Russell Roberts's Blog, page 81

Marian Tupy Talks With Deirdre McCloskey

(Don Boudreaux)

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As Tyler Cowen says, self-recommending.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 170 of Samuel Gregg’s excellent 2022 book, The Next American Economy: Nation, State, and Markets in an Uncertain World:

But those living in a society in which economic security is generally prioritized over liberty, and where the state is considered the primary institution responsible for securing such security, are more likely to trade off various economic liberties in return for economic security via the government – the long-term price being gradual stagnation.

DBx: Yes.

Skeptics and opponents of free markets never tire of hurling the accusation that markets are myopic – with each such accusation tied to the supposed implication that government officials take a longer-run view. Both the accusation and its supposed implication are nonsense.

A great deal of government intervention is aimed at increasing the public’s satisfaction today with little or no regard for the consequences of these interventions tomorrow. The political impulse is to protect today’s jobs despite the consequent negative impact on creating better jobs tomorrow. It is to keep inflation going for another day despite the accumulating damage that cannot avoid being paid tomorrow. It is to use antitrust to break-up or otherwise obstruct successful firms today despite the resulting negative impact on industrial structures and practices tomorrow. It is to fund spending today with debt that must be repaid tomorrow.

I’m tempted to say that governments are like alcoholics who drown themselves with booze tonight in reckless disregard of the price they’ll pay in the morning. But this analogy isn’t quite correct because what’s really going on is that today’s boozy high is enjoyed by politicians and interest groups while the appalling hangover tomorrow is suffered by the masses. If I can drink all I want this evening knowing that the resulting hangover will be suffered, not by me, but by strangers – and, further, by strangers who are unlikely to hold me accountable for their nausea and headaches – then pour me another, and keep ’em coming!

Some Links

(Don Boudreaux)

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Writing in Regulation, Pierre Lemieux looks back on the first 18 months of Biden’s trade policy, which, as matters disappointingly turn out, is quite like Trump’s trade policy. Two slices:

One difference between the two presidents is that Biden practices what former WTO Appellate Body judge James Bacchus calls “polite protectionism.” There are no longer any angry tweets or absurd claims, but Trump’s “national security” tariffs on aluminum and steel from friendly countries, or the “voluntary restraints” later “negotiated” with them, generally remain in force. It should be noted the new tariffs on aluminum and steel were not really targeting China since there was already little of these products imported from that country because of previous protectionist barriers.

In general, the Biden administration’s interest in trade appears motivated by the environmental, labor, and other restraints it can impose on trade agreements. There is no real effort to liberalize trade. For example, recent trade discussions with the United Kingdom produced pious generalities about the importance of “worker‐​centric trade” and “work[ing] to develop more durable and inclusive trade policies that demonstrate that trade can be a force for good and create more opportunities for people and gender equity” (to quote from the joint statement issued after the meeting), but nothing about abolishing government‐​created obstacles to trade.

…..

Trump’s protectionist policies catered to American manufacturers and their workers. Biden’s main political clientele is American trade unions and their members. The two presidents are splashing around in two different protectionist “swamps,” but there is much overlap between the two. Large trade unions often cater to employees of manufacturing corporations—for example, the United Steelworkers and large steel manufacturers, or the United Auto Workers and Detroit car makers. All these are special interests.

Biden claims to be defending “workers’ rights” (higher salaries and union rights) in foreign countries that trade with America—Mexican workers, for example. In fact, he is harming those workers to protect his domestic labor clientele. Foreign workers involved in trade with America would be better served if the U.S. government let them and their employers compete with their American counterparts based on what each finds his comparative advantage. To consider a domestic parallel, forcing Mississippi firms to pay the same wages as California firms would benefit the workers and business owners in the latter state, not those in the former.

