Russell Roberts's Blog, page 46

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(Don Boudreaux)

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Dan McLaughlin rightly rips into the 1619 Project, a (very) bad fictional tale peddled to the gullible as a bold factual one. Three slices:

Readers who have followed the 1619 Project from its inception in 2019 as a New York Times Magazine special edition through its metamorphoses into a classroom curriculum in 2020, a book released in November 2021, an ongoing campus and library-lecture tourby 1619 Project impresario Nikole Hannah-Jones, and now a slickly photographed miniseries on Hulu narrated by Hannah-Jones, should by now not be surprised at four things.

First, while the project contains some useful perspective on the history of slavery, segregation, and racism in America, it is wrapped in a highly tendentious ideological framework that ranges from rank Democratic partisanship to Marxist economic and political theory. Second, it gets important facts glaringly wrong. Third, it advances arguments without the slightest shame or self-reflection after being called out publicly on getting the supporting facts for those arguments glaringly wrong in the past.

And fourth, it remains a lucrative brand entirely without regard to whether it gets its facts straight or peddles partisan or ideological agitprop. That’s why Hannah-Jones has been showered with the highest awards the American intelligentsia can bestow, including a Pulitzer Prize, a MacArthur “genius grant,” an endowed chair in “Race and Journalism” at Howard University, and an entire Center for Journalism and Democracy at said school, which will fund her in producing a next generation of imitators of her approach to historical truth. These accolades are based entirely on the 1619 Project. Hannah-Jones, who was scarcely known before the publication of the project, has done little else since.

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The original magazine version of the 1619 Project, in the sentence that was since “clarified,” blandly asserted as fact that “one of the primary reasons the colonists decided to declare their independence from Britain was because they wanted to protect the institution of slavery.” At the time, Hannah-Jones did not even bother to cite facts or scholarship to back up her theory, other than asserting generically that “in London, there were growing calls to abolish the slave trade. This would have upended the economy of the colonies, in both the North and the South.” This was false history: As Sean Wilentz of Princeton notes, “the colonists had themselves taken decisive steps to end the Atlantic slave trade from 1769 to 1774. During that time, Maryland, New Jersey, Pennsylvania, Connecticut, and Rhode Island either outlawed the trade or imposed prohibitive duties on it. Measures to abolish the trade also won approval in Massachusetts, Delaware, New York, and Virginia, but were denied by royal officials.”

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The redoubtable Phil Magness has dismantled the revised-for-TV version, noting among other things that [Lord] Dunmore himself was a slave-owner, and an unrepentant one, as he showed as royal governor of Bermuda after the Revolution. Magness also details how Hannah-Jones and [Woody] Holton use the visual format to mislead viewers: Sitting in front of the governor’s mansion in Williamsburg, they falsely characterize Dunmore as issuing the proclamation from the mansion, when he had actually already been chased out of the capital months earlier and no longer governed Virginia in any practical sense.

George Will writes about the upcoming hearing by the U.S. Supreme Court of the case against Biden’s student-loan ‘forgiveness’ lawlessness. Two slices:

In his State of the Union address, President Biden had thoughts about almost everything, even unto the crisis of hotel “resort fees.” He was, however, parsimonious with words — just a three-word boast about “reducing student debt” — concerning his policy of student loan forgiveness. His reticence about unilaterally spending, by executive fiat, about $400 billion perhaps reflected foreboding.

He knew that on Feb. 28 the Supreme Court will hear oral arguments about his plan’s constitutionality. An amicus brief from 11 conservative intellectuals, with impressive judicial and executive branch experience, demonstrates that Biden’s behavior is a particularly egregious example of lawlessness committed by presidents of both parties. Were Biden to succeed, the nation’s constitutional architecture would be irrevocably altered.

The Magnificent Eleven note that the framers considered the power of the purse “the central and most important constitutional power reserved exclusively to the legislative branch, enabling it to oversee and control virtually every activity of the federal government.” Hence the clarity of the appropriations clause: “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

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Biden’s $400 billion overreach has taken presidential impudence to a new level. It signals his complete capitulation to his party’s progressives, whose project is to emancipate the president, and the administrative state he wields, from all restraints. To put a bridle on the modern presidency, Congress needs the court’s assistance. All the court needs is the appropriations clause.

