David Beckworth directed me to an interesting debate at a recent Brookings panel. Olivier Blanchard and Ben Bernanke presented a paper that evaluated various factors in the recent inflation surge, highlighting the role of supply issues related to food, energy, shortages, etc.  To be clear, they noted that some of the supply bottlenecks occurred due to previous over-stimulus of demand.  They also argued (correctly in my view) that inflation moves from transitory to permanent when it becomes embedded excessive wage growth.  The initial inflation surge was high prices relative to wages; the current problem is excessive wage growth.In his discussion, Jason Furman presented a slide showing his interpretation of their framework for aggregate demand shocks: He contrasted that with his preferred framework for the analysis: Long time readers will recognize that this is also my preferred way of thinking about demand shocks.  By itself, real GDP tells us almost nothing about demand.  In contrast, NGDP is a reasonable proxy for aggregate demand.  (That doesn’t stop pundits from occasionally citing real output and/or real consumption data as “demand”, even though that’s an EC101-level error.) In the subsequent discussion, Bernanke objected that the implications of rising NGDP were ambiguous, as one could imagine a scenario where both the AS and AD curve shifted upward (less AS, more AD, no change in output.)  Thus stable RGDP and rising NGDP does not necessarily imply that the problem is primarily excess demand.  He may have been reacting to this slide from Furman: In an accounting sense, it looks like the inflation problem is 100% nominal, with real GDP roughly on trend.  If I’m not mistaken, Bernanke’s argument is that in a counterfactual where NGDP rose less strongly, it is possible that output would have been lower (due to Covid/Ukraine, etc.) and we still would have experienced some excess inflation (albeit presumably less than what we actually experienced.) Here’s why I prefer Furman’s approach.  Prior to Covid, unemployment was roughly 3.5%, and hence the economy was probably close to equilibrium.  In that case, we should not have been aiming for fast NGDP growth to reduce unemployment below 2019 levels.  Rather, we should have aimed for NGDP growth of roughly 2% plus the Fed’s estimate of trend RGDP growth after 2019.  In fact, we got a couple trillion dollars in excess NGDP growth, roughly 8% above trend.  It would be shocking if that sort of rapid growth in nominal spending had not created high inflation, given that we were already near full employment in early 2020. That doesn’t mean that Bernanke’s theoretical observation is incorrect.  Rather I am suggesting that his point is probably of limited relevance for this particular episode.  Perhaps Covid reduced aggregate supply by 1% or 2% between early 2020 and today, and the powerful demand stimulus boosted output by a roughly equal amount, leaving RGDP close to trend.  If NGDP had grown at trend, perhaps output would be 1% or 2% lower than current levels.   What seems implausible is that the change in aggregate supply over the past three years is anything close to the 8% overshoot of demand.  That sort of rapid growth in nominal spending is not a necessary condition for inflation (supply shocks can also boost the CPI), but it seems to me that it’s pretty close to a sufficient condition for high inflation in the absence of some sort of truly extraordinary boost in aggregate supply.   So while Bernanke is right that fast rising NGDP doesn’t definitively prove that excess demand is the cause of the recent inflation overshoot, given plausible estimates of shifts in the AS curve, it seems highly likely that the 8% NGDP overshoot is by far the most important cause of high inflation. Furman also made some very good observations about the difficulties involved in separating supply and demand shocks.  For instance, congestion at the ports seems like a “supply problem”.  But most of this congestion was not caused by a physical problem at the ports.  According to Furman, import volumes at US ports were far higher in 2021 than in 2019.  Instead, it was the extraordinarily large demand for goods during 2021 (partly driven by stimulus checks) that was causing congestion at the ports.  So in a sense even the “bottleneck” problems were partly excess demand, even though they looked like a supply problem.  (Again, Blanchard and Bernanke acknowledged this problem in their paper.) In EC101, we are taught that P and Y, considered in isolation, tell us nothing about supply and demand shocks.  NGDP is different.  It measures prices times output, or total nominal expenditure.  Thus NGDP is a fairly direct read on aggregate demand.  Instead of looking at all sorts of sectors (food, energy, services, labor, investment, durables, exports, etc.), NGDP provides a simple and elegant way of thinking about total demand in the economy.  Yes, the Fed doesn’t directly target NGDP.  But there is no plausible interpretation of the Fed’s dual mandate where—if starting from equilibrium—it is appropriate to have NGDP growth either far above 4% or far below 4%.  In 2008-09, we went roughly 8% below trend (which was then 5%), and in the past three years we’ve gone roughly 8% above.  When the deviations in NGDP are that large, it’s reasonable to say that the problem is primarily demand. PS.  Of course I favor NGDP targeting, which is another reason to prefer Furman’s framing of the issue.  But I’d prefer his approach even if the Fed sticks to its current “dual mandate” approach.  As St. Louis Fed President Jim Bullard once observed, the implications of FAIT (if symmetrical) are pretty similar to NGDP level targeting. (0 COMMENTS)

