Russell Roberts's Blog, page 163
March 15, 2022
Would You Invest In a Company Run In This Manner?
In reality, of course, no private corporation would ever be run as irresponsibly as Jones runs Acme Inc. Indeed, even to contemplate such a degree of cluelessness, incompetence, and fraudulence in a corporate CEO is nearly impossible.
Yet after beholding now for more than a year the presidency of Joe Biden, I think it fair to say that he, the real-world president of the United States of America, is as clueless, as incompetent, and as fraudulent as is Jones, the imaginary CEO of Acme Inc. If you disbelieve me, read Biden’s 2022 State of the Union address. It proves my case.
Of course, Biden isn’t unique. American presidents – and state governors, and big-city mayors – have long peddled nonsense to their constituents. These politicians continue to get away with their destructive fraudulence for three main reasons. First, unlike shareholders in a private corporation, it’s extremely difficult for a citizen of a political jurisdiction (especially at the national level) to escape. Second, unlike executives of a private corporation, government officials can implement their policies, and cover up much of the evidence of their failure, by using coercion.
The third reason is that – unlike shareholders, customers, and suppliers of private corporations – many citizens of political jurisdictions believe that duly appointed government leaders have powers to work miracles. The belief is distressingly widespread that coercion deployed by government officials can work such wonders as making low-skilled workers worth more than they are really worth by enacting minimum-wage statutes, miraculously multiply domestic resources by borrowing and spending money, and increase citizens’ access to goods and services by denying citizens access to goods and services offered for sale by non-citizens.
With such bizarre beliefs being so widespread, it’s no wonder that millions of Americans can listen to the likes of Joe Biden and think “Yeah! Our national government is in the hands of a competent CEO!”
Bonus Quotation of the Day…
… is from page 209 of GMU Econ alums Alex Nowrasteh’s and Benjamin Powell’s superb 2021 book, Wretched Refuse? (footnotes deleted; links added; emphasis added):
Across the world today, support for welfare, redistribution, and government provision of public goods is inversely correlated with the share of the population that is foreign born and diverse. Besides allowing for mass unionization, closing the border also allowed the government to create a large welfare state while avoiding a powerful political counterargument: Immigrants are going to come here to take advantage of these benefits. Consequently, American progressives and other supporters of a large welfare state were near-uniformly against continuing the system of open immigration.
Remember, Much Government Debt Is Monetized
Here’s a letter to the editor of Independent Journal Review:
Editor:
You report that Speaker of the House Nancy Pelosi, when asked if government spending is fueling the rise in government indebtedness as well as inflation, answered “No, it isn’t. The government spending is doing the exact reverse, reducing the national debt. It is not inflationary” (“Pelosi Insists Gov’t Spending Is ‘Reducing’ the National Debt and ‘Not Inflationary’,” March 14).
Does Pelosi really believe what she says? If so, then prominent among our government ‘leaders’ are simpletons with less intelligence than dust bunnies. Or is Pelosi aware that her statement is the equivalent of proclaiming that 2+2 =-5, but calculates that Americans are so stupid as to fall for her flummery? If so, then prominent among our government ‘leaders’ are charlatans whose absurd assurances would bring a scarlet blush to the face of Bernie Madoff.
Either way, we’re in a heap of trouble.
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
When asked why airports and airlines should maintain mask mandates even if the cities in which they’re located have abandoned them, White House press secretary Jen Psaki answered that air travelers aren’t “static.” People traveling from a high COVID-19 zone could arrive at low-level COVID-19 areas, still posing a transmission risk. That sounds like an argument for banning travel rather than a justification for masks on planes.
The rationale in the new CDC guidelines for recommending masks in the minority of communities that are classified as medium or high level was to alleviate the strain on medical resources in those communities, not limit the spread to other communities. Even if the new rating guidelines roughly correlate with transmission risk, that would, at most, suggest prescribing mask wearing for people on flights originating in cities with medium or high levels instead of maintaining them for all flights — which, as noted above, is a very small group of communities.
