Russell Roberts's Blog, page 251

Foreign Investment in the U.S. Isn’t “Distorting”

(Don Boudreaux)

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Here’s a letter to a first-time correspondent:

Mr. G__:

Thanks for writing.

You charge that, in my letter that appears in today’s Wall Street Journal, I “ignore the distorting effects which excessive foreign investments have on the US economy.”

I plead innocent. The sole point of my letter is that former U.S. Trade Representative Robert Lighthizer fails to understand a reality that is grasped by every sophomore economics student, namely, that U.S. trade deficits (or, more precisely, U.S. current-account deficits) are the flip side of U.S. capital-account surpluses – that is, of net inflows of global investment funds to the U.S. If – as Mr. Lighthizer often alleges – U.S. trade deficits are a real problem for America, then he should be delighted rather than disturbed that a provision in the USMCA reduces in the minds of global investors the relative attractiveness of America’s economy.

But because you mention distortions, let me add that I see no reason why investments in America by non-Americans are more (or less) likely to be distorting than are investments in America by Americans. Foreigners, like Americans, have every incentive to invest their funds in ways that yield the highest risk-adjusted returns. To the extent that these investments systematically distort, these distortions are due to American monetary, fiscal, or regulatory policies that inject into the U.S. economy signals that mislead. But because American investors are no less subject to being misled by these false signals than are foreign investors, there’s no reason to conclude that foreign investment as such is “excessive” or “distorting.”

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

Some Covid Links

(Don Boudreaux)

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Jay Bhattacharya’s conversation with Jonathan Sumption is filled with insight and wisdom.

Writing in the New York Post, John Tierney reiterates the truth that “lockdown hysteria did more harm than Covid-19.” A slice:

Why did so many go so wrong for so long? The elite panic was due to two preexisting pathologies. The first is what I have called the Crisis Crisis, the incessant state of alarm fomented by journalists and politicians. To keep audiences frightened around the clock, journalists seek out Cassandras with their own incentives for fearmongering: politicians, bureaucrats, activists, academics and assorted experts who gain publicity, prestige, funding and power during a crisis.

The second pathology underlying the elite’s COVID panic is the politicization of research — what I have termed the left’s war on science, another long-standing problem that has gotten much worse. Just as the progressives a century ago yearned for a nation directed by “expert social engineers,” today’s progressives want sweeping new powers for politicians and bureaucrats who “believe in science,” meaning that they use the left’s version of science to justify their edicts.

Allister Heath decries the “new era of permanent Covid terror.” A slice:

The reality is that thanks to the vaccines, Covid, including in its delta variant, has been downgraded and is on the verge of becoming normalised. It will now surely become endemic like influenza, which kills some 17,000 in England in an average year and often a lot fewer. Covid’s ongoing toll is likely to be roughly similar; a mature, embedded virus would not require contact tracing and endlessly pinging apps, but the adult population would need to remain up to date with vaccinations, including jabs configured to protect against the latest variants.

Why, then, the continued panic? Why are so many still behaving as if we were in March 2020, when we looked on aghast at pictures of collapsing Italian hospitals, realising that our complacent world was about to be upended? The lure of turning back the clock, of the risk-free zero-Covid society, an impossibility even if every human being in the word were double-jabbed, looms large over our public consciousness.

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For such a rational, amazing species, we are singularly unable to assess risk correctly. This is at once a blessing and a debilitating pathology. We need mad gamblers: if Jeff Bezos and Elon Musk hadn’t believed, against all the odds, that they could be successful, the tech revolution would never have materialised, and neither would the age of private space travel. But errors work both ways: we can be too pessimistic as well as too optimistic. We were too relaxed about the risks of pandemics prior to 2020, and now many people are too scared about the threat of Covid today.

“No, this isn’t satire; this isn’t from a horror movie. This is Australia.” (DBx: Covid Derangement Syndrome is indeed real.)

TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)

Insight from Martin Kulldorff:

If you favor university vaccine mandates for low-risk American and European students, when there is not enough vaccines for older high-risk people in Asia, Africa and Latin America, please remove your #BLM tags from your Twitter/Facebook profiles.