Mike Munger understands that politicians’ incentives aren’t aligned with the public interest. Here’s his conclusion:

I am stumped by what a solution to this problem might look like. We ignore people who (rightly) point out that simple solutions to political and economic problems make things worse, not better. We vote for, and reward, charlatans who pretend to know the answers, and zealots who actually believe their own superficial galimatias. Ultimately, it’s a collective action problem: it would be better for society if our leaders were humble and honest about how little they actually know. But it’s better for the candidates for leadership if they pretend to be committed to a whole dog’s breakfast of truths that just ain’t so.

The Editorial Board of the Wall Street Journal wonders if Biden lost a few pages of the speech he delivered this past Wednesday evening at Union Station.

Also unimpressed with Biden’s Union Station speech is Wall Street Journal columnist Kimberly Strassel – who is correct that most Americans are equally unimpressed. A slice:

So why keep ignoring the vast majority’s concerns? Mr. Biden gave the same speech in Philadelphia in September, and Democratic fortunes have declined nearly every week since. One obvious answer is that Democrats don’t have a good story to tell. Which gets to the other: The only agenda progressives will allow the president to sell is one that even the Biden White House knows is too toxic to campaign on.

What’s the president supposed to say? Elect Democrats, and we’ll spend a lot more money during this time of inflation! Elect Democrats, and we’ll raise taxes on the verge of recession! Mr. Biden could have pivoted long ago to a message that resonates with more of the electorate: pro-energy, pro-growth, pro-fiscal-rectitude. But his base would lose its mind. So Mr. Biden is left talking to them alone, using the “threat to democracy” to spur Democratic turnout.

There’s a potent lesson for Republicans, too. If this election is showing anything, it’s that most Americans are exhausted by hysteria, impeachment, live congressional investigations, conspiracy theories and politicians who keep wrecking standards and norms in the name of saving democracy.

Christian Britschgi decries America’s imperial presidency.

Juliette Sellgren talks with James Kirchick about the secret history of gay Washington.

Back in August, Richard Epstein critically appraised Biden’s Orwellian-named “Inflation Reduction Act.” A slice:

There is thus a striking disconnect between the huge political battle over the legislation and these modest estimates of its supposed consequences. Unsurprisingly, professional economists are deeply divided over the impact of the legislation. On the one side stand critics of the IRA, who fear its provisions are down payments on a much larger programs to come; on the other are defenders of the program, such as Alan Blinder, who tend to say that opposition to the program is overblown, if only because “damage done through higher corporate rates would be offset by job-creating provisions.”

Unfortunately, this one sentence reveals the dangerous mindset that permeates the entire Democratic Party program. Why believe that these promised offsets will ever take place in this overheated political environment? At present, there are no available, let alone credible, estimates as to the size of these effects, which is par for the course. But matters only get worse because no estimate, however sophisticated, can anticipate how future regulations and ultimate enforcement policies will shape the economic effects. Elect a Republican president in 2024 and we have one kind of tax regime; elect a Democrat and there is quite another. Economists like Blinder then compound their original error when they insist that “higher taxes on capital distort corporate decision-making, but in the direction of using more labor, not less.” But, a priori, a distortion for labor is neither better nor worse than one for capital. Reduce capital, and the result may be diminished investments that in turn lead to fewer jobs. [DBx: Or, much more likely, worse-paying jobs.]

Jacob Sullum reports on the lawsuit filed by the New Civil Liberties Alliance on behalf of several physicians challenging California’s new authoritarian statute that penalize physicians who don’t tow the official line on covid. A slice:

Even if a doctor were keen to avoid deviation from the “scientific consensus” regarding COVID-19, he would have a hard time figuring out what that means. “The term ‘contemporary scientific consensus’ is undefined in the law and undefinable as a matter of logic,” the NCLA says. “No one can know, at any given time, the ‘consensus’ of doctors and scientists on various matters related to prevention and treatment of Covid-19. And even if such a poll could theoretically be taken, who would qualify to be polled? Only those doctors treating Covid-19 patients? All doctors and scientists, or only those in certain fields? Who determines which fields? How often would such polls be taken to ensure the results are based on the most up-to-date science? How large a majority (or plurality) of the polled professionals qualifies as a ‘consensus’? The very existence of these questions illustrates that any attempt at a legal definition of ‘scientific consensus’ according to which doctors must operate in their day-to-day practice is impractical and borders on the absurd.”

