Russell Roberts's Blog, page 14

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 117 of the 1993 Third Edition of the late Carlo Cipolla’s 1976 book, Before the Industrial Revolution: European Society and Economy, 1000-1700:

It was a poor and primitive Europe, a Europe made up of countless rural microcosms – the largely self-sufficient manors, whose autarchy was part cause and part consequence of the decline in trade. Society was dominated by a spirit of resignation, suspicion, and fear of the outside world. People withdrew into the economic isolation of the manors just as they sought spiritual isolation in the monasteries.

DBx: While today’s world isn’t likely to resort to the extreme localism and isolation that marked Europe in the latter half of the first millennium A.D., there is nevertheless a lesson for us in the calamitous actions of our ancestors from that era. Suspicion and fear of the outside world – in our case, suspicion and fear of citizens of foreign countries – that prompts us to retreat from the outside world and to arrest economic and social change will make us poorer materially, intellectually, and spiritually.

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(Don Boudreaux)

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David Harsanyi describes as “intolerably dishonest” the media’s coverage of the debt-limit battle. Two slices:

President Joe Biden, writes Politico’s White House Bureau Chief Jonathan Lemire, “has prioritized deal-making throughout the debt ceiling talks. But with GOP obstinate, Biden is changing tactics.”

What in the hell is he talking about, you may wonder. Only last month, Lemire’s publication reported that Biden was “happy to meet” with House Speaker Kevin McCarthy, R-Calif., but “not on whether or not the debt limit gets extended. That’s not negotiable.” (Italics mine.) That doesn’t sound like someone who’s “prioritized deal-making” on the debt ceiling.

Back in January, press secretary Karine Jean-Pierre was unequivocal in saying that “we will not be doing any negotiation over the debt ceiling.” On April 27, The Washington Post reported, “White House reiterates refusal to negotiate on debt limit as pressure mounts.”

…..

No one, of course, expects Democrats to unilaterally surrender. But media always covers negotiations over spending as if the organic center, the endpoint, the only reasonable place to be, stands not between the desires of two competing political parties or two competing branches of government but rather wherever Democrats happen to reside. One side is trying to save the nation from default and economic ruin; the other is a reckless “hostage taker” intent on rolling back progress.

Art Carden finds confirmation in Walmart that the material abundance available today to ordinary Americans is indeed enormous….

… But this abundance is under threat from government; as J.D. Tuccille advises, “[i]f you want to keep the lights on, it might be a good time to shop for a generator.”

David Henderson’s optimism is admirable and instructive.

My GMU Econ colleague Bryan Caplan uncovers “evidence that economic illiteracy is the foundation of draconian housing regulation.”

Here’s another one for the file “Why thehell does anyone trust that governments are mature and sensible organizations?”

Jay Bhattacharya tweets:

Lockdowns are focused protection of the laptop class:
March 22, 2020: Toronto imposes a harsh lockdown of the city to flatten covid. Over the next two months, covid spreads in the poorest neighborhoods, while the richest ones stay home and stay safe.

Jacob Sullum applauds U.S. Supreme Court Associate Justice Neil Gorsuch’s pointed criticisms of the tyranny of covidocrats. Two slices:

On March 15, 2020, two days after then-President Donald Trump declared a national COVID-19 emergency, Cornell law professor Michael Dorf urged Congress to impose a nationwide lockdown and suspend the writ of habeas corpus.

Congress never took either of those constitutionally dubious steps, which Dorf said were necessary to “save the nation.”

Instead, as Supreme Court Justice Neil Gorsuch noted this month, “executive officials across the country issued emergency decrees on a breathtaking scale,” amounting to one of “the greatest intrusions on civil liberties” in US history.

That experience made it clear that legislators need to reconsider the definition of emergencies and impose limits on the powers they confer.

…..

Meanwhile, however, local and state officials had ordered sweeping, long-lasting restrictions on social and economic activity, impeded only occasionally by judicial intervention.

Those orders often involved scientifically senseless rules and arbitrary distinctions between “essential” and “nonessential” businesses.

