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Ian Vásquez and Guillermina Sutter Schneider

Argentina’s President Javier Milei promised to take his chainsaw to regulations when he assumed power a year ago this week. His newly created Ministry of Deregulation began functioning in July, and virtually every day, Minister Federico Sturzenegger announces one or numerous regulatory reforms. 

Getting public spending under control and cutting red tape have been Milei’s two policy priorities this year. His success in shrinking government largesse, balancing the budget, and reducing inflation are well known. Less appreciated is how much he’s been deregulating, so we decided to try to measure that effort. 

We should note that prioritizing deregulation makes sense. A legacy of the corporatist state that Peronism entrenched, Argentina is one of the most regulated countries in the world. On the Fraser Institute’s economic freedom index, Argentina ranks 146 out of 165 countries in terms of regulatory burden.

Measuring regulatory reform is challenging. Argentine government data is sometimes incomplete or vague. How to quantify reform can also be open to judgment. (Does the elimination of various articles of a regulation affecting different forms of economic activity count as one reform or several? What about the elimination of an entire law or its modification?)

The best source on deregulation in Argentina is the deregulation czar himself, Federico Sturzenegger. We used his posts on X and those of his ministry, where deregulations are regularly announced, and cross-checked them on other government websites. We were conservative in our quantification. If one or dozens of articles were eliminated or modified within one law, we simply counted that as one deregulation. (Each law that was deregulated, no matter to what extent, counted as one deregulation.) 

What did we find? From December 10, 2023, when Milei assumed the presidency, to December 7, 2024, there were 672 regulatory reforms. On average, that means that during his presidency, Milei has been issuing 1.84 deregulations per day, counting weekends. Out of the total amount of reforms, 331 eliminated regulations and 341 modified existing regulations.

The heat chart above shows how many regulatory reforms Milei’s government has issued per week over the past year. Milei, in fact, began his administration with a deregulatory bang, introducing an emergency “megadecree” last December that consisted of 366 articles and has continued this drive with the creation of the new ministry. Argentine law allows emergency decrees, which are reviewable by Congress, under certain conditions. Most of the deregulations in the “megadecree” are in force.

In June of this year, the congress passed a massive bill that Milei presented (“Ley Bases”) that gave the president the ability to issue further deregulations for a period of one year. That is the authority under which most of Argentina’s deregulations are currently taking place. (The majority of Milei’s deregulations have since come out in the second half of the year.)

The laws and regulations that Milei has abolished or modified date back well into the 20th century and, in some cases, even further. We found that 12 percent of the laws that Milei deregulated took effect during military dictatorships and 88 percent originated during democracy, including under populist governments of the left. (The chart below is based on deregulations for which we could obtain sufficient information. Some of the laws that were deregulated took effect in the administrations that followed the ones that introduced them.)

Argentina’s deregulation drive covers a wide range of sectors: housing, pharmaceuticals, technology, non-tariff trade barriers, transportation, tourism, energy, agriculture, etc. Some reform has been procedural, affecting a range of areas. For example, Milei has instituted a “positive administrative silence” rule affecting numerous activities by which a requested permission is considered approved if the government bureaucracy does not respond to the request within a determined period of time.

It’s too early to measure the full impact of the deregulations, but there’s no doubt that they are significant given the bureaucratic weight they are lifting. Some indication of that can be seen in the following examples:

The elimination of an import licensing scheme has led to a 35% drop in the price of home appliances and a 20% drop in the price of clothing items. 
The lifting of Argentina’s burdensome rent control system has resulted in a tripling of the supply of rental apartments in Buenos Aires and a nearly 50% drop in price.
The elimination of a floor price of yerba mate, which is widely consumed in Argentina as a tea, led to a 25% drop in its price.

Many other deregulations, whose impact has not yet been measured, could be cited. Argentina has begun implementing an open skies policy that has increased the number of airlines operating there. The government has also lifted regulations that favored the state-owned airline Aerolineas Argentinas, such as the requirement that public employees book their flights on the more expensive state airline or that other airlines cannot park their airplanes overnight at one of the main airports in Buenos Aires. Milei has gotten rid of legally sanctioned hereditary positions at numerous government agencies (yes, you read that right). The government has permitted Starlink and Amazon to provide satellite internet service in the country, providing connectivity to vast swaths of Argentina that until now had no such connection. Etc., etc.

