Russell Roberts's Blog, page 65

Some People Have A Comparative Disadvantage at Understanding Comparative Advantage

(Don Boudreaux)

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Here’s a letter to someone who does not like my latest column at AIER:

Mr. C__:

In response to my latest AIER column on comparative advantage you allege that I “ignore all the strict qualifications, conditions & assumptions needed for comparative advantage to work.”

With respect, I do no such thing. The reason I do no such thing is that the “qualifications, conditions & assumptions needed for comparative advantage to work” are anything but strict. Comparative advantage is simply applied arithmetic.

If when Ann produces fish she sacrifices less of other valuable outputs than does Bob when he produces fish, Ann has a comparative advantage over Bob at producing fish. Ann can therefore produce fish at a cost lower than can Bob, making it beneficial for Bob to buy fish from Ann at a price at which it is beneficial for Ann to sell fish to Bob. (Extra credit if you can figure out why, if Ann has a comparative advantage over Bob at producing fish, Bob necessarily has a comparative advantage over Ann at producing some other good or service.)

It follows that if we Americans have a comparative advantage over the people of, say, Mexico at producing goods X, Y, and Z, then the people of Mexico have a comparative advantage over us at producing some other goods, say, A and B. Americans and Mexicans can thus trade with each other to the benefit of both.

The only ‘qualification, condition, or assumption’ in play here is the arithmetical one that the people of one country can produce some goods at lower costs, and some other goods at higher costs, than are the costs incurred by people of other countries to produce those same goods and services.

In reality, of course, both intranational and international patterns of comparative advantages change as individuals and countries develop. Also in reality, governments frequently obstruct their citizens’ ability to specialize according to their comparative advantages and to trade freely with foreigners. No one denies these realities. Yet as long as we Americans can produce some goods or services at costs lower than are the prices that foreigners must pay to non-American suppliers of these goods or services – a condition that will in practice always hold – then we Americans will have a comparative advantage that makes it beneficial for us to trade with foreigners.

None of the conditions that protectionists commonly assert to be necessary for comparative advantage to ‘work’ are in fact necessary. Not perfect knowledge. Not the absence of trade barriers abroad. Not the inability of capital to be invested abroad. Not the ability of resources to be quickly reallocated internally. Not the absence of so-called “trade imbalances.” Not international similarity of regulatory burdens. Not international similarity of tax bases and rates. Not decreasing returns to scale or the absence of externalities. Not the absence of “income effects.” Not compensation of trade’s so-called ‘losers.’ Not anything. Because differences in the costs of producing different goods and services will exist whether or not any or all of these conditions hold, comparative advantage will always exist. And where there is comparative advantage, there is the possibility of mutually advantageous trade. 

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

Quotation of the Day…

(Don Boudreaux)

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… is from page 11 of F.A. Hayek’s 1973 essay “Liberalism” as this essay appears as chapter one of Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by Paul Lewis), of The Collected Works of F.A. Hayek:

Adam Smith’s decisive contribution was the account of a self-regulating order which formed itself spontaneously if the individuals were restrained by appropriate rules of law. His Inquiry Into the Nature and Causes of the Wealth of Nations marks perhaps more than any other single work the beginning of the development of modern liberalism. It made people understand that those restrictions on the powers of government which had originated from sheer distrust of all arbitrary power had become the chief cause of Britain’s economic prosperity.

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(Don Boudreaux)

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My colleague Dan Klein has this letter in today’s Wall Street Journal:

Reviewing Prof. Glory Liu’s “Adam Smith’s America” (Books, Dec. 17), Barton Swaim shares his judgment that Smith’s “Theory of Moral Sentiments” “isn’t very good,” adding: “It’s mostly unreadable, to my mind.” Smith, however, thought that the “Moral Sentiments” was much superior to his “Wealth of Nations.” I share Smith’s judgment.

Mr. Swaim levels a long-prevalent criticism of the “Moral Sentiments”: “Sympathy as Smith defines it is far too weak a foundation on which to build an elaborate theory of morality.” That criticism—that Smith’s ethical philosophy lacks a foundation—consigned the “Moral Sentiments” to oblivion from roughly 1800 to 1976. During that long period, many other thinkers also attempted to give a foundation to ethics. Were any of them successful?