Writing at UnHerd, Mary Harrington explains her resistance to “covid amnesty.” Two slices:

This consensus was, instead, far more religious in character. Even famous and high-profile dissenters have faced harassment at its hands, for airing topics that ought, you’d think, to be within the scope of objective discussion. Celebrity podcaster Joe Rogan has faced calls to be cancelled after asking Covid questions. UnHerd’s Freddie Sayers was censored for interviewing lockdown dissenter and former WHO cancer lead Dr Karol Sikora.

Nor is having expertise or evidence on your side much of a defence. Dr Peter McCullough, a top American cardiologist, argued against vaccinating those with natural Covid immunity, and voiced concerns about the effect of the Covid vaccine on cardiac health. For expressing such views, and despite evidence that natural immunity is more robust than the vaccine and that myocarditis is a recognised side-effect of the vaccine, McCullough now faces being struck off by an American medical board.

Even as scientific debate has been stifled, obvious inferences from widely available evidence were ignored where these conflicted with settled Virtual consensus. There was, for example, no rationale for mandatory vaccination once it became clear that — as acknowledged as far back as December 2021 by even the Virtuals’ house journal the New York Times— vaccines didn’t prevent virus transmission. And yet mandates remained in place across many locations long after that date. Indeed, around the time the NYT article was published, Oster herself was advocating escalating pressure to vaccinate, from public shame to stopping the unvaccinated from travelling, working or attending events.

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We all knew every pandemic policy would come with trade-offs. The lawn-sign priesthood forbade any discussion of those trade-offs. I don’t blame the class that so piously dressed their own material interests as the common good, for wanting to dodge the baleful looks now coming their way. But no “amnesty” will be possible that doesn’t acknowledge the class politics, the corruption of scientific process, the self-dealing, and the self-righteousness that went to enforcing those grim years of lawn-sign tyranny.

Sharyl Attkison looks at the CDC’s loss of credibility. (HT Jay Bhattacharya)

Quotation of the Day…

(Don Boudreaux)

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… is from page 119 of my late Nobel-laureate colleague Jim Buchanan’s paper in the October 1987 issue of Ethics, “The Economizing Element in Knight’s Ethical Critique of Capitalist Order,” as this paper is reprinted in Economic Inquiry and Its Logic (2000), which is volume 12 of the Collected Works of James M. Buchanan:

I think we should recognize fantasy, whether in art or morals, and beware of using it as the basis of criticizing that which is or can be.

DBx: It’s human to dream, to envision, to experiment. And in a free society mass prosperity is created chiefly by a species of such dreaming, namely, entrepreneurial creativity – creativity free of the requirement that it get permission from the state or from some collective. This entrepreneurial creativity is disciplined by each person’s right to say ‘no’ and guided by market prices, profits, and losses.

The discipline and guidance supplied by private markets – markets embedded within the law of property, contract, and tort – helps to ensure that the ‘fantasies’ of entrepreneurs bear a significant attachment to reality, for the market will quickly halt the pursuit of wildly improbable ventures. But matters with government differ categorically. Government officials spend other people’s money and order other people about. The right to say ‘no’ is severely attenuated when the offers commands come from the state. Government officials – having no personal claim on whatever residual monetary revenues their schemes might leave after paying all costs – are neither incited in their imposition of these schemes by the lure of personal monetary profit nor disciplined by the fear of personal monetary loss. And these officials’ decisions, being intended to override market signals, are of course not guided by market prices.

Dreams and fantasies pursued through government inevitably make life more hellish (except for those individuals currently issuing the commands).