They impinged on fundamental rights, including freedom of movement, freedom of association, the free exercise of religion and the right to armed self-defense.

Worse, all these restrictions had the force of law, sometimes backed by criminal as well as civil penalties, even though the elected representatives charged with lawmaking did not participate in formulating or approving them.

The orders were based on statutes that granted governors vast powers during emergencies that they themselves declared and extended.

Quotation of the Day…

(Don Boudreaux)

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… is from page 52 of University of Connecticut economist Richard Langlois’s monumental forthcoming (2023) study, The Corporation and the Twentieth Century (emphasis original; footnote deleted):

In addition to limits on immigration, the Progressives thus supported a variety of nonmarket controls, notably minimum-wage laws and hour restrictions, not because they believed these would help the poorest members of society, but precisely because believed, as laissez-faire economists taught, that such policies would exclude the least productive from the labor market. They also believed (correctly) that these restrictions would exclude women as well, encouraging them back into their proper role in society.

DBx: Langlois here writes of the Progressives of early 20th-century America, but Progressives of early 21st-century America support many of the same policies that were supported by these earlier Progressives. The chief difference between Progressives of a century ago and Progressives of today is that Progressives of a century ago, while their values were vile, had a better understanding of economics than do Progressives of today. Progressives today, for example, actually believe that forcing employers to pay more for low-skilled labor will result in employers paying more for low-skilled labor without any negative impacts on this labor. Progressives of a century ago were not as prone to swallow such flat-earth-like nonsense.

Also worthy of note is that one of the goals of Progressives of a century ago was to keep women out of the workforce and at home. This skepticism of women working outside of the home is now found increasingly today among America’s “national conservatives” (who, intoxicated by nostalgia, mistakenly believe that the American economy of the mid-20th century was superior to the American economy of today).

…..

Pictured here is the American Progressive Edward Alsworth Ross, a man whose ethical values – certainly by the standards of today, and even by the standards of his own day – were vile. But, hey, when you believe yourself to be working to improve humanity with Science, ethical values must not obstruct your Scientific tinkering with society. After all, it’s Science!

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 334 of the “Random Thoughts” section of Thomas Sowell’s 2010 book, Dismantling America:

One of the scariest aspects of our times is how easy it is for glib loudmouths to turn us against each other, weakening the whole framework of society, on which we all depend.

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Writing in the Wall Street Journal, Scott Lincicome reports on a concrete example of the folly of industrial policy. A slice:

Industrial-policy plans often run into unexpected political and legal problems regarding their design and implementation. Even before the VinFast project stalled, North Carolina’s giveaway to a foreign company raised eyebrows. At the time of the award, VinFast had never sold a car in the U.S. Given the state’s long and unsuccessful quest to land an automobile manufacturer, the plan reeked of political desperation, not sound economics. Now it smells worse.

The government’s expedited seizure of local property for manifestly commercial purposes—promised roads and related infrastructure to support only VinFast’s factory—is also a classic case of eminent-domain abuse. While the U.S. Supreme Court ruled in Kelo v. City of New London (2005) that government may take private property for commercial purposes, many states have since outlawed the practice. North Carolina hasn’t.

Many on the left undoubtedly see these and related problems as mere speed bumps on the road to national progress, whether on climate change or any government priority. But some on the right embrace industrial policy too, with little acknowledgment that it often requires the expansion and exercise of state power in ways that undermine the economy and achieve the left’s priorities. State planning tends to trample on the principles, communities and people that national conservatives supposedly hold dear.

The corporate facility at issue in Kelo was never built, but the “little pink house” was bulldozed anyway. Maybe if the Merry Oaks Baptist Church suffers the same fate, “conservatives” who embrace industrial policy will reconsider their approach.

Kimberlee Josephson is among those appropriately exposing the economic ignorance and arrogance of FTC Chairwoman Lina Khan. A slice:

Antitrust cases cost a great deal of time and money, and yet Lina Khan asserts that FTC will be looking more closely at M&As both past and present — and this assertion should be of concern to any entrepreneur and any corporate investor.