Randall Holcombe’s Following Their Leaders: Political Preferences and Public Policy makes the case that contrary to the usual description of democracy, where voters call the shots with their votes and political leaders craft policies as the voters direct, political leaders control and craft policy, and voters follow their leaders, adopting their political preferences according to the platforms created by the elites. So how well does his case hold up? I’ll give my thoughts on what I see as the main claims of his case – the idea that votes reflect expressive preferences rather than instrumental preferences, the idea of anchor and derivative preferences, and the idea that policies are made by elites with voters following their leaders, rather than elites making policies according to voter preference. The claim that votes are expressive rather than instrumental is where I see the most grounds for skepticism. The idea is theoretically sound – what people express when nothing is at stake often differs from what they actually choose when they directly create an outcome. And it’s factually correct to say that in all but the smallest elections, the act of casting a vote has essentially zero chance of creating an outcome. But I think the case may be overstated here. It takes for granted that voters are aware that their votes have essentially zero instrumental value – an assumption that was forcefully criticized by Jeffrey Friedman in another book I’ve covered in depth, Power Without Knowledge: A Critique of Technocracy. Friedman argues this claim is simply asserted far more than analyzed, and Friedman also contends that the mathematical work showing votes have essentially zero instrumental value is actually an esoteric bit of knowledge that can’t simply be assumed as universally known. Additionally, when one openly declares “I don’t vote, because it’s not worth the time and effort since my one vote won’t make a difference”, the typical response from most people is bewilderment, because they consider that claim to be obviously wrong. Many – perhaps most – people will insist that of course your vote can make a difference, because most people genuinely have no idea of the mathematics implied by that claim. Successfully convincing people their vote has zero instrumental value takes a great deal of time and effort. Another reason I see for skepticism is something that should be familiar to anyone with inclinations towards so-called “third parties” in the United States. I wasn’t quite old enough to have voted in the 2000 presidential election, but I was at least politically aware at that time. And I well remember a major point of contention was the candidacy of Ralph Nader and the concern that he would be a spoiler candidate for Al Gore. There was a fierce debate going on at the time among Nader supporters about whether they should cast their vote for Nader, which would effectively tilt the odds of what was being projected as a very close election towards George W. Bush, or if they should withhold their vote from Nader and vote in favor of Gore, whom the typical Nader supporter considered the lesser evil. Many voters went to the polls in that election preferring Nader as a candidate, but still cast their vote for Al Gore, because they knew that the outcome would realistically be either Bush or Gore, and Gore was the outcome they preferred between those two. This kind of behavior seems far more like voters who see themselves as using their vote to choose an outcome rather than express a preference. This is not to say I think the distinction between expressive and instrumental preferences is without value, or that it never applies in voting. As I’ve commented before on this blog, I tend to interpret ideas like rational irrationality, or expressive vs instrumental preferences, as being more of a sliding scale than a binary switch. And if we take Holcombe’s strong claim (voters cast their votes expressively rather than instrumentally) and modify it to a weaker claim (many voters cast their votes more expressively than instrumentally), his point that voting aggregation methods can’t be used to validly infer instrumental social choices still holds. The concept of anchor and derivative preferences seems solid to me. When looking at how people form their political preferences, the statement “I like the red tribe’s policies, so I’ll be on their team” seems to be much less reflective of reality than “I’m a member of the red tribe, so I’ll support their policies.” There is no official account of how many political issues there are, but when we begin to list off issues impacted by political policies, the list quickly becomes extensive. Gun control, abortion, trade and tariff policy, police policy, taxes and spending, military spending and foreign policy are all obvious examples, and each of them breaks off into multiple lines of inquiry. For example, “taxes” as a category contains all sorts of separate issues, such