As KOSA Goes Up For A Vote, A Refresher

KOSA will get a floor vote in the Senate, likely this week. Its bipartisan sponsors are aiming to get the House to pass it and have it on the President’s desk before the August recess–a tight timeline.

Tech publication The Verge has a good article on the process stuff heading to potential passage, as well as objections to the bill.

If you’ve been on X dot com, you may have seen that LGBTQ+ groups oppose the bill on the grounds that (they say) it could be used to censor LGBTQ+ (and specifically trans) content. (One will leave unaddressed here the question of why LGBTQ+ groups seem so eager to reach minors specifically.) However, “the sponsors have since quelled concerns for many with changes to the bill’s language, such as specifying that it’s aimed at design features and that elements can’t be enforced by state attorneys general.”

The other objection on the left comes from online privacy groups. “India McKinney, called KOSA ‘an unconstitutional censorship bill that would give the Federal Trade Commission, and potentially state Attorneys General, the power to restrict protected online speech they find objectionable’ in a statement. According to McKinney, ‘Platforms will respond to KOSA’s vague new liability standard by censoring users’ lawful speech on topics that KOSA deems harmful. KOSA is ambiguous enough that different administrations could censor content all along the political spectrum, from guns to vaccines to transgender issues to abortions.'”

On the right, there is predictable opposition from libertarians. This briefing paper by Cato’s Jennifer Huddleston, though it doesn’t refer to KOSA specifically, may be taken as representative. There are standard First Amendment and parental rights objections. More interesting are the objections related to privacy implications due to increased data collection for age verification.

The most vigorous support on the right, however, has come from social conservatives, who are increasingly getting over their submission to libertarianism and free market orthodoxy. Here the best representative advocates are probably to be found at the Ethics and Public Policy Center, as with these papers by Patrick T. Brown and Clare Morell.

To this correspondent, it seems obvious that protections of minors on the internet are a joke and providing tools that ensure that only adults use content for adults and that parents have some control over what their kids do online seems unobjectionable. That said, while the concerns over content censorship seem overblown, the concerns related to data privacy especially seem serious.

Policy Links

#TheEconomy – We have been hearing these noises increasingly insistently, and now the Harvard Business Review warns: “U.S. Commercial Real Estate Is Headed Toward a Crisis” More: “The risks of U.S. commercial banks being overexposed to commercial real estate (CRE) have intensified as the global pandemic upended long-held economic assumptions of perpetually subdued inflation, low interest rates, and in-office work. An analysis from The Conference Board suggests that in the next two years, more than $1 trillion in CRE loans will come due, and an increasing number of banks, mostly regional and community banks, risk having insufficient capital cushions.”

#Financialization – It’s popular to complain about the “financialization” of the economy. Many of these complaints are legitimate. It should also be noted, however, that in many cases “financialization” is just capital improving the operations of existing businesses or redirecting capital from worse businesses to better ones, which is good. A new NBER paper indicates as much, looking at the impact of mergers and acquisitions on the performance of power plants. “We find a 2% average increase in efficiency for acquired plants, beginning five months after acquisitions. Efficiency gains rise to 5% under direct ownership changes, with no significant change when only parent ownership changes.”

#NIMBYILK – Time for a new housing policy obscure acronym? “Not In My Backyard I Like Kids”? We like to be contrarian. In the policy world, “YIMBY” (“Yes In My Backyard”) policies seem to be extremely popular. The theoretical economic case for YIMBY seems unimpeachable. And all that seems to stand against it is not a policy argument but simply the political organizing prowess of incumbent homeowners who do not want to see their capital gains depreciated. Your correspondent must confess that a part of him has always thought this story was a bit too simple. Well, the account More Births, which has been chronicling the collapse in global fertility very intelligently, points out an important correlation: urban density is strongly negatively correlated to birth rates. This thread goes deeper into it, with maps.