Essentially, the FTC is placing itself as the primary arbiter when it comes to business transactions, and it is conveying that it can predict what the future holds for innovations and acquisitions. This creates an environment of not only great uncertainty for business, especially now that previous transactions may be revisited and reconsidered, but also great risk for the competitiveness of US firms.

The FTC has not only a skewed view of the government’s role for business, but also a limited one in its assessment of the US market. Currently, the Chinese corporation Shein is proving to be one of the fastest growing online apparel retailers with sales surpassing H&M and Zara. The trend for promoting a #SheinHaul is also disrupting sales for Amazon, given the cost-savings consumers can find when buying directly from fast-fashion suppliers, rather than via Amazon’s e-commerce system. So while the FTC calls into question Amazon’s dominant status once again with another antitrust lawsuit, international competition from China may handle Khan’s concerns and quash the American-owned giant in the end. And with Temu hot on the heels of Shein, we may find American firms floundering to keep up at all, thanks to being sidelined by FTC filings.

Max Molden explains that economic competition is a function, not of the currently existing number of competitors in a particular industry (the definition of which, anyway, is always arbitrary), but of the absence of government-erected entry barriers.

Noah Rothman decries government’s “war on things that work.” Three slices:

Armed with unchecked self-confidence and possessed of an abiding faith in the idea that you must be coerced into altruism, the activists seem to be coming for almost everything you own. In the process, they are waging a crusade against convenience, an assault on comparative advantage, and a war on things that work.

Securing the fossil-fuel-free future that President Joe Biden imagines for us sometime in the 2030s will not be a pain-free proposition — at least that appears to be the conceit of the more radical wing of the environmentalist Left. The scale of the challenge, as they see it, demands sacrifice from us all. One of their most controversial moves is to give up natural-gas-powered appliances, your gas kitchen range foremost among them.

The relentless lobbying of local governments to forbid natural-gas hookups in new buildings had already succeeded in a number of municipalities when the U.S. Consumer Product Safety Commission (CPSC) sought public comment earlier this year on a proposal to impose a ban nationwide. By then, California had announced its own ban, to begin in the next decade, on the sale of new natural-gas-powered appliances, and New York State was set to follow suit.

…..

Or what if you value, you know, value? In most American states, natural-gas appliances cost between 10 and 30 percent less to operate on a regular basis than electric alternatives. What if you can’t afford to switch to the induction ranges — which can cost 60 percent more than gas stovetops — proposed by many anti-gas activists?

…..

The irrepressible self-righteousness of America’s technocratic social engineers may know no limits, but politicians who are responsible to voters just might learn from some of the green movement’s failed experiments. Take the State of New Jersey’s woeful example. In 2022, the Garden State implemented a policy so profoundly foolish that most residents probably doubted it would ever go into effect: an outright ban on single-use packaging — including food containers, plastic shopping bags, and even paper bags — in big-box and grocery stores.

Advocates of this policy routinely present circular logic by insisting that the success of their proscription can be measured in the number of people who comply with it. Yes, banning bags is an effective way to ban bags. But by any other measure, the switch makes little sense.

The alleged environmental benefits are indefinable. Scuttling plastic bags forces consumers to purchase and tote around reusable shopping bags, which require more energy and resources to produce (one European estimate found that reusable bags must be reused 7,100 times before they compete with plastic bags’ carbon footprint) and are less sanitary (as some might recall from the pandemic). The practical impact of the ban was so pronounced for disabled and low-income residents and the charities that serve them that the state baked into the law loopholes that temporarily allowed certain institutions to avoid complying with it.

George Will counsels Ron DeSantis to take a lesson from New Coke. A slice:

DeSantis has been marketing himself as Trump with the jagged edges filed off. But Trumpkins love their hero because of his jaggedness. And people repelled by Trump are uninterested in a smoother version of him. Besides, DeSantis is sometimes only slightly smoother.

