Russell Roberts's Blog, page 135

Quotation of the Day…

(Don Boudreaux)

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… is from page 5 of Richard Vedder’s and Lowell Gallaway’s vital 1993 volume, Out of Work:

[T]he evidence generally points to the conclusion that the unemployment situation was better in the relatively laissez-faire era before the Great Depression than in periods since.

Toddler-like Thinking

(Don Boudreaux)

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In my latest column for AIER I express my dismay at the jejune ‘thinking’ and commentary that passes these days for serious policy ‘analysis.’ A slice:

Pay close attention to how the clerisy (who are mostly, although not exclusively, Progressives) propose to ‘solve’ almost any problem, real or imaginary. You’ll discover that the proposed ‘solution’ is superficial; it’s rooted in the naïve assumption that social reality beyond what is immediately observable either doesn’t exist or is unaffected by attempts to rearrange surface phenomena. In the clerisy’s view, the only reality that matters is the reality that is easily seen and seemingly easily manipulated with coercion. The clerisy’s proposed ‘solutions,’ therefore, involve simply rearranging, or attempting to rearrange, surface phenomena.

Do some people use guns to murder other people? Yes, sadly. The clerisy’s superficial ‘solution’ to this real problem is to outlaw guns. Do some people have substantially higher net financial worths than other people? Yes. The clerisy’s juvenile ‘solution’ to this fake problem is to heavily tax the rich and transfer the proceeds to the less rich. Are some workers paid wages that are too low to support a family in modern America? Yes. The clerisy’s simplistic ‘solution’ to this fake problem – “fake” because most workers earning such low wages are not heads of households – is to have government prohibit the payment of wages below some stipulated minimum.

Do some people suffer substantial property damage, or even loss of life, because of hurricanes, droughts, and other bouts of severe weather? Yes. The clerisy’s lazy ‘solution’ to this real problem focuses on changing the weather by reducing the emissions of an element, carbon, that is now (a bit too simplistically) believed to heavily determine the weather.

Do prices of many ‘essential’ goods and services rise significantly in the immediate aftermath of natural disasters? Yes. The clerisy’s counterproductive ‘solution’ to this fake problem – “counterproductive” and “fake” because these high prices accurately reflect and signal underlying economic realities – is to prohibit the charging and payment of these high prices. When inflationary pressures build up because of excessive monetary growth, are these pressures vented in the form of rising prices? Yes indeed. The clerisy’s infantile ‘solution’ to the very real problem of inflation is to blame it on greed while raising taxes on profits.

Is the SARS-CoV-2 virus contagious and potentially dangerous to humans? Yes. The clerisy’s simple-minded ‘solution’ to this real problem is to forcibly prevent people from mingling with each other.

Do many Americans still not receive K-12 schooling of minimum acceptable quality? Yes. The clerisy’s lazy ‘solution’ to this real problem is to give pay raises to teachers and spend more money on school administrators.

Do some American workers lose jobs when American consumers buy more imports? Yes. The clerisy’s ‘solution’ is to obstruct consumers’ ability to buy imports. Are some people bigoted and beset with irrational dislike or fear of blacks, gays, lesbians, and bisexuals? Yes. The clerisy’s ‘solution’ to this real problem is to outlaw “hate” and to compel bigoted persons to behave as if they aren’t bigoted.

Do many persons who are eligible to vote in political elections refrain from voting? Yes. The ‘solution’ favored by at least some of the clerisy to this fake problem – “fake” because in a free society each person has a right to refrain from participating in politics – is to make voting mandatory.

The above list of simplistic and superficial ‘solutions’ to problems real and imaginary can easily be expanded.

The clerisy, mistaking words for realities, assumes that success at verbally describing realities more to their liking proves that these imagined realities can be made real by merely rearranging the relevant surface phenomena. Members of the clerisy ignore unintended consequences. And they overlook the fact that many of the social and economic realities that they abhor are the result, not of villainy or of correctible imperfections, but of complex trade-offs made by countless individuals.

