Russell Roberts's Blog, page 314

Quotation of the Day…

(Don Boudreaux)

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… is from page vi of the 2002 Dover Publications edition of the 1896 English-language translation – The Crowd: A Study of the Popular Mind – of Gustave Le Bon‘s 1895 La psychologie des foules:

Every conclusion drawn from our observation is, as a rule, premature, for behind the  phenomena which we see clearly are other phenomena that we see indistinctly, and perhaps behind these latter, yet others which we do not see at all.

“This Is the Most Politicized Disease In History”

(Don Boudreaux)

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(HT Lyle Albaugh)

Is Economic Theory Worthless?

(Don Boudreaux)

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Here’s a letter to economics educator Elaine Schwartz:

Elaine:

Thanks for including me on the mailing list for your Econlife series. Your series is very good.

I can’t resist, though, commenting on the quotation that you shared today from Nobel laureate economist Eric Maskin on the proposal to raise the federal minimum wage to $15 per hour. Asked by surveyors at Chicago’s Booth School of Business if “A federal minimum wage of $15 per hour would lower employment for low-wage workers in many states,” Prof. Maskin replied that he’s “uncertain.” The reason he gave for his uncertainty is this: “An increase to $15/hour is a big jump, and I’m not sure we have the data to know what the effect on employment would be.”

Prof. Maskin’s response makes me weep for my profession. If economic theory does not allow us to predict the general effects on employment of a 107 percent increase in the minimum wage, then economic theory is worthless. Why develop, learn, and teach economic theory if, in the face of such a big jump in the minimum wage, we must nevertheless wait to see whether or not any negative impacts on the employment of low-wage workers are revealed by the data?

I for one don’t believe that economic theory is worthless. I for one reject what so many other economists today apparently embrace – namely, the notion that the only role of the economist is to report on “the data” and to otherwise remain mute.

It’s dismaying that an economist as prominent as Prof. Maskin evidently has no idea that more than doubling the hourly wage will reduce employers’ demand for low-skilled workers.

Someone might defend Prof. Maskin by noting that – as Deirdre McCloskey, Richard McKenzie, and, most recently, Jeffrey Clemens have correctly argued – employers can respond to a rise in the minimum wage in ways other than by employing fewer workers. Employers can instead, for example, reduce the number of hours workers work, scale back fringe benefits, or increase jobs’ onerousness.

All true. Yet it’s impossible for me to believe that such a gargantuan hike in the minimum wage will play out in all ways other than in job losses. But even if I’m mistaken, if Prof. Maskin had these other negative consequences of minimum wages in mind, he surely would have mentioned them in his comment.

Again, if we economists truly cannot know, until we are told by the data, the general impact that a 107 percent increase in the minimum wage will have on the employment prospects of low-skilled workers, we ourselves are as devoid of advanced, worthwhile skills as are the workers who will be cast into the ranks of the unemployed when the minimum wage is raised.

Sincerely,
Don

Some Covid Links

(Don Boudreaux)

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Mark Perry, on Facebook, shares this picture of Covid-19 in historical perspective:

David Campbell explains why the U.K. government ought to, but will not, abandon lockdown. A slice:

When the UK Government became aware of the Covid-19 virus, it was obliged to make a decision with extremely imperfect knowledge. In part the imperfection was of knowledge of the organism itself. Though knowledge of human coronaviruses has accumulated over more than 50 years, Covid-19 was very likely only recently existent and certainly only recently known to UK and worldwide epidemiology. But much more important was the imperfection of knowledge of what sensibly could be done. A policy aimed at the entire population was from the outset bound to impose burdens on the Government’s capacity to formulate in detail and implement a policy unprecedented in the history of the modern state. All that could be said at the outset was that the costs of such a policy would be immense, certainly greater than those of any other peacetime policy ever adopted.

Such a policy was nevertheless adopted, largely on the basis of the claim that it was extremely desirable as it would avoid huge illness and loss of life. I must make it clear that I believe the predictions of these effects were speculations of a familiar, alarmist type, since given public credence by statistical reporting and other official information that is worse than worthless.

Glen Bishop is willing to put his money where his mouth is when exposing yet more bad science produced by the Imperial College. Will Neil Ferguson do the same? A slice:

The Imperial college model is a thing of mathematical beauty. It is intricate and complex enough that no mere MP would dare try to question the details of it. But no matter how good a scientific model looks, and how hard the theory and coding behind it is to grasp, if the fundamental assumptions are wrong it will not work. When Einstein simplified general relativity, he is quoted as saying: “everything should be as simple as possible, but no simpler”. The above is a simple analysis of the data over the last 12 months from an undergraduate maths student. If Professor Ferguson wants to wager whether there will be a significant surge of coronavirus fatalities between June and September this year, I will happily put all the student loan I have saved in lockdown on him being wrong.