When one of us (Ian) and a colleague visited Sturzenegger and his team at the ministry last month, we were struck by their sense of urgency, professionalism, and commitment to the task. They made clear that their priority was to increase freedom. When reviewing regulations, their first question is not about how to increase efficiency but rather about whether the government should be involved in a particular regulation at all. 

The deregulation team, made up of accomplished economists and legal experts, is up against the clock. During our visit, a countdown sign outside the minister’s office read “237 days left,” indicating the time remaining, according to current law, for the government to continue issuing deregulatory decrees. Argentina is a target-rich environment for the ministry’s work, and it is taking recommendations from the public at large (when the ministry recently set up a web portal to that effect called “Report the bureaucracy,” it received more than 1,300 entries within the first eight hours). The biggest challenges are doing as much as they can with the time remaining and prioritizing regulatory reform, which is sometimes informed by large differences in Argentine versus international prices.

Milei and Sturzenegger have their work cut out for them. But what they are accomplishing is more than most thought could be done in such a short period of time. Their deregulations are increasing economic freedom, reducing opportunities for corruption, creating greater transparency in government, helping to formalize the informal sector, stimulating growth, and setting an example for countries around the world to follow.

*Guillermina Sutter Schneider is a data scientist and information designer and a coauthor of the Human Freedom Index. This article draws partially from “Desregulacion: Argentina vs. Estados Unidos,” by Ian Vasquez (November 20, 2024) and “Argentina’s Escape from Kafka’s Castle,” by Guillermina Sutter Schneider (December 5, 2024).

Marc Joffe

The baseball club formerly known as the Oakland A’s has begun an odyssey that should ultimately take it to Las Vegas in the late 2020s. But the team may need to shake down Nevada taxpayers for even more money before finishing its journey. Professional sports, in which wealthy owners employ well-compensated players to compete in front of disproportionately affluent crowds, may seem like the least eligible business for taxpayer-funded government largesse, but somehow the subsidies keep coming.

Until the early 20th century, US stadiums were normally funded privately. But in 1928, Cleveland, Ohio voters approved a $2.5 million bond measure to fund the construction of Cleveland Municipal Stadium, kicking off the Depression-era trend toward publicly funded construction. Although the stadium was part of a failed effort to attract the 1932 Olympics, it soon became the home of the MLB Cleveland Indians and later the NFL Cleveland Browns. The facility was demolished in 1995, only 64 years after it opened, a fact that throws cold water on the notion that big municipal infrastructure projects are generational investments benefiting residents far into the future. Instead, stadiums rapidly become obsolete, necessitating either replacement or costly makeovers.

Such was the case with the Oakland Coliseum, which opened in 1966, became the home of the A’s in 1968, and was considered obsolescent long before the A’s finally left in 2024. The Coliseum and adjacent Oakland Arena have been encumbered by municipal bond debt throughout their entire existence.

Oakland hopes to finally extinguish the debt and plug its large FY 2025 budget deficit by selling the site to the African American Sports & Entertainment Group. However, there are doubts about whether this transaction will be completed. These doubts contributed to Fitch Ratings’ decision to downgrade the city two notches from AA- to A.

After extended negotiations with Oakland officials over a new stadium site, the A’s management walked away from the negotiating table and declared its intention to move. Their first stop is a small stadium in West Sacramento, California, which they will share with the San Francisco Giants’ AAA team for at least three years. That stadium, now known as Sutter Health Park, was also built with municipal bond proceeds. But, to the credit of Sacramento-area local governments, that debt can only be serviced with stadium proceeds, leaving taxpayers (at least theoretically) off the hook.

The move brings some drawbacks to the “no-longer Oakland” A’s. The minor league facility is very small by major league baseball standards, limiting attendance to only about 14,000 fans. Further, because the A’s are new to Sacramento and are staying temporarily, they may not be able to cultivate a dedicated fan base. As a result, they may struggle to sell out those 14,000 seats once the novelty effect wears out over the first few home games.

The small stadium and unfamiliar community will likely cement the A’s standing near the bottom of MLB stadium attendance. For the 2024 season, the A’s ranked dead last in attendance, with an average of 11,528 fans coming to its home games.

Depressed ticket and concession revenue will hurt the team’s financial performance as it prepares to move to its permanent new home in Las Vegas. Forbes reports that the A’s lost $11 million in 2023 despite its relatively low payroll, and it is reasonable to think that the losses will continue during the franchise’s time in West Sacramento.