The need for and efficacy of masks on airplanes has never been especially clear. Air quality on board an aircraft is much better than most other indoor environments. Half of the onboard air supplied is fresh air from outside and the other half is passed through High-Efficiency Particulate Air (HEPA) filters that are more than 99.9 percent effective at removing viruses. Cabin air is refreshed 20-30 times an hour, 10 times more than in most office buildings, and the air flow is from top to bottom, not along the length of the aircraft.
Even prior to the onset of the Omicron surge, a systematic review concluded that it is unclear if masks prevent in-flight transmission of COVID since most studies are of low quality and “did not provide clear data on the masking of passengers and crew.” The rationale for in-flight masking is even less compelling now since Omicron has spread easily despite mask mandates.
Writing in the Wall Street Journal, Rebecca Sugar is ashamed of herself for complying with a mask requirement. Here’s her conclusion:
I had refused masks before, forgoing a night at the opera and entrance into a store. When it was easy, I was all in. But in a moment of decision when convenience and conviction collided, I chose the former. Shame on me and on everyone who feels as I do and acts as I did. We are the reason that mask mandates still exist.
Steve Templeton decries the practice of analogizing the effort to minimize damage from Covid to war.
A week after New York City supposedly lifted its vaccine mandate, unvaccinated basketball superstar Kyrie Irving is still not allowed to take the court for the Brooklyn Nets.
He’s allowed to be in the arena with thousands of other people, to join his teammates in the locker room, and to visit bars, restaurants, and clubs in the city. None of those activities require showing proof of vaccination anymore. But the city regards him as a COVID risk if he sets foot on the court, thanks to an ongoing mandate that all employees for private businesses must be vaccinated.
…..
Irvine is hardly the only worker negatively affected by these confusing and contradictory rules. An unvaccinated New Yorker, under the current rules, could legally visit any bar in the city that would have him—but would be banned from mixing cocktails or pouring beer in the same venue. A performer could watch any show on Broadway, sitting amid hundreds of other people, but would not be allowed to sing, dance, act, or even get paid to clean up an empty theater after everyone has gone home. Because that’s a public health risk, obviously.
New York City’s private employer mandate—like the similar one that the Supreme Court blocked at the federal level—should never have been imposed in the first place. It was and is an unjustified intrusion of government power into the private working arrangements made by employers and employees.
Gabrielle Bauer decries the Covid-hysteria-fueled loss of sense and civility. Two slices:
For the first many decades of my life I don’t recall anyone calling me a selfish idiot, much less a sociopath or a mouth-breathing Trumptard. All that changed when Covid rolled in and I expressed, ever so gingerly, a few concerns about the lockdown policies. Here’s a sampling of what the keyboard warriors threw back at me:
Enjoy your sociopathy.Go lick a pole and catch the virus.Have fun choking on your own fluids in the ICU.Name three loved ones that you’re ready to sacrifice to Covid. Do it now, coward.You went to Harvard? Yeah, right, and I’m God. Last I checked, Harvard doesn’t accept troglodytes.From the earliest days of the pandemic, something deep inside me—in my soul, if you will—recoiled from the political and public response to the virus. Nothing about it felt right or strong or true. This was not just an epidemiological crisis, but a societal one, so why were we listening exclusively to some select epidemiologists? Where were the mental health experts? The child development specialists? The historians? The economists? And why were our political leaders encouraging fear rather than calm?
…..
To everyone who dumped on me for questioning the shutdown of civilization and calling out the damage it inflicted on the young and the poor: you can take your shaming, your scientific posturing, your insufferable moralizing, and stuff it. Every day, new research knocks more air out of your smug pronouncements.
You told me that without lockdowns, Covid would have wiped out a third of the world, much as the Black Death decimated Europe in the 14th century. Instead, a Johns Hopkins meta-analysis concluded that lockdowns in Europe and the US reduced Covid-19 mortality by an average of 0.2%.
What’s more, long before this study we had good evidence that anything less than a China-style door-welding lockdown wouldn’t do much good. In a 2006 paper, the WHO Writing Group affirmed that “mandatory case reporting and isolating patients during the influenza pandemic of 1918 did not stop virus transmission and were impractical.”