#Housing – Speaking of housing, supply and demand still exists, it turns out. A new comprehensive meta-analysis “of the literature on rent control, some 206 papers, published and unpublished from 1967-2013″ finds pretty conclusive results, and they are what you would expect, that is to say: that “the imposition of rent control amplifies the shortage of housing. Therefore, the waiting queues become longer and would-be tenants must spend more time looking for a dwelling,” that “nearly all studies indicate a negative effect of rent control on mobility,” and that “the published studies are almost unanimous with respect to the impact of rent control on the quality of housing….[namely] that rent control leads to a deterioration in the quality of those dwellings subject to regulations.” Other than that, Mrs. Lincoln, how was the play? Via Alex Tabarrok

#Trade – The highly esteemable Dr Samuel Gregg has a new white paper for AIER arguing that, as the subtitle puts it, “trade liberalization strengthens US national security, and economic nationalism undermines it.” The main argument we felt was a bit of a dodge: trade liberalization means more growth, and more growth is good for national security. Well, yes, obviously, there is a tautological sense in which being wealthy is better for national security, but this is not what is at issue (putting aside the fact that some would argue trade liberalization doesn’t even have those positive economic benefits). The question is what happens when there is a tradeoff between economic growth and national security; and, after all, conservatives are supposed to be most keenly aware that the world is full of difficult tradeoffs. To be fair, Gregg does address more specific arguments concerning supply chain vulnerabilities, dual-use technologies, foreign investment in strategic assets, strengthening geopolitical rivals, and self-reliance. Once he does address those specifics he is much more nuanced, and while taking a stance generally in favor of liberalization, he does acknowledge legitimate national security concerns in those areas. We hope to write more about this very interesting paper in the future.

#K12 – Interesting new NBER paper looking at the impact of Massachusetts’ urban and nonurban charter schools on college trajectories. (For the record, after reading the paper, “urban” seems to just mean “urban” and not code for something else.) The paper is interesting for a few reasons. First, it uses randomized admissions lotteries, so its predictive effects are pretty strong. Second, it finds that both urban and nonurban charter schools help college enrollment. Third, it finds that these two types of charter schools go about it in a different way: “In Massachusetts in the 2010’s, the site of our study, urban charter schools primarily used ‘No Excuses’ practices, whereas nonurban charters had greater model variety.” The parsimonious explanation is that anything is better than public schools in a deep-blue state. Anyway, interesting paper.

#MigrantCrime – John Oliver, a satirist with a show on some TV channel watched by very few people, made a segment claiming that there is “no migrant crime crisis.” The argument hinges almost completely on the non-controversial finding that the average immigrant crime rate is lower than the average resident crime rate, but this is a total non sequitur relating to the marginal increase in crime caused by unchecked immigration. Mark Krikorian of the Center for Immigration Studies put it as succintly as possible: “The ‘migrant crime wave’ has nothing to do with crime rates. Rather, the millions of illegals Biden & Harris have let in have committed thousands of crimes that wouldn’t have happened otherwise. That is the illegal-alien crime wave, caused by the Biden/Harris administration.” Sadly, the migrant crime wave is very real, and every single one of those crimes was preventable. (Read our comprehensive interview with Krikorian here.) Immigration journalist Wid Lyman also has a good X dot com thread “debunking” Oliver’s dishonest exposé.

#OpportunityZones – So-called “opportunity zones” have been a popular idea on the center and the right (all the way back to the 70s) to improve troubled urban areas by drastically reducing their taxes. TCJA included provisions for the creation of such Opportunity Zones. However, the Tax Foundation points to a new study that finds that while these Opportunity Zones were profitable for the investors who took advantage of the tax breaks, they didn’t do much to improve the lives of the poor people living there. Could it be that not everything can be solved with tax cuts?

#Nukes – A silver lining? R Street’s excellent energy analyst Josiah Neeley with an analysis of state and local permitting restrictions on nuclear power, who points out that the problem is largely federal, not local.

#DrugPatents – R Street’s Wayne Brough with recommendations to improve the patent system.

#Privacy – Interesting new NBER Paper: “Apple’s App Tracking Transparency feature caused a cut of billions in ad revenues, reduced firm count by 1.1%, and raised prices by 2.9%”

Chart of the Day

Via Wesley Yang

Meme of the Day