as what should be taxed (income, wealth, imports, externalities, etc.), how those taxes should be structured (flat rate, progressive rate, regressive rate, fixed payment), how those taxes interact with other taxes (deductions or credits), among other questions. Nobody has enough information or knowledge to have a well-formed opinion about all of these topics and subtopics simultaneously. And yet, the vast majority of voters do hold strong opinions on all of these topics, with high levels of certainty, and these beliefs are highly correlated with each other even when they have no direct connection. Holcombe’s contention that most voter beliefs are adopted derivatively, based on the elites, parties, or movements to which they anchor, both fits the facts and provides a highly plausible account for those facts. I also find Holcombe’s contention that policies are formed by elites and voters follow the lead of the elites, rather than elites forming policies based upon voter input, to be sound and persuasive. Indeed, I have a hard time understanding how anyone who observes how politics actually works could possibly believe that elites base policy on voter input, or that policies are formed based on voters compromising among themselves as equals. If anything, I think Holcombe may be too generous in his description of how elites interact with voters. For example, Holcombe makes the following observation: Recognizing that the demand for accurate and detailed information on the part of citizens is low, parties and candidates provide very little information of this type. Platforms are deliberately vague to broaden their appeal. Citizens will find little to disagree with in a vague platform. But politicians don’t merely keep their policy intentions vague. They frequently engage in false advertising, knowing that most voters are inattentive enough that it will go unnoticed. To use just one example, in the 2008 presidential campaign, then Senator Barack Obama advertised himself as fiercely opposed to NAFTA and loudly proclaimed his intentions to undo this policy. Meanwhile, his main economic advisor, Austin Goolsbee, was quietly reassuring the Canadian government that this was all just political blustering and there were no real implications for policy. And upon winning the election, President Obama took none of the actions on NAFTA he had campaigned on. Overall, I found Following Their Leaders to be a solid and important work. And as I mentioned in the first post of this series, my summary is no substitute for reading the book itself. However, I suspect the validity of the Holcombe’s argument also suggests why the argument will not find much traction. A key point Holcombe makes throughout the book is that, to a huge degree, people do not adopt parties based on policy, but instead adopt policy based on parties. Democracy is treated as sacrosanct, and its justness is taken for granted. I suspect that most people don’t come to support democracy because they are persuaded that democratic governments are accountable to the people – instead, they accept uncritically the idea that democratic governments are accountable to the people because it supports their pre-existing belief in the justness of democracy. Refuting the idea that democratic governments are accountable to the people will therefore have little effect. I wish I could end on a less dour note, and I sincerely hope to be proven wrong! But regardless of the impact it will have, Holcombe has written a well-reasoned and important book that deserves to be widely read, and one I can easily recommend. (0 COMMENTS)

When I wrote the op/ed on Robert E. Lucas in the Wall Street Journal last week, I was unaware of an article he wrote in 2004 for the Federal Reserve Bank of Minneapolis. It’s Robert E. Lucas, Jr., “The Industrial Revolution: Past and Future,” May 1, 2004. It’s quite good. (HT2 Art Carden.) And here is the last paragraph. Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution. In this very minute, a child is being born to an American family and another child, equally valued by God, is being born to a family in India. The resources of all kinds that will be at the disposal of this new American will be on the order of 15 times the resources available to his Indian brother. This seems to us a terrible wrong, justifying direct corrective action, and perhaps some actions of this kind can and should be taken. But of the vast increase in the well-being of hundreds of millions of people that has occurred in the 200-year course of the industrial revolution to date, virtually none of it can be attributed to the direct redistribution of resources from rich to poor. The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production. The article as a whole, which surveys economic growth over long periods, reminds me of my favorite study by University of California, Berkeley economist Brad DeLong. It’s titled “Cornucopia: The Pace of Economic Growth in the Twentieth Century,” NBER Working Paper 7602, March 2000. DeLong quotes a famous passage from Karl Marx and Friedrich Engels, The Communist Manifesto, in which Marx and Engels waxed rhapsodic about the incredible accomplishments of capitalism in the 19th century. The bourgeosie, wrote Marx and Engels, was: the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades…. 