Quotation of the Day…

(Don Boudreaux)

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… is from page 59 of F.A. Hayek’s penetrating October 6th, 1976, R.G. Mills Memorial Lecture (at the University of Sydney), titled “The Atavism of Social Justice,” as this lecture is reprinted in Hayek’s 1978 collection, New Studies in Philosophy, Politics, Economics and the History of Ideas:

It is a delusion to think of the individual in primitive society as free. There was no natural liberty for a social animal. Freedom is an artifact of civilisation. An individual person had in the group no recognised domain of independent action; even the head of the band could expect obedience, support and understanding of his signals only if they were for conventional activities. So long as each must serve that common order of rank for all needs, which present-day socialists dream of, there can be no free experimentation by the individual.

Some Covid Links

(Don Boudreaux)

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Barry Brownstein explores the reasons why good people enable totalitarians. A slice:

When a totalitarian State demands “worship,” we understand why totalitarians must control the narrative. We know the Covidocracy demands allegiance to their one best way, first lockdowns and now vaccines. Dissenters must be silenced. Government claims it must maintain lists of spreaders of “misinformation” and then partner with Facebook to ensure only correct “narratives” are available. Health ambassadors must be sent door-to-door to share the good word about vaccines.

Those who disagree must be demonized, the impure separated from society if they don’t accept a vaccine. Those who make different choices than we do, we mentally condemn and righteously proclaim they threaten others. Although lockdowns have ended, as Ethan Yang writes the intellectual war against them has not been won.

Noah Carl is understandably unimpressed by a new paper whose authors claim to find that lockdowns do not cause more health harms than they prevent.

Jonathan Sumption rightly opposes vaccine passports, for…

… as Madeline Grant argues, vaccine ‘passports’ are “a conspiracy against freedom.” A slice:

How would such a scheme operate, and where would it end? History suggests that having snatched powers during an emergency, governments are reluctant to relinquish them. It seems highly unlikely that after assembling a vast certification infrastructure at great cost, it will simply be dismantled when the “crisis” is over. More likely it would be used for further data-sharing schemes; perhaps even ID cards, something Britain has always resisted.

What would stop it being extended to other health conditions? Once Covid status is relevant, why not other infectious diseases that kill thousands each year, like flu? Will the state, or whichever firms run the app, be able to track our movements?

Here’s a slice from the latest by Wall Street Journal columnist Holman Jenkins:

If you haven’t had Covid yet, you will. If you’ve had it once, you’ll have it again. If you’re vaccinated or were infected previously—which will one day be most people except the very young—your symptoms will likely be mild or nonexistent, but it’s not guaranteed. Words the CDC says about the flu it will say about Covid: “Vaccination is especially important for people 65 years and older because they are at high risk of developing serious complications from flu. Flu vaccines are updated each season as needed to keep up with changing viruses.”

Nobody is surprised when they get the flu for the second, the third, the eighth time in their lives. This is what epidemiologists meant when, for the last 15 months, they said the new coronavirus was likely to evolve and become endemic.

Well: “Cloth face masks are ‘comfort blankets’ that do little to curb Covid spread, Sage adviser warns.” (HT my Mercatus Center colleague Jack Salmon).

Jay Bhattacharya rightly describes vaccine mandates as unethical. A slice:

Bhattacharya re-emphasized that the vulnerable have been protected by the vaccine, causing him to believe there is no longer a need for masks. He said this especially extends to mask mandates for children, which “do not make any sense.”

Also from Jay Bhattacharya – here writing with Neeraj Sood – is an essay protesting the mandatory masking of children. A slice:

COVID-19 is less of a threat to children than accidents or the common flu. The survival rate among American children with confirmed cases is approximately 99.99%; remarkably, recent studies find an even higher survival rate.

A Centers for Disease Control and Prevention study estimated that mask mandates in schools are associated with a roughly 20% reduction in COVID-19 incidence though the effect estimate was statistically indistinguishable from zero. Let’s take the 20% effect at face value and do the math. Last month, about 5,000 school age children in California were diagnosed with COVID-19, which means 1,000 infections would have been prevented if all school kids wore masks. Given the survival rate among children, mask mandates might prevent one child death in the coming school year, a tiny fraction of the approximately 900 deaths of children 5 to 17 years old in 2019. If the aim is to save children’s lives, other interventions – like enhanced pool safety – would be much more effective.