For those of you who continue to trust government officials with discretionary power to ‘manage’ a pandemic, Reason‘s Scott Shackford offers a report that you might wish to consult.

Janet Menage, M.D., from Wales has this letter in the BMJ:

Dear Editor

History is littered with examples of the atrocities which ensue when doctors abandon their traditional principles and judgement in favour of unquestioning subservience to government diktat – medical involvement in torture, human experimentation and psychiatric punishment of political dissidents being familiar examples.

Abbasi takes as axiomatic that there was no prior immunity in the population, that lockdowns are effective, that computer modelling is realistic, that statistics have been accurate and that WHO statements are reliable. All of these parameters have been widely challenged by knowledgeable and conscientious researchers whose findings were often disregarded, censored or vilified.

From a medical perspective, it was clear early on in the crisis that disregarding clinical acumen in favour of blind obedience to abnormal ventilation measures, reliance on an unsuitable laboratory test for diagnosis and management, and abandoning the duty of care to elderly hospitalised patients and those awaiting diagnosis and treatment of serious diseases, would create severe problems down the line.

Doctors who had empirically found effective pharmaceutical remedies and preventative treatments were ignored, or worse, denigrated or silenced. Information regarding helpful dietary supplements was suppressed.

This was further compounded by rule-changes to death certification, coroners’ instructions, autopsy guidelines, DNR notices and the cruel social isolation policy enforcement regarding family visits to the sick and dying.

When medical professionals allow themselves to be manipulated by corrupt politicians and influenced by media propaganda instead of being guided by their own ethical principles and common sense based on decades of clinical experience, the outlook becomes very bleak indeed.

Historically, public respect for and trust in doctors has exceeded that awarded to politicians. The unquestioning capitulation of medicine to an authoritarian executive and predatory corporate power may have undermined the doctor-patient relationship for a generation.

Those of you who continue to doubt that unchecked fear of Covid – and silence in the face of the resulting hysteria – leads to top officials seriously proposing policies that are absolutely inimical to a free society, check out this paragraph from a recent report in the Daily Mail:

It came after SAGE expert Professor John Edmunds told ITV’s Peston that most curbs on daily life — which may include the Rule of Six — are likely to be in force until the end of this year, while less restrictive curbs — like face mask wearing on public transport and indoors — could possibly be in place ‘forever’.

The great Lionel Shriver protests the tyranny she is now living under in Great Britain. A slice:

So it’s worth asking just how fortunate those Aussies and Kiwis really are. They can’t leave either. A foreigner would have to be a complete idiot to visit. Some 40,000 nationals are stranded abroad, many unable to afford the quarantine back home. The son of a close friend in London lives in New Zealand, and who knows when the family will be united again? The aviation, tourism and hospitality industries have been devastated. Most crucially: yeah, these countries have sealed themselves off from a world teeming with slime and impurity. But once hermetic restrictions are in place, how do you ever lift them? Wouldn’t ever opening up make all your sacrifices for naught?

“Mindless lockdowns destroy lives — and our Constitution” – so write John Yoo and Scott Atlas.

“Texas boy, 12, hangs himself after battling depression amid COVID-19“. (An anecdote? Yes. Do children commit suicide in times other than Covid? Yes. Might this young boy’s mental condition have been such that he’d have hung himself even had there never been lockdowns? Yes. But if the pro-lockdown crowd treats individual deaths attributed to Covid as evidence of the need for lockdown, then it’s fair to treat individual deaths attributed to lockdown as evidence of the need to end all lockdowns.)

Quotation of the Day…

(Don Boudreaux)

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… is from page 9 of the original 1960 Harvard University Press edition of Frank Knight’s collection of lectures, delivered in 1958 at the University of Virginia, titled Intelligence and Democratic Action:

Man is an opinionated animal, and contentious, as well as romantic (uncritical) in forming opinions. This is true in all fields of knowledge, but especially in those dealing with people and institutions, and most notably with respect to value judgments. In consequence, the need for  intelligence in a democratic society confronts dis-harmony within human nature.

DBx: So true.

Economics reveals to those who truly learn it vast amounts of phenomena unseen to those who don’t learn economics. Because of this reality, those persons whose material welfare or ideological attachments are furthered if others remain blind to phenomena revealed by economics have a positive interest in denying the reality of the unseen phenomena.

