Russell Roberts's Blog, page 266

Quotation of the Day…

(Don Boudreaux)

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… is from page 32 of Thomas Sowell’s excellent 1984 book, Civil Rights: Rhetoric or Reality? (original emphasis):

It would perhaps be easier to find an inverse correlation between political activity and economic success than a direct correlation. Groups that have the skills for other things seldom concentrate on politics. Moreover, politics has special disadvantages for ethnic minority groups, however much it may benefit individual ethnic leaders. Public displays of ethnic solidarity and/or chauvinism are the life blood of ethnic politics. Yet chauvinism almost invariably provokes counter-chauvinism.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 653 of the 1988 collection of Lord Acton’s writings (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University; (I can find no date for this passage):

We require in an honest man, not submission, but resistance and independence.

DBx: Truer words were never etched, quilled, penned, typed, thought, whispered, spoken, broadcast, telecast, texted, scribbled, emailed, blogged, preached, or shouted from rooftops.

Some Non-Covid Links

(Don Boudreaux)

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Douglas Holtz-Eakin writes wisely about the fallacies surrounding so-called “supply chains.” Here’s his opening:

A supply chain is a series of commercial transactions that permits the final assembly and delivery of a good or service. A supply chain is what it needs to be – short, long, simple, complex, quick, or time-consuming. Firms pick the combination of the characteristics to deliver the best value proposition they can. So, while I can understand what a tax policy is, what a trade policy is, what an occupational safety regulation is, and myriad other federal policies, I fear there is no such thing as a supply-chain policy. Supply chains are the province of private firms.

My intrepid Mercatus Center colleague Veronique de Rugy wonders if corporate wokeness is here to stay. A slice:

Conservatives should tread carefully before using the legislative branch to ban woke behavior. Any provisions that limit the power of woke leftists could and would be used against conservatives as well.  Furthermore, it is not clear that limiting companies’ political behaviors, including actions that may cost them their own consumers, would be effective. In fact, banning wokeness would be an excellent means of boosting its popularity.

My Mercatus Center colleagues Alden Abbott and Andrew Mercado urge caution before turning government regulators loose on the Internet. A slice:

Freedom of speech is a fundamental right set out in the Constitution. While it’s not a violation of free speech for platforms to monitor and regulate the speech occurring on their own platforms, free speech is threatened when targeted regulation is introduced to force the supervision of speech on platforms. Clegg claims regulation is the only way to prevent the United States from “becoming a nation that exports incredible technologies but fails to export its values.”

But his call for regulation of political speech on platforms is a paradox. If protection of speech is so fundamental to American values, then any regulation that suppresses political speech goes against those values. Political speech has long been protected by the Supreme Court, and Congress should not threaten that right just because the speech has moved online.

My intrepid Mercatus Center colleague Veronique de Rugy is no Keynesian.

I’m always honored to be a guest of Dan Proft and Amy Jacobson.

According to Arnold Kling, inflation in the U.S. is now running at about 8 percent annually.

Kyle Torpey recounts Paul Krugman’s decade-long history of being mistaken about Bitcoin.

Pierre Lemieux reminds us of the centrality of exchange.

David Waugh is understandably impressed with Jim Otteson’s new book, Seven Deadly Economic Sins.

I thank Oren Cass for inviting me to this discussion in American Compass’s “Critics Corner.”

Some Covid Links

(Don Boudreaux)

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Monica Gandhi and Jeanne Noble, writing in the Wall Street Journal, expose the deceptiveness of the CDC’s recent attempt to stir up fear of Covid’s risk to teenagers. Here are their opening paragraphs:

The Centers for Disease Control and Prevention released a report last week warning that adolescent hospitalizations due to Covid-19 were on the rise. The media picked up the message and ran with it. But it isn’t true. The CDC misrepresented the data and played down a more important finding that provides further evidence that pandemic-control measures are likely having a serious adverse impact on young people’s mental health.

The CDC truncated its analysis at the precise date—April 24—that would cast an increase in teen hospitalization in the worst possible light. The 10% rise in early March that attracted so many headlines was similar to rises in other age groups and had declined sharply by late April. Adolescent hospitalizations for Covid-19 were back down to 0.6 per 100,000 by late May, before the CDC report was published, and well below the rate of 2.6 for the adult U.S. population. Moreover, Covid cases among children in 2021 have now fallen by 84% and hospitalizations are down by 69% since January, thanks largely to adult vaccination.

Here’s Reason‘s Scott Shackford on California’s ‘easing’ of Covid diktats.