Bravo for Rand Paul for speaking out against that scourge of public health Anthony Fauci. (HT Martin Kulldorff) A slice:

Scientists who are skeptical of chief White House medical adviser Anthony Fauci’s proclamations about the coronavirus pandemic don’t want to go public with their concerns for fear it will affect their funding, Sen. Rand Paul claimed Tuesday.

“He’s been there for 40 years, probably 39 years too long, but he controls all the funding, so people are deathly afraid of him,” Paul, a Republican from Kentucky, told “Fox News Primetime” of Fauci, the director of the National Institute of Allergy and Infectious Diseases (NIAID) since 1984.

“I get letters from scientists all the time. You can find them. They’re very distrustful of what he’s saying,” Paul added. “They don’t think he’s making sense. They don’t think he’s reading the science accurately, but they’re afraid to speak out because many of them are university scientists and they depend on NIH [National Institutes of Health] funds, and to cross him means it’s the last money you’ll ever get.”

And bravo too for Eric Clapton.

Some Non-Covid Links

(Don Boudreaux)

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Jim Bovard rightly warns of the “history” that’s being taught in government “schools.” A slice:

American Federation of Teachers President Randi Weingarten recently proclaimed that her union members have a right to teach “honest history” in government classrooms. But putting politicians, bureaucrats, and union zealots in charge of a curriculum is the worst recipe for candor. Rather than truth, the likely result will be vaccinating young Americans from recognizing how Leviathan imperils their liberty.

Weingarten’s protests were spurred by the backlash in some states against Critical Race Theory (CRT), the latest politically correct fad from activist educators. CRT received a steroid boost from the New York Times’ 1619 series, which ludicrously claimed that the American Revolution was fought to preserve slavery (AIER’s Phil Magness debunked that charade in many articles and in this book). According to Weingarten and other CRT proponents, American schools criminally ignore the racial abuses in American history. However, the vast majority of state curriculums already teach that slavery was an abomination and a national disgrace.

Hartmut Kliemt compares the liberalism of Anthony de Jasay to that of James Buchanan.

Juliette Sellgren talks with the Cato Institute’s Trevor Burrus about campaign finance.

Inu Manak and Scott Lincicome remind us of just how absurd were the arguments that the Trump administration was willing to use to promote protectionism.

In this new video, John Stossel tackles the claim that the words that do (and don’t) come out of our mouths are often the equivalent of violence.

Nick Gillespie introduces us to the New York Times‘s libertarian podcaster, Jane Coaston.

Allison Schrager, despite picking some nits, is a fan of Deirdre McCloskey’s new book, Bettering Humanomics: A New, and Old, Approach to Economic Science. A slice:

We economists have lost our appreciation for the humanities, and that means that we underestimate the importance of human dignity. This is no small oversight. McCloskey spends about a third of her book arguing that understanding the humanity of the northwestern European population can explain why it industrialized first. Other countries around the world had wealth, strong institutions, and well-trained mathematicians and engineers (perhaps better ones), but industrialization happened in Britain first because it treated its people with dignity and empowered them with both rhetoric and knowledge. Scotland, for example, had extraordinarily high literacy rates, and even people of modest means had the “opportunity to have a go, testing their ideas in commerce.” Liberalism gave everyone a chance to innovate and create, and in doing so it upended the existing social and economic order.

Quotation of the Day…

(Don Boudreaux)

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… is from page 315 of the 1978 collection, edited by Eric Mack, of Auberon Herbert’s writings, The Right and Wrong of Compulsion by the State; specifically, it’s from Herbert’s 1908 essay, “A Plea for Voluntaryism”:

We, who call ourselves voluntaryists, appeal to you to free yourselves from these many systems of state force, which are rendering impossible the true and happy life of the nations of today. This ceaseless effort to compel each other, in turn for each new object that is clamored for by this or that set of politicians, this ceaseless effort to bind chains round the hands of each other, is preventing progress of the real kind, is preventing peace and friendship and brotherhood, and is turning the men of the same nation, who ought to labor happily together for common ends, in their own groups, in their own free unfettered fashion, into enemies, who live conspiring against and dreading, often hating each other.

