Russell Roberts's Blog, page 431

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 248 of George Will’s 2019 volume, The Conservative Sensibility:

Most of what makes up society, and most of what is most important in society, is the result of choices too numerous to count, not the planned intention of any individual or group of individuals. Hence the law postulated by Robert Conquest, the historian and poet: Everyone is conservative about that which he or she knows the most about. This is so because when one knows something well, one knows its complex antecedents and evolution.

Trump: Too Easy an Excuse and Target

(Don Boudreaux)

Tweet

Even only-occasional readers of this blog know that I am no fan of Donald Trump. I never have been a fan. I never will be a fan. Quite the opposite. And at the risk of appearing arrogant, I doubt that many people have been more harshly and consistently – indeed, obsessively, repetitively, tiresomely – critical of his trade policies than I have been. Trump’s ignorance (not least of, but not exclusively of, economics) is bottomless and his economic nationalism is disgraceful.

And yet I disapprove of, and fear, the anti-Trumpism that is now stampeding madly throughout the news media and punditry-land. Every real or imagined failure of government to prepare for, to anticipate, to warn of, and to deal with the spread both of COVID-19 and of the resulting public fear is conveniently blamed on Trump. Too conveniently, I’ve become convinced.

“Things would be much better now if only we’d had a better person as president,” the lazy thinking seems to be.

One major danger of this particular blame-game is that it creates the impression that little or no deep thinking about this crisis need be done. All or most problems are caused by Trump’s incompetence, megalomania, and evil mien. End of story. There’s no need, therefore, to question objectively the incentive structures within government agencies and within legislatures. Also, there’s no need to investigate carefully whatever changes in incentives and constraints are created in private markets by taxes and government spending, proscriptions, and prescriptions.

There’s no need for any such hard-nosed analysis because we all know the chief reason for any and all problems: President Donald J. Trump.

Would matters be better today if Hillary Clinton had won the 2016 election? Or if Barack Obama had been anointed to serve a third term? Or if Ronald Reagan or George Washington had been resurrected and ensconced in the Oval Office? Maybe. But if so the improvement would have been small. We Americans would still be in a heap of trouble.

Trump did not create the FDA, the CDC, or any of the countless occupational-licensing and certificate-of-need restrictions. Trump, being governor of no state, has imposed no stay-at-home diktats on private Americans. Trump did not create COVID-19. Nor did he bring this virus to the U.S.

As best as I can judge, a Pres. Clinton (H. or B.) or Pres. Obama or Pres. Biden or Sanders or Warren or Klobuchar in this moment would likely have done some things better than Trump, but also would likely have done some things worse. The social-engineering itch of modern-day Democrats would have prevented any of them from easing some of the regulations that Trump justifiably eased, and would perhaps have, in addition, moved them to impose restraints and restrictions that Trump never dreamed of and which – although surely these would have been greeted with “Oooohs” and “Ahhhs” from the intellectual and entertainment-world elite – would perhaps have inflicted even graver damage on the economy than that which we are enduring now.

As matters stand, however, Trump is the excuse. It’s lazy. It’s largely mistaken. And, as such, it’s dangerous. But it’s oh-so convenient and cool.

……

Note that the above post is not a defense of Trump. I have no interest in defending the man, for I thoroughly dislike him. It is, instead, a criticism of the media. It’s a lament of the media’s laziness and mindlessness – of their reversion to the path-of-least resistance of blaming Trump. They should practice what they preach and be more mindful, more thoughtful, more analytical, more rational than Trump. It’s a shame that so many people in the media now are, at bottom, akin to him in their enthusiastic embrace of thoughtless prejudices.

Bonus Quotation of the Day…

(Don Boudreaux)

Tweet

… is from the third entry of Roger Koppl’s important EconLog series titled “Pandemics and the Problem of Expert Failure” (link original):

But questioning is precisely what we need in crises. In his essay, “What is Science?” Richard Feynman remarked “Science is the belief in the ignorance of experts.” When we give experts power, including the power to decide who the experts are, we choke off science. The premise of a rigid hierarchy of knowers is mistaken. The knowledge we need in normal times and crisis times alike is distributed. It’s out there in thee and me and in all our habits practices and experience. It is not a set of instructions and doctrines coming from on high. It arises of its own from our many decentralized interactions. 

