Russell Roberts's Blog, page 224

Some Non-Covid Links

(Don Boudreaux)

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John Cochrane wonders how the Nobel committee can justify not awarding the prize to the great Thomas Sowell. A slice:

Yes, Tom’s work is empirical, neither full of equations of theory or econometrics. (Though Knowledge and Decisions is an excellent pice of theory.) Tom writes books. Well, maybe it’s time to celebrate persuasive fact-based books as well as the more standard approaches, as you also have done in the past.

While Tom is hardy, he is 91. None of us last forever. Nor does your opportunity to recognize one of the most important economists of our time. This is the year.

Writing in the Wall Street Journal, Tom Hazlett describes Biden’s broadband boondoggle. A slice:

Included in the bipartisan package are broadband-deployment subsidies. Mr. Biden asked for $100 billion. The Republicans and Democrats compromised at $65 billion in the “Infrastructure 1” package. Most of that, $42 billion, is slotted for subsidies to rural communications networks, promising to conquer the “digital divide.”

This is doubtful. The government has already expended at least $200 billion (in 2021 dollars) on the “universal service fund” established by the 1996 Telecommunications Act. Most of the money was meant to extend networks that serve rural areas, but some was also allocated to schools and libraries, health-care facilities and low-income mobile-phone users.

This money had little impact on network infrastructure. In 2011 the Federal Communications Commission found that 19 million people, living in seven million households, couldn’t get state-of-the-art broadband service. Ten years later, despite another more than $50 billion in subsidies for high-cost networks, the number in underserved areas was as many as 30 million, according to Mr. Biden.

David Henderson likes Casey Mulligan’s new book, You’re Hired.

Arnold Kling sensibly predicts that our future will soon feature significant price increases.

Scott Winship looks a new evidence on the costs and benefits of expanding the child tax credit. Here’s his conclusion:

In truth, almost everyone involved in anti-poverty debates has good intentions. No one favors increasing child poverty as a policy goal. We should all rely on evidence as best we can to guide our policy positions, but evidence is almost always more ambiguous than the staunchest advocates of safety net expansions believe. Ambiguity calls for caution and for the kind of experimentation that informed welfare reform. Jumping hastily into a dramatic transformation of the safety net without worrying about unintended consequences may be soft-hearted, but researchers and policymakers must take care to be hard-headed as well — because we are trying to help today’s and tomorrow’s children.

Cleaned by Capitalism XLII

(Don Boudreaux)

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This snapshot of a urinal in a men’s room at the Mayflower hotel in Washington, DC, was taken earlier this week.

I’m participating, along with Andy Morriss, in a (splendid) week-long event, at the Mayflower, sponsored by George Mason University’s Law & Economics Center. During one of the breaks, Andy observed that the plastic honeycomb-like devices (such as the one pictured here) now frequently found at the bottom of urinals are designed to reduced the splash – a fine outcome that is not achieved by leaving the bottom of the urinal bare or by the flat plastic pancake-shaped devices that until recently were commonly placed at the bottom of urinals.

Here we see yet another of the countless small ways that innovative entrepreneurship in markets makes our daily lives cleaner.

Quotation of the Day…

(Don Boudreaux)

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… is from page 428 of F.A. Hayek’s Spring 1949 University of Chicago Law Review paper titled “The Intellectuals and Socialism“:

The intellectual, by his whole disposition, is uninterested in technical details or practical difficulties. What appeals to him are the broad visions, the specious comprehension of the social order as a whole which a planned system promises.

Some Covid Links

(Don Boudreaux)

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el gato malo asks if hospitals really have be overrun because of Covid-19. (But do keep in mind that vaccination mandates might well leave some hospitals short-staffed.)

Jeffrey Singer and Michael Cannon explain that vaccination is best promoted through persuasion rather than by mandates.

Max Borders reports on another Declaration by sensible physicians. A slice:

The physicians and medical scientists who have signed the Declaration are also frustrated with the authoritarian measures supported by career bureaucrats such as Anthony Fauci.

“Harvard Epidemiologist Censored by LinkedIn for Defending Healthcare Jobs.”

Laura Dodsworth unearths more proposed tyranny by the Covidocracy.

Jeffrey Tucker wonders why Biden’s vaccine mandate hasn’t actually been issued.

My GMU Econ colleague Bryan Caplan is always wise. A slice:

The same naturally goes for Covid regulations.  Social Desirability Bias yields absurdly strict laws: “If it saves just one life.”  Yet Social Desirability Bias also prevents the merciless enforcement necessary to achieve compliance with these absurd laws.  Recently at the airport I saw ample unmasked faces.  If the government had picked out a random scofflaw and hauled him off to prison, the whole airport would have kept their masks on.  If the government arrested a hundred such people nationwide and held a press conference vowing to hand out a thousand years of prison time to these “mask criminals,” every airport in America would approach 100% compliance.  But that ain’t gonna happen.