Finally, although this is not the court’s concern, Biden’s gargantuan loan forgiveness expenditure is as morally repellent as it is constitutionally defective. And it should especially trouble progressives who are forever banging on about “social justice.” Biden’s regressive policy would benefit a portion of the privileged minority of Americans who have attended college and who for that reason will average higher lifetime earnings than those who have not attended. Hence, Sen. Bill Cassidy (R-La.) recently reported hearing this tart rhetorical question from someone regarding Biden, “Is he going to forgive the loan on my work truck?”

David Boaz decries the usurpation by U.S. presidents of legislative powers reserved by the Constitution for Congress.

“The DEI mania is overrunning legal education.”

Brian Balfour explains that Biden’s “Buy American” scheme will inflict economic harm on most Americans. A slice:

The result is that American taxpayers are forced to pay more for less. Excluding potentially cheaper and better imported inputs means fewer bridges, airports, and other infrastructure are made with a given amount of taxpayer dollars. As the New York Times’ Peter Coy writes, “If the American-made products were cheaper, better or both, there would be no need to force agencies to buy them. They’d be the natural choice. So either the requirement is harmful to the customers in the federal government and, by extension, taxpayers, or it’s superfluous.”

But what about all those American jobs being propped up by “buy American” efforts?

According to Livia Shmavonian, the White House made-in-America director, “The President believes that when we spend American taxpayers’ dollars, we should support American workers and businesses. Making more products at home creates manufacturing jobs, strengthens supply chains, and helps lower costs.”

Here we can channel Frederic Bastiat, who reminded us more than 150 years ago to not just take into account the easily visible effects of a policy, but those that are more difficult to detect. The Biden administration can readily tout American jobs supported by the taxpayer funds being directed to the various domestic manufacturing and construction firms. That is the easily “seen” result.

But more funds being tied up rewarding domestic firms for infrastructure projects means less funds available for other government projects that would utilize workers in other lines of employment. More importantly, however, is that more money being spent than necessary on these government infrastructure projects means more money taxed, borrowed, or inflated out of the economy.

Here are some one-paragraph book reviews by my GMU Econ colleague Bryan Caplan.

Jeffrey Miron is correct: “The way to address the debt limit is – yes – to cut Medicare and Social Security.”

The U.S. government is stripping Americans of nearly all financial privacy.

Muriel Blaive tweets: (HT Jay Bhattacharya)

We will need to question the mainstream media more and more in the Covid disaster because their behavior has generally been scandalous.
Here is a series of bona fide scientific studies showing the lockdowns never worked – we knew this from July 2020.

Writing at City Journal, John Tierney carefully explains what should be – but what won’t be – of special interest to those who Tierney justifiably calls “maskaholics”:

We now have the most authoritative estimate of the value provided by wearing masks during the pandemic: approximately zero. The most rigorous and extensive review of the scientific literature concludes that neither surgical masks nor N95 masks have been shown to make a difference in reducing the spread of Covid-19 and other respiratory illnesses.

This verdict ought to be the death knell for mask mandates, but that would require the Centers for Disease Control (CDC) and the rest of the public-health establishment to forsake “the science”—and unfortunately, these leaders and their acolytes in the media seem as determined as ever to ignore actual science. Before the pandemic, clinical trials repeatedly showed little or no benefit from wearing masks in preventing the spread of respiratory illnesses like flu and colds. That was why, in their pre-2020 plans for dealing with a viral pandemic, the World Health Organization, the CDC, and other national public-health agencies did not recommend masking the public. But once Covid-19 arrived, magical thinking prevailed. Officials ignored the previous findings and plans, instead touting crude and easily debunked studies purporting to show that masks worked.

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It may seem intuitive that masks must do something. But even if they do trap droplets from coughs or sneezes (the reason that surgeons wear masks), they still allow tiny viruses to spread by aerosol even when worn correctly—and it’s unrealistic to expect most people to do so. While a mask may keep out some pathogens, its inner surface can also trap concentrations of pathogens that are then breathed back into the lungs. Whatever theoretical benefits there might be, in clinical trials the benefits have turned out to be either illusory or offset by negative factors. Oxford’s Tom Jefferson, the lead author of the Cochrane review, summed up the real science on masks: “There is just no evidence that they make any difference. Full stop.”

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The CDC’s director, Rochelle Walensky, remains determined to ignore the best research on masks, as she made clear in a congressional hearing earlier this month. “Our masking guidance doesn’t really change with time,” she said when asked how the new review from Cochrane would affect the agency’s policies. “This is an important study,” she conceded, “but the Cochrane review only includes randomized clinical trials, and, as you can imagine, many of the randomized clinical trials were for other respiratory viruses.”