The demand for a foundation in ethics eased up after 1976. Since that year, the “Moral Sentiments” has enjoyed a tremendous resurgence. It is now perhaps more admired than even the “Wealth of Nations.” Smith’s approach to ethics is nonfoundationalist; that’s a feature, not a bug.

Mr. Swaim expresses dismay with the left reading of Smith. I, too, am dismayed about that. As for Prof. Liu’s book, a shortcoming not remarked on by Mr. Swaim is the unsatisfactory nature of her treatment of Ronald Coase, a Nobel Prize-winning economist and the best Smithian at the University of Chicago. Prof. Liu airbrushes Coase out of the story.

Prof. Daniel Klein
Mercatus Center, George Mason U.

GMU Econ alum Dominic Pino shares his thoughts that are prompted by Dan’s letter. A slice:

Barton Swaim began his Wall Street Journal review of Adam Smith’s America, a new book by Harvard’s Glory Liu on the great Scottish economist, by writing, “Admirers of Adam Smith may be surprised to learn that there is an entire academic industry dedicated to the proposition that the great Scottish economist was not a proponent of free-market capitalism.”

It’s true, such a movement does exist, and Liu’s book is only the most recent entry into the tradition. There are many “left-Smithians” who try to claim Smith as one of their own. They argue that because Smith makes some limited exceptions to free-market principles (which he certainly does), he shouldn’t really be considered a proponent of free markets. There’s now a right-wing equivalent to this movement as well, claiming that Smith’s exceptions permit wide-ranging government interventions in the economy when doing so is in “the national interest.”

The Wall Street Journal‘s Editorial Board continues to decry the contents of the new omnibus spending bill. A slice:

Also tucked in the bill are Potemkin pandemic reforms such as requiring the Centers for Disease Control and Prevention director to be confirmed by the Senate. More political accountability at the top won’t fix the ailing and bloated bureaucracy that has done so much to politicize public health. It is rewarded for its pandemic failures with a $760 million raise.

Also decrying the irresponsible omnibus spending bill is Reason‘s Eric Boehm.

David Henderson reflects on NYC mayor Eric Adams’s (1) correct understanding that the bulk of that city-government’s revenue is paid by a tiny percentage of income earners, and (2) incorrect presumption that those high-income-earning taxpayers belong to him. A slice:

Quit complaining about high-income people. Quit saying that they don’t deserve what they have. Those who earned it by serving other people—and that’s most high-income people—do deserve what they have. And, for Pete’s sake, don’t keep saying that they don’t pay “their fair share.”

What is their fair share? Your answer will depend on your concept of fairness. But here’s what sounds like a reasonable concept: make people pay according to the value they get from the government.

[DBx: The late Nobel-laureate economist James Buchanan would applaud David’s concept of fairness in taxation.]

Tom Hazlett remembers Martin Morse Wooster. A slice:

Wooster’s most serious long-form contribution is found in his book, The Great Philanthropists and the Problem of “Donor Intent.” The first edition appeared in 1994, the second in 1998, the third in 2007, and the fourth in 2017. As he explained in the Weekly Standard, “Philanthropic history can be entertaining [given] the rise of such heroic entrepreneurs as Andrew Carnegie, John D. Rockefeller, John MacArthur, and Bill Gates [coupled with] … a profession that attracts the overeducated and underemployed, who often fill their many idle hours with memorably vicious office politics.”

The stories are fascinating. Henry Ford was not a perfect man, but “he lived simply and reinvested most of his profits back into his business,” writes Wooster. Ford employed blacks (at equal pay scales) and paid “living wages.” Ford Motor Co. gave criminals a second chance, hiring 500 ex-convicts between 1914 and 1920, “including one convicted of forging the name ‘Henry F. Ford Jr.” on a check. Yet Henry Ford (the real one) did “not believe in charity”—on moral hazard grounds. This view was not radical in the day; Wooster notes that George Bernard Shaw stated the case for tough-love socialism. But it put Henry Ford at odds with many of the policies of the New Deal. And it left the Ford Foundation, which would support just the causes that the man rejected, violating donor intent.

