Yesterday Trump's Secretary of Transportation Elaine Chao announced that California will be required to pay back the federal taxpayer dollars it received for its spectacularly failed high speed rail project.
California was granted over $3 billion in federal funds under Obama's 2009 stimulus package. Nearly a decade later, California still has zero operating high speed rail lines from Obama's "shovel ready jobs bill."
And Governor Gavin Newsom admitted the project is a failure in his State of the State speech, saying: "The project, as currently planned, would cost too much and take too long... there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. I wish there were.”
Ridiculously, Newsom then went on to say he would upgrade the existing Amtrak line between Merced and Bakersfield – in order to avoid returning the federal grant money.
By Phil Kerpen
Transportation Secretary Elaine Chao did the right thing when she put the brakes on the Obama administration's regulatory mandate that would have forced an expensive technology called dedicated short-range communication (DSRC) in all new cars and trucks sold in America. The Obama rule would have imposed total costs of $108 billion and raised the price of every new car about $300 – for a technology that is already obsolete.
Now comes the related policy question of what to do with the big chunk of prime spectrum that would have been used for the Obama plan – will it be opened up for unlicensed use, enabling gigabit WiFi to make the Internet work better on all of our devices? Or will it continue to sit fallow on the prospects of potential future automotive use?
The Department of Transportation (DOT) has zealously guarded the 5.9GHz band since it was set aside by the Federal Communications Commission (FCC) in 1999. Twenty years later, DOT's longtime preferred DSRC technology remains nearly undeployed – the technology is in just 18,000 of the 270 million some passenger vehicles in the country. And the Obama DOT's own testing found that "every DSRC device deployed had to be recalled at least once... to identify and correct issues" and "there were more false alerts generated by the systems than anticipated."
Meanwhile, radar, lidar, camera-based, and cellular 4G technologies have been developed and enable a wide-array of driver-assist features. As 5G is deployed it will bring even greater capabilities.
Yet DOT and automakers insist on a slow, three-phase series of tests to see whether WiFi can share spectrum with DSRC before making any changes.
The first phase was completed successfully in October, but as FCC Commissioner Michael O'Rielly observed: "The reality is that the entire debate has gravitated away from the type of sharing regime envisioned in the testing. Instead, the Commission should move past this and initiate a rulemaking to reallocate at least 45 megahertz of the band, which is completely unused today for automobile safety."
He's right, and it's an issue with bipartisan agreement at the FCC.
Democratic Commissioner Jessica Rosenworcel joined O'Rielly in a 2016 joint statement, saying: "We believe this slice of spectrum provides the best near-term opportunity for promoting innovation and expanding current offerings, such as Wi-Fi. That’s because combining the airwaves in this band with those already available for unlicensed use nearby could mean increased capacity, reduced congestion, and higher speeds."
The Trump DOT has stopped the Obama DSRC mandate but so far held on to the spectrum. They have also, however, signaled a welcome shift to a technology-neutral approach, and are presently taking public comments on where vehicle communications technology is going.
Given the rapid development of mobile technology and the even greater capabilities coming with 5G – as well as sensor-based technologies being rapidly developed for driver-assist features and autonomous vehicles– it is possible...
By Phil Kerpen
Americans are justifiably angry that we pay the highest prescription drugs prices in the world – anger President Trump tapped into on the campaign trail. The disparity exists because other rich countries use price control schemes, forcing American consumers to provide the returns on capital that justify the enormous research and development costs associated with bringing new cures to market; the rest of the world free-rides on our innovation.
The good news is that the Trump administration has been aggressive on the trade front in efforts to break foreign price control regimes; the bad news is that the Trump administration is also proposing to actually import foreign price control regimes into the Medicare program by adopting a payment formula that is pegged to foreign prices.
In its recent report "The Opportunity Costs of Socialism," the White House Council of Economic Advisers (CEA) looked at "the impact on medical innovation of the U.S. adopting European-style price controls" and found: "If M4A would entail the same experience with below-market prices as other countries with socialized medicine, it would reduce the world market size and thereby medical innovation, and ultimately mean that future patients would forgo the health gains that would have come from these forgone innovations."
It is remarkable that, just days later, Health and Human Services Secretary Alex Azar proposed setting prices for drugs in the Medicare Part B program, which are doctor-administered drugs, with a formula based on foreign price controls.
That would directly undercut the efforts of the U.S. Trade Representative to combat foreign price controls. A recent study by the Committee to Unleash Prosperity found that eliminating price controls in OECD countries would result in eight to 13 more drugs coming to market every year by 2030 and raise life expectancy in the United States by 1.1 to 1.6 years.
The U.S. Commerce Department has found that easing foreign price control regimes could, by increasing research and development of new drugs, result in more competition and lower prices in the domestic U.S. market.
Doing the opposite – imposing foreign price controls to the domestic market – would have disastrous consequences.
"Economists and policymakers have long recognized that research and development activity suffers from a severe free-rider problem," Kevin Hassett, now president Trump's top economist, wrote in 2004. "In the past, the U.S. market has been large enough relative to the rest of the world that it has been able to support research despite these intrusions. The evidence reviewed here suggests that there could be devastating effects should our policy environment change."
Importing foreign price controls in the United States would short circuit diplomatic efforts to break foreign price controls, both because they would lack credibility and because the politics would flip, as higher prices abroad would now translate directly into higher prices at home through the price index.
Far from solving the free-rider problem, U.S. adoption of foreign price controls would undermine the incentive to invest in research and development; there...