Some people insist “Econ 101” is too simplistic to be valuable for real-world decision making. While Econ 101 is, of course, less than all-encompassing, I would still say that the world suffers from far too little application of basic economics than too much. As is often the case, a ready example was recently provided by progressive legislators in the city of Seattle.  Not long ago, a new ordinance was passed in Seattle seeking to boost the wages of food delivery drivers who use apps like Uber Eats or DoorDash. It was couched with all the usual rhetorical flourishes about “fair and livable wages,” but it was just a form of price controls. And the effects of price controls aren’t changed by rhetorical flourishes. Basic economics tells us that when the price of a good or service is artificially pushed up, we should expect to see a decrease in the quantity of that good or service demanded by consumers. This is sometimes too hastily phrased as “decreasing demand” but that’s not right. Price floors (including wage floors) don’t decrease demand; they decrease the quantity demanded. This seemingly minor terminological quibble describes an important difference. Demand refers to how much consumers want some good or service, and quantity demanded refers to how much of that good or service they are willing to buy at a given price. The reduced consumption that occurs after a price floor has been implemented isn’t happening because consumers have started wanting less of the service – they still want it just as much as before, but they’ll be getting less of it anyway. This is partly why changes in quantity supplied or demanded due to price controls represent a deadweight loss – because those changes aren’t driven by changes in the preferences and demands of consumers. There are potential gains from trade that will never be made, without anyone benefiting from those losses.  And of course, the insights of basic economics were right on the mark. Once the new ordinance took effect, citizens noticed that ordering food was suddenly becoming much more expensive and started doing it much less – or deleting their food delivery apps altogether.  Of course, how much impact a price control has also depends on things like the elasticity of supply or demand – that is, how responsive producers or consumers are to price changes. And in this case, it looks like the demand for food delivery drivers is highly elastic – the price increases have led to a large decrease in the quantity demanded. Many food delivery drivers have spoken up saying the new ordinance is backfiring and as a result they’re making less money than they did before.  Part of that is because fewer people are placing orders for delivery. But another part is the other side of wage controls – while they will decrease the quantity of labor demanded, they also increase the quantity of labor supplied. That is, when people see an ordinance mandating higher wages for delivery drivers, more people will enter the delivery driver market while at the same time fewer people will want to avail themselves of delivery driver services. As a result of this double effect, more drivers are sitting around hoping to catch a smaller quantity of orders – which decreases the odds of any given driver being able to get such an order. As one driver put it in the second story linked above:  “They’re not telling the whole story,” Shagen said. “Assuming that you are working constantly, then yes, you’re going to be making that much money. But that’s not what’s happening right now. Because people are not ordering as much anymore. The tips are going down because they think we’re making all this money.” One driver shared how much he made on this week last year: $931. But this week, he only made $464.81. Lardizabal said their “bread and butter” is often South Lake Union, near Amazon. But KING 5’s visit to the area Sunday resulted in several conversations with bored delivery workers who reiterated their wages have been slashed. On top of that, Lardizabal and others told KING 5 they believe they are competing against more drivers now. “Everybody in cars, planes, trains, automobiles, mopeds are converging on the city,” Lardizabal said. “We’re grinding. And we are for real not getting $26 an hour.” Anyone who had taken even a single introductory course in basic economics (and actually retained what they had learned) would have immediately predicted all of this. Unfortunately, there appear to have been no such people among Seattle policymakers. And no matter how many times we see this story play out, we see the stage being reset for yet another performance over and over again. For all its simplifications, a world that took Econ 101 seriously would be a massive improvement over what we have right now.  (0 COMMENTS)

Going through my hard drive, I found an article I wrote in 2004 dealing with an important controversy after 9/11. The controversy pitted Condeleezza Rice against Richard Clarke. Rice headed the National Security Council under George W. Bush. Clarke was one of her employees and he specialized in counterterrorism. This link gives you more background about his warning, in August 2001, that a terrorist attack was coming. My article appeared at Tech Central Station, which no longer exists. Maybe Clarke and Rice Are Both Right May 14, 2004 “Your government failed you, those entrusted with protecting you failed you, and I failed you.” — — Richard Clarke, March 25 “The problem is that the United States [government] was effectively blind to what was about to happen.”