Dream, by all means dream! But please pursue your dreams only on your dime and without the authority to order any of your fellow human beings hither and yon.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from pages 360-361 of the 1978 collection, edited by Eric Mack, of Auberon Herbert’s writings, The Right and Wrong of Compulsion by the State; specifically, it’s from Herbert’s 1908 essay, “A Plea for Voluntaryism”:

The high prices and dear living, the harassing interferences with trade, the rings and corners, the trickeries and corruption, that all tread so close on the heels of protection, the wild extravagance, the domineering insolent attitude of the state-made monopolists, the ever-growing power of the governments to go their own way, where they can gather vast sums of money so easily through their unseen tax collectors, the ever-spreading socialism, that is only protection made universal—all these things are preaching their eloquent lesson, and slowly preparing the way in other countries for free trade. Sooner or later the world after years of bitter experience learns to unmask all the impostor systems that have traded in its hopes and passions and fears. The thin coating wears off, and the baser metal betrays itself underneath. So it will fare with the protection, that asks you to be credulous enough to tie up your left hand in order that your right hand may work more profitably. It is true that in protected countries the wages of the workers may be pushed up higher than in the case of free trade countries, but life will remain harder and more difficult. Why? Because, as we have said, prices rule so high; corners and combinations flourish; trickery and corruption find their opportunity; more vultures of every kind flock to the feast; and with the feast of the vultures the burden of rates and taxes becomes intolerable. The whole thing hangs together. Establish freedom and open competition in everything, and all forms of trade and enterprise, all relations of men to each other, tend to become healthy and vigorous, pure and clean.

DBx: Herbert correctly understood that in practice protectionism is not only inevitably economically inefficient, it is also inevitably and grotesquely unjust. Protectionists miss this inefficiency and injustice because they see only the relatively small handful of concrete firms and flesh-and-blood individuals that benefit from protection. Only by ignoring protectionism’s inescapable economic damage and its unavoidable encouragement of special-interest-group rent-seeking can protectionists convince themselves and others that their restrictive schemes are good for the country as a whole.

Herbert, however, was unfortunately incorrect in his optimistic prediction that the damage and injustice that are inseparable from protectionism will eventually reveal themselves to enough people to prompt people to reject protectionism. The human mind is too easily fooled.

Both sincere and venal protectionists are remarkably able to convince most people that a regime of free trade will harm the country. Right-wingers today in America, such as those at American Compass, along with left-wingers, such as Bernie Bros, confident that they understand the case for free trade, remain ignorant of this case. (Why bother learning the case for free trade if you’re convinced that you already understand it sufficiently?) This ignorance of the case for free trade would embarrass a competent economics undergraduate, but it only further motivates protectionist pundits and politicians to push their proposals for commercial restrictions.

Competent economists can do nothing more than continue to refute, for the trillion-and-oneth time, each and every fallacy peddled daily by protectionists. Ideally, this effort of competent economists would pave a path to a future of free trade. But our world isn’t and won’t ever be ideal. So the best that competent economists can do is, through their education efforts, to reduce the damage done by protectionism as they shake their heads in wonder that people continue to be so daft as to fall for the comical idiocy of protectionist arguments and propaganda.

Southern Economic Journal: “The Resale Price Maintenance Policy Dilemma: Comment”

(Don Boudreaux)

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In the Spring 1996 issue of the Southern Economic Journal, Bob Ekelund and I sounded a similar theme – about quality competition and ‘inframarginal’ consumers – that we struck in this paper of ours in the Hofstra Law Review. You can read our SEJ paper below the fold.

(more…)

Some Links

(Don Boudreaux)

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Congratulations to John P.A. Ioannidis!

The Telegraph‘s Jeremy Warner decries “the catastrophic consequences of lockdown.” A slice:

The intention of lockdown, which was to save as many lives as possible, was a noble one, but even in terms of mortality, the policies adopted appear to have done a great deal more harm than good.

