Russell Roberts's Blog, page 96

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 255 of my colleague Peter Boettke’s January 2020 presentation to a meeting of the Mont Pelerin Society at the Hoover Institution’s Stanford University headquarters – a presentation titled “The Reception of Free to Choose and the Problem of the Tacit Presuppositions of Political Economy,” as the text of this presentation appears as Chapter 14 of Pete’s excellent 2021 book, The Struggle for a Better World:

But boiled down to its bare essentials the Friedmans are simply asking that public policies be incentive compatible with basic economic motivations. Asking policy proposals to not require mythical beings populating the world for the policies to yield the results desired is not too big a logical leap.

DBx: Indeed. Yet many professors, pundits, and politicians – left, center, and right – continue to propose policies as if these policies will be implemented by angelic miracle workers.

Some Links

(Don Boudreaux)

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The Wall Street Journal‘s Editorial Board criticizes the Biden administration for refusing to lift emergency covid measures. A slice:

President Biden finally dared to say it on Sunday, declaring in an interview on CBS’s “60 Minutes” that the “pandemic is over.” Various public-health eminences are saying he’s wrong, but his comments recognize the reality of the disease at this stage and the public mood. The trouble is that his Administration still hasn’t lifted its official finding of a Covid public-health emergency.

Eric Topol, the Scripps Research Translational Institute director who is one of America’s leading Covid scolds, tweeted “Wish this was true. What’s over is @POTUS’s and our government’s will to get ahead of it, with magical thinking on the new bivalent boosters. Ignores #LongCovid, inevitability of new variants, and our current incapability for blocking infections and transmission.”

But global Covid deaths in the first week of September were the lowest since March 2020 when the World Health Organization declared Covid a pandemic, and even Director-General Tedros Adhanom Ghebreyesus last week said “the end is in sight.”

Covid has become significantly less lethal as most people in the U.S. and world have gained some level of immunity from vaccination or infection. About 400 Americans each day have been dying from Covid this summer, but most are elderly or have other medical ailments. It’s still important to protect the vulnerable.

But for most Americans, Covid is no worse than a bad flu. “If you are up-to-date on your vaccines today, and you avail yourself of the treatments, your chances of dying [from] COVID are vanishingly rare and certainly much lower than your risk of getting into trouble with the flu,” White House Covid response coordinator Ashish Jha told National Public Radio.

But if that’s right, why hasn’t the President also declared an end to the public-health and national emergencies? If the pandemic is over, then so is the emergency. Yet the Administration continues to extend the public-health emergency that was first declared in January 2020.

Jonah Lynch, who lives in Italy, recognizes signs of totalitarianism when he encounters them. A slice:

Lockdowns shredded the social contract. They splintered society into violently opposed factions. (They damaged religions, they contributed to the inflation disaster, they contributed to roughly doubling the food price index, they led to mass surveillance, etc). And if the governments got lockdowns so wrong, why should we believe that they got other things right? This is still a relevant question as we careen toward energy rationing and food crises and already see inflation at around 10%.

Willamette University law professor Paul Diller explains how “covid-19 vaccine mandates skew campus viewpoints.”

Well, all of these people are undoubtedly grateful that what killed them wasn’t covid!

I’m always honored to be a guest on Chicago’s Morning Answer with Amy Jacobson and Dan Proft.

Jenin Younes tweets: (HT Jay Bhattacharya)

Francis Collins: “as the Covid pandemic was raging…I don’t think I ever felt a greater sense of the unanimity of the scientific community to come together.” Faux unanimity that Collins, Fauci, et al manufactured by ensuring dissenting voices weren’t heard

Writing in today’s Wall Street Journal, NYU physicist Steven Koonin says “Don’t believe the hype about Antarctica’s melting glaciers.” Two slices:

Alarming reports that the Antarctic ice sheet is shrinking misrepresent the science under way to understand a very complex situation. Antarctica has been ice-covered for at least 30 million years. The ice sheet holds about 26.5 million gigatons of water (a gigaton is a billion metric tons, or about 2.2 trillion pounds). If it were to melt completely, sea levels would rise 190 feet. Such a change is many millennia in the future, if it comes at all.