Nevada and Clark County lured the A’s to Las Vegas by offering to contribute $380 million to the cost of building a new domed stadium near the Las Vegas strip. The 33,000-seat facility was originally expected to cost a total of $1.5 billion to construct, but the budget has now escalated to $1.75 billion due to inflation and added amenities.

The A’s owner has assured Nevada lawmakers that he can take on the added costs, and the contractual agreement between the team and the new Las Vegas Stadium Authority appears to strictly limit the taxpayer contribution to $380 million. However, given the team’s financial status and the owner’s previous machinations in Oakland, one has to wonder whether he will attempt to extract further concessions if construction costs escalate further.

But regardless of whether the taxpayer damage is limited to “just” $380 million or goes higher, officials in Las Vegas and beyond should consider the academic research on stadium subsidies. As economists John Charles Bradbury, Dennis Coates, and Brad R. Humphrey concluded in their 2023 study of stadium subsidies:

The extensive body of research on the economic impact of stadiums demonstrates that professional sports venues generate limited economic and social benefits, which fall far short of the large public subsidies they typically receive. Stadium subsidies transfer wealth from the general tax base to billionaire team owners, millionaire players, and the wealthy cohort of fans who regularly attend stadium events. Despite the widespread consensus among economists that stadium subsidies represent poor public policy, state and local governments continue to subsidize venue construction with funding that now routinely exceeds $1 billion per new facility.

We can only hope that politicians and voters elsewhere will listen to this wisdom.

Jeffrey Miron

Are libertarians pro-union or anti-union?

Neither.

Libertarians hold that government policies should neither favor nor oppose unions. Employees should be free under the law to organize, request collective bargaining, or go on strike; and employers should be free under the law to fire employees who join a union or strike, or to hire replacement workers, or to move their operations to other states or countries. Thus, the libertarian perspective is not about unions per se but about government policy toward unions.

Assuming competition in the labor market, union protections imply higher wages but less employment than at the free-market wage. Thus, union protections distort economic activity. If employers have monopsony power (the ability to keep wages low because few firms hire a particular type of labor), then union-elevated wages potentially increase economic efficiency. Yet the degree of monopsony power in the United States appears to be modest, and nothing guarantees that government protection of union power will occur mainly in monopsonistic industries. Union power can also raise wages above the free-market level, thereby reducing efficiency even in the presence of monopsony.

Further, in the same way that monopoly prices incentivize the entry of new firms that undercut these prices, monopsony incentivizes the entry of new firms that offer more attractive wages and benefits to top employees. For instance, local taxi services were historically monopsony employers. Uber and Lyft, however, carved out major stakes in ride-hailing markets by providing drivers with better wages and the option to drive without leasing.

Thus, the libertarian position on monopsony power and union policy parallels the libertarian position on market power and antitrust policy. In neither case do libertarians insist that private arrangements are perfect, but that is not the right question. It is, instead, whether government intervention improves efficiency, and the libertarian assessment is that it does not.

This article appeared on Substack on December 8, 2024. Jonah Karafiol, a student at Harvard College, co-wrote this post.

Ivan G. Osorio

Fred L. Smith, Jr., founder and long-time leading light of the Competitive Enterprise Institute (CEI), recently passed away peacefully at home, surrounded by family and friends. Fred’s place as a prime mover—or perhaps, a force of nature—in the libertarian movement is well known. Founding CEI out of his and his wife Fran’s apartment in 1984, he built the organization into a major font of ideas for market-friendly regulatory reform that carries on his work today.

Fred’s passion for ideas went beyond intellectual exercises. He was always interested in how ideas mattered to people’s lives. In his work, that translated into applying the ideas of liberty to public policy in practical and principled ways by reaching people on their own terms. “People don’t care what you know,” he’d often say, “until they know you care.” 

I walked into that atmosphere he created when I joined CEI two decades ago as an editor before joining Cato last year. From editing a monthly newsletter, I managed to build CEI’s publications program into a major component of the institute, all thanks to the opportunity I got from Fred.

My experience wasn’t unique among those who worked with Fred. He cared about liberty because he cared about people. Like Julian Simon—after whom CEI named its famous award—Fred saw people as the ultimate resource, and he applied that belief in how he ran CEI. He was always curious to hear everyone’s opinions (even, or especially, when he didn’t agree) and saw potential in everyone who worked with him at one time or another. Fred’s curiosity extended beyond his work. He thought everyone, no matter where they came from, had a story to tell.