Speaking of California, here’s Wall Street Journal columnist James Freeman on that state’s power-drunk strongman, Gavin Newsom. A slice:

Will Mr. Newsom use his powers to liberate citizens from senseless bureaucracy? Golden Staters may need to go to court for such relief. Judges should also seize the next opportunity to clarify that the governor’s emergency authority cannot last forever.

A face of the inhuman (and inhumane) Covidocracy. And here’s more on this madness by Michael Curzon.

My GMU Econ colleague Chris Coyne summarizes the contents of the latest edition (Spring 2021) of The Independent Review. A slice:

In the opening paper, Richard Wagner notes that public health is an oft-used illustration of market failure and justification for governmental action to solve as a corrective. COVID-19 is just the latest in a continuing series of claims of market failure that are alleged to require solutions by politically selected experts. Although recognizing that COVID-19 presents problems of public health, Wagner argues that solutions are a complex matter of social organization and not a simple matter of selecting the right expert to determine the right solution. Subduing COVID-19 requires expertise provided by the scientific disciplines related to public health, but it requires more than that. To explore how much more, Wagner draws on Michael Polanyi’s notion of a “Republic of Science” to explain that subduing infectious disease is best accomplished not through a closed and limited system but instead through a system of free and open competition among ideas and approaches.

Lockdown measures enacted across the United States in response to the COVID- 19 pandemic have severely curtailed personal and economic liberties. The next two papers explore the origins and consequences of government responses to the pandemic. Phillip Magness and Peter Earle analyze the nonpharmaceutical interventions (NPIs) aimed at mitigating the transmission of COVID-19. Examples of NPIs include closing businesses, canceling events, restricting travel, limiting the size of gatherings, and imposing shelter-in-place mandates. Magness and Earle identify the various political economy dynamics at work in the design, implementation, and persistence of NPIs in the context of COVID. These factors include bias toward government action, political path dependency, and the emergence of public-health experts as an interest group incentivized to perpetuate the status quo. Their analysis has implications both for understanding the response to COVID-19 as well as for learning broader lessons for government responses to future public-health crises.

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

Ramesh Thakur writes that the example of Sweden is strong evidence that lockdowns are no ‘solution.‘ A slice:

Now, back to the Nordics. Sweden’s mortality rate is indeed thrice that of Denmark. But Denmark’s in turn is thrice that of Norway and five times higher than Iceland’s. Lockdowns cannot be the explanation for Denmark’s better performance than Sweden’s in light of its own identical disparity with Norway and still greater disparity with Iceland. Moreover, as shown in no fewer than 35 studies collated by the AEIR, globally and among US states Covid mortality is policy invariant, there’s no correlation between key Covid metrics and jurisdictions with severe and soft, mandatory and voluntary social distancing restrictions and guidance. The clear logical inference is that variations are due to factors other than lockdown like Iceland being an isolated island country – a bit like Australia and New Zealand, come to think of it. Danish and US researchers list 16 different factors (including lighter lockdowns) as possible explanations for Sweden’s worse toll among the Nordics. Not all are of equal weight but they are ‘thought-provoking’: average age of Covid deaths, co-morbidities, obesity levels, urbanisation, immigrant populations, crowded working and living conditions, care homes for the elderly (Sweden’s nursing home population is 50 per cent bigger than Denmark’s), cross-facility mobility of healthcare staff, hospital capacity and medicine stocks, climate, seasonality, vitamin D deficiency, etc.

“George Orwell must be looking down on the state of Victoria, rueing his lack of imagination” – so explains James Macpherson. A slice:

As dark as Orwell’s visions were, not even he foresaw a government telling citizens they must remain locked down because a quick easing of restrictions might breach their human rights.

Yet this is exactly what happened in truth-is-stranger-than-fiction Danistan yesterday.

Victoria’s Chief Health Officer Brett Sutton told journalists that harsh restrictions on movement could not be eased until after public servants had ensured it did not violate Victoria’s Charter of Human Rights.

In other words, the government couldn’t be too hasty giving people their freedom, just in case they violated people’s freedom.

Doublethink, thy name is Victoria!

Quotation of the Day…

(Don Boudreaux)

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… is from page 53 of the published version of James Coolidge Carter’s brilliant speech delivered on July 25th, 1889, to the annual meeting of the Virginia State Bar Association – a speech titled The Provinces of the Written and the Unwritten Law:

[O]ur unwritten jurisprudence, by its inherent flexibility and capacity for gradual change and growth, naturally accommodates itself, by insensible gradations, to the corresponding insensible gradation in the progress and changes of human affairs.

