Russell Roberts's Blog, page 259
July 2, 2021
Quotation of the Day…
… is from page 147 of the late Richard Pipes’s 2001 book, Communism: A History:
Communism was not a good idea that went wrong; it was a bad idea.
July 1, 2021
Bonus Quotation of the Day…
… is from pages 133-134 of Thomas Sowell’s excellent 1984 book, Civil Rights: Rhetoric or Reality? (original emphases; footnote deleted):
[image error]In reality, the historical data show that (1) the economic rise of minorities preceded passage of the Civil Rights Act of 1964 by many years, (2) the existing upward trend was not accelerated, either by that Act or by quotas that became generally mandatory in 1971, and (3) during the era of affirmative action, such disadvantaged blacks as young males with little experience or education, and members of female-headed households, actually retrogressed relative to whites of the same description, while more advantaged blacks rose both absolutely and relative to their white counterparts. In short, although affirmative action invokes the name of the disadvantaged, these are precisely the people who have fallen further behind under its auspices.
It’s Not A Rigorous Empirical Study, But….
On Monday, on my way back from Colorado to my home near the Potomac swamp, I was stranded at DFW airport for more than 12 hours. Needing to get work done, I splurged and bought a one-day pass at an American Airlines lounge.
Throughout my time in the AA lounge, I overheard several conversations – some face-to-face, others over telephones – of business people talking business with each other. Although (of course) the specific contents of each of these conversations differed from the others, I noticed that in each one there sounded a common theme: ‘How can we better please those persons with whom we deal?’
Most of these conversations were of how to structure deals that are more likely to attract or to retain customers. A few other of these conversations were of how to attract or to retain good workers. But contrary to what I imagine is the suspicion of free-market skeptics, not one of these conversations was about how to profit at the expense of customers or workers.
Obviously, the ultimate goal motivating each of the business people whose conversations I overheard was to increase his or her company’s profits. Yet in each and every case the means of achieving that goal involved improving the lives of customers or workers.
I don’t doubt that some business people in market economies are dishonest and seek to profit at others’ expense. But the ability of customers in free markets to say “no” to any offered deal, along with the ability of workers and other suppliers in free markets to say “no” to any offered deal, ensures that those who seek to profit at others’ expense are kept to a minimum as the bulk of business flows to those who successfully offer to others deals that are win-win.
Some Covid Links
The Covidocracy doesn’t care what people suffer from as long as that suffering isn’t caused directly by Covid-19. This attitude, my friends, is Covid Derangement Syndrome.
Starting at around the 18-minute, 40-second mark, David Brody talks with Jay Bhattacharya, including about the Delta variant. (By the way, this interview, sadly, is no longer available on YouTube.)
Omar Khan speaks with Sunetra Gupta.
Nine months after the Great Barrington Declaration was ridiculed for attacking a straw man, the straw man continues his calamitous global romping…. including, still, in the once-free country of Great Britain.
No one should have any sympathy for hypocritical covidocrats who so cruelly obstructed our humanity. A slice:
Mr [Matt] Hancock has always been one of the most emphatic for the rules. In internal government debates, he has invariably pushed for the toughest restrictions and wanted 10-year jail sentences as a penalty for trying to dodge draconian quarantine rules. “I make no apologies for the strength of these measures,” he said: they’d target a “minority who don’t want to follow the rules.” Who, presumably, he thinks, deserve everything coming their way. When two women were fined by police for walking together, Mr Hancock was unforgiving. “Every time you try to flex the rules,’ he said, “that could be fatal”.
Like Neil Ferguson’s tryst with his lover last year and Dominic Cummings’ notorious road trip to Barnard Castle, the Hancock imbroglio will be a bookmark in the Covid-19 story. The first two scandals were broadly forgiven after the vaccine success: a great many mistakes made last year, by every country in the world. But the vaccination programmes were supposed to pave the way back to normality. Things are safe, which is why ministers are acting normally. But the public is not (yet) allowed to carry on as before. Politically, it’s a sensitive mix.