And don’t miss this excellent comment on Bryan’s post by my student Jon Murphy:

This is interesting analysis.  I wonder if it helps explain certain enforcement mechanisms.  If we take your masking within the airport anecdote as given (my own experience has been a little different, but that’s irrelevant to the point I am making) then let’s consider the following:

Mask mandates are not too strictly enforced in the airport, an area that falls under the jurisdiction of the TSA and other federal agencies.  If the mandates were enforced there, blame (or praise) for the enforcement would fall on the Federal government.

However, masking is strictly, and often draconically, enforced on the airplanes themselves.  People have been arrested, banned from flying, etc., for not wearing masks.  Additionally, the enforcement has often gotten violent.

However, in the skies the enforcement falls on the airlines.  My understanding from my brother (who is a commercial pilot) is that the FAA is threatening the airlines and the individual crewmembers with massive fines, jail, or revoking their licenses if they do not enforce the mandates.  Thus, they face prohibitively high penalties, and thus they enforce the policies draconically.

Following Bryan’s comment, I offer the following hypothesis: the Federal agents know how unpopular these rules are.  Thus, to shield themselves from blame, they require non-governmental agencies (in this case, the airlines) to enforce their rules by threatening their livelihoods.  Second-hand enforcement.

Quotation of the Day…

(Don Boudreaux)

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… is from page 57 of my favorite of all of Richard Epstein’s many excellent books, his 1995 volume, Simple Rules for a Complex World (original emphasis):

Even though talent, circumstance, and luck play a role in human behavior, we all are spared an enormous administrative burden if we mutually renounce any claim to these assets of others. A rule of self-ownership, far better than any of its alternatives, allows us to move on with the business of life. A rule of self-ownership selects the single person to be the owner of each person’s natural talent, and picks that person who in the vast majority of cases tends to value those assets the most: each obtains control over his or her own body. At least for adults (and there are, of course, qualifications for children), the rule offers the shortest path from initial entitlement to productive human activity.

Some Non-Covid Links

(Don Boudreaux)

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David Henderson reviews Diane Coyle’s new book, Cogs and Monsters. A slice:

One of the biggest surprises I noticed in her view of economics is her statement, “Competition is quite a tender plant.” She explains, “The more successful, the larger, the more profitable and powerful the incumbents, the harder it is to maintain competition.” Actually, something closer to the opposite is the case. The more profitable the incumbents are, the greater is the incentive for new competitors to enter the industry. As I put it to my students the first day of class, competition is a hardy weed, not a delicate flower. That’s why so many competitors lobby various governments to limit competition, whether by licensing, high tariffs, or stingy import quotas: without such government restrictions, those firms would face tougher competition.

Chris Edwards decries American politicians’ addiction to debt.

Sam Staley reviews the movie Free Guy.

The tyranny of the woke is ever-more evident in the Biden administration.

Writing in the Wall Street Journal, GMU Econ alum Alex Salter warns of the dangers of a digital dollar.

J.D. Tuccille’s counsel is correct: “Don’t ask politicians to fix a supply chain crisis they created.”

George Will rightly applauds some Progressive members of Congress for standing up for Congressional say – even as he rightly skewers these same members of Congress for the dangerous policies they endorse. A slice:

Although Madison quickly became, with his boon companion Thomas Jefferson, a creator of what is now the world’s oldest political party, he could not have anticipated what would now appall him: the common attitude in Congress that members are mere spear carriers in a presidential opera.

In 2018, a congressman said in defense of a fellow Republican, a committee chairman accused of excessive subservience to the president: “You have to keep in mind who he works for. He works for the president and answers to the president.” Such thinking is the principal reason modern presidents are so rampant, and the one reason the Congressional Progressive Caucus is, despite its ideological intoxication, somewhat wholesome.

If the caucus accepts this compliment, it should send a similar salute across the barricades to the two Democratic senators the caucus currently despises. There is an adjective to describe West Virginia’s Joe Manchin III and Arizona’s Kyrsten Sinema as they resist pressures to buckle — pressures from Biden, the other side of the Capitol, and the great and the good in the media. The adjective is: senatorial.