It was a statement remarkable for its chutzpah as well as its scientific incoherence. One of the worst mistakes of the CDC and other lavishly funded federal agencies was the failure to conduct randomized clinical trials to determine whether their policies were effective. The Cochrane review had to rely on pandemic mask trials conducted in other countries—and now Walensky has the gall to complain that other countries didn’t do enough of the research that U.S. agencies shirked. She’s right that some of the trials involved other viruses, but why dismiss them as irrelevant to the coronavirus? And while one can always wish for more studies to include in a meta-analysis, that’s no excuse to ignore the best available evidence in favor of the shoddy science peddled by her agency to defend its policies.

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Can anything persuade the maskaholics in the public-health establishment and the public to give up their obsession? Some researchers, echoing Walensky, concede that the Cochrane review is the gold standard but argue that the clinical trials so far haven’t been extensive enough to rule out the possibility that masks might do some good. But that vague possibility is no reason to force masks on people: a public-health intervention is supposed to be based on solid evidence, not wishful thinking.

Quotation of the Day…

(Don Boudreaux)

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… is from page 31 of the original edition of Frank Taussig’s 1915 volume, Some Aspects of the Tariff Question:

In international trade, however, the principle [of comparative advantage], if not most important, needs most attention; because it is obscured by the extraordinary persistence of prejudice and of shallow reasoning in this part of economics.

DBx: More than a century later, Taussig’s observation about the general (mis)understanding of comparative advantage remains spot-on.

Failure to understand comparative advantage – and failure to understand comparative-advantage’s relevance for international trade – isn’t confined to non-intellectuals. Among those who routinely fail to understand comparative advantage are politicians, which is hardly surprising, as every politician’s overriding goal is not to seek truth, or even to speak truthfully, but to win the popularity contests called “elections.” Also prominent among those who regularly misunderstand comparative advantage are intellectuals.

The Intellectual Weakness Is Abundant and Evident

(Don Boudreaux)

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To understand just how inane and unserious a ‘thinker’ is the person behind the 1619 Project, take a look at this tweet of hers from earlier this afternoon. (HT Phil Magness)

From where does Ms. Hannah-Jones suppose the federal government gets whatever money it spends? Does she not realize that every cent comes from flesh-and-blood people? Likely not. As Phil Magness suggests on his Facebook page, Ms. Hannah-Jones seems to embrace the lunacy of Modern Monetary Theory (MMT) – that is, the ‘theory’ that economic reality is drowning in unused resources that are costlessly coaxed into use whenever central banks conjure into existence new money.

MMT is to economics what Lysenkoism is to biology and what Bernie Madoff was to prudent investing. And so if Ms. Hannah-Jones is an MMTer, we need no further reason to dismiss her as a crank spreading crackpot, and potentially dangerous, ideas.

If Ms. Hannah-Jones doesn’t embrace MMT, her tweet remains no less certain a sign of her intellectual feebleness. If her remark isn’t inspired by a belief in MMT, then at least she recognizes that any resources used to pay reparations must come from flesh-and-blood individuals. But now we ask: Does she believe – as her tweet would then suggest – that the tax revenues used to fund reparations payments would come from only non-white people? That belief, combined with her support for reparations payments, would be I-have-no-words-to-describe-it dumb: Asians, Latinos, Native Americans, Eskimos, Polynesians, and high-income Blacks would be the only payers of the taxes used to fund reparations payments, with whites paying nothing.

Wow. Individuals who are themselves and their ancestors innocent of the crimes and offenses that Ms. Hannah-Jones believes justify reparations are to be themselves treated unjustly by being compelled to pay all the taxes that will fund reparations. Wow. Perhaps some future Nikole Hannah-Jones-like person will one day argue that the descendants of these 21st-century American taxpayers should receive reparations.

Let’s be overly generous and suppose that she meant the second sentence of her tweet to read “Not only white people will pay reparations.” Still, we’d have a significant portion of reparations payments being made by Asians, Latinos, Native Americans, Eskimos, Polynesians and high-income Blacks. In this case, Ms. Hannah-Jones apparently has no problem with extracting payment for reparations from descendants of people who not only held no black slaves in the U.S., but who also were not responsible for the offensive Jim Crow-era restrictions. In addition, higher-income Blacks would be paying reparations to lower-income Blacks.