Wesley Smith, writing at National Review, is correct to write that the emergence of Stanford University’s “Dr. Jay Bhattacharya as a public figure was one of the few salutary consequences of the Covid pandemic.” Another slice:

In the end, the Great Barrington Declaration was validated as probably a better approach than those promoted and/or mandated by our own public-health establishment. (The GBD recommendations were very similar to the approach taken by Sweden, which reaped a lower Covid death rate than most other countries.)

Now, Bhattacharya and colleagues are back with a new Covid-related campaign that they hope will help ensure that the catastrophic failings and consequential loss of trust in our public-health institutions are not repeated.

Known as the Norfolk Group, Bhattacharya and his coauthors hope to create a national commission to explore the official responses to Covid — itemize what went right and wrong — toward the end of planning a better public-health response if/when another pandemic threatens. From the Executive Summary:

In this document we list specific questions on specific topics related to COVID-19 pandemic responses in the United States. We believe these questions are vital for the nation to ask the White House, the CDC, the FDA, and other government officials, as well as state health departments, scientists, and the media. The public deserves answers to these questions so we can learn from our mistakes. Key issues include:

What could have been done to better protect older high-risk Americans, so that fewer of them died or were hospitalized due to COVID-19?

Why was there widespread questioning of infection-acquired immunity by government officials and some prominent scientists? How did this hinder our fight against the virus?

Why were schools and universities closed despite early evidence about the enormous age-gradient in COVID-19 mortality, early data showing that schools were not major sources of spread, and early evidence that school closures would cause enormous collateral damage to the education and mental health of children and young adults?

Why was there an almost exclusive focus on COVID-19 to the detriment of recognizing and mitigating collateral damage on other aspects of public health, including but not limited to, cancer screening and treatment, diabetes, cardio-vascular diseases, childhood vaccinations, and mental health?

Why did the CDC fail to collect timely data to properly monitor and understand the pandemic? Why did we have to rely on studies from private initiatives and from other countries to understand the behavior of the virus and the effects of therapeutics, including vaccines?

Why was there so much emphasis and trust in complex epidemiological models, which are by nature unreliable during the middle of an epidemic, with unknown input parameters and questionable assumptions?

Could therapeutic trials have been run in a more timely manner? How was information on drug effectiveness and safety disseminated to doctors and clinicians? Were effective therapeutics easily accessible across the population? How did certain drugs become heavily politicized?

Why did vaccine randomized trials not evaluate mortality, hospitalization, and transmission as primary endpoints? Why were they terminated early? Why were there so few studies from the highest-quality CDC and FDA vaccine safety systems?

Why was the USA slow to approve and roll out critical COVID-19 testing capacity? Why was there more emphasis on testing young asymptomatic individuals than on testing to better protect older high-risk Americans? Why was so much effort spent on contact-tracing efforts?

Why was there an emphasis on community masking and mask mandates, which had weak or no data to support them, at the expense of efficient and critical COVID-19 mitigation efforts? Why did the CDC or NIH not fund large randomized trials to evaluate the efficacy and potential harms of mask wearing? Why didn’t policy recommendations change after the publication of randomized trial data from Denmark and Bangladesh which showed no or minimal efficacy of mask wearing by the public?

Quotation of the Day…

(Don Boudreaux)

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… is from page 262 of Milton Friedman’s March 13th, 1967, Newsweek column, “‘Public’ Education,” as this column is reprinted in the 1975 collection – An Economist’s Protest – of some of Milton Friedman’s popular writings:

“Does money bring happiness?” is a recurrent theme in movie, short story, and novel. Yet the corresponding question is seldom asked about government expenditures. It is simply taken for granted that more government spending means more of whatever the spending is for.

Thoughts on Immigration

(Don Boudreaux)

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In the Spring of 2020, concerned about the effects on liberty of the overreaction to covid, my intrepid Mercatus Center colleague, Veronique de Rugy, and I co-founded a small e-mail listserv titled “The Bastiat List.” The focus of this still-active listserv has since broadened to include topics beyond covid. One of the members of the Bastiat List is our GMU Econ colleague Dan Klein, who shared with the list this recent essay by Noah Carl (whose work I generally much admire). In this essay Mr. Carl argues that the number of potential immigrants today is simply too large to make open borders feasible.

