Russell Roberts's Blog, page 220
October 21, 2021
Quotation of the Day…
… is from page 37 of the 2021 35th anniversary edition – being released today – of Steven Rhoads’s excellent 1985 book, The Economist’s View of the World: And the Quest for Well-Being:
We can know how high to set any one objective only if we know what we give up in progress toward other objectives.
DBx: In normal times government officials are poor at recognizing and accounting for the opportunity costs of programs that are popular with the public or with powerful interests groups. But in times when the populace – justifiably or not – is terrified, dealing with the source of the terror becomes the singular goal; all other considerations are either completely ignored or are pushed much too far into the background.
Single-minded pursuit of one good – even when that good is unambiguously one that we’d all wish to have in superabundance were it costless – is deranged.
October 20, 2021
Some Covid Links
I’m going to contribute to the legal-defense fund of this British anti-lockdown protestor.
Covid hysteria further eats away cancerously at Britain’s democratic institutions and ethos.
Madeline Grant understandably worries that Brits will be frightened back into lockdown.
Who’d a-thunk it?! It appears that China’s draconian lockdowns did not defeat Covid-19 after all. (HT Phil Magness)
Dave Seminara writes from the Sunshine (and comparably Liberty) state. Two slices:
According to the New York Times Covid Tracker, Florida now has the second-lowest per capita Covid rate of any state: 12 per 100,000, behind only Hawaii, with nine per 100,000 as of October 18. Florida’s vaccination rate (59 percent fully vaccinated) is now above the national average (57 percent.) I live in Pinellas County (St. Petersburg), which currently has a per capita Covid infection rate that’s lower than every county in Delaware, Pennsylvania, Michigan, Wisconsin, Minnesota, and other blue states.
As media elites waxed indignant over Florida’s alleged Covid sins this summer, many couldn’t hide their see-we-told-you-so delight when the Delta plague hit our shores. The Left eviscerated Governor Ron DeSantis for his opposition to mask and vaccine mandates. Joy Behar of ABC’s The View called him a “homicidal sociopath” and a “dangerous criminal.” Jennifer Rubin, the Washington Post’s “conservative” columnist, wrote that DeSantis’s conduct revealed a “breathtaking disdain for the well-being of his state.” Charles Blow of the New York Times wrote: “Yes, Florida, DeSantis is allowing you to choose death so that he can have a greater political life.” Writing for CNN, Columbia University economics professor Jeffrey Sachs declared that “Governors Ron DeSantis of Florida and Greg Abbott of Texas have, through their policies, been effectively leading their citizens toward death.”
MSNBC host Joy Reid called DeSantis “Dr. Death” and “the grim reaper of the South,” who was “rolling out the red carpet for the virus,” and “rooting for the virus.” She asked one guest to explain what she characterized as DeSantis’s strategy of “killing children in (his) own state and letting children die of Covid.” MSNBC’s Mika Brzezinski called Florida’s governor “the DeSantis variant” and proclaimed him the new leader of a cult. “Almost all of these hospitalizations (and) deaths (in Florida) would have, and could have, been avoided if misguided Americans had not followed the crazed teachings of a growing death cult,” she said.
…..
Meantime, the states whose Covid infection rates are now heading in the wrong direction are almost all in cooler-weather states run by Democrats, like Michigan, Minnesota, Colorado, Pennsylvania, and New Mexico. Don’t expect the media to highlight this or question if the leaders of those states made bad policy choices.
The truth always finds a way to slip out, though. Florida’s second-quarter tourism arrivals were up 223 percent year over year, and the number of domestic visitors was up 6 percent over the record figures posted in 2019. (International arrivals were down substantially due to travel restrictions.) I’ve had several visitors from cold-weather states like New York, New Jersey, and Illinois, who expected to be stepping over bodies in the streets in my hometown of St. Petersburg but were pleasantly surprised by how normal life is here. At a time when the Left is having an authoritarian moment—pushing vaccine and mask mandates, demanding crackdowns on conservative speech, intimidating parents who criticize school boards, and branding anyone who disagrees with them bigoted or worse—Florida feels like a bastion of liberty.
Some Non-Covid Links
Like the local leaders in San Francisco, Baltimore officials blamed the retailers for leaving instead of the thieves for driving them away. But indulging criminal behavior in the name of “social justice” only helps criminals, who are not representative of all blacks. Public policies that give priority to the interests of lawbreakers only lead to more lawbreaking, and by extension to more economic inequality. Businesses have every incentive to flee these communities and the jobs follow them.