Answer Me This…

(Don Boudreaux)

Tweet

… how many more hospital beds would there be in America today if hospitals were free to open without first having to meet certificate-of-need (CON) requirements? Asked differently, how much potential hospital-bed capacity in the United States was destroyed by CON restrictions?

And how much blame for concerns about hospital-bed shortages will be aimed by politicians and the media at Certificate-of-Need restrictions?

Some Links

(Don Boudreaux)

Tweet

Peter Hitchens makes the case that the cure is worse than the disease. A slice:

What I have been surprised by is how little examination there has been to whether there is any logic to this. It is as if you went to the doctor with measles and the doctor said that this was serious measles and the only treatment for it is to cut off your left leg. And he cuts off your left leg and then later on, you recover from the measles and he says, ‘This is fantastic. I’ve cured you of the measles, sorry about your leg.’ That is more or less what is going on now.

My intrepid Mercatus Center colleague Veronique de Rugy is justifiably displeased with the power still exercised by freedom-exorcising bureaucrats. A slice:

Just a few weeks ago, a Springfield, Virginia, woman who ran an internet clothing business from her home was forced by the city to shut down because the local zoning doesn’t permit “retail sales establishments” in people’s homes—even if those sales only occur online. She’s already lost $30,000 of her income. In these times of great uncertainty, we should be doing everything we can to make it easier for people to find and sustain work—not turning honest, hardworking people into outlaws.

The lesson of the story is that during a pandemic life as we knew it is gone, but bureaucrats as we know them stay annoyingly the same.

Here’s Dan Mitchell on the importance of keeping airlines and other businesses from falling yet further under the control of government.

John Tamny argues that governments’ actions during the coronavirus crisis should turn everyone into a libertarian.

Here’s part 3 of Roger Koppl’s important series of posts at EconLog, “Pandemics and the Problem of Expert Failure.”

Among the still-too-small but hearty band of people who write sensibly, soberly, clearly, and wisely about the COVID-19 panic is Arnold Kling. Don’t miss – truly, do not miss – for example, here and here and here and here.

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 183 of Arthur Diamond, Jr.’s excellent 2019 book, Openness to Creative Destruction: Sustaining Innovative Dynamism (footnote deleted):

Steve Wozniak was one of the best inventors of our time. But he candidly admitted that even the best cannot see out beyond two years. The problem is that innovators cannot fully predict which of their own current innovations will pan out, and they cannot predict what new innovations they will come up with in the future. And even less can they predict the new innovations of others.

What we do know is that in the past, open institutions and policies have resulted in wonderful new goods and services. Based on that, we can predict with a high degree of confidence that if open institutions and policies continue, we will continue to benefit from wonderful new goods and services.

Essential Complexities

(Don Boudreaux)

Tweet

In my current column for the Pittsburgh Tribune-Review (which will be my final one for that splendid publication) I challenge the popular notion – one unsurprisingly pushed by Trump’s trade advisors – that the U.S. government should restrict Americans’ trade to ensure that we Americans produce all of our “essential medicines.” A slice:

Consider a drug with no substitutes and a 90% chance of working. Is this drug sufficiently essential to justify government preventing Americans from importing lower-cost versions of it? Many people will answer “yes.” But what if this drug’s chances of working are only 50%? Or a paltry 5%?

If you encounter difficulty answering such questions, the reason is not just that there’s no objective point at which a drug’s success rate transforms it from inessential to essential. Any such question is difficult to answer because a “correct” answer depends also upon just what illness a particular drug treats.

Which of the following four drugs, if any, would you classify as essential: one with a 0.1% chance of curing covid-19; one with a 10% chance of curing covid-19; one with a 40% chance of curing leukemia; one with a 100% chance of curing toenail fungus?

You’re more astute than me if you have a sure answer to this question.

Reality Isn’t Optional, #778

(Don Boudreaux)

Tweet

Here’s a follow-up note to Mr. Lee Bennani:

Mr. Bennani:

Thanks for your follow-up e-mail to my previous note.

You’re correct that among the perceived benefits of anti-price-gouging restrictions are “elevated chances for poor people to buy needed items instead of these things [being] all bought up by the rich.” This perception, alas, is false.

Nothing is easier than to imagine that, with prices kept artificially low by government diktat, poor people’s ability to acquire goods is increased both absolutely and relative to the ability of rich people to acquire goods. But imagination isn’t reality.

In reality, anti-price-gouging restrictions almost surely decrease the ability of the poor to compete successfully with the rich in acquiring goods.