I share below a slightly modified version of my response to Dan’s message. (A prefatory note: I’m willing to be persuaded that open borders of the sort that America had during her first century are today unwise. But, first, I don’t believe that the case against such open borders is as obviously solid as most people today assume it to be; and, second, even if what is not on the policy table is open borders à la 1850, my remarks below reveal my sympathy for dramatically easing immigration into the United States, including eliminating all vestiges of immigration quotas.)

Bastiatians,

Here are six thoughts in response to the Noah Carl piece on immigration shared by Dan.

First, America had almost completely open borders until the 1920s, the most-notable exception being the 1880s exclusion of the Chinese. This openness vastly improved our economy (and is why nearly every American on this list is in America). What reason have we to think that that which was true in the past is no longer true in the present? It will be said, of course, that was then, this is now, so….

Second, we today are arguably better able to absorb – or as Noah Carl says, “accommodate” – immigrants than we were 100 or more years ago. (One of my great regrets is that I never followed up on Julian Simon’s offer to me that he and I work together on this idea of immigrant absorption, which I first suggested to him in a telephone conversation in the Spring of 1996. Soon after his offer I became president of the Foundation for Economic Education (FEE) and simply didn’t have time for doing that kind of research. Julian then died suddenly in February 1998. I did, though, in 2002 write the short piece linked above on this question. I realize that this 2002 essay of mine is hardly definitive, but I believe that it is nevertheless highly suggestive.)

Third, I’m unsure how much credit to put in the survey data as used by Carl. Talk is cheap; it’s easy to answer ‘yes’ to a surveyor who asks if you’d like to emigrate. It’s much more costly actually to emigrate. That said….

Fourth, I don’t doubt that the number of people who actually would emigrate, if given the opportunity under existing circumstances to do so, is very large. But as more and more people emigrate, the circumstances within countries change as result of that emigration. Although the direction and details of change would vary from country to country, it’s at least plausible that in many countries now populated with lots of people who say that they would like to emigrate, changes caused by emigration would gradually reduce the attractiveness of further emigration. Most obviously, emigration would, at least in the short run, push low-skilled workers’ wages up in countries from which working-age people are emigrating – and in the short run push low-skilled workers’ wages down in countries to which working-age people are emigrating – thus reducing the attractiveness of emigration to people still remaining in their countries of birth. Such emigration might also prompt government officials in those countries to adopt policies that increase the attractiveness of remaining in those countries.

Fifth, the presumption of liberty ought to be strong. As I see matters, opponents of more-liberal immigration have not overcome this presumption. Their arguments are consistently inconsistent (such as ‘Immigrants steal jobs and are parasites through the welfare state!’). Of course it’s impossible to foretell the exact manner that many new immigrants will be absorbed into, integrated into, and change the American economy and American society. This impossibility is often taken to be a reason to keep immigration tightly restricted, as the imagination easily can – and does – conjure up images of worst-case scenarios. But to restrict immigration is to governmentalize human association. The government restricts who its subjects are permitted to hire, befriend, marry, socialize with, and have as neighbors.

Six (and related to point number five), in his 2021 book, Immigration and Freedom, Chandran Kukathas explains that government control of immigration is not merely control of foreigners; such control inevitably involves control on the actions of citizens. Think, for example, of the huge, intrusive set of controls now in place in the U.S. to ensure that employers don’t hire people who the U.S. government has yet to declare are eligible to work in the U.S. Do we trust government officials with this power? (I don’t.)

One final remark: When I was president of FEE (1997-2001) I had among my employees a young man named Tommy and a young woman named Claudia. Tommy is a native New Yorker; Claudia was an Argentine citizen born and raised in Argentina of Argentine parents. Tommy and Claudia fell in love with each other and wished to marry. Although Claudia was living and working in the U.S. legally, Claudia’s and Tommy’s attempt to marry was significantly delayed because some government bureaucrats worried that the marriage wasn’t real. Claudia and Tommy did eventually get permission from the state to marry – muchas gracias, state – but the hassles were real, time-consuming, and caused much anguish. How many are the couples whose luck was not in the end as ‘good’ as that of Tommy and Claudia?

