a law requiring the latter (i.e. disproportionately out-of-state) products to carry a scary warning label based on inconclusive evidence. Are they trying to enact a trade barrier? It sure looks like one. Meanwhile if the stuff is actually dangerous then it's dangerous in all 50 states, so the warning label should either be everywhere or nowhere according to the evidence, right?
Relatedly, having dozens or (at the city level) hundreds of different sets of rules is also a kind of trade barrier. Some small business in Ohio is willing to ship nationwide but every state has different rules, they might be inclined to cut off everyone who isn't in the local area since that's where they get most of their current sales, but that's bad. So then there is a legitimate interest in being able to say the rules have to be uniform if the states start trying to micromanage too much.
The better way to do this would be to only apply the interstate commerce rules to actual interstate commerce. So they could preempt California from requiring labeling on products shipped from Ohio, or require specific federal labeling on the things that are, but only California gets to decide about the things that never leave California. A lot of states would then say you have to follow the federal interstate rules even if you don't cross state lines, but it would be their decision and some might not.
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