Most of all, though, being around Fred was, well … fun. True to his Louisiana roots, which he held dear, he believed in the freedom to Laissez les bon temps rouler. 

Colleen Hroncich

Conservative Christians probably aren’t generally seen as trailblazers, but they were at the forefront of homeschooling in the 1960s and 1970s. So it’s not surprising that curricula and resources for homeschoolers are often Christian in nature. When Blair Lee, a college professor with a background in chemistry and biology, began homeschooling her son in the early 2000s, she struggled to find quality secular science resources. What started as an effort to fill that gap eventually became Secular Eclectic Academic (SEA) Homeschoolers.

“Homeschooling wasn’t really on my radar,” Blair says. “My son was a very early reader. No Child Left Behind left all of those advanced kids behind. His teacher prompted me to make the decision to homeschool. She told me that with the current system, my child would get lots of test prep, and they would always want to test him because he would make the school look good.” But he wouldn’t be given work that would challenge him and help him grow. The teacher predicted he would eventually wonder why he bothered trying so hard. He’d still be “advanced,” but he’d be achieving well below his capabilities. Blair listened to the teacher and homeschooled her son from first grade through high school.

When she looked for science materials for her son, she said everything was either religious or just fun experiments that didn’t explain the science behind what was happening. Since she had a science background, she solved the problem for herself by writing a chemistry book for third grade that was picked up by Pandia Press. She continued writing and is the principal author of Pandia’s REAL Science Odyssey series.

As her homeschooling and writing journey continued, Blair began attending conferences and joining online groups. “I came to feel that there needed to be more people talking about homeschooling as what I called a handcrafted education. You either had people who were unschooling or people who were using classical. There wasn’t enough conversation about making it innovative, making an academically rich education that was learner-centered and innovative. And that became a passion of mine,” she explains.

She found that people who aligned with her vision of homeschooling tended to join unschooling groups, so she posted her thoughts in an unschooling Facebook group. “I really expected that the radical unschoolers would come at me with pitchforks, and that did not happen. I’m friends with several of them, and they were glad someone else was having that conversation,” she recalls. “What was happening was that people who wanted academics but wanted it to be innovative would go into these unschooling groups, and it would devolve into these major arguments. So they said, ‘I hope you start a group, and everybody can join your group and get out of our groups.’”

Once again, Blair listened. What started from a question in a Facebook group when she didn’t have her own has become a very active 150,000+ member SEA Homeschoolers Facebook group, which is probably the heart of the organization. “If you haven’t been in our Facebook group, it functions different than any Facebook group anywhere that you have seen—especially one that is owned by a person who writes their own curriculum. It is a teachers’ lounge. That is what I consider it. It is a parent-teachers’ meet-up lounge,” Blair says. “There are times when you’re working with your kids and you’re like, ‘I’m not exactly sure what to do.’ So where do you go? If you’re a member of SEA, you go into SEA and say, ‘I don’t even know what to do, everyone. Can you help me?’ You will get hundreds of responses. We have 95,000 people in our largest group. And 90 percent engagement.”

Around 15 percent of the SEA community are not homeschoolers. They’re parents looking for ways to enrich their children’s academics or teachers looking for innovative strategies to use in their classrooms. “We’re a great fit because the topical presentation of stuff in our group is what you’ll find in schools,” Blair explains. Because the content is aligned, a child can use SEA resources to help stay on a path that is similar to public schools. This was particularly helpful during COVID-19 when families joined SEA but weren’t sure homeschooling was going to be a long-term fit. Blair says that school boards would recommend SEA to families who began homeschooling during the pandemic. “We literally would wake up one morning and have 400 join requests from people from a school district because their school district had recommended us. It was really nuts,” she adds.

SEA Homeschoolers even has an international reach. “We just had a conference in November, and we had people from 19 countries. Canada is our second largest population of families. Most of our families are in the United States, but once you get into the after-school community, you open yourself up to countries where people want to supplement their kids’ education,” Blair says.

In addition to the lively Facebook community, SEA Homeschoolers offers a variety of resources on its website. Homeschooling 101 includes links to state homeschooling regulations and links to resources specifically aimed at new homeschoolers. There are four live online conferences a year that feature presentations for secular homeschoolers and live Q&A sessions with speakers and vendors. There is also a quarterly magazine and an online store that includes books, curricula, and other resources.