And because remaining blind is easier than exerting the effort to see past the fogs and mirages to what exists over the horizon, those whose welfare or ideological attachments are promoted by others remaining blind to phenomena revealed by economics have little trouble convincing their fellow human beings that economists who are forever pointing out the unseen are to be ignored or even, on occasion, demonized.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 233 of the 1984 Penguin Classics edition of Alessandro Manzoni’s great mid-1820s novel, The Betrothed (I Promessi Sposi), translated by the late Bruce Penman; the character Antonio Ferrer is deputy governor of Milan during a time of bad grain harvests:

Ferrer saw, as anyone could see, that it is highly desirable that there should be a fair price for bread. He also thought – and this was where he went wrong – that an order from him could do the trick. He fixed the price of bread at the level that would have been right with corn at thirty-three lire per measure. But it was really being sold at up to eighty. Ferrer was behaving like a lady of a certain age, who thinks the can regain her youth by altering the date on her birth certificate.

DBx: Monetary prices and wages set on markets are not arbitrary.

A government can indeed prevent people from transacting at nominal prices and wages above those stipulated by the government. A government can indeed prevent people from transacting at nominal prices and wages below those stipulated by government. But no government, in doing so, thereby transforms the market values of goods and services into those that correspond to the government-enforced maximum or minimum prices and wages. (Actually, quite the opposite occurs.)

People who believe that anti-price-gouging legislation helps low-income buyers, and that minimum-wage legislation helps low-income workers, do indeed express a belief that is the intellectual equivalent of the belief that a person can become younger merely by scratching out from his or her birth certificate the true date of birth and scribbling in an arbitrarily chosen later “date of birth.”

This belief becomes not a smidge more reasonable if it is held or expressed by people who call themselves “Progressive” and who boast about “following the science.”

Some Non-Covid Links

(Don Boudreaux)

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My intrepid Mercatus Center colleague Veronique de Rugy isn’t impressed with Mitt Romney’s so-called “Family Security Act.” A slice:

However, this universality creates other work disincentives. For example, experiments with the universal basic income provide evidence that unconditional cash payments can be detrimental to beneficiaries’ employment. This undermines the importance of work as a pathway out of poverty for some low-income Americans and their children. In fact, Scott Winship at the American Enterprise Institute has made a powerful case that the work requirements included in welfare reform of the 1990s played an important role in reducing child poverty.

Jon Sanders is rightly grateful for being “price-gouged” (so-called).

Wall Street Journal columnist Dan Henninger is appropriately critical of the insidious tyranny lurking in Progressives’ notion of “our democracy.” A slice:

So be it, until the 2022 midterms. But how does voting to demote the election in a Georgia congressional district, no matter how freakish its representative’s views, square with “our democracy”?

Within days of that House vote, an inevitable corollary event arrived, with a New York Times columnist suggesting that in light of “our [that word again] national reality crisis,” some academics were urging the creation of a federal “reality czar,” whose office would identify and presumably correct false thinking.

It may be an exaggeration, but only a small one, to suggest that its proponents want a federal office of reality because they think that virtually all the 74 million Trump voters in 2020 were steeped in QAnon-like falsity. What an extraordinary juncture in U.S. politics. If you believe that everything your opponents think is false, and that everything you believe is the “truth” (apologies again for the oh so slight exaggeration), this surely is a form of insanity.

Wall Street Journal columnist Jason Riley wonders if teachers’ unions have finally overplayed their hand. A slice:

According to the most recent data from School Digger, a website that aggregates test score results, 23 of the top 30 schools in New York in 2019 were charters. The feat is all the more impressive because those schools sported student bodies that were more than 80% black and Hispanic, and some two-thirds of the kids qualified for free or discount lunches. The Empire State’s results were reflected nationally. In a U.S. News & World Report ranking released the same year, three of the top 10 public high schools in the country were charters, as were 23 of the top 100—even though charters made up only 10% of the nation’s 24,000 public high schools.

We are told constantly by defenders of the education status quo that the learning gap is rooted in poverty, segregation and “systemic” racism. We’re told that blaming traditional public schools for substandard student outcomes isn’t fair given the raw material that teachers have to work with. But if a student’s economic background is so decisive, or if black students need to be seated next to whites to understand Shakespeare and geometry, how can it be that so many of the most successful public schools are dominated by low-income minorities?

What is equity?

As Ryan Bourne reports, the absurdity of the arguments made in support of minimum wages knows no limits.

Speaking of minimum wages, here’s a brand new – and very important – paper on the subject from economist Jeffrey Clemens. A slice:

I show that margins including nonwage job attributes can have first-order implications for analyses of minimum wages. In models that account for such factors, predictions for the effects of minimum wages on unemployment and worker welfare can, perhaps surprisingly, be reversed from our basic intuitions. I also show how these results can be illustrated through minor extensions to basic diagrams of labor supply and demand.

George Will justly criticizes Chuck Schumer’s and Elizabeth Warren’s proposed welfare for the well-to-do. A slice:

One drama of Joe Biden’s infant presidency was foreshadowed 13 months ago in Iowa when a rival for the Democratic presidential nomination, Sen. Elizabeth Warren of Massachusetts, answered a question. Her “a program for every problem” repertoire included as much as $50,000 of forgiveness for indebted students or former students from households making less than $100,000, declining to zero for $250,000 households. An Iowan said to her:

“My daughter is getting out of school. I’ve saved all my money [so that] she doesn’t have any student loans. Am I going to get my money back?”

