Russell Roberts's Blog, page 47

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 189 of Thomas Sowell’s superb 1993 collection, Is Reality Optional?:

Envy plus rhetoric equals “social justice.”

Some Links

(Don Boudreaux)

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Maggie Kelly reports on the travesty that is Hulu’s series on the 1619 Project – and on Phil Magness’s criticisms of this series. A slice:

The “simple presence of trade, exchange, and financial institutions is not exclusive to capitalism. These have been features of almost every society in human history, free and unfree,” continued Magness, who has a doctorate in history from George Mason University.

Historian [Seth] Rockman also asserts an intrinsic link between slave-grown cotton and the American industrial revolution: “If you don’t have slave-grown cotton, you don’t have an American industrial revolution.”

Yet Magness counters this by noting “history provides numerous examples — Canada, Japan, several European states — of economies that underwent massive industrialization in the 19th century without the alleged benefits of slavery.” Even more, he added, “the plantation system may have enriched a small, elite group of slave-owners during its existence, but slavery is unambiguously harmful to economic development in the long run.”

More fundamentally, economists have “long rejected” the practice of explaining the economic history of an entire era in terms of one good or product, such as oil or railroads — or slave-picked cotton, he wrote.

FTC commissioner Christine Wilson will soon resign her seat in protest of the lawlessness of current FTC chairwoman Lina Khan. Two slices:

Much ink has been spilled about Lina Khan’s attempts to remake federal antitrust law as chairman of the Federal Trade Commission. Less has been said about her disregard for the rule of law and due process and the way senior FTC officials enable her. I have failed repeatedly to persuade Ms. Khan and her enablers to do the right thing, and I refuse to give their endeavor any further hint of legitimacy by remaining. Accordingly, I will soon resign as an FTC commissioner.

Since Ms. Khan’s confirmation in 2021, my staff and I have spent countless hours seeking to uncover her abuses of government power. That task has become increasingly difficult as she has consolidated power within the Office of the Chairman, breaking decades of bipartisan precedent and undermining the commission structure that Congress wrote into law. I have sought to provide transparency and facilitate accountability through speeches and statements, but I face constraints on the information I can disclose—many legitimate, but some manufactured by Ms. Khan and the Democratic majority to avoid embarrassment.

…..

I am not alone in harboring concerns about the honesty and integrity of Ms. Khan and her senior FTC leadership. Hundreds of FTC employees respond annually to the Federal Employee Viewpoint Survey. In 2020, the last year under Trump appointees, 87% of surveyed FTC employees agreed that senior agency officials maintain high standards of honesty and integrity. Today that share stands at 49%.

Many FTC staffers agree with Ms. Khan on antitrust policy, so these survey results don’t necessarily reflect disagreement with her ends. Instead, the data convey the staffers’ discomfort with her means, which involve dishonesty and subterfuge to pursue her agenda. I disagree with Ms. Khan’s policy goals but understand that elections have consequences. My fundamental concern with her leadership of the commission pertains to her willful disregard of congressionally imposed limits on agency jurisdiction, her defiance of legal precedent, and her abuse of power to achieve desired outcomes.

Three additional examples are illustrative. In November 2022, the commission issued an antitrust enforcement policy statement asserting that the FTC could ignore decades of court rulings and condemn essentially any business conduct that three unelected commissioners find distasteful. If conduct can be labeled with a nefarious adjective—“coercive,” “exploitative,” “abusive,” “restrictive”—it may violate the FTC Act of 1914. But the new policy contains no descriptions or definitions of these terms, many of which also lack context in the law. The commission also candidly explained that its analysis under the new policy may depart from prior antitrust precedent, and identified previously lawful conduct as now suspect. In other words, the new policy adopts an “I know it when I see it” approach. But due process demands that the lines between lawful and unlawful conduct be clearly drawn, to guide businesses before they face a lawsuit.

Also protesting Lina Khan’s lawless reign as the head of the FTC is the Editorial Board of the Wall Street Journal. Two slices:

President Biden first broke political norms by installing Ms. Khan as FTC Chair immediately after the Senate confirmed her by a 69-28 vote to serve on the commission. It’s customary for a President when nominating members to independent agencies to announce at the same time if they will serve as chair. Mr. Biden didn’t.

The Chair has considerable power to control hiring, direct investigations and set the agenda. Many Senate Republicans might have opposed Ms. Khan as Chair because of her long record agitating to replace the antitrust consumer-welfare standard that Robert Bork helped develop in the 1970s.

…..