The only potential ethical and economic salvation for this latter position is to insist that the costs of making and enforcing finer-grained distinctions are too high to justify shielding Asians, Latinos, Native Americans, Eskimos, Polynesians and high-income Blacks from having to pay taxes some of which would be used to fund reparations payments. If she’s taking this stance, then she – much like the slavers who she rightly abhors – is willing to forcefully extract from innocent people the fruits of their labor in order to enrich others.

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In the late 18th century, and early and mid-19th century, many pro-slavery Americans argued that, while slavery should be abolished in principle, the practical difficulties of doing so made abolition unworkable. Quite a convenient argument to justify the continuation of an unjust system. Equally convenient is the argument that the costs of shielding today’s American taxpayers whose ancestors played no role either in slavery or American apartheid are simply too high to avoid this injustice.

Note that I do not equate innocent people having to pay higher taxes to fund reparations with being enslaved, or with being discriminated against because of race. If I had to endure one of these injustices, I’d easily choose the former. But the former is nevertheless a real injustice. Has any serious attempt been made by Ms. Hannah-Jones to determine if unleashing this injustice is worth whatever ‘justice’ she fancies will arise from reparations payments? Given the demonstrated quality of her thinking, I suspect not.

The ability of human beings to conjure excuses for their predations against innocent others is frighteningly abundant. And very many of those who make and propound such excuses do so under the conviction that god, truth, and justice are unquestionably on their side.

Dishonorable Woke

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

Reading your report (Feb. 17) on school districts attempting to promote “equity” by abolishing honors courses makes clear that what Thomas Sowell observed in 1999 remains true in 2023: “Too many teachers today see their role as propagandists for the fashionable notions of the times. Their own ‘role model’ is not Mr. Chips but Joseph Goebbels.”*

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

* Thomas Sowell, Barbarians Inside the Gates (Stanford, CA: Hoover Institution Press, 1999), page 263.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from Scott Lincicome’s and Alfredo Carrillo Obregon’s April 19th, 2022, paper, “The (Updated) Case for Free Trade“:

Contrary to common descriptions of trade as transactions between nations (or even something that one country does to another), in reality it is millions of daily economic exchanges voluntarily undertaken by individuals across national borders. These international exchanges – little different from ones made between U.S. cities and states – make us richer in real terms by enabling us to consume more (in both quantity and variety) and work less, while improving broader economic growth and innovation in the process. “Free trade” simply gets the government (i.e., tariffs and nontariff barriers) out of the way.

DBx: Few policy topics are as encrusted with as many bizarre fallacies as is international trade. And no such fallacy is more bizarre than that which holds that free trade is a policy ‘imposed’ by elites on ordinary people.

This fallacy is the equivalent of the belief that your gun-owning neighbor ‘imposes’ on you a policy of free trade by his refraining from pointing his pistol at your head to demand payment whenever you purchase items from merchants who he disapproves of.

Some Links

(Don Boudreaux)

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Writing in the Wall Street Journal, Scott Lincicome and GMU Econ alum Gabby Beaumont-Smith detail the government-imposed obstructions that continue in the U.S. to disrupt the supply of baby formula. Two slices:

Politicians responded to the crisis with their standard pandemic playbook. They claimed decades of laissez-faire economics—free trade, deregulation, etc.—had left the U.S. formula market vulnerable to a major shock. Thus, the politicians argued, new government industrial policies and more regulatory enforcement were needed to resolve the current crisis and protect against future ones.

These refrains ignored the reality of the U.S. formula market and related federal policies, as well as the government’s own actions to restock American store shelves. The market was hardly free or overly dependent on imports, as some claimed during the crisis. In fact, the federal government imposed two different barriers to imported formula from almost every country in the world.

First, high and complicated “tariff rate quotas” dating back decades subjected most infant-formula imports to an effective tax of more than 25%; even most “free-trade agreement” partners, such as Canada and Australia, faced these or similar restrictions. Second, FDA regulations—governing everything from formula recipes to labels and scoop size and subjecting foreign producers to registration and inspection—further discouraged imports and authorized government officials to seize noncompliant shipments at the border.

As a result, the U.S. market was closed to large, popular and safe formula brands from Europe, the U.K., New Zealand and elsewhere. It was so closed, in fact, that American manufacturers accounted for more than 98% of U.S. formula consumption in 2021. And when the Abbott facility’s closing poked a giant hole in the American formula market, U.S. trade policies prevented imports from easily filling the gap.