Here’s the abstract of a recent paper by Miguel Acosta and Lydia Cox: (HT GMU Econ alum Gabby Beaumont-Smith)

The U.S. tariff code has a surprising and little-known feature: Tariffs are systematically higher on lower-end versions of goods relative to their higher-end counterparts. For example, a hand- bag made of reptile leather has a tariff rate of 5.3 percent, while a plastic-sided handbag has a tariff rate of 16 percent. In this paper, we document the presence, historical origins, and conse- quences of this regressive pattern. Regressive tariffs are present throughout the tariff code, but are especially pervasive in consumer goods categories, where tariffs are 1.2 percentage points higher, on average, for low-value varieties. Using a newly constructed dataset on legislated tariffs that covers all major trade agreements back to the 1930 Smoot-Hawley Tariff Act, we show that this variation in rates across varieties largely originated in trade agreements made in the 1930s and 40s and has persisted over time. Welfare estimates suggest that the regressive nature of tariff rates on consumer goods has important distributional consequences.

Quotation of the Day…

(Don Boudreaux)

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… is from page 427 of F.A. Hayek’s 1976 lecture “Socialism and Science,” as this lecture appears as Chapter 29 of Essays on Liberalism and the Economy (2022), which is volume 18 (splendidly edited by Paul Lewis) of The Collected Works of F.A. Hayek:

[M]y concrete differences with socialist fellow-economists on particular issues of social policy turn inevitably, not on differences in values, but on differences as to the effects particular measures will have.

DBx: Hayek – like Milton Friedman, like my late, great teacher Leland Yeager, and like all other intellectually and ethically mature people – understands that differences in beliefs about the consequences of the application of particular means do not reflect differences in values.

A mother ignorant of science who tries to cure her child dying of tuberculosis by bleeding the child and then doing a tribal dance – and who also, out of her ignorance, rejects the services of an M.D. – should not be judged as wanting her child to die, despite the inevitable sad result of her actions. She wants her child to live, but is calamitously ignorant of how best to achieve this worthy end. Likewise, a person ignorant of economics who endorses minimum wages, industrial policy, and income ‘redistribution’ as means of raising the living standards of ordinary people should not be judged as wanting to impoverish ordinary people, despite the inevitable sad results of these policies. This person wants to enrich the masses, but is calamitously ignorant of how best to achieve this worthy end.

On Mapping Onto Reality Our Theoretical Understanding of Comparative Advantage

(Don Boudreaux)

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In my latest column for AIER I was prompted by a student’s question about comparative advantage to better explain how the simple, classroom account of it maps onto reality. I also offer some general thoughts about theorizing. Two slices:

One reason a country might both import and export a particular kind of good (or service) is that producers often diversify their sources of supplies. Producers do so rationally. Diversification of sources of supplies better ensures that producers will not be without adequate access to inputs if one particular source dries up.

American as well as foreign automakers might, for example, purchase American-made tires from Goodyear and also foreign-made tires from Michelin. The demand for a diversity of supply sources results in producers in different locations each having comparative advantages. Even if, say, Goodyear cannot produce tires at a cost quite as low as can Michelin, the fact that Goodyear is a different company operating in a different geographical and political location gives to Goodyear tires a market value that more than compensates for Goodyear’s higher costs of producing tires. Goodyear’s comparative advantage, in this example, is made possible by its factories being located in different places than are Michelin’s factories.

There is at work here another comparative advantage worth noting. Private companies have a comparative advantage over governments at achieving ‘optimal’ diversification of supply sources. Private-company executives not only have intimate knowledge of the industries in which they operate (knowledge not possessed by government officials), private-company executives also have singularly powerful incentives to assess correctly the costs and benefits of diversifying supply sources. They are motivated to diversify up to the point, but not beyond, where the costs of further diversification of supply sources outweighs the benefits.

Private-company executives might, and sometimes do, err in assessing the costs and benefits of diversifying their sources of supplies. But their chances of erring are much lower than are the chances that government officials will err if decisions about supply-source diversification are seized from the private sector by the state.

…..