Phil Magness on the “1619 Project”

(Don Boudreaux)

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Phil Magness discusses with Bill Walton the “1619 Project.”

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 253 of F.A. Hayek’s March 23rd, 1966, lecture delivered to the British Academy and titled “Dr Bernard Mandeville,” as this lecture is reprinted in Hayek’s 1978 collection, New Studies in Philosophy, Politics, Economics and the History of Ideas:

His [Mandeville’s] main contention became simply that in the complex order of society the results of men’s actions were very different from what they had intended, and that the individuals, in pursuing their own ends, whether selfish or altruistic, produced useful results for others which they did not anticipate or perhaps even know; and, finally, that the whole order of society, and even all that we call culture, was the result of individual strivings which had no such end in view, but which were channeled to serve such ends by institutions, practices, and rules which also had never been deliberately invented but had grown up by the survival of what proved successful.

What I Fear

(Don Boudreaux)

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While the reaction to Covid-19 will not eventually result in humanity returning literally to a stone-age existence, I do fear that this cartoon captures an important reality about our future.[image error]

Some Covid Links

(Don Boudreaux)

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Matt Ridley reminds us that “virulent” does not mean “infectious.” A slice:

In other words, lockdowns (whether necessary or not) probably delayed the evolution of the virus into a milder form. That is now happening, and is our least worst option given that eradication is impossible and the virus may become more transmissible in response to vaccination.

In general, there is not nearly enough thinking along the lines of “Darwinian medicine” within the medical establishment, as Randy Nesse has long argued.

Sherelle Jacobs isn’t feeling much freedom flowing from Britain’s “Freedom Day.” Three slices:

As things stand, the libertarian cause has not simply been defeated, but routed. Instead of “learning to live with Covid”, society looks set to learn to live with restrictions.

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A coddled and frightened public that is reluctant to leave the lockdown rabbit hole has badly needed to hear harsh home truths. That while the vaccination campaign has proved tremendously successful, and Covid for now no longer threatens to overwhelm the NHS, more people will die. That it is as good as inevitable that new variants will emerge. That Long Covid will continue to affect a minority of people. But that, with children’s education being trashed, the nation’s mental health on a precipice and disastrous inflation possibly rearing its head, the risks of not reopening have become too great.

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Think about it for a moment: the state is poised to introduce a system akin to mandatory vaccination. Citizens will be compelled to give up potentially vast quantities of personal data as a basic condition for access to everyday services.

It is a dark turning point for the West. As it was with lockdowns, the only major country already experimenting in this unchartered territory is authoritarian China, with its notorious social credit system, which bars blacklisted non-compliant citizens from basic goods like train tickets and loans.

Richard Smith, former editor of the BMJ, writes that medical research has become so dishonest that “We have now reached a point where those doing systematic reviews must start by assuming that a study is fraudulent until they can have some evidence to the contrary.” Another slice:

Research fraud is often viewed as a problem of “bad apples,” but Barbara K Redman, who spoke at the webinar insists that it is not a problem of bad apples but bad barrels if not, she said, of rotten forests or orchards. In her book Research Misconduct Policy in Biomedicine: Beyond the Bad-Apple Approach she argues that research misconduct is a systems problem—the system provides incentives to publish fraudulent research and does not have adequate regulatory processes. Researchers progress by publishing research, and because the publication system is built on trust and peer review is not designed to detect fraud it is easy to publish fraudulent research. The business model of journals and publishers depends on publishing, preferably lots of studies as cheaply as possible. They have little incentive to check for fraud and a positive disincentive to experience reputational damage—and possibly legal risk—from retracting studies. Funders, universities, and other research institutions similarly have incentives to fund and publish studies and disincentives to make a fuss about fraudulent research they may have funded or had undertaken in their institution—perhaps by one of their star researchers.