Tempting though it may be to blame the social dysfunction in poorer communities on heartless business owners or racists cops, the bigger blame surely lies with public policies that condone counterproductive behavior and make successful businesses much more difficult to operate.
Still, credit goes to Maynard for coming up with a thoroughly fitting message for the party in power, as they approach the midterms: Democrats in 2022: Try to Lower Your Expectations!
If Ms. Maynard means it’s “our turn” to accept less economic vitality because Americans made the decision to elect Mr. Biden and enough Democrats to make Mr. Sanders the Senate’s first socialist budget committee chairman, then perhaps she has a point.
But there’s no reason voters should simply accept Washington failures without exercising their First Amendment right to peaceably assemble and petition the government for a redress of grievances. Voters are permitted to have regrets and to try to persuade politicians to avoid huge, obvious mistakes.
On the other hand, if voters really think it’s high time that Washington punished them for wanting plentiful goods and services, various online commenters have suggested a slogan for Democrats running in 2022:
Expect Less.
Peter Suderman calls out “Progressive” Democrats in Congress for their budgetary shenanigans.
J.D. Tuccille reports some good news.
Bryan Caplan writes about newly minted Nobelist David Card.
Additional puzzling evidence comes from data on productivity (how efficiently firms use inputs). Choi and Levchenko show that HCI Drive‐targeted firms experienced a large decrease in productivity, something other research, using the same data, has highlighted. The two pieces of evidence – the apparent HCI policy success in growing sales, and the simultaneous decrease in productivity –could indicate that South Korea’s HCI Drive was a success to the extent it circumvented previous foreign credit restrictions, leading to an increase in sales. But subsidies also led to excessive borrowing, bloated firms, and lower productivity. In this scenario, simply repealing the FCIA would have produced better results.
Veronique de Rugy and Jack Salmon at the Mercatus Center summarized 24 cross‐country studies that looked at government debt and growth, as summarized in the table below. Seventeen of the studies found a threshold above which rising debt is associated with reduced growth.
Government debt above 90 percent of GDP is correlated with slower economic growth, based on the average of 17 studies. That means America’s debt—at 141 percent and rising—is well into the debt damage zone and is likely undermining our prosperity already.
Salmon updated his debt and growth research in the Cato Journal. He found 36 studies that identified a statistically significant negative effect of government debt on growth.
First, any economic activity ostensibly spurred by a subsidy will be offset by reductions in government services, increased debt, or higher taxes that siphon resources from private enterprise. It’s like trying to fill a pool by dipping a bucket in one end and pouring it back in the other. Advocates claim to know which high-impact industries to subsidize, but even if this were true (their track record is poor), they usually fail to account for these tradeoffs.
Subsidies also breed inefficiency. If a local project wouldn’t be built without a subsidy, maybe your community isn’t well-suited for it. With enough money, Mississippi could create an ice fishing industry in artificially frozen lakes. But some things are better left to Minnesota.
The president’s plan would be the largest tax-and-spend increase—and disincentive to work—since the introduction of the income tax. It would tax those who produce and subsidize those who don’t. It would encourage dependency on government and punish self-sufficiency. Wealth taxes could exceed 70%, and marriage penalties on small-business owners could exceed $130,000. Families could be hard-pressed to keep farms and businesses after the original owner dies. And the real median household income would fall by $12,000. Meanwhile, lower-income households would see their generous government assistance decline rapidly in the event of even a modest increase in earned income.
Increasing the implicit tax on working has the same effect as a statutory tax increase on income, investment and wealth: decreased employment. With inflation-adjusted private investment having declined for the first two quarters of this year, the nation doesn’t need direct—or indirect—tax increases, especially on investment.
Quotation of the Day…
… is from page 150 of George Will’s 2021 book, American Happiness and Discontents: The Unruly Torrent, 2008-2020 – a collection of many of Will’s columns over these years; (the column from which the quotation below is drawn originally appeared in the Washington Post on April 22nd, 2018):
Many conservatives have embraced populism where it least belongs, in judicial reasoning. They have advocated broad judicial deference to decisions because they emanate from majoritarian institutions and processes. Progressives favor such deference because it liberates executive power from congressional direction or judicial supervision.
October 19, 2021
Balanced-Budget Requirements Are a Tool for Keeping Government Limited
Here’s another letter to John Tamny on the ill-consequences of deficit financing:
John:
The fact that you’re so astute about so many issues only intensifies my mystification at your continuing blindness to the dangers that lurk in deficit financing of government expenditures.
In your latest essay you again accuse those of us who oppose deficit financing of “the folly of putting the false notion of a ‘balanced budget’ on a pedestal.” You add that “[i]t has nothing to do with limited government.”