A more-general lesson here is that more than mere textbook mastery is required to usefully squeeze improved understanding of reality from economic theories. Also required is wisdom. Theorizing about reality is necessary to gain understanding. But when we theorize we unavoidably simplify, a fact that’s true at all levels of analysis, from Econ 101 to Econ 999 and beyond. We use words that mask the real-world details of the things or actions that the words describe. We use graphs, equations, and statistics that inevitably do the same. Taking these words, graphs, mathematical symbols, and statistical classifications literally generates a heady-but-false sensation of grasping reality with a fullness that, in fact, is impossible.

Words and other tools of theorizing are indispensable for coherent thought, but they are not the actual phenomena to which they refer in reality. Those phenomena, especially in the social sciences, are nearly always inconceivably more complex and fluid than they are made to appear by our words and other theoretical tools.

John Tierney Explains and Decries the Covid-Fueled Further Politicization of Science

(Don Boudreaux)

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The third paper in the Fraser Institute’s series on covid, covid hysteria, and covid (over)reactions is written by John Tierney, and is available on-line free of charge. Five slices:

In the pre-COVID era, the public health establishment had been gradually falling under the sway of progressives pushing their agendas, but it retained enough integrity to heed serious scientists—the ones who crunched data from past pandemics and analyzed studies of viral transmission and disease mitigation. They debated the efficacy of prevention measures, weighing the benefits against the costs, as the renowned epidemiologist Donald Henderson did in a landmark paper in 2006 contemplating a pandemic as deadly as the 1918 Spanish Flu (Inglesby, Nuzzo, O’Toole, and Henderson, 2006). Henderson, who had directed the successful international effort to eradicate smallpox, considered measures like closing businesses and schools, prohibiting social gatherings, restricting travel, mandating social distancing, quarantining those exposed to infection, and encouraging the universal wearing of surgical masks. His paper advised against all those measures, warning that they would do little to stop the spread but could be “devastating socially and economically” (2006: 368).

“Experience has shown,” Henderson and his colleagues at the University of Pittsburgh wrote, “that communities faced with epidemics or other adverse events respond best and with the least anxiety when the normal social functioning of the community is least disrupted” (2006: 373). The researchers stressed the need for leaders to “provide reassurance” to the public, and specifically cautioned them not to be guided by mathematical models of the pandemic, warning that such models could not reliably predict either the spread of the disease or the consequences of measures like closing businesses and schools.

This sensible advice was incorporated into pre-2020 pandemic plans developed by the Public Health Agency of Canada, the US Centers for Disease Control (CDC), and the United Kingdom’s Department of Health. The UK plan flatly declared, “It will not be possible to halt the spread of a new pandemic influenza virus, and it would be a waste of public health resources and capacity to attempt to do so” (UK Department of Health, 2011: 28.) The CDC’s planning scenarios didn’t recommend extended school or business closures even if the fatality rate were as high as during the Spanish Flu (Qualls, Levitt, Kanade, et al., 2017: table 8), and the other agencies reached similar conclusions. None of them urged universal masking, either, because randomized clinical trials had shown that, contrary to popular wisdom in some Asian countries, there was “no evidence that face masks are effective in reducing transmission,” as the World Health Organization (WHO) summarized the scientific literature (WHO, Global Influenza Programme, 2019: 14). Canada’s plan for a pandemic specifically rejected masks as well as efforts to disinfect surfaces in public areas (Public Health Agency of Canada, 2006).

But then, suddenly, all that peer-reviewed evidence and sensible advice was discarded. Instead of reassuring the public, public health officials went into full panic mode when a team of researchers at Imperial College in London released a computer model in March of 2020 projecting that within three months there would be 30 COVID patients for every one bed in the intensive-care units of hospitals in Great Britain (Ferguson, Laydon, Nedjati-Gilani, et al., 2020). This, of course, was precisely the sort of mathematical model that Henderson had warned against—and this model was based on obviously unrealistic assumptions. Yet public health leaders in Europe and North America immediately embraced not only the doomsday numbers but also the modelers’ conclusion that the “only viable strategy” was to impose drastic restrictions on businesses, schools, and social gatherings until a vaccine became available.