Much more modest ice loss is normal in Antarctica. Each year, some 2,200 gigatons (or 0.01%) of the ice is discharged in the form of melt and icebergs, while snowfall adds almost the same amount. The difference between the discharge and addition each year is the ice sheet’s annual loss. That figure has been increasing in recent decades, from 40 gigatons a year in the 1980s to 250 gigatons a year in the 2010s.

But the increase is a small change in a complex and highly variable process. For example, Greenland’s annual loss has fluctuated significantly over the past century. And while the Antarctic losses seem stupendously large, the recent annual losses amount to 0.001% of the total ice and, if they continued at that rate, would raise sea level by only 3 inches over 100 years.

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Under scenarios deemed likely by the United Nations’ Intergovernmental Panel on Climate Change, a connection between ocean currents and discharge would increase the overall discharge rate in one region of the continent by some 10% by the end of the century. But to emphasize the idea being tested, the modelers used human influences almost three times larger. Even though that fact is stated in the paper, reporters rarely catch such nuance, and the media goes with headlines such as “Antarctic Ice Melting Could Be 40 Percent Faster Than Thought” with the absurd statement that “a massive tsunami would swamp New York City and beyond, killing millions. London, Venice and Mumbai would also become aquariums.” A more accurate headline would read: “Ocean currents connecting antarctic glaciers might accelerate their melting.”

Michael Shellenberger asks why some people are more prone than others to see climate change as apocalyptic. Two slices:

Since the end of the Cold War, policymakers, journalists, and activists have pointed to melting glaciers, dying coral, and deadly floods as signs of the apocalypse. “Within 15 years,” said Al Gore in 2006 about Glacier National Park, “this is the park that will be formerly known as Glacier.” In 2017, CNN, PBS, and many others reported, “Climate change is killing the Great Barrier Reef.” And, last May, Newsweek reported that, “Cities Brace for Apocalyptic Flooding As New Age of Super Storms Dawns” while the National Oceanic and Atmospheric Administration (NOAA) warned of an “above-normal” Atlantic hurricane season.

But people misread the signs. In 2019, Glacier National Park officials began quietly removing visitor signs claiming the glaciers would all be gone by 2020 because they are all still there. Scientists in 2022 measured more coral on the Great Barrier Reef than at any point since they began monitoring them in 1986. And, not only have deaths and damages from flooding declined significantly worldwide, for the first time in 25 years, there were no Atlantic hurricanes in August.

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Why is that? Why is it that so many people have come to believe that climate change is an apocalyptic threat, despite all of the science to the contrary? And why do most of them tend to be liberal [DBx: that is, progressive] rather than conservative?

James Pethokoukis explains that “The battle to feed humanity may never end, but human ingenuity keeps winning.”

Scott Shackford is rightly dismayed by a recent ruling by the U.S. Fifth Circuit Court of Appeals. Two slices:

A panel of federal circuit judges has upheld a Texas law that limits the ability of social media companies to moderate their platforms and forces them to carry speech they find objectionable in what certainly appears to be a complete violation and abandonment of First Amendment protections for private companies.

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That decision upholding the law was finally released on Friday, and it reads like a Twitter rant, which is perhaps unsurprising given the subject matter. Written by Circuit Judge Andy Oldham, it declares on its very first page, “Today we reject the idea that corporations have a freewheeling First Amendment right to censor what people say.” This is something people should find troubling.

Quotation of the Day…

(Don Boudreaux)

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… is from page 59 of Edwin Cannan’s 1914 book, Wealth: A Brief Explanation of the Causes of Economic Wealth:

The present organization of industry is sometimes described as capitalistic, and the term is quite properly applied, if all that is meant by it is that in our part of the world the greater part of industry and property is immediately controlled by persons and institutions whose object is to make a profit on their capital. In Western Europe and America it is certain that the majority of workers work as they are directed to work by persons and bodies of persons who employ them in order to make a profit by getting more than they pay for all expenses, and who reckon the profit as a percentage on their capital. The greater part of the property is also in the hands of such persons and institutions. But we are not to conclude from this that these persons and institutions exercise any really spontaneous control over mankind and the useful things upon the face of the earth. They are only intermediaries between the consumer on the one side and the persons whose work and property is necessary for production on the other. They can only get their profits in consequence of a careful attention to value which compels them to agree on the one side with the consumer with means, and on the other with the workers whom they employ and the owners whose property they use. Their profit is dependent on the price the consumer with means will give, and on the prices at which they can obtain the things and services necessary for the production. If the consumers for any reason choose to place a lower value on some commodity or service which is being produced by “capitalistic” methods, the profits fall off, and all or some of the persons, firms, or companies engaged in the trade are compelled, or at the least find it better, to reduce their output. And the same thing happens if, on the other hand, the value of some of the necessary elements of the production rises: profits are reduced until the amount produced is cut down, so that a rise in its price takes place.