MacLean Is Best Ignored

(Don Boudreaux)

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I received a very nice note from someone suggesting an open letter in response to Nancy MacLean’s latest work of fiction. Here’s my reply:

Mr. L__:

Thanks for suggesting that I and other classical-liberal scholars write an open letter expressing our many sound reasons for regarding Nancy MacLean’s attacks on economists James Buchanan, Milton Friedman, and W.H. Hutt as nothing but a river of ridiculous nonsense. But I concur with the advice that you report receiving from Deirdre McCloskey: MacLean is best ignored.

MacLean reveals in her work that she’s either as stupid as a stump or driven delusional by her ideological priors. A third possibility is that she’s an outright liar. My suspicion, though, is that she doesn’t lie in the sense of being aware that what she writes and says is utterly detached from reality. But regardless of whether she’s stupid, delusional, or deceitful, neither she nor any of the pathetic souls who swallow her preposterous tales deserves attention from anyone whose time has any value at all.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Some Covid Links

(Don Boudreaux)

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Writing in today’s Wall Street Journal, Jay Bhattacharya decries the White House’s continuing stoking of the unjustified fear that covid poses a serious threat to children. Two slices:

In a May 30 tweet, Dr. [Ashish] Jha asserted that Covid is “a far greater threat to kids than the flu is.” He linked to an article by Harvard Medical School instructor Jeremy Faust, which claims that Covid killed more than 600 children in 2021, whereas the flu kills “an average” of only 120 children annually. But Dr. Faust’s data are severely skewed, for three reasons.

First, while flu is seldom tested, everyone admitted to a hospital for any reason gets a Covid test. Between October 2018 and September 2019, 1.4 million flu tests were reported to public-health and clinical labs. As of May 31, 2022, there had been 897 million PCR tests for Covid.

Second, evidence from audits of death certificates found that 35% of all pediatric deaths in 2020 “had co-occurring diagnosis codes that could not be plausibly categorized as either a chain-of-event or significant contributing condition,” according to a study published by the Centers for Disease Control and Prevention. Put another way, in at least 35% of pediatric “Covid deaths,” Covid couldn’t have been the cause.

Third, Dr. Faust relies on a figure for confirmed flu deaths that is well-known to underestimate actual flu deaths by an order of magnitude. Correcting for the lack of flu testing, the National Center for Immunization and Respiratory Diseases estimated 1,161 pediatric flu deaths in the 2012-13 season rather than the 142 that Dr. Faust reported.

…..

There are far greater risks to children than Covid. Since March 2020, more than 1,000 kids have died with Covid (an average of around 38 a month), according to the CDC. In the same period more than 1,400 children died from drug- and alcohol-related causes.

The Wall Street Journal‘s Editorial Board writes about the recent official finding that Florida governor Ron DeSantis did not falsify that state’s covid numbers. Two slices:

A frequent phenomenon of our times is the flurry over an alleged scandal that on examination turns out to be false. The latest case is the claim that Florida Gov. Ron DeSantis manipulated Covid data.

Mr. DeSantis became public-health enemy number one by defying the left’s lockdown consensus early in the pandemic. When former state health department employee Rebekah Jones claimed she was fired for refusing to fudge state Covid data to support the state’s reopening in spring 2020, national and local media outlets reported her allegations as fact.

“Florida Dismisses A Scientist For Her Refusal To Manipulate State’s Coronavirus Data,” NPR reported. After the Florida Department of Law Enforcement executed a search warrant of her home, Ms. Jones claimed Mr. DeSantis had “sent the gestapo” to silence her. “FDLE raid dramatizes Florida’s COVID-19 coverup” the South Florida Sun Sentinel editorialized.

But according to the Governor’s office, Ms. Jones was fired for repeated “insubordination” and making “unilateral decisions to modify the Department’s COVID-19 dashboard without input or approval from the epidemiological team or her supervisors.”

…..