The Imperial College team gave no reason to reject the conclusions of scientists with far more expertise who had spent years devising plans for a pandemic. The modelers didn’t even pretend to weigh the costs and benefits of a lockdown, and neither did the public health officials who adopted the policy. Their sole justification was the Chinese government’s claim that its lockdown had halted COVID. Given the communist government’s history of skewing and suppressing public health data, there was every reason to doubt this claim—and no reason to look to China’s authoritarian decrees as a model for policy in a free society.

Yet lockdowns immediately became “the science,” and those who questioned this “consensus” were denounced despite their sterling credentials. One of the first victims was John Ioannidis of Stanford University, whose studies of the reliability of medical research had made him one of the world’s most frequently cited authors in the scientific literature. Early in the pandemic he published an essay presciently titled, “A Fiasco in the Making? As the Coronavirus Pandemic Takes Hold, We Are Making Decisions Without Reliable Data” (Ioannidis, 2020, March 17). He echoed the longstanding concerns of Henderson and other experts, but was immediately savaged on Twitter and in the media by scientists and journalists accusing him of endangering lives. “I was very disappointed to see these attacks coming from knowledgeable people,” he said. “Scientists whom I respect started acting like warriors who had to subvert the enemy” (Tierney, 2021).

…..

Thousands of scientists and doctors went on to sign the Great Barrington Declaration, and they were vindicated as the pandemic wore on. The lockdown strategy failed, both in China—its “Zero COVID” strategy was a social and economic disaster—and in the rest of the world. Except in a few isolated spots, the lockdowns didn’t halt the spread, as demonstrated by dozens of studies and by the relative success of places that ignored the “consensus.” Sweden, Finland, Norway, and the state of Florida kept schools and businesses open, without mask mandates, while doing as well as or better than average in measures of age-adjusted COVID mortality and overall “excess mortality.”

But “the science” continued to trump actual science in most other places. The Great Barrington scientists were espousing longstanding principles of public health and had plenty of new data on their side, but the lockdown advocates had powerful allies in the media as well as in the public agencies and private foundations funding much of the infectious-disease research around the world. Early in the pandemic prominent virologists privately expressed concern that the coronavirus had been created in a laboratory in Wuhan, but then they publicly dismissed that possibility after a teleconference with the chief scientific advisers to the UK and the US governments—governments that also just happened to be funding some of the virologists’ research.

…..

The British Medical Journal (BMJ), published a scurrilous ad hominem attack on the Great Barrington scientists, absurdly accusing them of being somehow linked to “climate denialists,” the libertarian billionaire Charles Koch, and the fossil fuel industry (Yamey and Gorski, 2021, September 13). Bill Gates, whose foundation was a major source of research funding, dismissed the “crackpot theories” of another prominent lockdown opponent, Scott Atlas of the Hoover Institution at Stanford, and the Stanford faculty senate passed a resolution declaring Atlas’ actions to be “anathema to our community” (Chesley, 2020, November 20). The Journal of the American Medical Association (JAMA), published an article recommending that Atlas and other doctors who publicly criticized COVID orthodoxy should lose their medical licenses, and the General Medical Council of Britain actually restricted the privileges of one doctor who did so (Pizzo, Spiegel, and Mello, 2021, February 4).

…..

The scientists gave in to the fearmongers because the scientific and public health establishments had been gradually weakened by a preexisting pathology. Their collapse during the pandemic came suddenly, but it was the culmination of what Marxists call the long march through institutions—more specifically, what I call the Left’s war on science (Tierney, 2016). For more than a century, from the eugenics movement of the 1920s through today’s “climate emergency,” progressives have been using their cherry-picked versions of “the science” to justify their plans for redesigning society. As they’ve come to dominate universities, professional societies, scientific journals, and the mainstream media, they’ve enforced progressive orthodoxy in one discipline after another, squelching debate by demonizing dissenters on topics like IQ, sex differences, race, family structure, transgenderism, and climate change.