On the contrary, advocacy of keeping annual government budgets balanced has nothing to do with fetishizing some accounting outcome; this advocacy has everything to do with keeping government limited.
Deficit financing allows today’s citizens-taxpayers to push the costs of today’s government activities onto future generations. Deficit financing thus enables today’s citizens-taxpayers to live at the expense of others. And people able to live at the expense of others will live excessively expensively. Access to deficit financing loosens the limits on government growth. Therefore, a balanced-budget requirement would indeed limit the growth of government.
You deny that deficit financing imposes costs on future generations. To reach this mistaken conclusion you’re misled by the correct fact that all resources used by government today, regardless of how government finances their acquisition, are indeed drawn away today from other possible current uses. But you wrongly believe that this reality means that we budget hawks are mistaken to point out that the costs of deficit-financed projects are paid, not by today’s citizens-taxpayers, but by tomorrow’s citizens-taxpayers.
To see your error, suppose that you borrow from a bank $30,000 today to buy a car. You therefore do not buy this car out of your current income or savings. The $30,000 comes from the bank. But clearly the party who pays for your car is not the bank; the party who pays for your car is the future you.
The same logic holds with government borrowing, but with one huge twist. Just as the bank does not pay for your car, government’s creditors today do not pay for the projects that their loans enable government to undertake. Those projects are paid for by whoever is responsible for repaying the loans – namely, citizens-taxpayers in the future. (I’m vain enough to brag that Randy Holcombe and I explain this reality with some clarity in chapter two of our new book.)
The huge twist is this: When you buy a car with borrowed funds, you – the same individual who borrows the funds – are the individual responsible for repaying them. So you borrow and spend prudently. But with deficit financing by government, the individuals who borrow the funds (that is, today’s citizens-taxpayers and their political representatives) are not the same individuals who are responsible for repaying them. That responsibility falls on other people; it falls on future citizens-taxpayers, many of whom aren’t yet born. Therefore, access to deficit financing gives today’s citizens-taxpayers (and their political representatives) freedom to spend more lavishly than they would were they required to pay for all government projects out of current taxes.
Access to deficit financing fuels government growth. You cannot oppose the growth of government and simultaneously insist that the means of financing government’s activities is inconsequential.
Sincerely,
Don
Some Covid Links
Recognizing the reality of immunity after COVID-recovery is a pro-vax position.
Acknowledging this fact builds credibility so people believe it when you correctly say the vax protects vs. severe disease.
Pushing cruel vax mandates, on the other hand, undermines that trust.
“Yale Epidemiology Prof: ‘Natural Immunity is Much Longer-Lasting Than Vaccinated Immunity’.”
David Henderson and Charley Hooper ably defend their July 28th, 2021, Wall Street Journal piece on ivermectin. Here’s their conclusion:
While we can all be happy that Merck has developed a new therapeutic that can keep us safe from the ravages of Covid-19, we should realize that the FDA’s rules give companies an incentive to focus on newer drugs while ignoring older ones. Ivermectin may or may not be a miracle drug for Covid-19. The FDA doesn’t want us to learn the truth.
The FDA spreads lies and alarms Americans while preventing drug companies from providing us with scientific explorations of existing, promising, generic drugs.
Robby Soave reports on yet another high-profile Covid hypocrite. Here’s his conclusion:
And that’s what should really irritate people about Biden failing to mask up while making a quick exit. He isn’t worried about his health during those few seconds; he probably knows that it’s pointless to require masking under some circumstances while groups of unmasked people are eating, drinking, and talking for hours. The government’s strict mask policies are so stupid that everyone who can get away with ignoring them already does so, yet they remain in place. Not for safety, or because of the science, but because our elected leaders can’t be bothered to tweak the rules.
Speaking of high-profile Covid hypocrites….
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)
Of course Fauci – who admits to lying to the pubic – would accuse his critics thusly.
Well, at least some sanity is returning in some quarters.
Dr Byram Bridle, associate professor of viral immunology at the University of Guelph in Canada pointed out the lunacy of the vaccine mandates that reign across most of the Western world. He is banned from his campus even though he can demonstrate with a pathology test that he has robust antibodies whereas others with no effective antibodies and a vaccine pass enter. He offered to set up an antibody test for the university which was ignored. Instead, he has been subjected to vicious workplace harassment.
Noah Carl investigates the origins of the ‘science’ of lockdowns. Two slices:
As many lockdown sceptics (including myself) have noted, lockdowns represent a radical departure from conventional forms of pandemic management. There is no evidence that, before 2020, they were considered an effective way to deal with influenza pandemics.