You told me that social interaction is a want, not a need. Well, yes. So is good food. In truth, social isolation kills. As reported in a September 2020 review article published in Cell, loneliness “may be the most potent threat to survival and longevity.” The article explains how social isolation lowers cognitive development, weakens the immune system, and puts people at risk of substance use disorders. And it’s not like we didn’t know this before Covid: in 2017, research by Brigham Young University professor Julianne Holt-Lunstad determined that social isolation accelerates mortality as much as smoking 15 cigarettes per day. Her findings splashed the pages of news outlets around the world.
You told me we need not worry about the effects of Covid restrictions on children because kids are resilient—and besides, they had it much worse in the great wars. Meanwhile, the UK saw a 77% increase in pediatric referrals for such issues as self-harm and suicidal thoughts during a 6-month period in 2021, in relation to a similar stretch in 2019. And if that doesn’t shake you up, a World Bank analysis estimated that, in low-income countries, the economic contraction ensuing from lockdown policies led 1.76 children to lose their lives for every Covid fatality averted.
You told me that vaccinated people don’t carry the virus, taking your cue from CDC director Rachel Walensky’s proclamation in early 2021, and we all know how well that aged.
You told me I had no business questioning what infectious disease experts were telling us to do. (I’m paraphrasing here. What you actually said was: “How about staying in your lane and shutting the eff up?”) I got my vindication from Dr. Stefanos Kales, another from Harvard Medical School, who warned of the “dangers of turning over public policy and public health recommendations to people who have had their careers exclusively focused on infectious disease” in a recent CNBC interview. “Public health is a balance,” he said. Indeed it is.
Hong Kong now reports higher Covid mortality than any other 1M+ country at any time during the pandemic.
… thus prompting Raffi to tweet: (HT Jay Bhattacharya)
Here’s a proposal: if you, in your capacity as an “expert”, at any point in the past two years supported blunt restrictions on *all* human beings regardless of health or risk or age or vulnerability, you can stop talking now and preserve whatever dignity you may have left.
The straw man is really wreaking havoc in China, as this Wall Street Journal report documents. A slice:
The 5,154 new symptomatic and asymptomatic infections found Monday are the highest since early 2020, when the epidemic first erupted in China. About 4,000 were from Jilin province, according to National Health Commission data published Tuesday.
The majority of infections were in Jilin City and the nearby provincial capital of Changchun, where residents had already been placed under “closed management.” Nonessential businesses must shut and people stay home, with one household member allowed out every other day to buy food and other necessities, while all residents undergo multiple rounds of testing.
Since the first case was detected in Jilin on March 1, new infections in the province had hovered about 100 a day. But numbers surged Saturday, and China’s vice-premier in charge of its anti-Covid strategy, Sun Chunlan, arrived the next day to spearhead the campaign to halt the outbreak.
Ms. Sun told authorities to speed up screening by using both nucleic acid and rapid antigen tests, state news agency Xinhua reported.
Seven hospitals were ordered to empty their wards and turn all efforts to treating symptomatic Covid-19 patients. The province is also building five makeshift treatment facilities to house and observe asymptomatic cases, bringing the available bed count to almost 30 000, according to data provided by the Jilin provincial government during a press briefing Tuesday.
(DBx: Keep in mind these facts: The newly detected infections in China are of Omicron. Omicron is far less dangerous than earlier Covid variants. China – the ‘government’ of which has resorted literally to welding shut household doors to prevent people from leaving home – has tyrannically long pursued a policy of zero Covid. Covid continues to pose serious risks overwhelmingly only to the very elderly. Jilin City’s population is 3.6 million. And yet, if this WSJ report is accurate, some hospitals are commanded to ignore all other illnesses and injuries in order exclusively to treat symptomatic Covid patients.
You tell me if you think I exaggerate when I insist on the reality of Covid Derangement Syndrome.
I submit that those of you who worry that the Chinese state has of late been unleashing its genius, cunning, and power to turn China into the globe’s mighty economic hegemon can stop worrying.)