Public health institutions have been especially corrupted, as James T. Bennett and Thomas J. DiLorenzo chronicled two decades ago in their history of the profession, From Pathology to Politics. “Since 1968,” they write, “a top priority—if not the top priority—of the public health establishment has been to promote the idea that more government control and intervention is the surest route to sounder health” (2008: 25). These interventions have often been disastrous, like the past campaigns to restrict fat in the diet, which led to more obesity and diabetes as people substituted carbohydrates. Leading nutrition researchers criticized this intervention as unsupported by evidence, but public health activists prevailed in the public debate by falsely portraying the critics as tools of the food industry.

…..

The public’s trust in scientists rose at the start of the pandemic, but it has since plummeted—and for good reason. The lockdowns were the worst public policy mistake ever made during peacetime. Until scientists and public health officials acknowledge their catastrophic errors and reform their politicized institutions, there’s no reason to trust them anymore.

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(Don Boudreaux)

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George Will bids adieu to 2022. Two slices:

The Federal Emergency Management Agency denied that Vladimir Putin’s nuclear saber-rattling explained its recommendation that, if nuclear war seems imminent, Americans taking shelter should practice social distancing and wear masks. FEMA says its “nuclear explosion” guidelines predate the war in Ukraine.

This year was replete with reminders that we increasingly live in a “permission society” that requires government’s approval to do even sensible things. For example, when Hurricane Ian ripped the roofs off many Floridians’ homes, Terence Duque, a Texas roofer, hastened to Florida’s Charlotte County to ply his suddenly much-needed trade. This commercial activity between consenting adults got Duque arrested by the County’s Economic Crimes Unit for being useful: for conducting business without — wait for it — a Florida license.

…..

Alexandria Ocasio-Cortez, scourge of the plutocracy, last year had “Tax the Rich” written on the back of her custom-made dress at the Met Gala, where a table cost up to $300,000. This year, arrested at an abortion-rights protest, the histrionic congresswoman walked with her hands behind her back, as though handcuffed, until she passed some supporters, to whom she gave a clenched-fist salute.

Judson Berger kills it with his ridicule of Stanford University’s woke language polizei.

My intrepid Mercatus Center colleague, Veronique de Rugy, has some suggestions for cutting U.S. government spending. A slice:

For instance, it’s high time for Congress to end tax deductions for employer-paid health insurance. This tax deduction is one of the biggest of what we wrongly call “tax expenditures.” It’s responsible for many of the gargantuan distortions in the health-care market and the resulting enormous rise in health-care costs. The CBO report doesn’t eliminate this deduction; instead, it limits the income and payroll tax exclusion to the 50th percentile of premiums (i.e. annual contributions exceeding $8,900 for individual coverage and $21,600 a year for family coverage). The savings from this reform alone would reduce the deficit by roughly $900 billion.

Art Carden details some of the many ways that Progressives suppress the dollar-votes of the poor. A slice:

Dollar store chains, which serve primarily low-income communities, have taken a lot of heat in recent years. Incumbent retailers don’t like how stores like Dollar General are “stealing their customers.” Observers and activists find them aesthetically and socially unappealing. Anti-chain movements cloak themselves in nice-sounding rhetoric, but they are fundamentally efforts to suppress people’s commercial autonomy because special interests, observers, and activists don’t like the results. And as demagogues are wont to do, they are able to whip up resentment and gain support even among the people their demagoguery hurts by making impassioned, plausible-sounding cases that Walmart, Dollar General, or McDonald’s caused their poverty and distress.

Housing regulation is another kind of commercial voter suppression. Consider what happens when people rally to oppose new housing developments (you can probably find more than one example not far from you with a quick search). Efforts to restrict development or to require that housing construction go through a lengthy approval process are efforts, once gain, to suppress the dollar-votes of the people who would occupy the new housing.

James Pethokoukis reports “some good news about the state of American economic dynamism.”

David Henderson warns that “new drug-price provisions [in the Orwellian-named “Inflation Reduction Act”] will inhibit development of life-saving pharmaceuticals.” A slice:

In short, the federal government will now start acting like many other governments around the world, using the threat of force to get prices down to what it thinks is reasonable. I feel bad for drug companies because I feel bad for anyone who produces a product to help us and gets punished for doing so.