Blair emphasizes that she defines secular as evidence-based, not anti-religious. Nonetheless, as with all educational resources, parents—especially more traditional homeschoolers—will probably want to evaluate the content before jumping in. “At the end of the day,” Blair says, “every homeschooler I have ever met has shared one thing—we really want our children to be turned on by learning and to be excited about it.”

Marc Joffe

Mecklenburg County residents in North Carolina have been paying a 0.5 percent transportation sales tax since 1999. Now local leaders would like to triple that tax, thereby raising the total sales tax Charlotte consumers pay to 8.25 percent. If approved by the state legislature and voters, the new tax revenue would fund an expensive new transit line and other projects. While a growing area like Charlotte/​Mecklenburg needs more transportation infrastructure, a new commuter rail line, funded by taxpayers, is probably not the most cost-effective solution.

The proposed rail service, named the Red Line by the Charlotte Area Transit System (CATS), would run 25 miles from a new intermodal station in Uptown Charlotte through the northern suburbs to Mount Morne in Iredell County. Trains would run on existing track that the City of Charlotte recently purchased from Norfolk Southern for $74 million. The city paid Norfolk Southern an additional $17 million for the Uptown site on which the new Charlotte Gateway Station is intended to be built.

Beyond the $91 million required to purchase the land and tracks, the cost of starting commuter rail service on the Red Line is unknown. However, a 2011 Business and Financial Plan for an earlier incarnation of the project placed the cost at $452 million, based on then-anticipated 2018 prices. The largest costs were track upgrades, the addition of crossing gates, acquiring rolling stock, and building stations. Given recent general inflation and the tendency for public works to grow, an updated estimate will undoubtedly be far higher, probably in the billions.

Also unavailable is a recent ridership projection. When Randall O’Toole reviewed the original Red Line initiative for CATS in 2012, he quoted a ridership estimate of just 5,600 per day. While Charlotte’s population has grown rapidly since then, commuting has become less common in the wake of COVID-19. Overall, CATS ridership in September 2024, the latest month for which National Transit Database data were available at this writing, was only 65 percent of the September 2019 level.

Since many of the stations are not adjacent to residential areas, most passengers would have to access the Red Line from another transportation mode, such as their personal vehicle or a bus. This suggests that the Red Line will not save commuters time versus other options.

Currently, commuters have the option of taking express buses along nearby Interstate 77 to reach Charlotte’s downtown. These MetroRapid Buses take advantage of I‑77’s Express Lanes, which limit traffic by using variable tolls on motorists. While we do not have ridership data for individual bus lines, one rider shared his impression that the 63X bus from Huntersville to Charlotte only ran about 30 percent full on average.

With a federal match unlikely in the Trump era, the Red Line will have to rely fully on the proposed additional one-cent sales tax. Before voters are asked to approve it, they should have full information about estimated costs and (realistic) ridership projections. If the Red Line does not pencil out (as we have strong reason to believe), voters should just say no.

Norbert Michel and Jerome Famularo

In the aftermath of the COVID-19 pandemic, the United States experienced a much higher rate of inflation than at any time during the prior few decades. Like the prices of many goods and services, the cost of housing rose rapidly. The median home price, for instance, jumped from less than $350,000 to almost $450,000. (Figure 1.)

So, it is unsurprising that potential homebuyers were—and still are—shocked and upset.

It is also not surprising that many politicians have latched on to this issue. For instance, during the 2024 presidential campaign, both Donald Trump and Kamala Harris offered their own proposals for quashing rising home prices, ranging from subsidies to selling federal land.

Long before the pandemic, though, various groups claimed that the United States was experiencing a housing crisis, one marked by some combination of a housing shortage and unaffordable homes. A recent Brookings Institute article shows how conventional this view has become, arguing that “experts broadly agree that the US has millions fewer” homes than it needs.

But is America really facing a housing crisis? Is there really a shortage of millions of homes? And will these latest federal proposals really help improve housing affordability? Though it may seem surprising, a great deal of evidence suggests that the answer to each of these questions is “no.”

Over the next two weeks, we will present a series of Cato at Liberty blog posts that examine these issues. The series, which relies heavily on a new paper that we coauthored with S. Sayantani, argues that the United States is not facing a housing crisis and that less government intervention—not more—is needed to strengthen housing markets.

This introductory post provides perspective on federal housing policy and a basic overview of the crisis story to get things started.