Quotation of the Day…
… is from page 13 of the late Gerald Gaus’s 2021 book, The Open Society and Its Complexities (footnote deleted):
In different ways, Hayek’s theses reiterate a single point: the diverse, complex, Open Society has evolved to the point where it has outstripped basic human inclinations and capacities. The first thesis argues that it is fundamentally at odds with our deepest moral intuitions; the second that it has outstripped our capacity to understand the function and justification of its constitutive rules; and the third that it has evolved beyond our governance. Because of the first, we are constantly tempted to morally renounce it and, on moralistic grounds, construct barriers to it. Because of the second, our attempts to reflect and reconstruct its rules lead to constant and unrelenting moral conflict; we seek to justify, and so present a series of justificatory schemes and criticisms of its basic moral structure. Yet we do not really understand how it works or what it does for us. And we seek to devise policies to improve its function, yet again we do not have the knowledge to competently do so, hence we are constantly disappointed by the last round of interventions and we blame the last government for its failures and broken promises. Perhaps, as seems to have happened today (as it has in the past), the people begin to distrust all claims to expertise and seek simpler, more intuitive, solutions.
DBx: Yes.
Our minds are not, and will never be, capable of gaining more than a sliver of knowledge of the practical details that are essential for the operation of modern social institutions – including, especially, of the economy that generates modern prosperity. Nor are our minds prone to accept the reality of this limitation. Arrogantly thinking that we know more – or can know more – than we can possibly know, we frequently misinterpret reality; we frequently mistake the results of inescapable trade-offs as being ‘failures’ or ‘imperfections’ that we, with our god-like minds, can and should ‘correct.’
The inevitable real failures of all such hubris-fueled interventions – interventions often endorsed and guided by so-called ‘experts’ – then creates unwarranted distrust of all expertise. Expertise is genuine, but genuine expertise exists only for minuscule sections of reality. Pediatric gastroenterologists are expert in diagnosing and treating the digestive ailments of children; HVAC technicians are expert in installing and repairing HVAC systems; taxi drivers in Tucson are expert in driving passengers to and fro in the greater Tuscon area; vintners in Napa Valley are expert in producing wine from grapes grown in that region; columnists for the Wall Street Journal are expert in writing columns that are enjoyed by readers of that newspaper, while columnists for the Nation are expert in writing pieces that are enjoyed by readers of that magazine; politicians are expert at winning the popularity contests called “elections” and, if they win enough of these contests, become expert also in how to use the legislative process to extract ever-more favors for themselves.
But no one is, or can ever be, expert in redesigning or ‘resetting’ an economy (and, much less, redesigning or resetting the larger society). No one is, or can ever be, expert in repatriating supply-chains webs in ways that actually increase the economic prosperity and security of fellow citizens. No one is, or can ever be, expert in making society more diverse, equitable, and inclusive in a way that actually achieves greater harmony, social cooperation, and justice. No one is, or can ever be, expert in doing any of the many aspirational schemes that daily pour forth from the mouths of professors, pundits, and politicians – mouths attached to brains the ignorance of which is matched only by their arrogance.
…..
Pictured above is Gerry Gaus (1952-2020). He was a brilliant political philosopher.
March 14, 2022
Bonus Quotation of the Day…
… is from page 111 of Lionel Shriver’s great 2016 novel, The Mandibles:
Inflation is a tax. Money for the government. A tax that people don’t see as a tax. That’s the best kind, for politicians.
Some Non-Covid Links
The fact that the Bitcoin network uses electricity does not provide the requisite evidence. Hospitals use electricity, as do school buses and airplanes. Virtually every industry uses electricity to produce its output. Bitcoin is not exceptional in that regard. It is true that, at the margin, Bitcoin’s demand for electricity contributes to total demand and thereby to determining the price of electricity. The greater is Bitcoin’s electricity use, the higher is the price of electricity. But that, too, is equally true for every other electric-power-using industry. The spillover effect of additional electricity demand on the price of electricity is, in technical economic terms, merely a pecuniary externality, not a technological externality. As such, it is not a source of inefficiency. Price changes are necessary for any market to regain efficiency in the face of supply or demand shifts. Price changes do not interfere with anyone’s use and enjoyment of his property. They are not the kind of Pareto-relevant externality we should worry about.
J.D. Tuccille applauds encryption.