But even if you don’t feel bad for drug companies, you should feel bad for yourself. The reason is that the federal government will be forcing down prices on an increasing number of drugs and those drugs, given that they’re covered by Medicare, are the kind that we seniors disproportionately use.

Dr. Robert Spear writes to the Wall Street Journal about long covid:

As a pediatric intensive-care-unit doctor, I am not surprised that prolonged symptoms following Covid in children were exaggerated, since Covid in children is so mild compared with in adults. But vaccine reactions, including heart inflammation, are unfortunately common in teenagers, especially in males after the second dose.

I’m not that concerned about long Covid in kids. I am, however, very concerned with what might be called “long Covid vaccine.” I welcomed the vaccine when it was released in January 2021 and worked long hours as a vaccinator at our local clinic. I never envisioned that this vaccine would later be mandated for healthy young adults as a prerequisite for college admission or as a cudgel to prevent one’s dismissal from the military. Dr. Makary provides nuance and intellectual curiosity to the Covid discussion, a healthy change from the many so-called experts who were trotted out seemingly to sell the vaccine to the masses.

Robert M. Spear, M.D.
Coronado, Calif.

Why did so many lockdown proponents, and even those who remained silent as this tyranny was being practiced upon humanity, not foresee this development – a development that was obvious to a handful of us from the very start?

Covid hysteria still haunts New York City.

Jay Bhattacharya tweets:

Governments have been the most important and most damaging source of covid misinformation during the pandemic. With the Indiana AG’s office & @MartinKulldorff, we prepared a list of particulars, including recovered immunity, school closures, etc.

https://content.govdelivery.com/attachments/IN…

Quotation of the Day…

(Don Boudreaux)

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… is from page 47 of Bruce Caldwell’s brilliant Introduction to the 1997 collection of some of F.A. Hayek’s essays and papers (Bruce Caldwell, ed.), Socialism and War:

Totalitarians rarely go gently into the night.

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Wall Street Journal columnist Holman Jenkins asks “What did we learn from China’s Covid experiment?” Two slices:

China will lowball its Covid deaths now but it won’t recapitulate our seminal folly. This was the constant dunning of the public with a “confirmed cases” measure that grossly under-represented how quickly the virus was spreading. The consequences were not just the absurd pouring of resources into hopeless contact-tracing efforts. The media enjoyed insinuating that the virus was stoppable but for the criminal incompetence of our leaders in the face of a disease that killed 2%, 3%, 4% of those infected (when accurate data would have shown the death rate closer to the flu’s 0.1%).

The public was consistently bamboozled to believe, as a University of Southern California survey showed, the virus both harder to catch and deadlier than it was.

…..

The Washington Post last week quoted the incomparable wisdom of a young Chinese businesswoman: “It is impossible to lock everyone up at home and lock them up forever, right? What should come will come…. You have to take this path, and everyone has to take this step, so that China can get on with normal work and life.”

Words like these would have helped the American people make better informed, more rational decisions, especially when waiting for a vaccine to arrive, about how to get themselves and their loved ones through a Covid trial that could not be avoided.

Joanna Baron surveys “the aftermath of Canada’s Freedom Convoy.” (HT David Henderson) A slice:

In other words, Trudeau and his team took the deliberately stringent application prescribed by the Emergencies Act and flattened it into a reasonableness standard, claiming the Commissioner grant them deference where the exigencies of “public safety”—in an environment where a single physical threat remained unidentified— justified the creation of new criminal laws, freezing of bank accounts without a warrant and expanded financial surveillance powers.

The legislative history of the Act makes it unambiguous that this was exactly the sort of conduct it sought to prevent. The Act was introduced to replace the War Measures Act, which was widely seen as permitting overreach and civil rights abuses in response to the Front de Libération de Quebec crisis in 1970, and was meant to constrain executive action.

Thorsteinn Siglaugsson is wise. A slice:

We may eventually get out of the Covid panic. But as long as the soil is fertile; as long as we do not question, do not doubt, but blindly believe and obey, the sword of mass panic, and all the damage done by it, still hangs over our heads. We have to rid ourselves of this threat. What is at stake is freedom and democracy.