– Condoleezza Rice, April 8 Who’s right? Is Richard Clarke right that he and the rest of the government failed the victims of September 11? Or is Condoleezza Rice right that the government could have done little to prevent 9/11? Actually, they’re both right. The reason comes from the economic thinking of Nobel Prize winning economist Friedrich Hayek, the man who pounded the final intellectual nail in socialism’s coffin. And on 9/11 there were two pieces of evidence that there’s a better way than trusting our security to centralized planners, evidence that was hidden in plain sight. Central economic planning can’t work, explained Hayek, because no small number of people at the top, however brilliant or informed, can aggregate all the trillions of pieces of data needed to plan an economy well. The main information that matters in real time is what Hayek called “knowledge of particular circumstances of time and place” and this information is necessarily decentralized: it exists only fleetingly in the minds of millions of people. Forbid people from acting on their information, argued Hayek, and the information won’t be used. That, plus lack of incentives, is why crops rotted while waiting for railway cars and why the wrong sizes and types of steel were produced regularly in the Soviet economy. In a free-market economy, by contrast, people have both the incentive and the ability to use their information. For instance, wrote Hayek, “the shipper who earns his living from using otherwise empty or half-filled journeys of tramp steamers” is performing a useful function based on special fleeting knowledge not known to others. Hayek’s argument applies whether the good being produced is food, steel, or internal security. In fact, in her testimony before the 9/11 Commission, Dr. Rice explained the problems with centralization eloquently: You have thousands of pieces of information . . . and you have to depend to a certain degree on the intelligence agencies to tell you what is actually relevant, what is actually based on sound sources, what is speculative. Dr. Rice is right. How are she and her colleagues to decide in advance which threats are real and which are not? They could treat all threats as real and then clamp down on border crossings and other largely peaceful activities. That would quickly change the United States into a police state, something that not even the police want. Does this mean the situation is hopeless? Not at all. Because we [decentralized Hayekian actors] are actually pretty good at taking care of much of our own safety-and we even spring occasionally to create safety for others. Think of two good things that happened on that horrible September 11. The first was the actions of the heroic passengers on United Flight #93. They got information about the hijackers’ true intentions, not by waiting for some central government announcement, but by acting in the moment to get information from friends and loved ones. They quickly figured out that they would not be on a free trip to Cuba, but on a one-way trip, probably to a high-value target in Washington. So, with little to lose, they acted to protect the lives of strangers in Washington. And they succeeded. The second good thing was a centralized agency, the FAA, letting its air traffic controllers figure out, in a decentralized way, how to bring a few thousand planes down safely in a few hours. As USA Today reported (August 13, 2002), after 9/11, the FAA started to write a manual for clearing the skies so they could have a more organized plan the next time. Then it stopped. FAA officials realized that they couldn’t plan for the next time because the situation would be different. Instead, the FAA would have to trust that hundreds of air traffic controllers would cooperate the next time as they did so well on that awful day. A centralized government agency can’t be the main body entrusted to protect us. Because it must sift through too much data, almost all of which will turn out to be benign, it moves too slowly. That was Dr. Rice’s insight even if she didn’t dare state it quite so bluntly. The government failed to protect us—that was Mr. Clarke’s insight stated bluntly. So let’s protect ourselves. Let’s allow airlines to decide whether to let their pilots carry guns, as they were free to do before 1987. Pilots are now allowed to carry guns, but only if they give the government intimate details about their personal lives. If airlines want to man their flights with armed, retired FBI agents, as one major airline wanted to do until the FAA nixed it, they should be free to do so. And the government should allow other precautions that are too numerous to list in this short space. The lesson of September 11 is not that government should plan better and not that a Republican president plans better or worse than a Democrat president. The lesson of 9/11 is that central planning doesn’t work and that government should not get in the way of our planning.   (0 COMMENTS)