To advance the progressive agenda, she has also breached her ethical obligations. She assured Senators during her confirmation hearing that she would “seek the guidance of the relevant ethics officials at the agency and proceed accordingly” if she were asked to recuse herself from a matter.

Federal ethics rules require that executive-branch employees recuse themselves if “a reasonable person with knowledge of the relevant facts would question his impartiality in the matter.” That fits Ms. Khan’s situation on many issues. Prior to joining the FTC, she called for the government to break up Big Tech companies and block future acquisitions.

In 2017 she wrote to then-acting FTC Chair Maureen Ohlhausen asking the agency “to prohibit mergers between Facebook . . . [and] other new and promising products and services.” The letter stated that Meta “has become too big and complex for any executive team to manage responsibly” and that all transactions involving Meta should be blocked.

Yet Ms. Khan declined to recuse herself from the FTC review of Meta’s acquisition of virtual reality app developer Within Unlimited. As Ms. Wilson wrote in a dissent, Ms. Khan either did not “seek the guidance of the relevant ethics officials at the agency and proceed accordingly” or “asked for guidance and then ignored the recommendation.”

Democratic commissioners Rebecca Slaughter and Alvaro Bedoya required heavy redactions of Ms. Wilson’s statement, so we can’t know what ethical advice Ms. Khan received. Lack of transparency appears to be the new norm at the agency.

James Pethokoukis is correct: “Antitrust advocacy should be informed by Business 101.” [DBx: And, I add, also by Econ 101.]

George Leef reports on some unfortunate goings-on at the U.S. Department of Education.

Tyler Cowen has a conversation with Glenn Loury.

Arnold Kling continues to offer wisdom. A slice:

Robert Higgs argued that the length and severity of the Great Depression in the United States was because we experienced regime uncertainty. Both revolutionaries out of power and radicals within the Roosevelt Administration created doubts in the minds of capitalists that long-term investments would be sufficiently protected to earn rewards.

Regime uncertainty undermines the banking system. If the government will not be there tomorrow to enforce contracts between banks and borrowers, then how can depositors be confident that their own contractual relationships with banks will be honored? When the fall of a government is imminent, worried depositors rush to transfer money overseas.

In fact, for banking to work, banks must convince their customers that the bank is a perpetually-lived institution. Back in the day, that is what those marble lobbies were all about. As soon as the public gets a whiff that the bank might fail, unless another bank or the government steps in with a guarantee, the people will run from the bank, and it will fail.

Alberto Mingardi writes informatively about the nature of law. A slice:

I don’t think either [Bruno] Leoni or [C.K.] Allen (or Hayek) thought judges were infallible, nor this process always conducive to lasting and uncontroversial outcomes. But you can argue that the pluralism of judges makes human fallibility less of an issue, than attempting to put all your eggs in the basket of legislated law.

Australian Richard Kelly decries “the criminalization of the ordinary.” A slice:

In the blink of an eye, the fundamental, bedrock principles on which we have based our lives and centred our grasp on reality have fallen away, to become grains of sand blown about by the wind and waves of a censor’s whim. Among them: individual autonomy and agency, respect for human dignity, the presumption of innocence, freedom of movement and freedom of speech, medical ethics, the right to work, the rule of law, biology itself – the list goes on and on. Ordinary humans are assumed to be a vector for deadly disease. Ordinary debate is categorised as treason. Ordinary grief is denied comfort. Ordinary joy is denied expression.

Ordinariness itself has been shown to be vulnerable to criminalisation by power-crazed Premiers – what is more ordinary than to walk on a beach, or push a child on a swing, or breath fresh air? Or to play golf, or to visit your gran, or have a wedding reception? All of these things, and more, were at one time or another during the last three years against the law in Victoria.

eugyppius warns us not to fall for covidians’ disingenuous apologies for their monstrous tyrannies.

Jay Bhattacharya tweets:

If you wanted to harm the health and well being of the poorest and most vulnerable people on earth, you could not have come up with something more effective than the lockdowns.

Quotation of the Day…

(Don Boudreaux)

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… is from page 56 of Lawrence M. Friedman’s 1984 volume, American Law (original emphasis):

For much of our history, we were indeed one of the freest, most democratic, most “equal” countries in the world. Where we were bad, other countries were (and are) much worse. America was never utopia; it has always been a mix of good and bad, plus and minus. It began as an experiment in letting people run their own country. Not all people, but more than were allowed to have power in England or France or anywhere else. The experiment worked. But it also meant that law reflected, and had to reflect great waves of popular sentiment. It could never stray too far from the mean. It could express ideals, it could express “enlightened” opinion, but it could never be dramatically better or worse than the values of articulate people. That was its weakness, and also its strength.