Venezuela’s state-owned oil company, PdVSA, is an environmental wrecking ball. Satellite images of Lake Maracaibo show the complete devastation the company has caused. Similar degradation has occurred in the Amazonas and Orinoco regions, where the Maduro regime collaborates with criminal groups engaged in mining that trashes the environment.
On human rights, Caracas’s record of imprisonment, torture and extrajudicial killings is chilling. Some five million Venezuelans have fled the country. Those who remain suffer unimaginable privation, often without running water or adequate nutrition for their children
And here’s (mostly) sound advice from Wall Street Journal columnist Andy Kessler. A slice:
As Ben Franklin might tell today’s U.S. leaders, “You have the reserve currency status, if you can keep it.” What to do? The Federal Reserve should solidify the dollar by raising interest rates pronto. Treasury Secretary Janet Yellen needs to shout “a strong dollar is in our national interest” from the mountain tops. Ending fiscal deficits would also help by creating a bidding war for outstanding Treasurys. U.S. companies need to update complacent supply chains. If products like medications and iPhones come only from China, that’s a problem. Because of this, the Biden administration should quit the union-loving “Buy American” pitch we heard in his State of the Union address, which echoes Donald Trump’s “America first.” Apple can’t assemble iPhones in union-heavy Michigan. America’s strength comes from buying goods and services from our allies in lower horizontal layers like Vietnam, South Africa and countries in Eastern Europe. Don’t mess with that.
Alberto Mingardi understandably disagrees with Quinn Slobodian.
No state has completely deregulated car sales by allowing all manufacturers to sell all vehicles directly to customers. Faced with any move to end these anti-consumer laws and allow the market to function freely, dealerships cannot continue to plead the “mom-and-pop business” defense. “The top 10 dealership groups in America have annual revenue of around $100 billion, more than any car company,” says University of Michigan law professor Daniel Crane. Last year 75 economics and law professors urging states to legalize direct sales. “Not only have the original justifications for prohibiting direct distribution evaporated,” it noted, “but the advent of EV technology has created an urgent need to permit direct distribution.”
There are almost no other sectors where such naked protectionism is still tolerated. Liquor sales are one major exception, with some states still limiting home delivery.
A forthcoming research article from the Independent Institute finds that Federal Reserve economists are increasingly driven by political activism and affiliation; they also demonstrate a growing preoccupation with politically charged topics such as climate change, discrimination, and economic inequality. These goals add more pressure on the Fed to maintain accommodative monetary policy, even as inflation spirals out of control.
Perhaps this provides another explanation for why the federal-funds interest rate is still at zero and the Fed is still engaged in quantitative easing after eleven consecutive months of the annualized CPI running above 4 percent.
Some Covid Links
Jay Bhattacharya and Martin Kulldorff explain that vaccine fanaticism fuels vaccine skepticism. Two slices:
Despite lack of evidence that the COVID-19 vaccines could prevent transmission and mounting evidence in spring and summer 2021 that they couldn’t stop the spread of the disease, Dr. Anthony Fauci and others convinced themselves that COVID-19 could be conquered only if 70 percent, 80 percent, 90 percent, or more of the population was vaccinated. And when the vaccines didn’t live up to scientifically unproven promises, people’s trust in those who over-promised naturally collapsed.
In its pursuit of the impossible goal of COVID suppression by vaccines alone, public health vaccine fanatics induced many people to become skeptical of the COVID-19 vaccine’s benefits.
Public authorities espoused psychological manipulation to induce vaccine uptake. For example, in its April 2021 guidance on mask-wearing, the Centers for Disease Control and Prevention (CDC) gave permission only to the vaccinated to doff the mask. Their reasoning was based on a mistaken belief that vaccinated individuals can’t spread the disease, but also as an inducement to get people vaccinated since mask-wearing is unpleasant.
…..
When these tactics failed, the public health establishment embraced vaccine coercion. They instituted vaccine passports to exclude the unvaccinated from participation in civil life, including access to libraries, museums, and restaurants.
The federal government went further, using its vast regulatory powers to mandate vaccines as a condition of employment. These coercive actions effectively cast the unvaccinated into second-class citizenship. As they watched the vaccinated and unvaccinated alike contract COVID-19, they undoubtedly began to wonder whether public health truly had their best interests at heart.