Liam Halligan decries the on-going appalling failure of the media to report reasonably on Covid-19. A slice:

A major problem is the mindless fixation of our political and media class on the absolute number of Covid cases recorded, in the absence of vital context relating to the number of tests conducted and the link with hospitalisations and deaths. Yes, we’re registering around 50,000 daily Covid cases – levels last seen in January. But the UK is now conducting way over twice as many tests each day as back then. We should focus, instead, on the share of tests that are positive, a far more indicative measure of the true extent of Covid.

Adam Creighton rightly criticizes the totalitarian response to Covid-19. Two slices:

“The lockdown of 11 million people is unprecedented in public health history, so it is certainly not a recommendation the WHO has made,” the World Health Organisation’s Beijing representative said in January last year, referring to the Wuhan lockdown. The people of Wuhan became trailblazers for the 11 million Australians locked down across Victoria and NSW, and the hundreds of millions of others in between.

Eighteen months on, all the features of the Wuhan response – lockdowns, mandatory masks, surveillance and border closures – have become standard practice, despite each specifically being ruled out by the WHO in 2019.

The WHO understood such extreme measures in free societies would have profound and enduring economic, social, constitu­tional and political ramifications. Real life wasn’t a game of SimCity, where elite public servants, largely immune from the costs of their own decisions, could dial restrictions up and down.

Why the West junked all its pre-2020 disease management advice remains the most concerning and unanswered question of our time. In 2017, the US government updated its pandemic plan, spelling out clearly what governments should do based on the severity of any pandemic. It’s not surprising the Centres for Disease Control and Prevention hasn’t yet declared the severity level for Covid-19 because it would fall around category three based on its own criteria: in other words, not nearly severe enough to justify the measures used to contain it.
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Stanford University professor of medicine Jay Bhattacharya says there has long been a tension in public health between advising people how to be healthy and forcing them to be.

“There’s also a norm in public health that there has to be unan­imity in messaging … you have to all say the same thing, think the same thing,” he says.

That makes sense for smoking, for instance, where the link with cancer is overwhelming. But for Covid-19, where debate rages about the disease and its origin, let alone the best way to deal with it, censorship is inexcusable.

The professor himself was censored by social media back in April for appearing with Florida Governor Ron DeSantis on a live panel, where some experts questioned the benefits of compulsory mask wearing. “I thought it was good governance for the public to see a governor speaking publicly with experts, but instead it was removed from YouTube,” he says.

Martin Kulldorff corrects Bret Weinstein’s mistaken suggestion that SARS-CoV-2 can be eradicated.

Writing in the Wall Street Journal, Johns Hopkins School of Medicine professor Marty Makary exposes the “flimsy evidence behind the CDC’s push to vaccinate children.” Two slices:

A tremendous number of government and private policies affecting kids are based on one number: 335. That is how many children under 18 have died with a Covid diagnosis code in their record, according to the Centers for Disease Control and Prevention. Yet the CDC, which has 21,000 employees, hasn’t researched each death to find out whether Covid caused it or if it involved a pre-existing medical condition.

Without these data, the CDC Advisory Committee on Immunization Practices decided in May that the benefits of two-dose vaccination outweigh the risks for all kids 12 to 15. I’ve written hundreds of peer-reviewed medical studies, and I can think of no journal editor who would accept the claim that 335 deaths resulted from a virus without data to indicate if the virus was incidental or causal, and without an analysis of relevant risk factors such as obesity.

My research team at Johns Hopkins worked with the nonprofit FAIR Health to analyze approximately 48,000 children under 18 diagnosed with Covid in health-insurance data from April to August 2020. Our report found a mortality rate of zero among children without a pre-existing medical condition such as leukemia. If that trend holds, it has significant implications for healthy kids and whether they need two vaccine doses. The National Education Association has been debating whether to urge schools to require vaccination before returning to school in person. How can they or anyone debate the issue without the right data?

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Most striking, the CDC has never systematically collected and reported the No. 1 leading indicator of the pandemic—daily new hospitalizations for Covid sickness. Instead, the CDC offers the lagging indicator of hospitalization for anyone who tests positive for Covid.

The CDC data on natural-immunity rates is similarly disappointing. The CDC reports this measure in fragments on their website, but it’s outdated and some states are listed as having “no data available.” The low priority given to this indicator is consistent with how public-health officials have played down and ignored natural immunity in their drive to get everyone vaccinated.