Chris Koresko contacted me out of the blue to tell me that I had won a bet against him. I appreciate his integrity–and his memory. He reminded me that we had made the following bet: I [Chris Koresko] will pay you the sum of $25 on or around October 26, 2021 if no nuclear attack has killed 10 or more people anywhere in the world between now and that date, on the condition that you agree to pay me the sum of $100 soon after any such attack occurs between now and that date. The bet is nullified if either of us becomes incapacitated or dies before the debt comes due, or if neither of us remembers the bet within two weeks of the debt coming due. He wrote me the following: I seem to recall that some years ago on EconLog you and I had a bet about whether a nuclear exchange would occur somewhere in the world within the next 10 (?) years. I believe you won that bet, and IIRC we bet a bottle of wine. So I think I owe you a bottle. Is there an address you’d like me to send it to? Also, is there any wine in particular you’d prefer? Congrats on winning our bet. I’m very glad you did! Chris I thanked him for his integrity and told him that he might be surprised at the number of people who have reneged on such bets. I gave him my address to send the check. But in posting this, I just noticed the clause at the end. This means that he owes me zero. I will tell him. But the more important big-picture point is that my optimism was justified.     (0 COMMENTS)

There is a photo of a restaurant whiteboard that has bumped around the interwebs for years. I first saw a version in April 2016, posted on Twitter by Scott Lincicome. Robert Tracinski  offered some comments at the time, but the sentiment has now become a meme. I have reproduced a version of the message here, written out in hippy-loopy longhand, the way this message should be written out. Here it is: Those of us of a “certain age” remember the back-to-nature, self-sufficiency movement of the 1960s. There was a range of literature both celebrating and “how-to”-ing economic independence and moving “off the grid.” The most beloved source was probably “The Whole Earth Catalog,” which Steve Jobs famously compared to a paper version of “Google” in his 2005 Stanford commencement speech.  Now, being able to find information about how to do things on your own was, and is, a blessing. Perhaps unsurprisingly, the WEG ceased publication with the development of the internet. After all, the combination of Google and YouTube means that I can find a video that shows me how to do almost anything I could want to do. (Including “Grow Your Own Food!”) That’s what makes the little whiteboard meme so interesting. Whoever first wrote it out recognizes that it makes no sense to “grow your own food.” Instead, what you need to do is grow a large quantity of a different crop, and trade for everything you don’t have. In other words, there are  two states of world:  In State A I grow everything for myself, in small amounts. Say I have four acres, and I grow one acre of beans, one of corn, one of wheat, and one of tomatoes. The three other people in the world do the same thing. Overall, Person 1, Person 2, Person 3, and Person 4 each devote one acre each to each crop, so our little community has four acres of beans, four of corn, and the same for wheat and tomatoes. We are all self-sufficient! (If you remember the ‘Sixties, now is the time to hum “I am a Rock, I am an Island.”) In State B I grow just one thing, on all of my four acres. Persons 2, 3, and 4 do the same. And then we exchange. You’ll immediately see that this means that the same total acreage is devoted to the same crops in both State A and State B: four acres of beans, of corn, of wheat, and of tomatoes. But whereas in State A each of us is self-sufficient, in State B we are mutually dependent.   So, there’s no difference, and we’d be better off in State A, where we don’t depend on anyone else, right?  What’s so cool about the “free food” meme: the writer recognizes the error in this reasoning!  We are actually better off in State B, perhaps by quite a bit, because of what Adam Smith taught us about Division of Labor.  But the memer doesn’t understand the principle that s/he was working with. Food is not free; it can’t be. If I grow one thing, the cost is whatever I didn’t grow. Further, if I eat something, it is not available for you to eat. So food always has a cost. The problem is how to get more, and better, and more various kinds of food, at lower prices, including costs to the environment.  The price of expecting others to give me food I lack is for me to give them food they lack, so that the exchange makes both of us, or all of us, better off. Famed George Mason University economist Walter Williams summarized Smith’s insight accurately: “The better I serve my fellow man…the greater my claim on the goods my fellow man produces. That’s the morality of the market.” As Adam Smith put it:  The time spent in two different sorts of work will not always alone determine [the barter rate of one good for another]. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account…But it is not easy to find any accurate measure either of hardship or ingenuity. In exchanging indeed the different productions of different sorts of labour for one another, some allowance is commonly made for both. It is adjusted, however, not by any accurate measure, but by the higgling and bargaining of the market, according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life. (Wealth of Nations, Book I, Chapter 5) So, the memer has a good idea: we’ll each grow a crop, and then trade. But it would be better still to have a commercial society, in which there is some commonly accepted measure of the value of the service we are providing one another in growing food to share. Walter Williams extended Smith’s insight, in a way that makes clear why the system works so well:  Say that you hire me to mow your lawn and afterwards you pay me $30. What I have earned might be thought of as certificates of performance, i. e. proof that I served you. With these certificates of performance in hand, I visit my grocer and demand 3 pounds of steak and a six-pack of beer that my fellow man produced. In effect, the grocer asks, “Williams, you’re demanding that your fellow man, as ranchers and brewers, serve you; what did you do in turn to serve your fellow man?” I say, “I mowed my fellow man’s lawn.” The grocer says, “Prove it!” That’s when I hand over my certificates of performance — the $30. Unsurprisingly, the system of money exchange that we have devised instead works better than the barter system of farming the romantic memer longs for. But that’s only because such people have never been near a barter system—or a farm, for that matter.   Michael Munger teaches at Duke University and is Director of the interdisciplinary program in Philosophy, Politics, and Economics (PPE) at Duke University. He is a frequent guest on EconTalk. Read more of Michael Munger’s writing at Archive. (0 COMMENTS)

If a reminder should be tattooed on the arms of all politicians and bureaucrats, it would be the reflection of the Russian official who, after the breakup of the Soviet Union, asked British economist Paul Seabright (quoted in Philip Coggan, More [The Economist, 2020], p. 357): Who is in charge of the supply of bread to the population of London? But I agree that a compulsory course in microeconomics would be more effective than a tattoo. During the pandemic, it was thought that a czar should be in charge of the production or distribution of masks and other medical supplies in America. The situation was not better in most countries. Donald Trump named Peter Navarro as his “equipment czar.” Nararro talked tough, a bit like the speculator fighters during the French Revolution—see my post “When Free-Market Prices are Banned,” April 1, 2020. (He was then very much law-and-order, until he was prosecuted by the other tough-speaking law-and-order types.) It is revealing that powerful government figures are affectionately called by the name of the Russian absolute rulers (whose two-headed symbol adorns the featured image of this post). So, the US government subsidized domestic companies to produce masks and Americans are now stuck with the inefficiency of the beneficiaries (“The U.S. Invested Millions to Produce Masks at Home. Now Nobody’s Buying,” Wall Street Journal, February 4, 2024): By early 2022, Moldex was producing 5 million medical-grade N95 masks a month. Most were bought by HHS [Department of Health and Human Services] and distributed to hospitals and government agencies. Mask orders dropped off later that year, causing Moldex to stop most production at the Tennessee plant in early 2023. American health services, like the bread vendors in London, are again in charge of their own supplies. They buy less expensive masks, which are not surprisingly produced in developing countries with their relatively unproductive (and thus inexpensive) labor. Apparently, some conclude that the “price playing field” should be “leveled”: “How do you level the price playing field? That’s what it comes down to,” said Mike Schiller, interim director of the Association for Health Care Resource & Materials Management. The only efficient way to “level the price playing field” is to let competition free, which amounts to saying that everyone is at liberty to buy where he considers the best bargain, at home or abroad, and any producer is free to respond to demand. It is called economic freedom. The current drama is that, as national states are rediscovering their pre-industrial habit of restricting, buyers may tomorrow have to pay a premium for domestically produced goods. But let them make their own trade-offs. Laissez-faire, morbleu! That this lesson has not been learned is an intriguing phenomenon. Many factors must be in play: the non-intuitive character of economic theory compared with the tribal intuitions or authoritarian experience of mankind during the 500,000 or so preceding the epoch of Adam Smith; the values or interests of those who, consciously or not, undervalue the welfare of the common people; and our political technology, which gives coercive power to 50%+1 of the voters or to others who control the political agenda. The ordinary people