Some Covid Links

(Don Boudreaux)

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Phil Magness and James Harrigan commemorate the one-year anniversary of the release of the deeply important and eminently sensible – yet mindlessly dismissed and tragically neglected – Great Barrington Declaration. A slice:

More pro-lockdown epidemiologists seemed inclined to grasp the central theme of the badly misnamed John Snow Memorandum in the Lancet – drafted in direct response to the GBD. This petition, co-organized by [Deepti] Gurdasani and other pro-lockdown scientists, predictably claimed that drastic nonpharmaceutical measures such as business closures and shelter-in-place orders had a large effect on reducing Covid transmission in the spring and summer of 2020. Recent data indicate that this statement is overblown, and common sense should have researchers looking for the tradeoffs that have to be made in these sorts of large-scale public policies. Be that as it may, the Snow Memorandum was built upon unreliable pro-lockdown studies out of Imperial College-London that have since been discredited.

Another major claim of the Snow Memorandum – that naturally acquired immunity was not robust and Covid-19 reinfections among recovered patients could become widespread – turned out to be incorrect. The best evidence we now have suggests that naturally acquired immunity is very robust. To date, neither the Snow Memorandum authors nor the Lancet have issued an appropriate correction to their erroneous claim.

“TSA security screenings led to more driving and thus more auto deaths. Mandating vaccines on airplanes could have a similar effect” – so reports Christian Britscghi. A slice:

It’s also not clear that such a mandate would do much for public safety given the low risk of COVID transmission aboard flights. That low risk was detailed in an October 2020 article published in the Journal of the American Medical Association. Cabin air, the article’s authors note, is recycled through HEPA filters which filter out virus particles. The way air flows within the cabin—from ceiling to floor, with little flow between rows—also reduces the odds of in-flight COVID transmission, they said.

“An airplane cabin is probably one of the most secure conditions you can be in,” Sebastian Hoehl, a researcher at the Institute for Medical Virology at Goethe University Frankfurt in Germany, told Scientific American in November 2020.

Clemson University’s Brad Thompson wastes no words in criticizing the dismissal of an Oklahoma State University student from a position on the school newspaper over the student’s expressed objections to the school’s absurd mandatory-masking policy.

Power abuses such as this one reported by Charles Oliver are inevitable when hysterical fears are stirred. A slice:

An investigation has found that the Canadian military used the COVID-19 pandemic as an excuse to turn on the Canadian people propaganda techniques intended to be used against foreign enemies. The plan was developed by Canadian Joint Operations Command without the direction of civilian leadership.  Military officials said the project was aimed at bolstering government messages about the disease and at stopping civil disobedience to pandemic restrictions.

Australia extends its ban on foreign tourists. (HT Phil Magness)

David Leyonhjelm decries Australians’ compliance in their own subjugation by the Covidocracy. A slice:

Australia never gained its independence through war and has nothing resembling the Declaration of Independence. Notwithstanding our convict history, we are more like jailers than the miners at the Eureka Stockade or a sheep stealer who jumps into the billabong to avoid capture. Our larrikin image is not based on a deep-rooted respect for freedom.

That explains why so many Australians, fearful of catching the disease, accepted without protest the loss of freedom of speech, of assembly, of religion, of movement, and of the right to protest, because they expected the government to protect them. They even tolerated the separation of children from their parents, welcomed the use of the military to promote compliance, and looked away when the police engaged in violent thuggery

Only a minority, quite small at first, questioned the measures. Are these losses of liberties proportionate to the risks, they asked? Why aren’t you even trying to convince us? Have all aspects, not just health, been taken into account? If jobs, careers, education and businesses are also important, why have they been disregarded in the pursuit of minimising the Covid health risk?

Quotation of the Day…

(Don Boudreaux)

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… is from page 228 of Albert Jay Nock’s 1923 essay “The State,” as it is printed in Liberty Fund’s 1991 collection of some of Nock’s essays – a collection titled The State of the Union: Essays in Social Criticism (Charles H. Hamilton, ed.) (original emphasis; link added):

To gain a livelihood, to satisfy his needs and desires, man can either work or steal, he can use the economic means or the political means. By the economic means, he exchanges labour and labour-products for the labour and labour-products of others. By the political means, he appropriates the labour and labour-products of others, giving neither labour nor labour-products in exchange. Inasmuch as so large proportion of the State’s activity, certainly ninety per cent of it, is spent upon enabling this uncompensated appropriation of labour and labour products, the State itself is well described by [Franz] Oppenheimer, in reference to its origin, nature and function, as the organization of the political means. “Political government” signifies the same thing; it means the sort of government that has for its primary purpose the maintenance of economic exploitation through privilege.

Some Non-Covid Links

(Don Boudreaux)

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Paul Rubin, writing in the Wall Street Journal, explains that the ‘economics’ of the woke crowd is primitive. Two slices:

Karl Marx called his system “scientific socialism.” Modern leftists advocate a similar ideology and call themselves “woke” to indicate that they understand the world better than the rest of us. Yet the worldview of Marxists and woke leftists alike is fundamentally primitive.