At the start of the pandemic, ministers were astonished how closely people followed the rules. The first lockdown was delayed, in part, because it was argued that Britons would tire of restrictions after a few weeks. It might not have taken long for “lockdown fatigue” to overcome those making the rules, but the public went through months of sacrifice – even if studies suggested that stay-at-home diktats were far more than was needed to force back the virus. The bans on intimacy, even guidance on hugging: very little of that was based on science.
Stuart Ritchie is beginning to doubt the seriousness of Long Covid. A slice:
Still, as the medical scientist Adam Gaffney has argued, it’s likely that some substantial proportion of people reporting Long Covid are actually people who’ve never had the virus. Which might help us understand why the numbers on Long Covid are so weird. Some sources argue that “10-30%” of people who have had a Covid infection go on to experience it — which is itself already quite a range. But look at a UK study released this week (which hasn’t yet been peer-reviewed and is in preprint form). The researchers — some of whom are colleagues of mine — were able to dig into electronic health records from the NHS, and produced a startling figure. Of the 1,199,812 people they found who’d had a positive test for Covid, been hospitalised for Covid or been otherwise diagnosed with Covid, just 3,327 had also reported Long Covid — that’s 0.27%, a different universe from the other numbers.
Amelia Janaskie and Ryan Yonk survey some studies on excess deaths and Covid lockdowns.
Tell me again why Australia deserves applause for its response to Covid.
Quotation of the Day…
… is from page 176 of the late Roy Jenkins’s splendid 1995 biography – Gladstone – of the great 19th-century liberal British statesman William Gladstone:
Furthermore, he [Gladstone] extolled all the non-martial virtues, denounced the ‘glare of glory’ and regretted that the policy of peace and negotiation, which was the only basis of ‘real moral and social advancement of man’, sometimes failed to sustain itself against the false glamour and romantic excitement of war.
June 30, 2021
If Only Foreigners Were Willing to Hold Even More Dollars Indefinitely
Here’s a wonky response to someone who is giving a talk tomorrow to an audience that is likely to worry about non-Americans holding, rather than spending, large amounts of U.S. dollars.
Doug:
Thanks for writing.
You’re correct that, according to the conventions of international-economic accounting, each country’s current-account position is always exactly balanced by its capital- (or “financial”-) account position. More prosaically (if not technically precise), a country that runs a trade deficit during some period simultaneously runs during that period an identically sized capital-account surplus.
You’re correct also that holdings of dollars abroad are accounted as investments by foreigners in U.S. assets. Therefore, such dollar holdings do indeed cause the U.S. current-account deficit to be higher than it would be were these dollars instead spent on U.S. exports. But contrary to much popular and political anxiety, these dollar holdings – and any corresponding rise in the U.S. trade deficit – are no cause for concern.
Start with the fact that many protectionists would not be alarmed if foreigners accept from us an amount of real exports – such as software, pharmaceuticals, lumber, and machine tools – equal in value to the value of the imports we receive in exchange from foreigners. “There’s no trade deficit!” protectionists cheer, breathing sighs of relief.
But there’s nothing special about foreigners wanting the likes of American-made medicines and machine tools. Suppose that foreigners’ preferences change such that they come to regard U.S. dollars as consumption goods – say, foreigners come to want to wallpaper all of their homes and offices with Federal Reserve Notes. In this case, foreigners would be willing to continue to export to us steel, clothing, furniture, and whatever other real goods and services we demand from them in exchange for our little pieces of paper featuring monochrome portraits of dead Americans.
Although these purchases by foreigners of American dollars would still be accounted as foreign “investments” in America – and, thus, raise America’s trade deficit – why would it matter if the consumption goods that foreigners choose to buy from America consists overwhelmingly of rectangular pieces of green-ink-smeared paper as opposed to something else? In all cases, we Americans should wish to pay as little as possible – that is, to export that which costs us as little as possible to produce – and to receive in exchange for these exports as many as possible imports.
Precisely because producing dollars involves very little in the way of real resource expenditures, the greater is the amount of dollars that foreigners wish to acquire, and to hold indefinitely, in exchange for the goods and services they sell to us, the better off we are.