who made the Industrial Revolution and to whom we owe our wealth and our (much threatened) liberties were celebrated by Deirde McCloskey in her Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World (University of Chicago Press, 2016): In the eighteenth century certain members of the clerisy [artists, intellectuals, journalists, professionals, and bureaucrats], such as Voltaire and Tom Paine, courageously advocated our liberties in trade. And in truth our main protection against the ravenous has been just such competition in trade—not Citi Hall or Whitehall, which have their own ravenous habits, backed by violence. … Much of the clerisy [later] mislaid its former commitment to a free and dignified common people. It forgot the main, and the one scientifically proven, social discovery of the nineteenth century … that ordinary men and women do not need to be directed from above, and when honored and left alone become immensely creative. … The modern world was made by a slow-motion revolution in ethical convictions about virtues and vices, in particular by a much higher level than in earlier times of toleration for trade-tested progress—letting people make mutually advantageous deals, and even admiring them for doing so, and especially admiring them when, Steve-Jobs like, they imagine betterments. … Trade-and-betterment toleration was advocated first by the bourgeoisie itself, then more consequentially by the clerisy, which for a century before 1848, I have noted, admired economic liberty and bourgeois dignity … By then, however, as I also noted, much of the avant-garde of the clerisy worldwide had turned decisively against the bourgeoisie, on the road to twentieth-century fascism and communism.” … The original and sustaining causes of the modern world … were the widening adoption of two mere ideas, the new and liberal economic idea of liberty for ordinary people and the new and democratic social idea of dignity for them. When ordinary people want to rule, instead of exercising their equal individual liberty in voluntary social cooperation, the result is not democracy as McCloskey and classical liberals understand it, but competitive czarism. The true democratic ideal is that each ordinary individual rule over himself (or herself, of course). (0 COMMENTS)

I say the answer should be no.  It should make no difference whether we call addiction a disease or a bad lifestyle.  (I say “should” because it might matter for insurance purposes.)  But it does matter whether addiction is something that can be controlled, or is something that is beyond human control.  Most experts I read seem to agree that addiction is at least partly under the addict’s control.  This is from a Reason magazine interview of Sally Satel, who spent years helping addicts in Appalachia: I’m not going to deny any of the neurobiological facts or the very dramatic and eye-catching brain scans that they use—of course the brain has changed in addiction. So that’s all true. But the point is the brain isn’t changed to the point where a person can no longer make decisions. If my choices are saying addiction is a disease vs. it’s a sin or it’s a crime or it’s evidence of moral failing, well, damn, I’m going to pick disease. But it’s a condition, a behavioral phenomenon that responds to contingencies, that responds to consequences, and that people engage in for reasons. In Ironton and D.C., there’s not one patient who walked into a clinic and didn’t say that they were there because their wife was going to leave them, their boss is going to fire them, their probation officer is going to punish them, or their kid’s going to hate them. The point is they’re responding to something in their environment. If I had Alzheimer’s disease, which is to me a classic brain pathology, it wouldn’t matter what was going on in the environment or in my cognition or in my view of myself. If you talk to someone who drinks too much or uses drugs too much—and I emphasize the too much, because that’s the problem—I’d say to them, “Why are you doing that? What’s going on?” That question makes sense. That question can be answered in existential terms. If I said to a person with Alzheimer’s disease, “Why do you have Alzheimer’s disease?” maybe they’ll talk to me about [brain] plaques and tangles and neural pathology. The answer doesn’t come in the form of existential language. That’s very important, because that goes to why people use and how we get them out of it. I really like this answer.  Many people allow words to distort their thinking about various issues.  They may say to themselves, “First I need to determine if taxation is theft, and then that will allow me to decide how I feel about taxation.”  That’s wrong.  The question of whether taxation is justified has nothing to do with the label you decide to attach to the institution. Similarly, people might say to themselves, “First I’ll decide if addiction is a disease, and then I’ll decide whether to criticize the addict for their behavior.” That’s also wrong.  Satel regards addiction as a disease, and yet seems willing to criticize addicts for their behavior.  