DBx: Yes.

Thomas Piketty and his fans are mistaken when they assert that the value of capital “tends to grow mechanically,” as in independently (1) of the creativity, risk-taking, and on-going effort of owners of business firms, and of (2) the desires and options of individuals acting in their capacities as consumers and as workers.

Pictures – Well, Graphs – Worth Many Words

(Don Boudreaux)

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In my latest column for AIER, I present several graphs, each of which is offered as a means of busting a myth or myths about trade or the current condition of the American economy. A slice:

Another popular myth is that American manufacturing output has been long declining. The graph below – reproduced from the St. Louis Fed’s FRED data site – busts that myth. American manufacturing output hit an all-time high on the eve of the Great Recession. After falling during that recession, it then grew a bit before leveling off for about eight years. Manufacturing output fell again during the first throes of COVID hysteria, but has, since April 2020, chugged upward. In July 2022 this output was only three percent lower than its all-time high in December 2007, and was 21 percent higher than its Great-Recession low in June 2009.

A broader measure of output is industrial production, which includes, in addition to manufacturing output, also the mining of raw materials and production of energy. Industrial production has grown steadily for more than a century. In July 2022, the latest month for which these data are available, U.S. industrial production was at an all-time high.

Given this reality of U.S. industrial output, it’s no surprise that, as the next graph shows, U.S. industrial capacity is also at an all-time high.

Some Links

(Don Boudreaux)

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GMU Econ alum Dominic Pino reports, at National Review, on Biden’s “alternate economic universe.” A slice:

[60 Minutes’s Scott] Pelley should have called out Biden for his comments on the deficit. The American Rescue Plan was the most expensive spending bill of the past 50 years, adding $1.9 trillion to the debt. The savings from the so-called Inflation Reduction Act (which Pelley referenced in his introduction as “the largest investment ever on climate change,” never mentioning inflation reduction) are largely based on gimmicks. And even if they weren’t, they are more than completely wiped out by the estimated cost of Biden’s illegal student-loan “forgiveness.” The continued torrent of government spending certainly isn’t helping to lower inflation.

Nick Gillespie interviews Ken Burns and Lynn Novick about their new documentary, The U.S. and the Holocaust.

Pete Boettke recommends this video of a talk about immigration given by Michael Clemens, who, I’m delighted to say, will soon join the full-time faculty of GMU Economics.

Juliette Sellgren talks with Michael Cannon about employer-sponsored health care.

Barry Brownstein warns against the impulse to fall for the deceptions of power-seekers and their enablers.

Writing in the Wall Street Journal, Lois McLatchie decries the growing disrespect for freedom of speech in Scotland. A slice:

Ironically, it was the democratically elected Scottish government that cracked the authoritarian whip last week. Moments before Charles IIIwas proclaimed king in Scotland’s capital on Sunday, a 22-year-old woman was arrested on the street for holding an antimonarchy sign that included an obscenity. The next day, as the royals walked somberly behind the late queen’s coffin, only a single voice in the crowd called the notorious Prince Andrew a “sick old man.” Barely a week ago, that would have likely been met by a thundering cheer.

Was it morally appropriate, at that moment, to heckle a grieving procession? Probably not. Was it legally appropriate for the police of the state to throw the heckler to the ground and arrest him? Absolutely not, if the fundamental right to freedom of expression is of any weight and relevance.

For a country famed for its ancient cry of freedom from English rule, the incident could not have better highlighted the ironic authoritarianism of our current government. It’s hardly plausible that our nationalist ruling party was so overcome with reckless enthusiasm for the British sovereign that it sanctioned the arrests on an ideological vendetta. Rather, our mechanics of policing have become so scrupulously censorial that this was the instinct of a police officer faced with a view deemed to be at risk of causing offense.