Data last week from the Office for National Statistics (ONS) showed that in the past six months there have been more excess deaths from causes other than Covid, than deaths from coronavirus for the entire year.

All Covid restrictions ended last March, but excess deaths – that is, mortalities over and above what would normally be expected – are once again mounting. Health experts widely attribute the phenomenon to medical conditions that were left untreated during the months of lockdown. The hiatus in provision has since been compounded by a growing sense of crisis in the NHS as it struggles to cope with the consequent backlog and a similar problem with staff shortages as that afflicting the hospitality sector.

Alex Gutentag sets the record straight about the record of people making claims about covid vaccinations preventing the vaccinated from spreading the virus. Two slices:

Vaccine mandates were mainly rationalized through the belief that the higher the rate of vaccination, the less the virus would spread. For example, during oral arguments for Biden’s health care worker mandate, Associate Justice of the Supreme Court Elena Kagan claimed that health care workers had to get vaccinated “so that you’re not transmitting the disease.” But recently, on Oct. 10, 2022, a Pfizer spokesperson told the European Parliament that the vaccines had never actually been tested for preventing transmission. While this was presented on social media as “breaking news,” the fact that the vaccines were not tested for this purpose has been documented extensively ever since Pfizer and Moderna received their original Emergency Use Authorization (EUA).

During the Dec. 10, 2020, Food and Drug Administration (FDA) meeting when the first mRNA vaccines were authorized, FDA adviser Dr. Patrick Moore stated, “Pfizer has presented no evidence in its data today that the vaccine has any effect on virus carriage or shedding, which is the fundamental basis for herd immunity.” Despite the data presented for individual efficacy, he continued, “we really, as of right now, do not have any evidence that it will have an impact, social-wide, on the epidemic.” The FDA EUA press release from December 2020 also confirms that there was no “evidence that the vaccine prevents transmission of SARS-COV-2 from person to person.”

Simply put, the reason many people believed the vaccines stopped transmission was because government officials and media outlets across the Western world were either careless with their words or did not tell the truth. In 2021, for instance, Director of the Centers for Disease Control (CDC) Rochelle Walensky claimed that vaccinated people “do not carry the virus,” and Dr. Anthony Fauci said they would become “dead ends” for the virus. Any speculation that the vaccines significantly reduced transmission was based on limited results from independent studies and the false assumption that the vaccine would prevent infection. Without adequate evidence, vaccination campaigns called on people to get vaccinated not just for their own protection, but to help “protect others” and “save lives.”

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In the case of COVID, while claiming that it was the dissenters who caused harm, it was in fact the censors and enforcers of speech restrictions who caused immense damage to the social fabric and to the lives of individuals. The excuse that medical segregation was once necessary but is no longer necessary because “the facts changed” or “the science changed” is demonstrably false. The facts didn’t change. They were just banned.

Natalya Murakhver is not about to forgive Randi Weingarten….

…. and Maud Maron is not impressed by an award to a pro-lockdown, pro-mask NYC school teacher.

Reason‘s Eric Boehm writes insightfully about American election-outcome deniers.

Emma Camp writes insightfully about an already infamous – and already deleted – tweet in which the Biden White House takes credit for a large increase in Social Security benefits. A slice:

On Monday, the White House Twitter account announced that “seniors are getting the biggest increase in their Social Security checks in 10 years through President Biden’s leadership.” However, the account quickly deleted the tweet after commenters pointed out the obvious: the increase wasn’t due to Biden’s leadership, but the rapid inflation occurring under his watch—which is massively increasing the cost of goods and services for American seniors, thus requiring under federal law that they receive larger checks.

George Will argues that Biden and Harris should – for the good of the country – remove themselves from the ballot in 2024.

GMU Econ alum Rosolino Candela and I recently chatted about the history of antitrust policy and economics.

My intrepid Mercatus Center colleague has some good advice for what looks increasingly likely, starting in January 2023, to be a Republican U.S. Congress.