Anti-price-gouging restrictions reduce available supplies of goods. The resulting increased scarcity of goods thus raises these goods’ actual market values. As a result, the costs that individuals are willing to incur to acquire these goods are made higher than these costs would be without any restrictions on price hikes. (The excess of per-unit values over per-unit maximum-allowed monetary prices is why people are willing to wait in long lines – to incur socially wasteful costs of spending hours in queues – for a chance of buying goods that are in short supply.) The fact that government prohibits monetary prices from accurately reflecting these higher values no more changes this reality than did the Chinese government’s initial prohibition on physicians accurately reporting COVID-19 change that reality. In both cases, government prohibition of accurate reporting makes matters worse.

So with quantities supplied artificially shrunken by anti-price-gouging restrictions, who is most likely to acquire what few supplies are available? Not the poor. Yes, they are (perhaps) better able than are the rich to afford to spend time waiting in long lines. But the rich are (surely) better able than are the poor to pay others to wait in long lines for them.

More importantly, the rich are far more likely than are the poor to have personal, social, business, and political connections that enable them to persuade merchants to hold inventories aside for them – for the rich – to purchase.

Unless you honestly believe that in the throes of shortages created by price ceilings poor people are on equal footing, in competing for goods and services that are in short supply, with people such as Jeff Bezos, Mitch McConnell, Andrew Cuomo, Scarlett Johansson, LeBron James, Paul Krugman, the mayor of your city, the branch manager of your bank, and your wife’s gynecologist, you should reassess your claim that anti-price-gouging statutes result in “elevated chances for poor people to buy needed items instead of these things [being] all bought up by the rich.”

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 Links

(Don Boudreaux)

Tweet

My intrepid Mercatus Center colleague Veronique de Rugy reveals how the coronavirus crisis puts many government regulations into clearer perspective. Here’s her conclusion:

The large number of rules lifted by federal, state and local governments in response to this pandemic reveals the sad reality that many regulations serve little to no good public purpose. Hopefully, people will realize how counterproductive these rules were and will not allow them to be reinstated after the crisis is over. In the end, we’ll all be freer and safer.

Also from Veronique is this clear-eyed assessment of airline bailouts.

Here’s needed perspective, from Dr. John Lee, on what we know and don’t know about COVID-19.

Also offering needed perspective on the current crisis is GMU law professor David Bernstein.

Pierre Lemieux writes eloquently about some of awful consequences of governmental suppression of market prices. A slice:

Since prices are not allowed to rise with rising short-run marginal costs, the shortage will continue. (In fact, it will continue even in the long term if the long-run industry curve shows diminishing returns to scale.) As by an invisible hand, the government will be pushed into doubling-down on authoritarianism. This reaction was illustrated by Trump’s bossing General Motors around and by Peter Navarro’s talking tough, which is easy when you have laws and decrees and armed men behind you. Navarro is Trump’s new “equipment czar”; the informal title says everything.

Rightly warning of the viral growth of government powers is Raymond Niles.

Roman Pancs argues eloquently that the current shutdown of the economy is de facto criminal. Here’s his conclusion:

The current government interference with freedoms of movement and contract is—for lack of a better term—criminal. If you want to interfere, interfere with zoning rules and build makeshift hospitals. Interfere with FDA approval guidelines, with patents on critical components for life support machines and face masks, and with employment restrictions imposed by professional associations. Motivate the industry to produce life support machines. Announce prizes for medical advances. Pay the nurses double. But do not gratuitously interfere with the freedoms that are the core values of the civilisation. Western democracies have already been exhibiting isolationist tendencies, and the recent travel bans run the risk of normalising nationalism.

But what scares me most is the layman who neither questions nor protests. And the economist who refuses to calculate.

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from pages 81-82 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1991 paper “Frank H. Knight,” a remembrance of his great mentor at the University of Chicago:

Frank Knight could never have joined those of the self-selected elite who, in idea or practice, seek to plan, steer, or direct the lives of those who are excluded. He was a classical liberal, not because he predicted that only with widespread individual liberty would desired results be generated, but because the liberal order is required to allow individuals, all individuals, to define their own objectives.

DBx: Neither society in general nor the economy specifically is an engineering project to be ‘maximized,’ ‘optimized,’ or whateverized either by the market’s invisible hand or by the state’s visible fist. And individuals are not fleshy Lego pieces to be assembled or arranged by a giant planner.