That’s because addicts respond to incentives. You are free to define words as you choose, but don’t expect society to follow along.  If you say, “It’s not a disease if self control can improve the condition”, then diabetes would no longer be a disease. PS.  Mental illness is another problematic term.  The issue is not whether mental illness is a disease or a behavioral choice; the question is how should we treat people who behave in unconventional ways.  Here’s Tyler Cowen: I don’t find the term “mental illness” very useful, and very often it is misleading, or even dangerous, or used to restrict the liberties of individuals unjustly. Tyler doesn’t deny that mental illness exists—the problem is that it’s poorly defined.  For instance, we once treated both pedophilia and homosexuality as illnesses.  More recently, we’ve changed our minds on homosexuality for (in my view) essentially utilitarian reasons.   (0 COMMENTS)

Recently, I posted a defense of the value of widespread consumer choice against the dismissal of some socialists. While talking to my wife about that post, she brought up a couple of good points I thought were worth unpacking as well.  On the issue of “you don’t need 18 different choices for shoes,” she pointed out how that might seem true to someone who thinks about things in a very narrow and self-centered sense. I mean, it’s actually true that I, specifically, don’t need 18 different types of shoes to get by. I’m a guy of simple taste, and I only have about four sets of shoes that fully cover my daily wear, gym, and formal dress needs. But let’s assume I wanted a bit more variety than I really do – let’s go so far as to say that it would take upwards of ten different varieties of shoes to fully serve my purposes. In fact, let’s be really unrealistic and just say that ten different varieties of shoes would fully meet the needs of any given person. Would Senator Sanders have a point then?  Well, no, he wouldn’t. Let’s say this particular set of ten different types of shoes is the set that fully meets my every need, and that particular set of ten is the set that fully meets your every need. How much overlap will there be between the ten types of shoes that fully work for me, and the ten types of shoes that fully work for you? Maybe one pair? In that case, there would need to be 19 different choices available to fully meet both our needs. That just so happens to be greater than the number of choices Senator Sanders had already decided was excessive for serving the entire market – and we’re only talking about two people so far! The more people you add in, the greater variety will be needed to make something that works for everyone. There will be some overlap among individuals, of course, but that doesn’t go very far. Advocates of the free market are often accused of being excessively individualist and self-concerned and not being sufficiently concerned with the well-being of others, but I think the opposite is true. If I was excessively self-focused, I might take the fact that ten pairs of shoes are more than enough for me as proof that it’s more than enough variety for anyone, because I might fail to recognize how different the needs and preferences of other people might be from my own. And if I was truly lacking in an awareness of the needs and desires of others, I might go so far as to assume that the specific ten choices that work for me are the same ten choices that would also work for everyone – and thus lament the “pointless waste” of a market system that produced not ten varieties of shoes, but ten thousand different varieties.  As my wife put it, it’s not that I need ten thousand different options, or that you need ten thousand options. Each of us might get by just fine with only ten. But in a country with hundreds of millions of people, with such a wide array of different preferences, desires, lifestyles, and goals, a system that provides every person with the set of ten different choices they need might very well have to produce ten thousand different choices in total. And that’s exactly what the market does – and why Hayek was right to call it a marvel.  The comedian Ricky Gervais once said “You found it offensive? I found it funny. That’s why I’m happier than you.” In the same way, while some socialists look at the incomprehensible variety of goods and services provided by markets and commerce and despair, I look at that same thing and celebrate a system that seeks to fill every need and fit every niche, in all the glorious variety that represents. And that’s why I’m happier than them.  (0 COMMENTS)

Journalist and author Robert Wright invited EconTalk’s Russ Roberts to his podcast, NonZero, to discuss the Israeli-Palestinian conflict, knowing that there would be plenty to disagree about. The two then agreed to release their back-and-forth on their respective podcasts. The result is a lively but respectful discussion that is more debate than the usual EconTalk […] The post A Lively Debate on the Israeli-Palestinian Conflict (with Robert Wright) appeared first on Econlib.