In an ideal world for Americans, foreigners would give to us their exports for free. But it would be nearly as good if foreigners were willing to give to us their exports in exchange only for dollars that they never, ever intend to spend in America.
In short, tell your audience this: To worry about foreigners accumulating U.S. dollars never to be spent in America is to worry about foreigners shipping to us lots of valuable real goods and services in exchange for a product that costs us next to nothing to produce. It would be the equivalent of you or me being able to buy all that we desire of food, wine, clothing, automobiles, housing, jewelry, education, and Parisian vacations using only Post-It notes on which we hand-scribble the numbers “1,” “2,” “5,” “10,” “20,” “50,” and “100.”
Only if members of your audience believe that they and their families would be made worse off were they able to acquire valuable goods and services with such hand-scribbled Post-It notes should they worry about foreigners selling us stuff in exchange for dollars-to-hold.
Good luck with your talk!
Sincerely,
Don
Bonus Quotation of the Day…
… is from page 80 of Thomas Sowell’s 2013 book, Intellectuals and Race:
Just as the preferences of Progressive-era intellectuals for genetic explanations of group differences led them to give little attention to cultural explanations of intergroup differences in educational achievement, so the preferences of intellectuals in the second half of the twentieth century for external social explanations – racial segregation and/or discrimination in schools being prominent – led them to likewise overlook cultural explanations.
DBx: Again, Happy 91st Birthday, Professor Sowell!
Maintain Your Cafe Hayek Subscriptions
Cafe Hayek Patrons:
To maintain your e-mail subscriptions to Cafe Hayek, you’ll have to sign up at the link below. (Doing so takes only a few seconds.) The reason is that, as of tomorrow (July 1st), Feedburner will no longer supply such subscriptions. Thanks! – Don
https://mercatuscenter.formstack.com/forms/cafehayekrssfeed
Some Non-Covid Links
Juliette Sellgren discusses the 14th amendment with Randy Barnett.
And yet, we continue to believe that somehow, this time, industrial policy will work better. You even hear conservatives make arguments like, “It works in China, so we have to do the same.” It’s as if some people are convinced that the problems that have plagued past and current central-planning efforts in the U.S. government don’t exist in China. But the truth is that China’s successes may not look as good relative to the U.S. if you look closely at the data and facts. Also, the U.S. private sector may not even be as deficient at R&D investments as some believe.
My Mercatus Center colleague Adam Thierer reviews the history of industrial policy in Japan. A slice:
Perhaps most notable in this regard was the Japanese government’s own admission that the MITI model had not worked as well as planned. A 2000 report by the Policy Research Institute within Japan’s Ministry of Finance concluded that “the Japanese model was not the source of Japanese competitiveness but the cause of our failure.” MITI was renamed the Ministry of Economy, Trade and Industry at about the same time, and its mission shifted more toward market-oriented reforms.
Yesterday (June 29th) was the 220th anniversary of the birth of Bastiat. Mark Perry celebrated!
Also from Mark Perry is this new take on the devastating effects of minimum wages. Here’s his opening:
I was alerted by UC-Irvine economics professor Richard McKenzie to the recent article “The minimum wage paradox” by Craig Richardson, BB&T Distinguished Professor of Economics at Winston-Salem University and founding director of the university’s Center for the Study of Economic Mobility (CSEM). Professor McKenzie commented that Richardson’s minimum wage analysis is “one of the few new takes on the minimum wage in thirty years.” Specifically, Richardson finds that even a 107% increase in the minimum wage from $7.25 to $15 an hour “may barely change the lives of low-wage workers who are currently drawing social benefits such as food stamps (SNAP benefits), child care, and/or housing assistance.”
George Will decries Amtrak subsidies. A slice:
A hidden subsidy to Amtrak is the law giving it priority over freight trains on tracks privately owned by freight railroads — more than 70 percent of Amtrak miles are on such tracks. If the increased preference for Amtrak, which Biden proposes, causes freight rail to lose business to trucks, which haul tonnage with much higher carbon emissions than freight trains, this will increase Amtrak’s environmental damage.