Don

The Public’s – and the Media’s – Economic Understanding Remains Primitive

(Don Boudreaux)

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Here’s a letter to BBC News:

Editor:

You report that the British government “is discussing plans for supermarkets to introduce a cap on the price of basic food items to help tackle the rising cost of living” (“Plans for supermarket price cap on basic food,” May 28). This scheme – which will only make matters worse by causing shortages – is both devious and cowardly. Only because the government dramatically inflated the money supply since mid-2020, while locking the economy down for long periods, are prices now rising. These rising prices, in short, are an accurate report of the government’s own reckless monetary and covid policies.

For a government that inflates the money supply while shutting down the economy now to cajole merchants into not raising prices is as dishonest and dangerous as would be a government that, when evidence begins to emerge that it’s spying on its own citizens, pleads with the news media to remain silent about the spying.

Falsifying reports not only doesn’t make the reported-on ugly reality as beautiful as the false reports suggest, it worsens reality by denying to members of the public the accurate, clear information they need to adapt as well as possible to the wretched reality.

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

Only Airheads Believe That the Economy Is Well-Served by ESG Investing

(Don Boudreaux)

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In the April 14th, 2023, print edition of the Wall Street Journal, David Henderson and I drew a lesson from the movie Air about ESG investing. You can read our op-ed in full beneath the fold. (Note: Our op-ed’s title – which wasn’t chosen by us – is a bit inaccurate: the lesson that David and I draw about ESG investing comes from only one part of the movie rather than being the, or even a, main theme of the movie.)

(more…)

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The Wall Street Journal‘s Editorial Board warns of this summer’s coming blackouts that will be caused by U.S. government climate policies. A slice:

Speaking of the sun, California’s grid is poised to weather this summer better than last year owing to more abundant hydropower from winter storms. However, if there’s a heat wave, California would need to import more power from other states—beyond the enormous amounts that it already does—after the sun goes down.

If neighboring states are strapped too—for instance, because the EPA won’t let them run coal plants all-out—Californians could be stuck. Better buy an emergency generator while stores still have them.

Here’s Jay Schweikert and Isaiah McKinney on the U.S. Supreme Court’s recent ruling in Sackett v. EPA.

Jon Miltimore explains that Ludwig von Mises would have had no patience for the pretentious folly that is ESG ‘investing.’ A slice:

This was always the danger in “stakeholder capitalism,” the decades-old attempt to nudge corporations into serving interests other than their own shareholders and consumers. It subordinates consumers, the very people who should be in charge.

“The real bosses, in the capitalist system of market economy, are the consumers,” the economist Ludwig von Mises famously wrote in his book Bureaucracy. “They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality.”

Who’d a-thunk it?!

In this letter in the Wall Street Journal, Marcie Wilhelmi makes an excellent point:

Former Sen. John Danforth’s op-ed “The Clarence Thomas Stories that PBS Refused to Tell” (May 20) is appropriately measured, but I feel that when NPR and PBS continually shill for obvious partisan campaigns, their tax funding should be removed. Contrary to what they expect, my admiration for Justice Thomas grows as he weathers these disingenuous attacks.

Marcie Wilhelmi
Augusta, Ga.

Far too many ridiculous and harmful ideas about the economy are immortal – including that which proclaims that inflation can be reduced by government-imposed price ceilings. This particular bit of economic delusion is being applied by Britain’s Tories.

George Leef documents yet another instance of woke intolerance on campus.

Juliette Sellgren talks with Emily Chamlee-Wright about the liberal sensibility.

Rich Vedder explains that “Biden’s college-loan writeoffs are unfair, irresponsible – and illegal.” A slice:

The administration brags about the money borrowers will save; but what about taxpayers, who ultimately will be responsible for the unpaid debts?