“If the complainant or other DOH staff were to have falsified COVID-19 data on the dashboard, the dashboard would then not have matched the data in the corresponding final daily report,” the IG explained, adding that “such a discrepancy” would surely have been detected by Bureau of Epidemiology staff, researchers or the media. The IG found no truth to any of Ms. Jones’s accusations.

Covidocratic tyranny in China became so egregious that even a CNN reporter reported it.

The New York Post‘s Editorial Board calls on the Biden administration to end “the nonsensical requirement that all international travelers test negative for COVID to board flights here.” A slice:

Most important, the pandemic is over: COVID will keep on sickening and killing a few people, but only as a background threat, much like the flu. Pandering to the remaining hysteria only feeds fear, holding back the full return to normalcy.

el gato malo believes that humans’ natural discomfort with cognitive dissonance is an important part of why covidocrats acted as they did. A slice:

to be sure, there are serious, dangerous liars in the mix here as well (a fellah whose name rhymes with “phony slouchy” comes to mind) but i suspect it’s far fewer than many have come to presume.

consider:

we have a large group of highly unqualified people with generally technocratic/authoritarian mindsets that have failed up into positions of power for which no one, much less they are really suited. in a crisis, the emotional drive to “do something” is overwhelming. everyone clamors for action. so they did things, visible things, bold things, wrong things. then it all blew up and went wrong and by then, they were too emotionally invested to own the mistakes so they doubled and tripled down and blamed everyone but themselves for “not pandemicing hard enough.” and they all got trapped. and their cognitive dissonance and selection bias took over to protect their mental states.

and so in their minds they did not lose the debate. “you were too too benighted and dim to see that they won” is just the low energy pathway to preserve sense of self and self-worth.

Jay Bhattacharya tweets:

PM Trudeau invoked the Emergencies Act against anti lockdown truckers to suppress a legitimate protest, seize bank accounts of regular people, and take political prisoners. Public health that needs this kind of authoritarian power to get its way has lost moral authority.

Quotation of the Day…

(Don Boudreaux)

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… is from page 173 of economist Arthur Diamond, Jr.’s excellent 2019 book, Openness to Creative Destruction: Sustaining Innovative Dynamism (original emphases; footnote deleted):

Federal disclosure rules [imposed by the U.S. Securities and Exchange Commission] result in long, opaque documents that almost no one reads, resulting paradoxically in consumers who are less well-informed but who believe that the government is protecting them. Remember that a good part of the reason why financial information is so lengthy and opaque is that government regulations require it.

Enough With “Greedflation”

(Don Boudreaux)

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I’m catching up on my correspondence.

Mr. K__:

Thanks for your follow-up e-mail.

About this Café Hayek post of May 21st you write: “Greed is a necessary part of the explanation for inflation. Not greed alone. But greed in tandem with the Ukraine invasion and other supply constrictions. This cannot be denied. Greed is the motive for corporations to increase prices.”

I can and do deny that any part of an explanation of inflation is “greed.” And while the unusually tight supply constraints that we’ve endured lately account for some one-time jumps in prices, they can’t account for the on-going price hikes – the inflation – that we’re now suffering. Either way, no legitimate part of the explanation of inflation is provided by “greed.”

I ask my students to imagine New York City police officers arriving on 34th Street to investigate the death of someone who fell from the Empire State Building. An officer approaches the crowd surrounding the mangled body and asks “Does anyone here know what caused this to person fall?” A young man proudly answers “I do! Gravity!”

My students rightly laugh at this explanation’s absurdity. And my students – no less rightly – remain unimpressed with the “gravity” explanation even after I note the indisputable fact that, absent gravity, the person now splattered dead on Manhattan’s pavement would still be alive. My students understand that the actual cause of this death is something that changed – say, a decision to commit suicide, or a snapped cable on window-washing scaffolding – to enable ever-present gravity to pull the person fatally to the ground.