Alexei Navalny’s Death Is a Timely Reminder of How Much Russia Sucks By Eric Boehm, Reason, February 16, 2024 Excerpt: If there is the thinnest bit of a silver lining to be found in the untimely demise of Alexei Navalny, the Russian opposition leader who reportedly died this week in prison, perhaps it is this: It is a well-timed reminder of how much Russia sucks. Most Americans probably don’t need the reminder. After all, Russia has been an authoritarian state for as long as any American alive today can remember, and Russian President Vladimir Putin’s record of murdering political opponents, imprisoning critics, and silencing dissent is well established. Also, there’s that foolish, destructive war in Ukraine. This week, however, the internet has been treated to the absurd spectacle of former Fox News pundit Tucker Carlson’s bizarre propaganda tour of Moscow (on the heels of his more defensible decision to interview Putin). Via videos posted to X, formerly Twitter, Carlson raved about the beauty of the Moscow subway system and was wowed by the stunning technology of…shopping carts? Through it all, Carlson has repeatedly suggested that maybe Russia isn’t such bad a place, as if a lack of subway graffiti were the most important metric for measuring the quality of a country. My comment: It’s too bad that Tucker didn’t seem to have seen any Dollar stores in Moscow. Surely then, he would have seen through his own hype. 1968 Robert F. Kennedy Campaign Ad Ignorant U.S. Senator Scares the Bejesus out of Young Children   Los Angeles’ one weird trick to build affordable housing at no public cost by Ben Christopher, Cal Matters, February 7, 2024. (HT2 co-blogger Scott Sumner) Excerpt: Another key detail: Unlike most recent statewide laws aimed at speeding up the approval of new housing, the Los Angeles law doesn’t require developers to pay construction workers heightened “prevailing wages” — roughly equal to what unionized construction workers earn on a public infrastructure projects. Muhammad Alameldin, a researcher at UC Berkeley’s Terner Center for Housing Innovation, said that makes Executive Directive 1 a kind of alternate reality for housing policy in California. Then comes the next step. Most so-called “ED1 projects” also make use of a hodgepodge of statewide “density bonus” laws that allow developers of 100% affordable housing projects to pack far more units and floors onto a given lot than would otherwise be allowed under local zoning rules. These laws also let affordable developers pick and choose from a wide range of goodies and freebies that cut costs further and allow for yet denser development. That means no parking spots, limited open space, smaller rooms and fewer trees. All those added units mean developers can set the rents lower and still pay themselves back for the cost of construction and then some. Comment: By “No Public Cost” in the title, the author means not “no cost to the public,” but “no cost to taxpayers.” The people who buy them will still pay a pretty penny, but it’s worth it to them. Biden administration to reportedly relax EV rule on tailpipe emissions Reuters, February 18, 2024 Excerpt: U.S. President Joe Biden’s administration intends to relax limits on tailpipe emissions that are designed to get Americans to move from gas-powered cars to electric vehicles, the New York Times reported, citing people familiar with the plan. The administration would give car manufacturers more time instead of requiring them to rapidly ramp up sales of electric vehicles over the next few years, the report said, adding that the new rule could be published by early spring. The shift would mean that EV sales would not need to rise sharply until after 2030. Reuters previously reported that the White House could enact proposed Environmental Protection Agency regulations as soon as March that would mandate dramatic reductions in tailpipe emissions. The administration proposal would require boosting U.S. EV market share to 67% by 2032 from less than 8% in 2023. I predict that the mandate for EV sales will NOT rise sharply before 2035.   Me vs Huemer by David Friedman, David Friedman’s Substack, February 13, 2024 Excerpt: One problem with Huemer’s argument is that the expertise of the expert rarely covers enough of the issue to derive a conclusion on the basis of his own knowledge. A climatologist knows more about climate than I do so the expert consensus on what is going to happen to global temperature, assuming I can figure out what it is, is a better guess than I can produce for myself. But the climatologist has no expertise in economics, which is one of the things needed to work out the consequences of that change — and I do. He probably has little expertise in statistics; I am better off figuring out for myself, with the assistance of information from statisticians,  whether to believe Michael Mann’s hockey stick diagram. His expertise in climatology tells him nothing about the effect of CO2 concentration on crop yields, a question it may not have occurred to him to think about. His conclusions about the consequences of climate change depend on quite a lot of things he is not an expert in. Once I have accepted his prediction of future climate I have no reason to give special weight to his conclusions about its effect on human welfare or the cost of reducing CO2 production, both of which the policy conclusions that people argue about depend on, so there is little reason to prefer his conclusions to mine. That is one example that I happened to have looked at in considerable detail. The same would be true of gun control, where one of the main controversies (over concealed carry) was set off by an article by two economists offering evidence for an economic point I had made, years before, in my Price Theory. For the abortion controversy the issues are religious and moral questions on which, as best I can tell, there are no experts, at best people whose writing helps the reader think through the issue for himself.   (1 COMMENTS)