DBx: Ideas matter.

Hygiene Socialism Isn’t “Authoritarian Capitalism”

(Don Boudreaux)

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Here’s a letter to the Guardian:

Editor:

You deserve credit for publishing Larry Elliott’s acknowledgement that the costs of covid lockdowns increasingly appear to be greater than whatever benefits were wrung from that unprecedented, repressive policy (“The price Britain paid for lockdown was colossal. Was there an alternative?” Feb. 12). And Mr Elliott rightly supports his case by citing the important work of Toby Green and Thomas Fazi, two men of the left who from early on wisely warned of lockdowns’ economic and social harms.

But I must protest Green’s and Fazi’s description, as quoted by Mr Elliott, of lockdowns as “authoritarian capitalism.” “Capitalism” refers to an economic system in which individuals as consumers and as producers are free of state interference to buy, invest, produce, and sell – using only their own money – as they choose. People on the left believe that such freedom too seldom leads to outcomes that are acceptable, while Thatcherite conservatives and libertarians believe that attempts to correct or to override market processes with government intervention too often make matters worse.

Regardless of who on this score is correct, when government coercively shuts businesses down, orders people to remain at home, and – as the British government did – induces compliance with its draconian measures by intentionally filling the public with exaggerated fear, it brutally tramples on the private property rights, and obstructs the voluntary exchanges, that are at the heart of capitalism. That it did these deeds in pursuit of a higher ‘social’ good doesn’t change these deeds’ awful reality.

Far from being “authoritarian capitalism” – an oxymoron – lockdowns are, as described by the Australian historian David Hart, hygiene socialism.

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

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 32 of W.H. Hutt‘s important 1936 volume, Economists and the Public:

There is something almost tragic in the fact that the leading apologists for reason cease to be rational when they enter the field of economic controversy.

DBx: Indeed so. Far too many people who boast of their commitment to science and reason are quite unscientific in their evaluations of market processes, commonly failing to ask “As compared to what?”. Even worse, such people are downright mystical in their evaluation of political processes. They believe in miracles.

Some Links

(Don Boudreaux)

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Here are three parts of the transcript of Aaron Brown’s and John Osterhoudt’s exposé of the shamelessness of the attack on physicist Steven Koonin for his speaking truth to power:

In 2021, the physicist and New York University professor Steven E. Koonin, who served as undersecretary for science in the Obama administration’s Energy Department, published the best-selling Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters.

The book attracted extremely negative reviews filled with ad hominem attacks, such as a short statement appearing in Scientific American and signed by 12 academics that, instead of substantively rebutting Koonin’s arguments, calls him “a crank who’s only taken seriously by far-right disinformation peddlers hungry for anything they can use to score political points” and “just another denier trying to sell a book.”

We couldn’t find a single negative review of Unsettled that disputed its claims directly or even described them accurately. Many of the reviewers seem to have stopped reading after the first few pages. Others were forced to concede that many of Koonin’s facts were correct but objected that they were used in the service of challenging official dogma. True statements were downplayed as trivial or as things everyone knows, despite the extensive parts of Unsettled that document precisely the opposite: that the facts were widely denied in major media coverage and misrepresentations were cited as the basis for major policy initiatives.

…..

In a review of Unsettled in Scientific American, Gary Yohe, an emeritus professor at Wesleyan University, gives the impression that he didn’t read past the first few pages. The book has nine chapters filled with examples of exaggerations and outright falsehoods in both scientific and popular accounts. Yohe mentions just four claims taken from the first two pages, plus one from a chapter subtitle, and manages to refute none of them.

…..

Koonin is accused of having “cherrypicked and carelessly misrepresented many of his sources” by Bob Ward, the policy and communications director of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Politic Sciences.

Though his refutations are weak, at least Ward does seem to have read the book. In one chapter, Koonin takes the media to task for its overheated account of the link between human CO2 emissions and hurricane frequency, such as a USA Today article headlined, “Global warming is making hurricanes stronger, study says.” That article states unequivocally that ​​”Human-caused global warming has strengthened the wind speeds of hurricanes, typhoons and cyclones around the globe.” Koonin points out that the study on which that article is based doesn’t make that claim with such certainty.

Koonin quotes directly from the study, but Ward accuses him of having omitted another excerpt from the same paper, which reads: “From a storyline, balance-of-evidence, or Type-II error avoidance perspective, the consistency of the trends identified here with expectations based on physical understanding and greenhouse warming simulations increases confidence that TCs have become substantially stronger, and that there is a likely human fingerprint on this increase.”