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The combination of high trade barriers, onerous domestic regulations and restrictive government contracts has created a concentrated and sclerotic U.S. formula market that collapsed when a single factory shut down and still hasn’t fully recovered. Tellingly, the federal government’s emergency actions to alleviate the formula crisis targeted these very policies. Congress suspended baby-formula tariffs through the end of 2022. The FDA exercised its “enforcement discretion” to approve eight new foreign manufacturers to sell formula until 2025 without meeting all U.S. regulations. The Agriculture Department allowed WIC recipients to use their benefits to buy noncontract formula brands, including imports, until mid-2023. And President Biden’s Operation Fly Formula commissioned military aircraft to deliver formula from abroad.

In all cases, the federal government implicitly recognized how freer markets can boost economic resilience and how protectionism and excessive regulation undermine it. Yet Congress and the executive branch haven’t made these reforms permanent. Tariffs are now back in force, even as discrete shortages persist.

My emeritus Nobel-laureate colleague, Vernon Smith, writes at National Review about Adam Smith. A slice:

Adam Smith observed that none of us can know what another feels except by entering into his or her situation using our imagination and remembering what we felt in similar circumstances. Our first judgments of others initiate our socialization, a process that doesn’t end so long as we live in interaction with others. If my kitten scratches a friend’s finger, it hurts, for I have been there and felt that. Or if my friend bumps her knee on the door jamb, I can almost feel it. We immediately “know” (subject to error) what must be in the mind and body of that other person. This human capacity for shared sentiment underlies the fellow-feeling that so powerfully, yet often unknowingly, fuels our learning, knowledge, and understanding in society and economy.

Here’s Antony Davies on the media, and on us. A slice:

The media only has a profit incentive to deliver truth if the people want truth. And here something interesting and unfortunate happens, because people do want to hear the truth, but they also want to be entertained. This gives the media a profit incentive not to lie, but not to tell the whole truth either. The media’s incentive is to tell us the portion of the truth that is entertaining. And what we have demonstrated by our behavior is that bad news entertains us.

People complain about the media’s fixation on bad news, yet research shows that the problem isn’t the media, but us. Plenty of legitimate news sites show only good news: Good News Network (10,194th most popular site in the US), Good Good Good (45,996th most popular), Optimist Daily (189,415th most popular), and Positive News (111,881st most popular). Yet, by the numbers, we spend our time not there, but on the sites that bring us the bad news about which we complain, like CNN (33rd most popular site in the US) and ABC News (165th most popular). Our behavior encourages the media not to lie, but not to tell the entire truth either. The industry tells us the portion of the news that we have demonstrated that we want to hear.

The result is that many of us have developed a warped sense of the world around us. We believe that the world is going to hell when, in fact, life is improving for almost everyone almost everywhere. A good example played out in January with the unusual round of tech layoffs. Throughout the month, the media trumpeted layoffs at all the well-known tech companies: 18,000 layoffs at Amazon, 12,000 at Alphabet (Google), 11,000 at Meta (Facebook), 10,000 at Microsoft, 7,500 at Twitter, 6,600 at Dell, 3,900 at IBM, 2,000 at Paypal. The media was happy to continue its litany of the dead until some even worse or scarier news came along (the Chinese spy balloon appears to have fit the bill).

My intrepid Mercatus Center colleague, Veronique de Rugy, explains that Social Security’s and Medicare’s fiscal realities are inescapable.

Another Mercatus Center colleague, Liya Palagashvili, decries the Biden administration’s assault on independent contractors. A slice:

For example, while gig platforms like Uber, Lyft, and DoorDash are ubiquitous in our everyday lives, work­ers at those types of online labor platforms amount to only 8.6 percent of the overall independent contractor work force. At the same time, the exponential growth of online labor platforms is driven almost entirely by individuals whose primary incomes come from traditional jobs and who supplement those incomes with platform work. This should alleviate some concerns about most of the gig work force lacking access to common workplace benefits such as health insurance.

Furthermore, according to tax data, the industries with the greatest share of independent contractors are “professional, scientific, and technical services,” followed by “other services” and “health care.” This is a far different picture than the one we’re sold about the conquest of the American work force by app-based ride-sharing and delivery-driving jobs.

George Leef reports on the offensive and destructive fad of having candidates for faculty positions at colleges and universities submit “diversity statements.”