My Mercatus Center colleagues Brian Knight and Tom Hoenig decry “the unchecked powers of federal bank regulators.”

The Cato Institute’s Jim Dorn – inspired by the work of, among others, my former teacher Leland Yeager – offers a nice tutorial on basic monetary policy. A slice:

In sum, interest rates are best left to free markets. They are relative prices that reflect tradeoffs between present and future consumption, and thus depend on consumers’ time preferences as well as on the productivity of capital. A central bank that tries to use interest rates, rather than the quantity of money, to guide monetary policy is prone to create monetary disequilibrium and distort interest rates away from their natural, market‐​determined levels—misallocating capital in the process.

According to Boston Globe columnist Jeff Jacoby, “‘Jim Crow 2.0’ was the lie of the year.” Here’s his conclusion:

“Jim Crow 2.0” was a lie. So was “Jim Crow on steroids.” Democracy is alive and well in Georgia, as throngs of early voters, white and Black alike, are proving. The state’s governor and lawmakers are entitled to an apology. They probably shouldn’t hold their breath waiting.

Aeon Skoble reminds us of the deep wisdom of John Adams.

Quotation of the Day…

(Don Boudreaux)

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… is from pages 253-254 of the late William Baumol’s 2002 book, The Free-Market Innovation Machine:

In an economy [such as that of ancient Rome] in which commerce and industry were disreputable activities, in which rent-seeking and destructive enterprise were the respectable avenues to wealth, and in which one hears nothing of markets characterized by vigorous competition entailing innovative commodities and production processes, the evidence suggesting substantial technological stagnation does not seem extremely surprising.

On Emily Oster’s Proposed ‘Pandemic Amnesty’

(Don Boudreaux)

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National Review‘s Staff introduces this new video this way:

The leading voices for lockdowns and school closures are attempting to evade accountability as the damage that their policies wreaked becomes more evident. Over on the YouTube channel, Caroline Downey and Brent Buterbaugh break down Emily Oster’s article for the Atlantic that makes the case for a “pandemic amnesty.”

Progressivism and Public Health

(Don Boudreaux)

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My friend Todd Zywicki (of GMU Law) and I are on a couple of different private e-mail listservs with a number of other people who are dismayed by covid hysteria and the resulting lockdowns and mandates. On one of these listservs is also Laura Rosen Cohen, who recently penned this fine essay for Newsweek (to which I linked a few days ago). When Ms. Cohen shared her Newsweek piece with the group, Todd wrote the e-mail below. I share it here with Todd’s kind permission.

Laura:
This is superb.

But there is a larger and more menacing lesson lurking under the surface here. From the origins of modern Progressivism and Public Health (in many ways the 2 go together) in the early 20th century, their defining motivation has been sort of a crude, reductionist utilitarianism that sacrifices individuals to the grinding wheel of scientific, cold, calculating management of society.

It is no coincidence that the same Progressives who readily threw your son overboard are also those who crusaded for eugenics and forced sterilization a century ago. “Three generations of imbeciles are enough.” And encourage abortions for the mentally and physically disabled. And the Death Panels that were discussed during the Obamacare debates.

Jacobson beget Buck v Bell. And Buck v Bell beget Korematsu and the wholesale violation of Japanese-American civil rights during WWII for no reason other than their ethnicity.

These are the same people who never paused to force vaccination on those with natural immunity–it later came out that was because it would have just been “too much trouble” as a bureaucratic administrative matter to try to accommodate an exception for natural immunity.

What you and your son experienced is heartbreaking and cruel. But it is the logical working out of the cold utilitarian worldview that passes for “Progressivism.”

Oh yeah, the sole dissenting Judge in Buck v Bell was Justice Pierce Butler, a devout Catholic.

Todd J. Zywicki
George Mason University Foundation Professor of Law
Antonin Scalia Law School at George Mason University