Ward must be confused about what that sentence means because it doesn’t support the USA Today article or undermine Koonin’s point. That passage is basically saying that although there’s only suggestive evidence that tropical cyclones have gotten stronger, we’re better off assuming that they are and that humans are partly responsible. Koonin likely agrees with that statement, and he’s certainly correct that it doesn’t justify unambiguous headlines like, “Global warming is making hurricanes stronger, study says.”

Want to keep track of how much student-loan “forgiveness” is costing taxpayers?

The Wall Street Journal‘s Editorial Board justifiably says ‘We told you so.’ A slice:

Intel CEO Pat Gelsinger, meet your new boss—Elizabeth Warren. We predicted that last year’s semiconductor subsidy bill would subject chip makers to political control. And what do you know? Democrats in Congress are demanding that subsidy beneficiaries be banned from buying back their stock.

The $280 billion CHIPS and Science Act included $52 billion for companies to make semiconductors domestically. Chip makers said government aid was urgently needed to prevent chip shortages and compete with China. Now there’s a glut of chips owing to declining demand, which has resulted in plunging prices and layoffs.

Unless you’re in the teachers union, there is no such thing as free government money. Subsidies invariably come with government regulation on how businesses operate. The law expressly barred chip makers from using government largesse on shareholder buybacks, which was fair.

The National Institute of Standards and Technology also says that the Commerce Department will give funding preference to companies that commit to not engage in stock buybacks. Now eight Democrats in Congress, including Sens. Warren (Mass.), Bernie Sanders (Vt.), and Tammy Baldwin (Wis.) want Commerce to do more.

In a Feb. 10 letter, they demand that Secretary Gina Raimondo ban chip makers that receive government funds from buying back stock for at least 10 years. They hoist Mr. Gelsinger on his statement in May 2021 that “we will not be anywhere near as focused on buybacks going forward as we have in the past,” which he made while lobbying Congress for subsidies.

Also from the Wall Street Journal‘s Editorial Board is this level-headed warning to be aware of that which is unseen. A slice:

There’s no such thing as a free financial product. If regulators limit one source of revenue, businesses will find another to cover their costs. That is one lesson from the Dodd-Frank Act, which limited debit-card fees that banks charge retailers for using their network. As a result, banks increased overdraft fees.

Jon Sanders decries the itch to have government intervene under the pretense that “a new study finds.”

David Henderson explains what the Peltzman effect is and isn’t.

Juliette Sellgren talks with Adam Smith scholar Ryan Hanley about the morality of markets.

Inside an Australian covid quarantine camp prison.

Vigilent Fox tweets: (HT Jay Bhattacharya)

Dr. Scott Atlas: No Civilized Society Should Ever Use Children as Human Shields to Protect Grandma

“I’m a father. My role is to be a shield for my children. They are not to be a shield for me.”

In Defense of Steven Koonin

(Don Boudreaux)

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Woke Spoofs Itself

(Don Boudreaux)

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I’m starting a new occasional series here at Cafe Hayek. It’s titled “Woke Spoofs Itself.” My intention with this series is to do my part to draw attention to just how utterly mindless – and, hence,  how ultimately dangerous – is wokeism.

The first entry in the series is this account reported by Charles Oliver:

Historical reenactors say new rules effectively ban reenactments of battles at state-owned historical sites in Pennsylvania. The Pennsylvania Historical & Museum Commission said it will no longer permit reenactments of “simulated warfare or violence between opposing forces” on sites it controls. Last year, the commission asked the organizers of the annual reenactment of the Battle of Bushy Run, which took place in the colonial era between British troops and American Indians, to cancel it because non-Indians are allowed to play Indians. The reenactment, which has taken place for 40 years, typically draws around 1,500 spectators.

Quotation of the Day…

(Don Boudreaux)

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… is from page 256 of Thomas Sowell’s 1999 book, Barbarians Inside the Gates:

The last thing you want to do is to promote tribalism when you are one of the smaller tribes. Yet minority “leaders” do this because it promotes their individual self-interest, regardless of what bad effects this will have on others, including their followers.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 13 of the late William Niskanen’s insightful 1997 essay “R&D and Economic Growth: Cautionary Thoughts,” which is reprinted as chapter 2 of the 2008 collection of some of the best of Niskanen’s writings, Reflections of a Political Economist:

The historical and cross-national record reveals a strong relation between real expenditures for research and development (R&D) and the level of national output – but little relation with the rate of economic growth. This record is more consistent with a hypothesis that R&D is an income-elastic consumption good, something that rich nations do, rather than an investment that will increase future economic growth.