DBx: The more I study the works of Carter (1827-1905), the more I come to regard him as being not only one of the greatest legal minds ever to write in the English language, but also as one of history’s most astute social philosophers. It’s a shame that he is today almost completely forgotten. The man was a font of impressive learning and of deep wisdom. In some important ways, Carter was F.A. Hayek before F.A. Hayek, and Bruno Leoni before Bruno Leoni.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 1 of Vol. II (“The Mirage of Social Justice” [1976]) of F.A. Hayek’s great work, Law, Legislation, and Liberty:

In a free society the general good consists principally in the facilitation of the pursuit of unknown individual purposes.

DBx: This insight is profound – as can be understood by reflecting on how very many benefits you enjoy, in every minute of your life, that are the results of strangers each pursuing their own individual, specific purposes that are unknown to you and that were unknown (and were unknowable) to government officials at the time these pursuits were undertaken.

You and I benefit whenever someone profits from implementing a new and better way to produce existing products, or profits from producing new products. Such profit arises from doing that which is novel – from doing that which no one, in the past, had the foresight to do. Economic (as opposed to accounting) profits earned in markets reveal quite well the monetary value of seizing opportunities that, until the profits were earned, had yet to be seized – opportunities that, indeed, in most cases had yet even to be noticed.

You and I benefit from Henry Ford’s innovative idea to manufacture automobiles using an assembly line. We benefit from Malcolm MacLean’s creative idea for container shipping. We benefit from Steve Jobs’s insistence on driving innovation and high-quality at Apple. We benefit from Fred Smith’s innovative idea for overnight package delivery. We benefit from Ron Zappe entering the potato-chip market. We benefit from Jeff Bezos’s innovations in retailing, just as we benefitted from Sam Walton’s – and, long before him, from Richard Warren Sears’s – earlier innovations in retailing.

Each of these individuals – like each of literally millions of other entrepreneurs over the past few hundred years – pursued his and her own goals in ways that would have been inconsistent with any plan for the economy.

Unless proponents of industrial policy discover a way to impart near-omniscience to the government officials charged with the task of consciously directing the economy in ways that improve the masses’ living standards over time, all industrial-policy schemes are doomed to fail. By “fail,” I mean that such schemes are doomed to result in economic outcomes over time that are worse than would be the economic outcomes that emerge spontaneously from competitive market process in which profits and losses play key roles, and in which income earners are free to spend, and invest, their incomes as they choose.

Some Covid Links

(Don Boudreaux)

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Jeffrey Tucker writes of the lockdowns’ inequity. A slice:

And that is precisely what happened in 2020. In the name of all these strange new practices – ‘Nonpharmaceutical Interventions’, ‘Targeted Layered Containments’, or, in the words of Dr. Fauci “public health measures,” all of which are euphemisms for lockdowns – many governments sliced and diced the population. The ruling class cobbled together its own Medieval-style system for beating disease through an expectation that the people who do not matter much will be on the front lines while the rest stay home and stay safe.

Lockdowns are not just a brutal and failed form of disease mitigation. They were the replacement of a social system based on freedom and equality with another based on income, class, and the worthiness to stay free of, or be exposed to, disease. That is the meta analysis of what happened to us in these last 15 months, whether intended or not.

Jacob Sullum reports on efforts in Pennsylvania to rein in government-executives’ emergency powers.

Wise writing by Joakim Book. A slice:

In the Covid-19 disaster, though, plenty of early decision-makers and academics whose models scared an entire world were off by orders of magnitude to the upside. The best and kindest thing that can be said about Imperial College London’s infamous model and others that confidently pronounced doom is that they were exaggerated.

From Swiss Policy Research comes this explanation of the derangement – and grave danger – of Australia’s cruel and authoritarian response to Covid. A slice:

For more than a year already, both Australia and New Zealand have been largely isolated from the rest of the world. Nevertheless, the Australian state of Victoria and its capital city of Melbourne have recently had to impose yet another preemptive lockdown in order to suppress renewed community transmission of the coronavirus.

“Vaccination Doesn’t Add Any Protection to that Gained from Previous Infection.”

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

I’m with Elle Reynolds: Shake hands and ignore any advice offered by Fauci. Here’s her conclusion:

After a yearlong assault on daily life as we’ve known it and an attempt to replace it with a sterile and fearful “new normal,” the handshake is one more thing we shouldn’t let go. To do away with it is just one more way to perpetuate the suspicion, detachment, and self-centeredness we’ve seen too much of this past year.