“Let’s be honest. Hillary Clinton is going to be the next president of the United States.” I uttered those fateful words on election day 2016 and then proceeded to lose a few hundred dollars at Predictit.org, where I had bet on a Clinton victory. The experience made me appreciate Yogi Berra’s maxim that “it’s hard to make predictions, especially about the future” even more. That experience combined with what I’ve read about experts’ lousy records making concrete predictions was chastening, to say the least, and now my default answer to, “What do you think is going to happen?” and, “What should we do about [whatever]?” is, “I don’t know.” It’s a good lesson to remember as we mark the second anniversary of Russia invading Ukraine. I’d say allow more immigration, but that’s a good idea regardless. Reading Richard Hanania’s Public Choice Theory and the Illusion of Grand Strategy: How Generals, Weapons Manufacturers, and Foreign Governments Shape American Foreign Policy, convinced me sanctions will be ineffective if not counterproductive. They stand a very good chance of being worse than doing nothing, and the paradigmatic case for successful sanctions–the end of Apartheid in South Africa–was not due to sanctions but due to other causes. Was the Russian invasion bad? Yes. Is Vladimir Putin a bad guy? Yes. Do those two facts alone mean we can make things better? No. The world is filled with problems we do not know how to solve, and it’s unwise to try to keep up with all of them and foolish to try to solve all of them. I basically stopped keeping up with current events after reading Rolf Dobelli’s essay “Avoid News: Towards a Healthy News Diet.” Dobelli argues that news is to the mind as candy is to the body, and he explains that news takes our faulty ways of thinking about risks and makes them worse. As he puts it, for example, “Terrorism is overrated. Chronic stress is underrated.” Most of what you see on the evening news or read on your favorite news website is irrelevant to your daily affairs, and many of the confident pronouncements people are making about this or that will be wrong or correct only fortuitously. Checking the news is like going to the pantry for a bag of chips. It’s OK to do every so often, but just as chronic snacking on junk food ruins our bodies, chronic snacking on junk information ruins our minds. I’m also inspired by Michael Huemer’s article “In Praise of Passivity” and Chris Freiman’s argument for why it is OK to ignore politics. I don’t think we’re at the stage in our knowledge of the social and moral sciences where we can confidently predict the actual, long-run consequences of many actions and interventions. We can make predictions based on models, which can be informative, but there’s enough randomness in the system that, once again, even the best forecasters aren’t very good at it. For someone who doesn’t specialize in a particular area, a citizen’s or observer’s Hippocratic Oath: first and foremost, don’t make things worse. As Hanania argues, many American military adventures abroad wind up with ad hoc justifications based on jingoism and short-run political expediency. Huemer is right: it’s OK to stand by and watch. Huemerian passivity, of course, isn’t the same as apathy. We should care about what happens in the world, but not to the point of distraction or neglect of our other duties. In any event, politics is hard and the world is an unimaginably complex place. To the objection that it is not OK to ignore politics and that we have a duty to be informed citizens, Freiman responds by pointing out the overwhelming intellectual burden one needs to bear in order to really understand things and account for the consequences of different policies and proposals. It is hard enough for me to keep up with the scholarly literature in my very narrow field of specialization within economics, and even then, there is a lot I don’t know and end up missing. Christopher Freiman thinks it’s OK to ignore political debates even about very sensitive issues because of the sheer complexity of what is involved and because it’s by no means certain that we will make things better overall. I tend to agree. So what are we to do? I am learning to pray with Reinhold Niebuhr for the courage to change the things I can, the serenity to accept the things I can’t, and the wisdom to know the difference. What’s happening in Ukraine right now is getting a lot of attention, but it’s almost certainly something I can’t change.   Art Carden is Professor of Economics & Medical Properties Trust Fellow at Samford University, and he is by his own admission as Koched up as they come: he has an award named for Charles G. Koch in his office, he does a lot of work for and is affiliated with an array of Koch-related organizations, and he has applied for and received money from the Charles Koch Foundation to host on-campus events. (0 COMMENTS)