What You Should Be Reading: May 2024

Welcome back to “What You Should Be Reading,” a monthly series where the Taxpayers Protection Alliance (TPA) fist-pumps along to exciting new public-policy papers and hopes that you – after reading this post – will do the same.

May’s edition (yes, we’re running a little behind) includes advice for would-be social-media regulators from somebody who knows something about content moderation, a corrective to bogus data on worker pay and productivity, and the latest antitrust report from the inimitable Timothy Muris.

So, without further ado…

Cato Institute: “A Guide to Content Moderation for Policymakers”

A new paper from the Cato Institute identifies – and attempts to ease – perhaps the most troublesome problem now plaguing debates about social-media regulation. While lawmakers in each party worry about sometimes legitimate ills, “efforts to regulate content moderation often reflect a lack of understanding of how content moderation works.” The paper’s author, David Inserra, knows of what he speaks. Inserra spent years on Meta’s trust and safety teams, and he details the labyrinthine intricacies and stunning immensity of social-media content moderation at scale.

On a bipartisan basis, lawmakers have determined to regulate social media – though for different ends. Inserra argues that new regulation will likely foreclose innovative moderation models, including decentralized models that will empower users. Caught in inflexible regulatory vices, social media platforms cannot innovate and experiment. Thus, lawmakers who seek to fix the status quo instead threaten to calcify it.

Frustrated Republicans – many of whom claim that Big Tech “censors” right-wing speech – should carefully note two sections of Inserra’s report. First, it’s true (he writes) that tech-sector employees lean left; but observers must remember that “trust and safety” teams – no matter their members’ ideological biases – have an “structural” bias towards prioritizing “trust and safety,” not maximally free expression. “Some platforms, however, mitigate this problem by exerting less centralized control over content policies and grant greater control to individual communities or users,” Inserra also suggests.

Moreover, free-speech advocates have largely abandoned attempts to sway social-media platforms towards permissive policies. Expression-adverse activists have marched through the institutions of the digital world, but civil libertarians have beat a rapid retreat therefrom. Left-wing “academics and aligned interest groups are actively, consistently, and aggressively telling social media companies about the many harms of freer expression, effectively setting the norms of what speech should and should not be allowed,” reports Inserra. Activists’ successful efforts to tighten content-moderation guideline yield concentrated benefits (e.g., Media Matters efforts to stigmatize right-wing speech increases its statute with its donor base). However, “the cost of reduced expression is felt across the platform in often dispersed ways.”

Having declined to combat this cultural illiberalism, the right should not wonder that content-moderation decisions often skew censorial.

Read the full piece here.

American Enterprise Institute: “Understanding Trends in Worker Pay over the Past 50 Years”

Statists of every bent predicate their command-and-control schemes on the notion that modern American capitalism has failed everyone but the wealthy. The inconvenient truth is that the data usually marshaled to support these arguments lack consistency, necessary context, or other basic hallmarks of credible analysis.

In a new report from the American Enterprise Institute, Scott Winship shreds claims that workers’ wage gains have dramatically lagged productivity. Sensationalist analysis purporting to show a stark divergence obscure basic methodological errors, Winship writes. These include calculating productivity and compensation using different sections of the economy, measuring inflation to minimize workers’ apparent pay increases, ignoring non-wage compensation, and many more. Capitalism seems a failure when viewed through the dirty lens of methodological sloppiness.

As bias-confirming sloppiness so often does, the doomers’ data gamesmanship obscures truly useful insights. As Winship relates, beginning in the 1970s, “growth in the productivity of the median worker has slowed, causing growth in the pay of the median worker to slow.” Even within firms, more productive employees enjoy disproportionate compensation increases. Men, particularly, suffered from productivity and wage stagnation. As women entered the workforce en masse, and the economy pivoted towards services, men’s wage growth slowed. Fortunately, however, Winship reports that “The painful transition for men is largely behind us, and the median male worker has seen significant pay growth over the past 30 years.”

Policy makers convinced of capitalism’s total failure to benefit workers will arrive at wildly different policy conclusions than those who understand that wages – like any price signal – offer information of about more foundational market dynamics. The doomers’ attempts to increase workers’ lots by diktat succeed only in decoupling compensation from productivity. As Exhibit A, consider the (newest) New Right’s affection of labor unions, whose aims include slowing technological (i.e., productivity-boosting) innovation and extracting ever-cushier benefits packages from employers.

Better economic minds – those who understand prices – instead question how policy reforms can boost productivity and allow wages to naturally rise thereafter. Instead of rubbing dirt in the cut to make it appear less red, the better treatment is to disinfect the wound, removing whatever regulatory impediments prevent workers and businesses from exercising fully their capacities for productivity and wealth generation.

Read the full piece here.

Competitive Enterprise Institute: “Achieving Change at the Federal Trade Commission”

A new paper from the Competitive Enterprise Institute examines the failures of the Federal Trade Commission (FTC). The authors (former FTC chairman Timothy J. Muris and multi-time senior FTC official, J. Howard Beales III) contend that, beyond any current policy disputes, current leadership misunderstands the mechanics of effective administration and institutional change. Moreover, they argue, the agency has violated myriad norms, eroding its credibility and effectiveness. Muris and Beales recount the history of previous FTCs, indicating that systemic change, if attempted competently, can be made.

Revolutionizing an agency requires administrative competence, good strategy, and close attention to the creation of an effective staff – all of which the current FTC lacks. “The new leaders want transformative policies in both antitrust and consumer protection to restrain what they call the excessive power of major American corporations—policies likely impossible under existing law,” Muris and Beales write. “We see no evidence of efforts to replicate the brick by brick approach that built the legal underpinnings of the past 40 years, widely accepted by the current judiciary.”

The current FTC leadership has attempted to effect change by brute force, hamstringing itself. It has conspicuously dodged congressional oversight, alienated career staffers in favor of progressive outsiders, withheld information from dissenting commissioners, and more. “In at least two merger reviews, Commissioner Wilson was unable to obtain copies of the staff’s second request for information from the staff itself,” the report states. “Instead, she had to take the step, unprecedented in our experience, of asking for the information from parties under investigation.” What’s more, in a highly public and unprecedented step, Chair Lina Khan contravened an ethics official’s recommendation that she recuse herself from the case against Meta’s acquisition of virtual-reality developer Within.

In the end, a quote from John Wooden, found at the top of the report’s first section, puts it best: “Never mistake activity for achievement.”

Note: TPA highlights research projects that contribute meaningfully to important public-policy discussions. TPA does not necessarily endorse the policy recommendations the featured authors make.