Jay Bhattacharya says that Fauci’s “credibility is entirely shot.” I agree.

Quotation of the Day…

(Don Boudreaux)

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… is from pages xxii-xxiii of Thomas Mackay’s Preface to the 1891 collection he edited titled, A Plea For Liberty; specifically it’s from the 1981 Liberty Fund edition (Jeffrey Paul, ed.) of this collection:

Each addition to the responsibility of the State adds to the list of ill-contrived solutions of difficulty, and to the enlargement of the sphere of a stereotyped regimentation of human life. Inseparable from this obnoxious growth is the repression of private experiment and of the energy and inventiveness of human character. Instead thereof human character is degraded to a parasitic dependent on the assistance of the state, which after all proves to be but a broken reed.

Some Non-Covid Links

(Don Boudreaux)

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GMU Econ alum Dan Mitchell reminds us that “by historical standards, today’s Americans are fantastically wealthy.”

My intrepid Mercatus Center colleague Veronique de Rugy talks with Emily Jashinsky about some of Biden’s irresponsible policies.

Also from Vero is this EconLog blog post on Covid and Keynesian stimulus. Here’s her conclusion:

I am not expecting newspapers to stop calling government spending “stimulus”, but it would be nice if textbooks would adjust their Keynesian theory content to reflect what we know the value of the multiplier actually is rather than what Keynesians hope that value will be. At the very least, they should note that just because an idea is true in theory does not mean it is true in fact.

Here’s my new GMU Econ colleague Vincent Geloso on inequality.

Deirdre McCloskey debates Marcus Chown on whether or not space exploration is worthwhile for taxpayers. A slice from Deirdre:

The practice is known to economists as the “Tang Fallacy.” Tang was a horrible faux-orange drink made from a powder to which you added water. It was touted as a spin-off from the space programme (poor astronauts!), which implied Nasa was transforming our daily lives. In reality there was no link. And of course we never saw what technologies might have arrived had ordinary people had that money to innovate with instead of it being wasted on moonshots. Yet High-Frontier romantics try to persuade us to give them trillions by adding Tang to the wonderful benefits of space exploration that we have enjoyed. Let’s not.

David Henderson applauds commercial culture.

Damon Root reveals the trouble with “common good originalism.”

James Pethokoukis is an excellent buster of myths.

My GMU Econ colleague Dan Klein shares some observations from David Green about FDR.

From Ryan Bourne: “Minimum wages encourage uneconomic automation”. Here’s his conclusion:

Not all automation, in other words, is created equal. Indeed, if raising minimum wages to encourage automation was “good for the economy,” then why not increase the minimum wage to $100 per hour to really see a productivity boom?

Eric Boehm exposes the ugly reality of the U.S. Senate’s industrial-policy bill. A slice:

Having Congress set industrial policy is good news for businesses with power and influence over federal policymaking, and this proposal is no exception. The bill’s 1,500-plus pages—which were reportedly still being finalized even just a day before the package was supposed to go to the Senate floor for a vote—provide ample opportunity for waste and cronyism.

“The bill spends well over $100 billion on special interests and managing the U.S. economy in areas where the private sector has already proven itself effective,” writes Walter Lohman, director of the Asian Studies Center at the Heritage Foundation, a conservative think tank.

A huge amount of that spending is flowing to Intel and other microchip-manufacturing firms, despite the fact that there is little indication the industry is in need of $52 billion in government aid. Schumer and the Times are eager to suggest that America is losing its technological lead over China in semiconductor manufacturing, but that’s not accurate either. According to the Semiconductor Industry Association, a trade group, American-based firms control 47 percent of the global share of the semiconductor industry—while China controls just 5 percent.

Framing competition with China as a crisis has allows lobbyists to snag some taxpayer cash for their clients, and it also allows Congress to avoid figuring out how to pay for the bill. Instead, the entire package will be financed with public debt.

Some Covid Links

(Don Boudreaux)

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Johns Hopkins School of Medicine professor Marty Makary, writing in the Wall Street Journal, explains the power of natural immunity to Covid-19. Here’s his conclusion:

Dr. Fauci said last Aug. 13 that when you have fewer than 10 cases per 100,000, “you should be able to open up safely and clearly.” The U.S. reached that point in mid-May. It’s time to stop the fear mongering and level with the public about the incredible capabilities of both modern medical research and the human body’s immune system.