In a 2006 paper, four leading scientists (including Donald Henderson, who led the effort to eradicate smallpox) examined measures for controlling pandemic influenza. Regarding “large-scale quarantine”, they wrote, “The negative consequences… are so extreme” that this measure “should be eliminated from serious consideration”.
Likewise, a WHO report published mere months before the COVID-19 pandemic classified “quarantine of exposed individuals” as “not recommended under any circumstances”. The report noted that “there is no obvious rationale for this measure”.
And we all know what the U.K.’s own ‘Pandemic Preparedness Strategy’ said, namely: “It will not be possible to halt the spread of a new pandemic influenza virus, and it would be a waste of public health resources and capacity to attempt to do so.”
As an additional exercise, I searched the pandemic preparedness plans of all the English-speaking Western countries (U.K., Ireland, U.S., Canada, Australia and New Zealand) for mentions of ‘lockdown’, ‘lock-down’ ‘lock down’ or ‘curfew’.
Only ‘curfew’ was mentioned, and only once – in Ireland’s plan. The relevant sentence was: “Mandatory quarantine and curfews are not considered necessary.” None of the lockdown strings were mentioned in any of the countries’ plans.
…..
As to whether one should trust ‘The Science’ on lockdowns, a reasonable answer would be, ‘Do you mean the pre or the post-Covid science?’
Some Non-Covid Links
Is the school choice movement historically tainted by racism? American Federation of Teachers boss Randi Weingarten described vouchers in 2017 as “slightly more polite cousins of segregation.” Historian Nancy MacLean recently depicted vouchers as a product of an unholy alliance between economist Milton Friedman and segregationists after Brown v. Board of Education.
According to this narrative, vouchers came out of the “Massive Resistance” program of Sen. Harry F. Byrd Sr., who sought to circumvent Brown by rerouting education funding to private schools in 1950s Virginia. Friedman, the story goes, opportunistically assisted the segregationists in creating a voucherlike tuition-grant system that allowed white parents to transfer children out of integrated schools and into private “segregation academies.”
These critics have their history backward. As early as 1955, economists such as Friedman began touting vouchers as a strategy to expedite integration. Virginia’s segregationist hard-liners recognized the likely outcomes and began attacking school choice as an existential threat to their white-supremacist order.
Finally, I don’t need to explain to readers of EconLog what’s wrong with the statement that “markets don’t know best.” While markets aren’t perfect, they are a far superior to central planning and bureaucratic interventions at gather and using relevant knowledge.
The bottom line is that while this candidate would certainly bring a different perspective to the position of Comptroller of the Currency, in part because of her background, her affinity for making statements praising the USSR and her economic ignorance are pretty worrisome.
Samuel Gregg describes “the distorted market for woke capitalism.” A slice:
Whenever I inform students of Smith and Friedman’s unflattering opinions of the business community, they are invariably shocked. But their eyes start opening when I point out that large established businesses don’t actually like competition, aren’t wildly excited about other people’s new ideas and products threatening “their” market share, and are quite happy to hop into bed with complaisant legislators to use state power to make life difficult for new and potential competitors. At this point, students begin realizing that to be pro-market is not the same as being pro-business. The two are at odds in some very important ways.
This is one way of understanding the phenomenon of “woke capitalism,” and it features in Vivek Ramaswamy’s Woke, Inc: Inside Corporate America’s Social Justice Scam. For if there is anything that characterizes woke capitalism, it is the desire—like the mercantilists of old—to exclude (ironically, in the name of tolerance, diversity, equality, etc.) particular individuals and groups from “their” markets and corporate America in general. In the case of woke capitalists, the excluded is anyone who doesn’t embrace all the usual progressive orthodoxies or who won’t play the woke game to go along to get along.
Writing in the Washington Post, Robert Atkinson busts some economic myths. A slice:
Monopolies are jacking up prices!” Economists Jan De Loecker, Jan Eeckhout, and Gabriel Unger asserted in 2020 that the prices companies charged above their costs of production tripled between 1980 and 2016. Their analysis is regularly cited as evidence we have a monopoly problem. But it is just not true. If markups tripled, then why didn’t profits increase? And why did markups increase faster in smaller firms and in industries with lots of competition? The reality is that they mismeasured firms’ costs, ignoring growth in spending on marketing, software and R&D.