Costly History of Federal Involvement in Housing

If history is any guide, Americans should beware of politicians promising to make housing more affordable. For most of the past century, officials have promised to improve affordability while expanding federal involvement in housing markets. Yet, each Congress is marked with the same affordable housing debates. And, for the most part, the policies that officials are promoting now are no different from the failed policies of the past.

From both the demand side and the supply side, decades of expansive federal policies have increased the nominal cost of housing. On the demand side, the constant expansion of subsidies and federal backing of mortgages has fueled growth in home prices and debt. On the supply side, the expansion of subsidies such as tax credits has done little more than enrich developers for building housing that would have been built anyway.

While these policies have cost Americans hundreds of billions of dollars in bailouts and inflated both mortgage debt and home prices, they have failed to create any lasting change in the homeownership rate. (Public housing has also been an abysmal failure, but we’ll set that aside for now.)

Today’s Economy and the Crisis Story

These past few years, many Americans have taken an economic beating—real wages fell and prices have not reverted to pre-COVID-19 levels. Therefore, it is no surprise that many people have been calling for increased government intervention, as in years past.

However, if federal officials answer those calls, it will likely increase Americans’ economic burden. Evidence shows that over the long-term, people have overcome the many federal roadblocks that increase the nominal cost of housing, but affordability would be much improved in the absence of those harmful federal policies.

At the state and local level, zoning and regulatory restrictions make it unnecessarily burdensome to build new housing. State and local officials should reduce those restrictions because, holding other factors constant, such changes would put downward pressure on home prices. But federal officials should stay out of these decisions and refrain from enacting policies that exacerbate problems in local housing markets.

Aside from being far removed from local communities’ needs and wants, most federal housing policies boost demand across the entire nation, putting upward pressure on prices regardless of local zoning rules. Congress has shown little appetite for fixing this problem, but federal officials should eliminate these demand-boosting policies.

The lessons learned from the post-COVID-19 inflationary episode are directly applicable to the housing market. In both cases, federal policies that distort demand and supply result in harmful outcomes. The housing market is simply a microcosm of what can go wrong—and how difficult it can be to fix—when the federal government interferes with markets. 

Taking a step back, it is important to determine whether the United States is really facing a housing crisis. Federal officials can’t afford to gloss over this question. If they enact a set of policies to solve a crisis that doesn’t exist, the results could be disastrous.

At the very least, it is worrisome that officials are promoting a far-reaching federal effort based on such a wide range of estimates of the so-called housing shortage. These estimates have ranged from about 1.5 million to 20 million units in the past several years. Presumably, a policy designed to close a national shortfall of 1.5 million units would be very different than one aiming to add 20 million units.

So, it is important to consider, at minimum, the following questions:

Is the United States really facing a housing crisis?
Can people generally buy or rent at market prices?
Have home prices and rents really become unaffordable, to the point that people have no place to live?

Our new paper and this blog series carefully examine these issues and present evidence against the crisis story. They also present evidence that elected officials should temper their expectations regarding how much relaxing zoning restrictions might reduce home prices. Local officials should strive to improve their communities through zoning and regulatory reforms—nothing in the paper or the blog series suggests otherwise—but the price effects from these kinds of changes tend to be rather small.

Looking Ahead

Here is a preview of the future posts for the blog series.

Post 2: Questioning the Housing Crisis: A First Look at the Affordability Data

Post 3: Questioning the Housing Crisis: Crisis or Consumer Preference?

Post 4: Questioning the Housing Crisis: Demand Moves Faster Than Supply

Post 5: Questioning the Housing Crisis: A First Look at the Housing “Shortage”

Post 6: Questioning the Housing Crisis: A Different Approach to Estimating Housing Availability

Post 7: Questioning the Housing Crisis: Recap and Reforms to Improve Affordability 

Christian Schneider

Any day is good to raise a cold glass full of spirits, but enjoying a stiff drink on December 5 is especially apt, given it is the day alcohol prohibition was repealed in 1933.

The benefits of ending Prohibition immediately became evident: People stopped poisoning themselves with alcohol mixed with paint thinner in their bathtubs, organized crime lost much of its clout, and breweries once again were able to provide jobs for local workers.

But even today, we are sporadically reminded of the downsides of restricting alcohol consumption. For instance, many colleges still ban the sale of alcohol at their sporting events, leading to some unintended consequences. In a National Review Online column in May of last year, I identified one of these downsides by telling the tale of two football stadiums in the state of Wisconsin:

On November 26 of last year, the Wisconsin Badgers football team played their final game of the season against their hated rivals, the Minnesota Golden Gophers. The game saw 54 people ejected (27 of whom were students), 16 people arrested, and another 16 cited (one for the overly polite-sounding charge of “disposing of human waste”).