David McGrogan applies Bruce Yandle’s ‘bootleggers and Baptists’ insight to explain the pattern of support for lockdowns. A slice:

In light of this, are we at all surprised that it is very often the big social media firms, streaming services and the like that have been most strongly in favor of restrictions? There is nothing conspiratorial about this, nor probably even anything intentional. It is just the straightforward application of one of the most fundamental lessons of classical economics: incentives matter, and the incentives of these actors just tend to point in the same direction. It’s not that these businesses consciously support lockdowns due to a naked profit motive, in other words; it’s simply that their incentives to reject lockdownism are not strong, or are lacking entirely, because their interests are not in conflict with it.

One of the most important, helpful, but least well-systematized concepts in the study of regulation is the ‘bootleggers and Baptists’ phenomenon, coined by Bruce Yandle. Yandle observed that political activism in favour of the prohibition of alcohol sales and Sunday closing laws in the US was often a combination of high and low motives. Baptists are in favor of restricting the selling of alcohol because it is ‘good for society.’ Bootleggers are in favor of it because, for their purposes, the less alcohol that is lawfully available the better. The two groups do not conspire with one another, openly or otherwise. But the alignment of their interests is a kind of pincer movement which regulators find difficult to resist.

Andrew Lloyd Webber will, if necessary, defy the British government’s lockdown and ‘social-distancing’ diktats in order to open his theaters. A slice:

The world premiere of his £6 million Cinderella depends on social distancing being lifted, in accordance with the Government’s “roadmap”, on June 21, a promised milestone that looks increasingly in doubt. Yet, Lloyd Webber tells me, his voice bristling with defiance, “We are going to open, come hell or high water”. What if the Government demands a postponement? “We will say: come to the theatre and arrest us.”

And The Telegraph‘s editors rightly applaud Lloyd Webber. A slice:

It is unconscionable to treat businesses as if they can be switched on or off without consequences, especially when so many will have made plans for how they will attempt to fix the damage of the past year after June 21. Lord Lloyd-Webber’s intervention is a welcome one. Other industry leaders should follow suit.

Here’s Kathy Gyngell on Ivor Cummins on Sweden.

Madeline Grant decries “lockdown Britain.” A slice:

We are still living under rules that few understand, but which remain bossily in place. This is the logic that says amateur choirs in carefully-managed environments cannot sing together safely but professional ones or terraces of chanting football fans can, that insists that you wear a mask when walking around a pub but the moment you sit down everything changes. And we are still being treated like irresponsible children, rather than rational citizens.

What explains our apparent indifference to all this? Perhaps we’ve simply become numb to the constant fluctuations and uncertainties. I’ve certainly found pessimism helpful – by adopting a 24/7 Eeyorishness; never assuming anything is happening, you’re rarely disappointed. Of course, what for some are mere annoyances or inconveniences can cause unimaginable anguish to others. But is something more profound happening here too?

In his brilliant essay The Seen and the Unseen, the 19th century French economist Frederic Bastiat exposed a common human tendency to focus on the visible benefits of an action – the “seen” – while ignoring the “unseen” penalties or drawbacks associated with the same activity. I wonder if, per Bastiat, the combination of a year of limited horizons and the novelty of partial reopening has provided a kind of bread and circuses effect, shielding us from the “unseen”.

Sipping our pints in the glorious weather, it’s easy to forget about the quarter of hospitality venues that never opened; or the 8,500 that have so far shut their doors for good. Obedience is doubly easy for those who remain insulated from economic reality by furlough – or for those who’ve actively enjoyed elements of lockdown, such as working from home.

Julia Hartley-Brewer clashes with a British official who truly is afflicted with Covid Derangement Syndrome.

The straw man will simply not leave Australia. (That which is alleged to be imaginary is really battering a country that is alleged to have wisely used draconian policies to escape the alleged continuing need for that which is allegedly imaginary. It’s all terrifying in reality.) Here’s more from James Bolt:

We Melburnians know the reality of Zero Covid: we are currently locked in our homes 22 hours a day for another week because of six new local cases. This is no way to live. But, unfortunately, it is the way we will have to live for a long time to come.

A Zero Covid strategy is foolish. It involves confining people to their homes over a handful of cases. It involves closing schools, workplaces and churches. It involves cutting off people from friends and family at a moment’s notice. On Wednesday 25 May, Melburnians could be with 30 people in public. The next day they could not meet any.

This is how we live in Melbourne. We are trapped in a seemingly never-ending cycle of lockdowns. Whenever we get some freedoms handed back to us, we know they are only loaned – and could be seized back again at any time.