Matt Ridley rightly complains that “[t]he search for Covid-19’s origins continues to be hindered by fear of offending China.” A slice:

The Lancet Commission into “lessons for the future from the Covid-19 pandemic”, chaired by the economist Jeffrey Sachs, has concluded that “the origin of the virus remains unknown” and that “both natural and laboratory spillovers are in play and need further investigation”. This conclusion matters because there has been an attempt to shut down all curiosity about the origin of the pandemic. The media has been flooded with claims from a small number of virologists that the source of the virus was definitely an infected animal on sale in a market in Wuhan. Yet no such infected animal has been found in the market or elsewhere. In the absence of evidence for a natural spillover of the virus from animals, it is likely that the centrally located market with its vast retail space was the site of an early “superspreader” event among people.

The Sachs Commission points out that a great many related viruses were collected from bats and engineered by a laboratory at the Wuhan Institute of Virology in collaboration with US partners in the years leading up to the outbreak. That simple fact puts the Wuhan lab under suspicion. Further, SARS-CoV-2 contains a dangerous feature called a furin cleavage site in its spike gene that is found in no other virus of this kind (the sarbecoviruses). Many scientists admitted early in the pandemic to being baffled as to how it could have acquired this feature naturally yet with minimal other mutations in its spike gene. Last year a document surfaced showing that scientists in Wuhan and elsewhere were in 2018 considering inserting exactly such a furin cleavage site into newly discovered sarbecoviruses to test their virulence in human cells.

Will wonders never cease?! This passage is from a piece in the New York Times Magazine:

With his early bet on reopening and his concede-nothing posture, [Florida governor Ron] DeSantis has plainly won the political argument on Covid. The economic advantages and day-to-day freedoms of his hands-off approach were undeniable, and state-to-state virus statistics are rarely as clean as his opponents would like.

Martin Kulldorff tweets:

In 2020, I was a lonely voice in the Twitter wilderness, opposing lockdowns with a few scattered friends.
In 2022, I am preaching to the choir; a choir with a wonderful, beautiful voice. Thank you for singing!

Quotation of the Day…

(Don Boudreaux)

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… is from the posthumous 1965 collection of some of Gen. Douglas MacArthur’s papers and speeches, A Soldier Speaks, as this quotation from MacArthur appears on page 124 as the head of Chapter 6 of Robert Higgs’s excellent 2006 collection, Depression, War, and Cold War:

Our government has kept us in a perpetual state of fear – kept us in a continuous stampede of patriotic fervor – with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it by furnishing the exorbitant funds demanded. Yet, in retrospect, these disasters seem never to have happened, seem never to have been quite real.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from pages 277-278 of the original, 1982 edition of Dominick Armentano’s superb but regrettably neglected volume Antitrust and Monopoly: Anatomy of a Policy Failure:

There are, of course, business organizations that do benefit from the power to restrict entry and competition. This power, however, is not a function of product differentiation, or of advertising, or of the “technostructure,” or of market concentration, but is a function of explicit favors and privileges obtained from government. The sole source of the monopoly power, and of the problem, is the state. Yet it is the very state that most of the critics of business (and supporters of antitrust) would expand and enlarge to suit their particular vision of the good society. Knowingly or unknowingly, the critics of big business would enhance the very institution, and the very relationships that are at the root of the social problems they claim to abhor.

Some Links

(Don Boudreaux)

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George Will was moved by Ken Burns’s new documentary, The U.S. and the Holocaust, which premiers this evening in the U.S. on PBS. Also moved by this documentary is Boston Globe columnist Jeff Jacoby. A slice from Jacoby:

There are a number of interlocking themes in “The US and the Holocaust.” Among them: the entrenched antisemitism of prewar America, the stiff anti-immigration laws that excluded most refugees from the United States, and the way Jim Crow segregation in the American South provided a model for the Nazis’ infamous Nuremberg laws stripping German Jews of their rights. In his trademark fashion, Burns interweaves gripping human stories, some recounted by survivors who managed to avoid the fate that befell 6 million of Europe’s Jews, others told about those who struggled in vain for permission to enter America but ended up as corpses in the Nazi ghettoes, execution pits, and death camps.