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.) A slice:
It turns out that extreme anti-COVID measures have a real, and deadly, cost. Such as the 17 lives lost (eight of them children) along with dozens injured in the January fire at the Twin Parks North West building in the Bronx.
The head of the fire inspectors’ union now says that building’s inspection was delayed because its inspector was reassigned to check restaurants’ COVID compliance.
That’s 17 dead, to satisfy the witless demands of the de Blasio-imposed public-health regime that did nothing for public health.
To repeat: TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)
The straw man continues to tyrannize China. A slice:
Millions of people across China have been plunged into a lockdown on Sunday as cases of Covid-19 tripled after a surge in infections in the north east cause the worst outbreak the country has seen in two years.
A total of 1,938 new cases of coronavirus have been reported by authorities in China on Sunday, which is three times the Saturday figures.
Tighter controls have been put in place for those looking to access Shanghai, with services in the eastern port city, of over 24 million people, have been suspended after their cases rose by 15 to 432.
Quotation of the Day…
… is from page xi of Dr. Michael Fitzpatrick’s Foreword to Christopher Snowdon’s excellent 2017 book, Killjoys: A Critique of Paternalism:
Whereas classical political economy assumed the competence and rationality of a reasonably well-informed consumer, all these assumptions are now questioned by the gurus of behavioural economics and the mandarins of the new public health.
March 13, 2022
Some Non-Covid Links
Gary Galles applauds Calvin Coolidge. A slice:
One might ask why there is such a gap between Coolidge’s success and his reputation. In large part, it is because he advocated individualism, as clearly spelled out in his speeches (which he composed himself, in sharp contrast to Biden, who can now barely deliver words written for him), and the newspaper column he wrote after leaving the Presidency. For example, his speech to mark the 150th anniversary of the Declaration of Independence is well worth people’s attention. While that seems appropriate for the only President born on the Fourth of July, it is so distant from the modern mindset that many now cannot understand why someone who, as Senator, Governor, Vice-President, and President, viewed government intervention in broad areas of life as a problem rather than a panacea.
Some people’s unduly negative evaluations of Coolidge also come from attributing the origins of the Great Depression under Herbert Hoover, who had been his Secretary of Commerce. But they have not done so because of any evidence that his policies were responsible. Along with monetary policy blunders, the Great Depression was triggered by Hoover’s abandonment of Coolidge’s policies, in favor of disasters ranging from erecting monumental trade barriers to sharply raising tax rates. Coolidge made the chasm between the two men clear when he said of Hoover: “That man has offered me unsolicited advice for six years, all of it bad.”
Here’s David Henderson on Zach Weissmueller on cryptocurrencies.
Steven Greenhut urges Republicans to wise up. A slice:
This problem is just as pernicious on the Left. An avowed socialist came perilously close to winning the Democratic presidential nomination. Liberal Democratic mayors have struggled to condemn the Antifa fanatics who had turned parts of their cities into wastelands. I remember the Cold War days when progressives fawned over Fidel Castro and Daniel Ortega, just as some righties now fawn over Putin and Hungary’s Viktor Orban.
Given all the talk about Russia, it’s a good time to consider the legacy of Alexander Kerensky, the relatively moderate prime minister of the Russian government in 1917. As his regime faced attacks from the Right, Kerensky embraced a “no enemies on the Left” strategy that emboldened Bolsheviks such as Lenin—and led to the overthrow of his government and to a 70-year totalitarian calamity.
The modern lesson is that liberal parties that can’t purge themselves of socialists and conservative parties that can’t purge themselves of fascists risk destruction by those “allies.”
Douglas Murray harshly criticizes the dangerous fanatics who form the group Extinction Rebellion. Here’s his conclusion:
A wise person adapts to the situation around them. A judicious person recognises their own cause in relation to the other priorities of their time. But fanatics like those of XR will never do these things. Not just because they are injudicious and unwise, but because they are fundamentally selfish. They believe that they hold the only truth that matters and that everybody else must suffer – to the utmost extent, if need be – until such a time as everyone recognises the fanatic to be right. They are a great irritant, to be sure. And though there is no logic that could make them go away, still one wishes they would leave us alone now. At this moment, if not for good.
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