Compare that crowd to the one that gathered the previous weekend at Lambeau Field, home of the Green Bay Packers and the mecca of professional drinking in America. Despite the doctoral levels of inebriation among fans watching the Packers defeat the Dallas Cowboys, there were only five arrests and eleven ejections. (If you are designated “the drunk” at a Packers game, you have achieved bacchanalian immortality.)

These are two stadiums, around the same size, in the same state, with the same drinking culture. And yet, according to numbers provided to me by UW-Madison police, more arrests and ejections occur among the Badgers devotees than among the seasoned NFL crowd. When the college team played Washington State, 45 people were ejected, 36 of whom were students. During the game against New Mexico, 66 people were ejected, 24 of whom were students. By contrast, the numbers for Packers games hovered in the single digits—during the final game of the year against the Detroit Lions, there were only four arrests and eight ejections.

These stats may confuse people, considering that alcohol is actually served at Packers games. How is it that a college crowd can be so much more sauced despite the lack of beer flowing at the concession stands?

The answer is simple. Knowing there’ll be no chance to get their hands on a cold one during the game, under-21s pound as much as they can outside the stadium before the game begins. The kids get themselves good and hammered, knowing the buzz is going to have to last three hours.

This is all perfectly evident to anyone who has ever attended a sporting event—if you know you won’t be able to drink while sitting in the stands for the length of a football game, you are going to do one of two things: You’ll either drink as much as humanly possible before the game, or you’ll sneak in hard alcohol somewhere on your person.

In the piece, I point out that at Lambeau Field, home to both a professional football team and stands full of professional drinkers, arrests were a small fraction of what they were at the college stadium down the road in Madison. That isn’t in spite of beer being sold in the stadium, it is because of it.

Before this season, the University of Wisconsin–Madison took my advice and decided to start selling beer during its football games.

“The option to purchase alcohol is common at collegiate athletic venues all over the country and we’re glad that we can now offer it as part of the fan experience at Camp Randall,” said Chancellor Jennifer Mnookin at the time, adding that the plan combined “opportunity with public safety.”

Well, the numbers are in, and they are entirely predictable. This year at Badger football games, beer and wine consumption was up and arrests were down.

From the Milwaukee Journal Sentinel:

According to University of Wisconsin–Madison Police Department interim police chief Brent Plisch, alcohol-related police contacts decreased by about 25%, from 118 incidents in 2021 to 89 incidents this year.

Although it might seem counterintuitive, Plisch said this is a phenomenon across college athletics in general: After allowing alcohol to be served inside the stadiums, universities tend to see a reduction in police contacts for alcohol-related offenses.

Except that it’s not counterintuitive at all. Allowing people the opportunity to drink freely in public teaches them to be more responsible and spread their drinking out rather than getting hammered before the game. The school shouldn’t be taking credit for the drop in arrests; it should be taking the blame for waiting too long to see what was plainly obvious.

So enjoy a pleasant beverage today. And if you do so at a sporting event, even better.

Jennifer Huddleston

Vanessa Brown Calder

The Department of Housing and Urban Development (HUD) is a good place to start for an administration with an appetite for change. Failed programs like public housing should be abandoned permanently, and unfocused programs with mostly unmeasurable results, like Community Development Block Grants (CDBG), should be eliminated, while other HUD functions can be devolved to state governments.

The CDBG program is a more than $3 billion federal program that provides city, county, and state governments with control over federal revenue for community development, neighborhood revitalization, and housing spending. Communities use funds for 27 categories of eligible activities and are given broad discretion in selecting funded activities.

There are a variety of issues with CDBG, including a broad, ambiguous mission and funding ill-targeted to low-income people. Policymakers designed CDBG as a flexible program, and “community development” is a broad goal. However, the program’s flexibility has resulted in spending on various disparate activities that have little to do with meeting low-income people’s needs or even critical community needs.

Recent reporting indicates that policymakers used CDBG to develop a plaza to host a Best of Beer and Wine Festival, fund the New York city of Newburgh’s summer film festival, expand a brewery in Montana, and support five failed restaurants in Toledo, Ohio. The most recent HUD data indicate that some of the highest per capita CDBG spending is on nonresidential historic preservation. Past years’ CDBG projects included corporate subsidies, funding a cinema that later foreclosed, and nearly half a million dollars on hull repair for a steamship.