Kyle Lamb tweets: (HT Jay Bhattacharya)

We knew outdoor transmission was insanely rare very early on. We knew unhealthy people were far more at-risk from the virus early on. We suspected exercise would help.

It’s so maddening how many places closed beaches, parks, gyms, masked youth sports. Such unscientific baloney.

Casey Mulligan tweets: (HT Jay Bhattacharya)

How quaint! Way back in 2008 the ACLU opposed “punitive, police-state tactics, such as forced examinations, vaccination and treatment, and criminal sanctions for those individuals who did not follow the rules.”

Writing in the New York Times, Scott Winship reveals “the true cost of expanding the child tax credit.” A slice:

Based on the evidence we have now, a permanent child allowance would indeed reduce poverty among those who fall temporarily on hard times. (That is the initial effect, after all, of giving people money.) But among those families with the weakest attachment to stable work and family life, it would be likely to consign them to more entrenched multigenerational poverty by further disconnecting them from those institutions.

Rich Vedder decries “the most selfish generation.” A slice:

In the 21 years from the first full year of the George W. Bush administration (fiscal year 2002) through today, the U.S. government has not balanced its budget once. This is the longest sustained period of deficit financing in American history, leading to a rise in the gross national debt to about 125 percent of total output. This is higher than it was at the end of the war fought by the Greatest Generation. Contrast that to the period 1900–1930. This is the time when the Greatest Generation was born, grew up, and reached early adulthood. The federal government ran budget surpluses in 20 of those 31 years. During the Roaring Twenties, the national debt declined by one-third, as Presidents Warren Harding and especially Calvin Coolidge worked assiduously to reduce the debt burden.

Why is this important? The national debt is a burden on future generations—individuals who over the next several decades will have to pay bondholders who lent money to the federal government. Today’s Most Selfish Generation is imposing an enormous burden on future Americans. As interest rates move from abnormal lows (owing to the Federal Reserve’s manipulation efforts to lower them) to rates more consistent with economic reality and true-time preferences (people wanting things now rather than later), the interest payments on the debt due annually can be expected to soar shortly—I would conservatively estimate by $600 billion annually. This means higher taxes, reduced government spending, and/or the printing of money to pay off the debt (creating huge inflation). Future generations will feel fiscal pain, and, if modern-day fiscal irresponsibility continues, it likely will also mean that the U.S. dollar’s primacy as the world’s leading currency will be imperiled, and, with it, our planetary economic leadership.

[DBx: Question for “national conservatives” (and others) who continue to call for the U.S. government to adopt “industrial policy”: If the U.S. government cannot muster the political courage and responsibility to do a task as basic as balancing its budget, what reason have you to believe that this same government can be trusted to allocate private-sector economic resources wisely? My question is a serious one. I’d love to get an answer to this question from an industrial-policy advocate such as Oren Cass, Julius Krein, Sam Hammond, Brink Lindsey, Michael Brendan Dougherty, or Marco Rubio.]

Mike Munger creatively explains the inevitability, in a growing economy, of creative destruction.

George Leef isn’t impressed with Harvard’s new president.

Clark Packard makes the case that “the U.S. can’t afford another decade without new free trade agreements.”

Let’s Amend the U.S. Constitution

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

Among your many just criticisms of the new omnibus spending bill is the fact that, being 4,155 pages, this bill is one that “most Members will never read” (“The Ugliest Omnibus Bill Ever,” Dec. 21). The Constitution’s framers are looking down with disgust.

The brilliance of the U.S. Constitution owes much to the framers’ mature recognition that persons holding political power are more prone to act as scoundrels rather than as saints. The limits and checks on the power granted by the Constitution to the national government were thus created to protect citizens from government-officials’ scoundrelly behavior.

But as clear-eyed and realistic as the framers were, they did not imagine members of Congress being so utterly irresponsible and corrupt as to enact statutes the texts of which no Member can possibly even read. If the framers had been given a glimpse of a 21st-century Congress, they would surely have included in the Constitution this simple provision, one that would have otherwise seemed to an 18th-century American mind to be ludicrously unnecessary: ‘Congress shall make no law that is impossible for persons of ordinary intelligence to read in full in the time allotted for enactment of said law.’

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