Folk economics is the economics of people untrained in economics. It is the economic view of the world that evolved in our brains before the development of the modern economy. During this period of evolution the economy was simple, with little specialization except by age and sex, no economic growth, no technological change, limited trade, little capital, and warfare between neighboring tribes.

Zero-sum thinking was well-adapted to this world. Since there was no economic growth, incomes and wealth didn’t grow. If one person had access to more food or other goods, or greater access to females, it was likely because of expropriation from others. Since there was little capital, a “labor theory of value”—the idea that all value is created by labor alone—would have been appropriate, and there was little need to protect capital through property rights. Frequent warfare encouraged xenophobia.

…..

Dislike of the rich makes sense in a world where one can become rich only by exploiting others, but not in a society full of creativity and useful inventions. Changing tax laws to soak the rich makes sense with a labor theory of value, but not with a sophisticated understanding of continual investment and technological change.

Speaking of the economically ignorant woke, Liz Wolfe reports on one such.

Antony Davies warns that federal-government spending is out of control.

Richard Rahn calls Biden’s team of economic advisors “fools.” This descriptor is accurate. And as Pierre Lemieux reports, that team is about to get even worse with the addition of a Soviet-trained dirigiste as comptroller of the currency.

So Biden, after all, on trade doesn’t much differ from Trump. (HT Bryan Riley)

Here is Bryan Riley on Biden’s destructive protectionism. And here’s Scott Lincicome.

On the evil and destructiveness of tariffs, see also this new essay by James Bovard.

According to Eric Boehm, “Biden’s China trade policy is littered with contradictions.” A slice:

U.S. Trade Representative Katherine Tai delivered a speech Monday morning that White House officials had been touting as a major signal of the Biden administration’s shifting strategy in the trade war with China. In fact, the speech mostly doubled down on what Trump spent four years promising: that a mixture of big government at home and barriers to trade from abroad will strengthen the U.S. economy and benefit American workers.

There’s plenty of evidence to show that Trump’s approach failed, but what Tai outlined was more of a shift in style than in substance. Rather than all-caps tweets about China stealing jobs, the Biden administration is pushing what Tai described as “a worker-centric trade policy” that will include “smart domestic investments”—Washington-speak for giving unions more influence over policy and for lots of new industrial subsidies.

Russ Roberts’s latest episode of EconTalk is with Arnold Kling.

Behind and Beyond Even Accurate Statistics

(Don Boudreaux)

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In my latest column for AIER I warn against naive interpretation of statistics. A slice:

Second, monetary income, while important, is only one aspect of a person’s, or a household’s, economic condition. Always to some degree – and frequently to a large degree – monetary income is an offset to some significant non-monetary aspect of a person’s or a household’s economic condition. High income might reflect unusually dangerous or unpleasant work conditions, or unusually risky financial decisions. Low income might reflect a conscious decision to avoid such conditions and decisions.

A personal story is a lone data point, but in this case it’s one that plausibly conveys a general truth. As I neared graduation from the University of Virginia School of Law in May 1992 I received two offers of full-time employment. The first was for a tenure-track position as associate professor in Clemson University’s Department of Economics. The second was as a junior attorney at the prestigious Washington, DC, law firm for which I worked the previous summer. The annual monetary pay offered by the law firm was nearly three times higher than was the annual monetary pay offered by Clemson University. And also, I knew, the difference in lifetime monetary income earned as a lawyer, over the pay of a college professor, was even higher.

I remember talking on the telephone to the law-firm hiring partner who called with the job offer. After thanking her profusely, I turned the offer down without hesitation. It’s a decision that I’ve never regretted. The value to me of the leisure and task-flexibility enjoyed by a college professor was much higher than the additional monetary income of working as a lawyer. Or alternatively, the cost to me of the pressure and long hours of working at a big-city law firm is higher than is the value to me of the additional monetary income that I’d have been paid by working as a practicing attorney.

Therefore, a comparison of my monetary income to that of a practicing attorney reveals a distorted reality. Superficially, this comparison reveals that my economic welfare is lower than that of the attorney. But the deeper reality is otherwise. If the impossible were possible – specifically here, to observe and quantify subjectively experienced economic welfare – my welfare would be ranked as equivalent to, and perhaps even higher than, that of the attorney. Yet because monetary incomes are observable and quantifiable, they are what is seen and reported, while the many complex trade-offs that give rise to them remain hidden. The seemingly objective and straightforward reality is, in fact, a distorted reality. Government policy based upon such a distorted understanding of reality is likely to worsen the true reality.