CDBG Funding Is Poorly Targeted

Given CDBG funds festivals and breweries, it shouldn’t be any wonder that the funding is generally ill-targeted to those most in need. A recent study found that neighborhoods with the largest portion of low- and moderate-income families were not the most likely to receive CDBG funds. As the authors noted, local governments have a lot of latitude in distributing CDBG funding, and local incentives are not necessarily aligned with program goals.

Complicating matters further, the allocation formula used to allocate federal dollars has a shaky relationship with need to begin with. Research finds the relationship has deteriorated nationally and locally over time. One study found that in Chicago, “relatively poorer council districts receive lower funding than predicted by their share of the [low and moderate income] population.”

Considering the types of projects that CDBG funds and the tenuous relationship between program funding and need, it’s not surprising that CDBG’s outcomes are hard to measure. Following the program’s creation in the 1970s, one analyst characterized it as “more of a grab bag than a plan, a loose collection of unrelated ways to spend money rather than a unified approach to solving the city’s most acute problems.”

As economist Eileen Norcross described the problem, “claims of [CDBG] effectiveness tend to rest on intermediate measures, such as the number of jobs created, houses built, or dollars leveraged. These metrics are not evidence of success. They indicate how funds were spent, not the objectives achieved by the program.”

Left-leaning research groups and government agencies have also recognized these issues. An Urban Institute analysis acknowledges that “impact evaluations [for CDBG] have been even more limited and have been completely absent in recent years.… It is indeed difficult to estimate the effects of CDBG because the funds can be used for such a wide range of activities.” The Government Accountability Office found “few comprehensive studies on the impact of the CDBG and HOME programs exist.”

CDBG Is Poorly Designed

One of the primary purposes of CDBG was to allow local governments more discretionary decisionmaking authority surrounding what community development projects to fund. The idea was that local decisionmakers would have more localized information and act accordingly.

However, research finding that local decisionmakers make effective funding decisions is lacking. Urban expert Margaret E. Dewar observed that “programs aimed at specific distressed geographic areas show almost no effects on the [economic] growth of these areas.”

Ultimately, CDBG is designed to subsidize places and structures rather than needy people, reducing utility as a result. Analysts have suggested updating the allocation formula in various ways, but simply revising the formula would not solve the problem. 

As urban economist Edward Glaeser noted, “Investing in building instead of people in places where prices were already low may have been the biggest mistake of urban policy over the past sixty years” and “building is the result, not the cause of success.… people, not structures, determine a city’s success.”

CDBG’s design presumes that people should stay in declining places rather than move to areas of greater opportunity where they may be better off. As David Schleicher argues, “Unless place-based subsidies fundamentally alter the structure of local economies, they ultimately encourage people to stay in declining places.… From a cynical perspective, subsidies to declining regions sometimes can appear to be policies designed to serve the interests of rich areas—as efforts to keep the riffraff out—rather than genuine efforts to reduce poverty.”

Local elected officials arguably desire visible and quick results that will bolster their reelection prospects, and visible projects are a distraction from making genuine and often challenging improvements in other areas. CDBG provides ribbon-cutting ceremonies and news items that meet local policymakers’ needs for media exposure and speedy results, whether or not they meaningfully improve the prospects of disadvantaged residents.

CDBG also allows federal policymakers to claim credit for local development. Chris Edwards reports that “the purpose of more than one-third of press releases from US senators is to claim credit for federal spending in their states.” Policymakers could do more to improve local community and economic conditions by reforming zoning regulation, education policy, taxes, and occupational licensing, but these reform efforts would entail more effort.

Conclusion

If CDBG genuinely served low-income people’s needs, spending would be allocated based on individual characteristics rather than tenuously related location-based characteristics like population size, population growth lag, or housing stock age. Officials would direct funds to needy people rather than politicians, businesses, and buildings, and officials would require funding to produce clear and measurable results. 

But this isn’t the CDBG program we know. Given the program’s questionable efficacy, flawed design, and state and local government’s proper responsibility for community and economic development activities, eliminating the program is the best course of action. 

To its credit, the White House proposed doing just that during President Trump’s first term. This proposal generated predictable resistance from activists and local policymakers, but the Trump administration was right to target the program then, and the administration and its Department of Government Efficiency should see the proposal through now.