Richard Ebeling defends F.A. Hayek from the slandering of “Progressives’.“
Some Covid Links
Jacob Sullum decries the Covid-19-fueled expansion of the CDC’s authoritarian powers. A slice:
Since the beginning of the COVID-19 pandemic, Americans have argued about the merits of guidelines issued by the Centers for Disease Control and Prevention (CDC), which have been described as both too strict and too lax, too rigid and too changeable. Imagine how bitter an already rancorous debate would have been if the CDC had the power to command as well as recommend the best methods for reducing virus transmission.
Except according to the CDC, it does have that power. The agency’s legal defense of its nationwide eviction moratorium, which it recently extended for another month, implies that the CDC has boundless authority to control how Americans behave and interact with each other, as long as it thinks the edicts are “reasonably necessary” to prevent the interstate spread of “any” communicable disease.
As George Mason law professor Ilya Somin noted in September, when the CDC first ordered landlords to continue housing tenants who fail to pay their rent, this purported power is not confined to diseases as dangerous as COVID-19. Even the threat posed by the seasonal flu or the common cold theoretically could justify invoking it.
Sarah Knapton explains how “mass testing provides a skewed picture of the pandemic’s scale.” A slice:
Mass testing is giving a skewed picture of the Covid pandemic, with community prevalence currently five times lower than when the country had similar case numbers last year, analysis by The Telegraph shows.
On Tuesday, Downing Street said it would continue to publish daily virus figures even after restrictions are lifted, claiming they “provide an important level of transparency”.
Yet critics have previously called for the daily cases data to be scrapped, with the focus shifted to hospital admissions and deaths, because vaccinations have broken the link between infections and healthcare needs.
On Tuesday, Britain recorded 20,479 cases, with the seven-day total increasing by 72 per cent. Looking at the daily case data, it might be assumed that the country is now in a similar predicament to mid-December, when around 20,000 daily infections were reported.
Yet on December 13, when cases hit 20,263, an average of 340,285 tests were being carried out each day compared to the current seven-day rolling rates of 922,622.
Writing in the Wall Street Journal, Martin Kulldorff and Jay Bhattacharya describe some criteria that would characterize a trustworthy Covid commission. Here’s their conclusion:
For the health of science and the country, we need an honest and thorough evaluation of Covid policies, not one that can be dismissed as a whitewash like the World Health Organization’s efforts. The vaccines are a success story, but science has lost much luster during the pandemic. Science will fail in its important mission without the trust of every part of society.
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)
Wow! Covid modellers are mistaken again! Who’d a-thunk it possible?!
But if a law is to be obeyed then the way it is promulgated is of paramount importance. A democratic state cannot arrogate to itself powers it does not possess and then insist everyone does as they are told, and yet that has happened here. Apart from Lord Sumption, the former Supreme Court judge, hardly anyone has questioned the legitimacy of these laws – the questionable use of the Public Health Act to circumscribe the activities of perfectly healthy people, for instance.
Prof Neil Ferguson of Imperial College, London, disclosed that behavioural scientists initially thought that they “couldn’t get away” with what China did in locking down Wuhan. “And then Italy did it. And we realised we could,” he added. There is something telling in that “couldn’t get away with it”, an acknowledgement that it was slightly nefarious.
Issuing a similar lament is David McGrogan.
The Covidocracy continues to tyrannize Albertans.
What is going on here is not the fight of our lives against a fearsome pestilence. It is politicians willingly sacrificing their people’s welfare, hoping the people see their actions as a sufficient offering. It’s the modern analogue of killing virgins in the hope of getting a good harvest.
We need to stop this madness. Right now, we need to focus our attention and protection on the people in our population who are actually vulnerable to serious effects of this virus. We need to buy medicines and establish treatment protocols that work to reduce the severity of COVID symptoms, while offering vaccinations to anyone in vulnerable groups who wants them – with no compulsion, and no tethering of population vaccination rates to border openings.
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