Demonstrably wrong though these myths may be, they have had a very real impact on policy: Birch’s job-creation myth led policymakers to favor less efficient small firms over more efficient larger ones, showering them with tax preferences and other benefits. Frey and Osborne’s job-destruction myth has led policymakers to entertain anti-growth schemes such as taxing automation equipment. Piketty and Saez’s inequality myth has led many policymakers to abandon their faith in growth in favor of only redistribution. And De Loecker, Eeckhout and Unger’s price-markup myth has fueled the “anti-monopoly” fire, which holds the potential to distort U.S. antitrust laws in ways that will damage growth and innovation.
Speaking of inflation, Arnold Kling partially yet ably defends Jason Furman’s now-infamous tweet.
Quotation of the Day…
… is from page 95 of the late Peter Bauer’s essay “Black Africa: the Living Legacy of Dying Colonialism,” which is Chapter 6 in Bauer’s excellent 1984 book, Reality and Rhetoric: Studies in the Economics of Development:
According to the perverse priorities of contemporary government, the creation of specific organizations and the expenditure of large sums of money can lead to recognition even if the money is clearly wasted, or activities run counter to their declared objectives or to acknowledged principles of policy. Conversely, achievement – even great achievement – goes unrecognized if it cannot readily be attributed to some specific action or to particular individuals.
October 18, 2021
Some Covid Links
The undisputed fact is that the CDC changed rules for causation on death certificates in March 2020, so now we have no idea whatsoever whether the 713,000 deaths reported to date were deaths because OF Covid or just incidentally were departures from this mortal world WITH Covid. The extensive well-documented cases of DOA from heart attacks, gunshot wounds, strangulation or motorcycle accidents, which had tested positive before the fatal event or by postmortem, are proof enough.
…..
The Great Barrington Declaration was penned by three fearless world leading epidemiologists—Dr. Martin Kulldorff of Harvard, Dr. Sunetra Gupta of Oxford University and Dr. Jay Bhattacharya of Sanford—and was a powerful antidote to the Evil Hand theory then raging through the MSM and political class of almost every stripe.
At essence, it said the real science was that America was not being attacked by a Grim Reaper visiting death upon one and all regardless of age, health status or physical circumstances, but, instead, was a highly selective respiratory disease variant that honed-in tightly on the immunity-impaired aged and co-morbid. Accordingly, the one-size-fits all Lockdown policy was dead wrong, and what was needed was highly targeted help, protections and treatments for the smallish minority of the vulnerable, which policy would presently lead to the attainment of “herd immunity” and the ultimate extinguishment of the pandemic in the normal way.
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.) (HT Jay Bhattacharya)
Again, TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)
Writing in 2016, Shane Neilson warns of misperceptions created by masking. (HT Martin Kulldorff)
David Gorski’s and Gavin Yamey’s September 13th, 2021, scurrilous ad hominem attack, at a BMJ site, against the great Great Barrington Declaration has since been amended with some corrections:
Update notice: This article was updated on 15 September 2021 to add an extra paragraph break. This article was revised further on 23 September 2021. The phrase, “this is not the first time billionaires aligned with industry have ‘funded’ proponents of herd immunity was changed to “‘provided support’” to proponents of herd immunity; to clarify that the GBD arose out of a conference hosted and heavily promoted by the AIER instead of being sponsored by the AIER; that the AIER received funding from the Charles Koch Foundation rather than being part of a network of organisations funded by Charles Koch; and that Scott Atlas’s association with AIER was as a contributor.
Phil Magness writes at Facebook about this ‘Update’:
The BMJ, a once-prestigious medical journal that published an unhinged and conspiratorial smear job against AIER over the Great Barrington Declaration last month, has issued a substantial correction to several of its loonier claims.
This follows from several weeks of back-and-forth between myself and the editors of the journal, requesting the same.
The journal’s editor in chief nonetheless recently described the piece as “high quality” and continued to defend his decision to run it, despite now making retractions and corrections to several of its main claims.
Here’s a report of a small but sad example of the cruelty caused by Covid Derangement Syndrome.
Police in Australia are checking that people’s coffee cups are full to make sure they have a reason to not wear their mask outside
Still not convinced that Covid hysteria has turned Australia dystopian?
Quotation of the Day…
… is from page 122 of the 1976 Liberty Fund edition of John Chamberlain’s excellent 1959 volume, The Roots of Capitalism:
Once capitalism is seen as a profit-and-loss system, with everyone at the mercy of the sovereign consumer’s whims as he balances one marginal desire against another, the incidence of anticapitalistic criticism must shift. The capitalist who can make money in a consumer-oriented system is the one who shrewdly anticipates the customer’s desires, and under such a dispensation profit – far from being “surplus value” – becomes the deserved reward for acumen.
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