David Henderson imagines a conversation in 2023 with his brother Paul, who died in 1970. A slice:

David (changing the subject): I remember that one of your favorite singers in the 1960s was Donovan. Do you want to listen to some Donovan?

Paul: Sure. Where’s your stereo?

David: It’s in the attic. I haven’t used it in about twenty years. My music is now on this iPhone.

Paul: How is that possible?

David: I don’t know. It’s something that neither of us had heard of in 1970: software. That, combined with another thing we hadn’t heard of: Moore’s Law. Anyway, some really smart people who work at a company called Apple figured out how to put thousands of songs in this little phone. They aren’t even actually in the phone. They’re in something called “the cloud.” It’s not a real cloud, but I can link to it as if it’s a cloud floating overhead. And you can access the songs quickly by touching a few things (we call it “clicking”) and finding the songs you want. Or you can ask a fictional person named “Siri” who has “learned” to recognize your voice.

Julie Burchill warns that “[t]he eco-elites are determined to stop us from travelling and earning.”

Kevin Bass tweets: (HT Jay Bhattacharya)

Benefit outweighing risk of harm is not a sufficient to justify an intervention. For an intervention applied to a large population, benefit must overwhelmingly outweigh risk, and an intervention must be very safe.

This is because people harmed do not see things in terms of a benefit:risk ratio. They only see the harm that was done to them. And a number of these people will turn against medicine forever, causing much more harm than captured in the formal original benefit:harm calculation.

At minimum, the risks of an intervention should not be downplayed. Otherwise, again, people will feel that they were not adequately warned and they lose trust in medicine and the intervention will cause much more harm in the long term than was captured in the formal benefit:risk calculation.

Quotation of the Day…

(Don Boudreaux)

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… is from page 88 of Joseph Ellis’s 2001 book, Founding Brothers:

At least at the rhetorical level, the egalitarian principles on which the American revolutionaries had based their war for independence from Great Britain placed slavery on the permanent defensive and gave what seemed at the time a decisive advantage to the antislavery side of any debate.

DBx: Slavery is indeed a stain on America’s history. But it’s a stain on America’s history because America’s history is part of humanity’s history – and humanity’s history is filled with slavery. What distinguished the American revolutionaries was their embrace – some more fully than others – of liberalism, which is a philosophy fundamentally incompatible with slavery.

The American revolutionaries can and should be justly criticized for not taking their liberalism further toward its logical conclusion by abolishing slavery. But they also deserve credit for embracing what was then a new political philosophy the spread and deepening of which was destined to rid humanity of that millennia-long stain on its history.

An Economics Pop Quiz

(Don Boudreaux)

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In my latest column for AIER I offer a pop quiz, with answers at the end. A slice:

2) Which of the following occurrences would increase the productivity of — and, hence, raise the wages paid to — workers in Acme, Inc.’s machine-tool factory in Michigan?

A) Michiganders increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

B) Missourians and Marylanders increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

C) Mexicans and Mozambiqueans increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

D) All of the above.

3) Which of the following is the least likely way that owners of motels will respond if government raises the minimum wage to a level above the wages that motels pay many of their housekeeping staff?

A) Motel owners will do nothing but raise the pay of all housekeeping staffers up to the minimum wage and learn to live with the resulting higher cost of labor.

B) Motel owners will offer motel guests discounts for agreeing not to have their rooms cleaned daily, enabling motels to operate using fewer housekeeping staff.

C) Motel owners will lay off — that is, fire — housekeeping staffers who work most slowly and demand that housekeeping staffers who remain on the job work faster.

D) Motel owners will reduce the value of fringe benefits paid to housekeeping staff.

4) True or false: Government-enforced prohibitions on all but the most highly qualified and certified electricians selling their services to the general public have resulted in fewer accidental electrocutions.

A) True

B) False

5) All other things unchanged, an increase in the US trade deficit means:

A) the American economy is becoming less competitive.

B) foreigners are trading unfairly with Americans.

C) foreigners are becoming more impressed with the US as a place to invest their savings.

D) Americans’ indebtedness to foreigners is necessarily increasing.

6) In what year did the percentage of American workers employed in the service sector become greater than the percentage of American workers employed in either manufacturing, or in agriculture and extraction industries?