The same logic applies to inflation. To truly explain inflation we must identify something that changed – something that changed both to incite sellers to charge higher prices and, more importantly, to enable buyers to pay these higher prices. That something clearly isn’t “greed.” Not only is greed (or, using a more measured term, self-interest) ever-present, it’s not something that consumers can spend. Therefore, the only plausible explanation of inflation is excessive growth in the money supply – which, as it happens, we’ve lately had a great deal of.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Quotation of the Day…

(Don Boudreaux)

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… is from Book IV, Chapter 3 – on page 493, Vol. 1, of the 1981 Liberty Fund edition – of Adam Smith’s monumental 1776 An Inquiry Into the Nature and Causes of the Wealth of Nations:

The Portugese, it is said, indeed, are better customers for our manufactures than the French, and should therefore be encouraged in preference to them. As they give us their custom, it is pretended, we should give them ours. The sneaking arts of underling tradesmen are thus erected into political maxims for the conduct of a great empire: for it is the most underling tradesmen only who make it a rule to employ chiefly their own customers. A great trader purchases his goods always where they are cheapest and best, without regard to any little interest of this kind.

DBx: On this date 299 years ago – June 5th, 1723 – Adam Smith was born (or, perhaps, baptized; his gravestone in Edinburgh gives his birth date as June 5th). Happy Birthday, sir!

Jonathan Sumption Argues Against Lockdowns

(Don Boudreaux)

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This past November, Jonathan Sumption – debating at the Oxford Union – made the case against covid lockdowns.

There Is No Good Practical Case for Price Controls

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

Jason Zweig suggests that price controls might be worth a try “when there’s a national will to see them succeed” (“An Old Way to Fight Inflation Gets New Fans,” June 3). The chief piece of serious economic research he cites in support of his case is Hugh Rockoff’s 1981 paper, “Price and Wage Controls in Four Wartime Periods,”* that does indeed report limited and qualified evidence that wartime price controls sometimes might break expectations of inflation without seriously reducing economic productivity.

But beware of the allure of price controls. First, economic historian Robert Higgs has demonstrated the unreliability of the wartime output measures used by Rockoff as a basis for concluding that wartime price controls had little negative impact on economic productivity.**

Second, Rockoff himself concludes a 2008 essay on price controls with this warning:

By examining cases in which controls have prevented the price mechanism from working, we gain a better appreciation of its usual elegance and efficiency. This does not mean that there are no circumstances in which temporary controls may be effective. But a fair reading of economic history shows just how rare those circumstances are.***

The indispensable role that prices play in allocating economic resources combines with the indisputable role that politics play in allocating government restrictions to counsel us never again to allow government to control prices.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

* Hugh Rockoff, “Price and Wage Controls in Four Wartime Periods,” Journal of Economic History, June 1981.

** Robert Higgs, Depression, War, and Cold War (New York: Oxford University Press, 2006), especially pages xi-xii and 61-100.

*** Hugh Rockoff, “Price Controls,” Concise Encyclopedia of Economics, David R. Henderson, ed. (Indianapolis: Liberty Fund, 2008), page 412.

Quotation of the Day…

(Don Boudreaux)

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… is from page 74 of David Mamet’s 2022 book, Recessional: The Death of Free Speech and the Cost of a Free Lunch:

The virus, here, is government. Absent intervention it will, like any disease, eventually kill the host  organism. The problem is not that the electorate may choose badly, but absolute power will not admit of any change at all.

DBx: Yes. Authoritarian exercises of power, even when imposed and accepted for the best of reasons, have a strong tendency to dangerously self-replicate.

Social life isn’t lived in a series of discreet time units, with the happenings at time t2 being unaffected by what happened in time t1. Among the most surprising and disappointing features, to me, of the world since March 2020 is the apparent supposition by many people – Progressives, conservatives, liberals, libertarians, whatevers – that government can be trusted with enormous, unprecedented powers to stop the spread of a respiratory disease without those powers themselves becoming not only dangerous, but becoming both endemic and far more dangerous and widespread over time than is the respiratory disease that the powers grabbed and exercised were meant to halt.