Warren: “Of course not.”

Iowan: “So you’re going to pay for people who didn’t save any money, and those of us who did the right thing get screwed?”

Of course: Activist government usually serves those who know how to activate it — relatively affluent and articulate complainers.

Some Covid Links

(Don Boudreaux)

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The White House – impressed by the apparently shocking new discovery that pathogens mutate – is talking about imposing restrictions on domestic travel within the United States…. Phil Magness accurately identifies such talk as an impeachable offense. (Why are so few people speaking out against this madness and tyranny?!)

Those of you who, astonishingly at this point, continue to doubt that the excuses for lockdown continue to morph ever-more outrageously  – and into ever-greater tyranny – might want to read this item about what was once a free country…

… and you might want to listen to this short interview with British MP Charles Walker.

Guy de la Bédoyère weighs in. A slice:

I freely admit that of late I have tried to adopt a more conciliatory tone, frustrated by the polarisation of the debate about how to get out of this crisis and the apparent inability of people to listen to each other. But with the news getting worse every day, vaccines gradually diminishing as an escape as scientists reel back at the earth-shattering discovery that viruses mutate, and lockdowns turning into a permanent policy in the fantasy world of Zero Covid (now they are necessary to help the fight against mutations), I am close to the point of giving up.

Living in Britain in 2021 is like cowering in a submarine while enemy depth charges explode all around you. You daren’t rise to the surface and instead just sink lower and lower. The only difference is it’s our own Government dropping them.

Reason‘s Robby Soave rightly scolds long-time enemy of education Randi Weingarten for spreading disinformation about Covid-19.

Jeffrey Tucker lists some of the people who wanted, or at least were unlikely to opposed, the tyrannical Covid lockdowns.

Back in November, Matt Kibbe spoke with Ivor Cummins.

Here’s the video of Phil Magness’s and Jeremy Horpedahl’s recent debate over lockdowns. (HT Matt Zwolinski) (And here are some of David Henderson’s thoughts on that debate.)

Phil Kerpen isn’t impressed with the evidence trotted out to support double-masking. (HT Iain Murray)

Here’s the abstract from a new paper by Pinar Jenkins, Karol Sikora, and Paul Dolan:

Every policy has direct and indirect effects of intended and unintended consequences. Policies that require people to stay at home to reduce the morbidity and mortality from Covid-19 will have effects beyond the virus. For example, they will adversely affect mental health and economic prospects for many. They will also affect people’s willingness and ability to access health and social services. This is likely to result in increases in morbidity and mortality from otherwise curable diseases, such as cancer, acute myocardial infarction and stroke. A comparison between Covid-19 deaths prevented and excess cancer deaths caused shows it is possible that preventing Covid-19 deaths through lockdowns might result in more life-years being lost than saved.

Alex Berezow rightly wonders why the CDC’s own new estimate of the number of Covid infections in the U.S. isn’t more widely spoken and written about. Here are his first few paragraphs (original emphasis):

As of now, the official number of COVID cases in the United States stands at roughly 27.1 million. However, the CDC just released its own estimate of the actual number of infections: 83.1 million, more than three times the official count.

If this number is anywhere near accurate, it changes just about everything. Here are some of them:

1) The lockdowns didn’t work as intended. It may be too early to say that lockdowns were an abject failure, but if there really are 83 million infected Americans, we can safely say that the lockdowns didn’t work as intended.

To be fair, it’s far easier to make this statement in retrospect. In the middle of a pandemic, when people are dying left and right, a lockdown looks quite reasonable. In fact, lockdowns may be necessary to prevent overwhelming the healthcare system. So, instead of concluding that we shouldn’t have done any lockdown, the better conclusion is that the lockdown should have been smarter. For instance, perhaps only those who are 65 and older should have been given “stay at home” orders rather than the entire community.

Quotation of the Day…

(Don Boudreaux)

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… is from pages 268-269 of Matt Ridley’s excellent 2020 book, How Innovation Works: And Why It Flourishes in Freedom:

In the ten years from 2008, America’s economy grew by 15 per cent but its energy use fell by 2 per cent.

This is not because the American economy is generating fewer products; it’s producing more. It is not because there is more recycling – though there is. It’s because of economies and efficiencies created by innovation…. [T]hose who say growth is impossible without using more resources are simply wrong. It will always be possible to raise living standards further by lowering the amount of a resource that is used to produce a given output. Growth is therefore indefinitely ‘sustainable’.

Desmond Swayne Talks With Julia Hartley-Brewer About the Calamity of Lockdowns

(Don Boudreaux)

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