A) 1916

B) 1966

C) 1986

D) 1996

E) 2006

Some Links

(Don Boudreaux)

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George Will eviscerates the Consumer Financial Protection Bureau. Two slices:

Frail humans, fallen creatures in a broken world, rarely approach perfection in any endeavor. In 2010, however, congressional majorities (including only six Republicans) created a perfectly, meaning comprehensively, unconstitutional entity. The Consumer Financial Protection Bureau also perfectly illustrates progressivism’s anti-constitutional aspiration for government both unlimited and unaccountable.

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On Friday, the Supreme Court justices in conference will consider the CFPB’s request that the court overturn a decision by the U.S. Court of Appeals for the 5th Circuit. It struck down a particular rule issued by the CFPB. The 5th Circuit argued that the rule was issued by the CFPB director while he was unconstitutionally insulated from presidential removal. And that the rule was promulgated by spending funds in violation of the appropriations clause (“No money shall be drawn from the Treasury, but in consequence of appropriations made by law”).

In 2010, Congress gave a new law enforcement agency a blank check — forever. If Congress can cede funding of the CFPB to the CFPB, what limiting principle would prevent Congress from nullifying the appropriations clause by allowing the entire executive branch to fund itself in perpetuity, thereby abandoning the controlling power of the purse?

The Supreme Court should give the CFPB a reason to remember the adage “be careful what you wish for.” The court should grant the CFPB’s request and hear its challenge to the 5th Circuit. And the court should hold that the CFPB’s power to set its own budget results from Congress’s violation of the non-delegation doctrine: Congress cannot delegate to others powers the Constitution vests exclusively in it.

This is a fight constitutionalists crave. They are intellectually well-armed. Progressives have the media-academia-entertainment complex, but constitutionalists have the Antonin Scalia Law School’s C. Boyden Gray Center for the Study of the Administrative State. Goliath, meet David.

My intrepid Mercatus Center colleague, Veronique de Rugy, and Christine McDaniel propose “an abundance agenda.” A slice:

Unfortunately, President Biden has more or less continued to carry the protectionist torch lit by Trump, albeit a bit more diplomatically. And still these policies have yet to deliver the promised economic results. Industries given special protection via tariffs include steel, aluminum, washing machines, solar panels and a broad range of competitors with Chinese imports. Any positive effects of those tariffs for “special” sectors have come at an even bigger cost to the rest of the economy: reductions in U.S. manufacturing employment, rising input costs, higher household prices and retaliatory tariffs. Subsidies and tax credits to boost American-made semiconductors, batteries, and electric vehicles will have the same impact and will hurt the same victims.

We, of course, are not surprised by these failures, as Trump and the Nat Pops have simply exhumed the same old ghastly, desiccated protectionism that – despite insidious claims to the contrary – has never worked yet refuses to stay buried. So, rather than advocate for a return to the pre-Trump trade era, we hereby offer a more radical vision: a new dawn for America’s trading system.

Scott Lincicome explains that “[f]orcing federal contractors to use U.S. goods and services generates all sorts of economic harms.”

Donald Kochan, one of my GMU colleagues over the the Scalia School of Law, explains in today’s Wall Street Journal that “the SEC can’t regulate climate change.” Two slices:

Justice Antonin Scalia cautioned more than 20 years ago that Congress doesn’t “hide elephants in mouseholes.” When Congress chooses not to pursue a certain policy or delegate a new authority, it isn’t inviting administrative agencies to step in and fill the empty space. But federal agencies are increasingly attempting to impose major climate regulations with no mandate from Congress.

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With its recently proposed climate change policies, the Securities and Exchange Commission is similarly trying to exercise authority it doesn’t have. In an April 2022 rulemaking, the SEC proposed a set of expansive and costly regulations that would require public companies registered with the SEC to publish information about “climate-related risks” in annual reports and audited financial statements if those risks are “reasonably likely to have a material impact” on a company’s “business, results of operations, or financial condition.” The SEC also proposed requiring disclosure of registrants’ direct greenhouse-gas emissions as well as those from its purchases of electricity and its supply-chain partners.

This isn’t mere “disclosure.” It’s a heavy regulatory burden designed to serve climate policy goals, and it goes beyond the SEC’s statutory authority.

Climate change involves some of the biggest and most complicated policy debates of our day. A financial regulator empowered by Congress only to police fraud and protect investors isn’t equipped to engage with the policy questions surrounding climate change. That’s a mousehole of authority. There’s no room in it for a climate elephant to hide.

Progressives really do have a (sometimes hilarious) habit of not taking reality with the seriousness that reality demands.