Through it all, the US government, with some rare and heroic exceptions, not only refused to help Europe’s Jews escape the Nazi genocide, it went to extremes to suppress or downplay reports of the horror that was underway. Hull’s grotesque contention in the spring of 1933 that putting a lid on anti-Nazi criticism in America was the best way to ease anti-Jewish attacks in Germany was no aberration. Again and again, the administration of Franklin D. Roosevelt, and especially the State Department, where FDR’s close friend and financial backer Breckinridge Long was a powerful assistant secretary of state, worked assiduously to thwart refugees from reaching safe haven in the United States.

Pierre Lemieux joins in to expose the damage done to America’s economy by the cronyist Jones Act.

My intrepid Mercatus Center colleague Veronique de Rugy (with superb help from our colleague Jack Salmon) exposes just how off-base were many experts’ predictions of inflation.

Antony Davies and James Harrigan decry the weakening of the U.S. Constitution.

Wall Street Journal columnist Andy Kessler explains that one Michael Faraday is worth 1,000 Faucis. Three slices:

The public’s trust in scientists is way down this year, according to the Pew Research Center. Ya think? “Fifteen days to slow the spread” and “flatten the curve” may have something to do with it. Some airlines still hand out disinfecting wipes as you board—to combat an airborne virus. Real scientists, like Michael Faraday (1791-1867), whose birthday is this week, would be rolling their eyes.

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Why is science so maligned these days? To me, the turning point came in 1984, with (fictional) Columbia professor and ghostbuster Dr. Peter Venkman, played by Bill Murray, who when questioned said, “Back off, man. I’m a scientist.”

Venkman’s false claim of authority surely influenced Al Gore to claim during his 2007 congressional testimony on climate change, “The science is settled.” Wait, wasn’t that perjury? Science is never settled. Faraday was ahead of this, saying, “A man who is certain he is right is almost sure to be wrong.”

Same for Anthony Fauci, who was wrong on masks, social distancing and school closings, and who claimed his detractors were “really criticizing science, because I represent science.” Back off, man.

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Here’s the latest science hypocrisy. President Biden gave a speech last week in Boston on his “cancer moonshot” initiative, which will require lots of biology and chemistry. Yet his administration’s Federal Trade Commission tried to block DNA sequencer Illumina from buying and ramping up artificial-intelligence-enabled cancer-screening company Grail to find cancer early. Unscientific policy kills scientific advancement.

TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)

Jay Bhattacharya tweets:

I will be in Melbourne and Sydney this coming week, speaking at various events on covid policy. Information about these events are at the links below. It would be great to meet folks in person if you can make it!

Some Empirical Evidence on Deflation

(Don Boudreaux)

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After I posted this letter to the Wall Street Journal, GMU Econ alum Bob Subrick (who teaches at James Madison University) alerted me to Andrew Atkeson’s and Patrick Kehoe’s paper titled “Deflation and Depression: Is There an Empirical Link?,” which appears on pages 99-103 of the May 2004 issue of the American Economic Review. I was unaware of this paper until Bob brought it to my attention. This paper is for most of you, unfortunately, behind a paywall. The following three quotations from the paper, however, nicely summarize the authors’ key empirical finding:

Our main finding is that the only episode in which there is evidence of a link between deflation and depression is the Great Depression (1929-1934). We find virtually no evidence of such a link in any other period.

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The data suggest that deflation is not closely related to depression. A broad historical look finds many more periods of deflation with reasonable growth than with depression, and many more periods of depression with inflation than with deflation. Overall, the data show virtually
no link between deflation and depression.

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The bar has thus been raised for those who claim that deflation and depression are closely linked.

Quotation of the Day…

(Don Boudreaux)

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… is from page 9 of my GMU Econ colleague Mark Koyama’s, and his co-author Jared Rubin’s, 2022 book, How the World Became Rich (link added):

We observe a strong positive relationship between gains in height and per capita GDP in the past 200 years. People in the past were short. The mean height of an 18 year old in the English army between 1763 and 1767 was 160.76 cm (around 5’3″) (Floud, Fogel, Harris, and Hong, 2011, p. 27). The increase in average height partly reflects the improvement in nutritional standards achieved since the onset of modern economic growth.

DBx: As Koyama and Rubin note elsewhere in their book, the improved nutritional standards that increased humans’ average height are ones not only for children but also for mothers during pregnancy.