The Wall Street Journal‘s Editorial Board documents Biden’s grotesque fiscal incontinence. A slice:

“What Idris Elba gets right about race.”

Gabrielle Bauer looks back on the great Great Barrington Declaration and its authors’ wise call for Focused Protection.

“Freedom Wins: States with Less Restrictive COVID Policies Outperformed States with More Restrictive COVID Policies” – so explain Joel Zinberg, GMU Econ alum Brian Blase, Eric Sun, and Casey Mulligan. Here’s the Executive Summary (emphasis added):

The COVID-19 pandemic led to government interventions into the social and economic structures of our society that were unprecedented in their severity and duration. The fact that different states and localities took different approaches to imposing these measures created an opportunity to determine whether these interventions improved health outcomes, what economic and social side effects the interventions caused, and whether the interventions influenced people’s decisions about where to live.

This paper compares a quantitative measure of government interventions from the Oxford COVID-19 Government Response Tracker—a systematic collection of information on policy measures that governments have taken to combat COVID-19—to health, economic, and educational outcome measures in all 50 states and the District of Columbia. We use the Government Response Index, which is the Oxford researchers’ most comprehensive index.

Our results show that more severe government interventions, as measured by the Oxford index, did not significantly improve health outcomes (age-adjusted and pre-existing-condition adjusted COVID mortality and all-cause excess mortality) in states that imposed them relative to states that imposed less restrictive measures. But the severity of the government response was strongly correlated with worse economic (increased unemployment and decreased GDP) and educational (days of in-person schooling) outcomes and with a worse overall COVID outcomes score that equally weighted the health, economic, and educational outcomes.

We also used Census data on domestic migration to examine whether government pandemic measures affected state-to-state migration decisions. We compared the net change in migration into or out of states in the pandemic period between July 1, 2020, and June 30, 2022, with the migration patterns over five pre-pandemic years. There was a substantial increase in domestic migration during the pandemic compared to pre-pandemic trends. There was also a significant negative correlation between states’ government response measures and states’ net pandemic migration, suggesting that people fled states with more severe lockdowns and moved to states with less severe measures.

A comparison of two populous states that took divergent approaches to government pandemic measures—Florida and California—exemplifies the impact of government measures. Florida relaxed lockdowns after a short time, resulting in a low Oxford COVID-19 Government Response Index score, whereas California imposed strict and prolonged lockdowns and had one of the highest index scores in the nation. Yet the two states had roughly equal health outcomes scores, suggesting little, if any, health benefit from California’s severe approach. But California suffered far worse economic and education outcomes. And both states had substantial increases in their pre-existing domestic migration patterns. California’s severe lockdowns seemed to elicit a jump in its already high out-migration, while Florida experienced a significant in-migration increase during the pandemic as compared with pre-pandemic trends. Florida’s commitment to keeping schools open was likely a significant factor in attracting people from around the country.

This study confirms what multiple other studies have documented: Severe government measures did little to lower COVID-19 deaths or excess mortality from all causes. Indeed, government measures appear to have increased excess mortality from non-COVID health conditions. Yet the severity of these measures negatively affected economic performance as measured by unemployment and GDP and education as measured by access to in-person schooling. States such as Florida and countries such as Sweden that took more restrained approaches and focused protection efforts on the most medically vulnerable populations had superior economic and educational outcomes at little or no health cost. The evidence suggests that in future pandemics policymakers should avoid severe, prolonged, and generalized restrictions and instead carefully tailor government responses to specific disease threats, encouraging state and local governments to balance the health benefits against the economic, educational, health, and social costs of specific response measures.

Quotation of the Day…

(Don Boudreaux)

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… is from page 79 of economists Phil Gramm’s, Robert Ekelund’s, and John Early’s important and data-rich 2022 book, The Myth of American Inequality: How Government Biases Policy Debate:

The most significant factor affecting earned-income inequality was the dramatic enlargement of the difference in the amount of work performed by members of households. The proportion of prime work-age persons in the bottom quintile [of American households ranked by annual income] who worked dropped by half [between 1967 and 2017]. A smaller decline also occurred in the second quintile. In the middle and higher income quintiles, the change was in the opposite direction, with increases in the proportion of prime work-age people who worked.

Not only did the differences among quintiles in the proportion of prime work-age adults who worked grow bigger between 1967 and 2017, but the differences in the hours actually worked also grew.