[It has], during its rule of scarce one hundred years…created more massive and more colossal productive forces than have all preceding generations together. The subjection of nature’s forces to man, machinery, the application of chemistry to industry and agriculture, steam-navigation, the railways, electric telegraphs, the clearing of entire continents for cultivation, the canalization of rivers, the conjuring of entire populations out of the ground–what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor? Then DeLong writes: Yet compared to the pace of economic growth in the twentieth century, all other centuries–even the nineteenth century that so impressed Karl Marx–were standing still. DeLong backs it up, by the way. The other person who does something similar to what Lucas does, but with an imaginative and illuminating video that shows the connection between income growth and increases in life expectancy, is Hans Rosling. Here’s his “200 Countries, 200 Years, 4 Minutes, The Joy of Stats.” I highly recommend it: educational and entertaining. Now back to the paragraph from Lucas that I quoted near the start. The last line is particularly important. If we focused on getting the conditions that lead to economic growth right, then distribution would become less important: a rising tide lifts almost all boats–and has been lifting almost all boats. There is something missing, though. Economists who see big gaps in prices tend to think of arbitrage. I would have expected Lucas, a first-rate economist if there ever was one, to note that the huge discrepancy between wages and productivity between India and the United States, for example, would lead to a movement of resources–labor–from India to the United States. One way to get a huge increase in world productivity over a time period as a short as a decade is to allow hundreds of millions of, and maybe even a billion, people to move from poorer countries to rich countries. In other words, allow much more immigration. In all the work I’ve read by Lucas, and I read a lot when I wrote his biography in The Concise Encyclopedia of Economics, I don’t recall seeing him say much about immigration. Do any of you know whether he wrote or spoke in favor of allowing more immigration? Postscript: If you read Lucas’s article carefully, you’ll notice that someone made a mistake in labeling the vertical axis in Figure 1. It’s labeled “Population Growth Rate.” It should be labeled “Population.” (0 COMMENTS)

Why do you visit museums, and what do you hope will “happen” while you’re there, or after you’ve left? How do the objects within a museum affect your experience, and how do we know that a given piece “belongs” there? Tiffany Jenkins, author of Keeping Their Marbles, and EconTalk host Russ Roberts’ guest in this episode, suggests there’s something transporting about visiting a museum, an experience she especially appreciates since COVID forbade such opportunities. To visit a museum, Jenkins hopes, provides one with an encounter with the past and the people of the past, noting that the things that impress us in museums weren’t created by people to impress us. Much of the conversation focuses on the issue of artifact repatriation- the Elgin marbles at the British museum being the dominant example from Jenkins’ book. These sculptures, taken from the ruins of the Parthenon more than 200 years ago, reside half in London and half in Athens (at the Acropolis Museum). While technically legally acquired, many questions remain as to whether the marbles ought to remain in Britain. What do you think? How does the case of the Elgin marbles illuminate the larger purpose(s) of museums in society today? We’d love to hear your thoughts.     1- What are the bases of the demands to “return” artifacts such as the Elgin marbles to their country of origin? What is Jenkin’s argument against returning them to Athens? What does she mean when she says, “objects do different things in different places?” Do you think they should be returned? Explain.   2- Jenkins describes how Brits’ feelings were mixed at the time of the marbles’ acquisition. To what extent does it “matter” that the sculptures’ legal agreement still exists? How does the “looting” of the French compare to that of the British (which Jenkins describes as “much more accidental and haphazard and informal”)? How does the way in which such artifacts are acquired affect the argument for their repatriation?   3- Jenkins makes the bold prediction that the Elgin marbles will never leave the British Museum, while Roberts suspects they will be returned, perhaps replaced by casts. (Roberts mentions his appreciation of the Burghers of Calais at Stanford, of which there are many copies.) How does it matter whether an exhibit features original works versus reproductions? Couldn’t the exhibit at the British Museum be equally enthralling with casts or full-color reproductions of the marbles? Explain.   4- What should be the role of museums today? How do museums of the Enlightenment age compare to those of the present day, according to Jenkins? How has the notion of accessibility in particular changed from the time of the Enlightenment till today? Have museums become moralized? Do we have more or less interest in other cultures today than in the past? In what way(s)?   5- The conversation includes a good deal of discussion about how the mission of museums has changed over time, and many changes in the way in which exhibits are presented have also occurred in an attempt to illuminate the “hidden histories” of the past. (Roberts and Jenkins cite the National Museum of the American Indian as one such example.) Are we in danger of “quarantining the past rather than exploring it,” as Jenkins suggests?     (0 COMMENTS)

A one-infant increase in the child–staff ratio requirement for infants is associated with a decrease in the cost of care of between 9 percent and 20 percent, which translates into a reduction in the annual cost of child care of between $850 and $1,890 for the average cost of care across states. This is from Diana W. Thomas and Devon Gorry, “Regulation and the Cost of Child Care,” Mercatus Working Paper, August 2015. Diana tells me that it was later published but that this working paper contains the essence of their findings. This is huge. Allowing just one more infant per care giver would dramatically reduce the cost of child care. If I had known about this study when I was fighting a proposed new property tax to pay for child care, it would have strengthened my argument. HT2 Vincent Geloso. (0 COMMENTS)

I have a confession to make. I’ve never understood military history. I don’t go out of my way to read military history, but while reading ordinary history I’ve often run across explanations of how the world’s greatest generals were able to achieve their success.  There is frequently a description of how a general would “outflank his opponent” and rout the enemy army. Or “seize the high ground”. Or engage in a “surprise early morning attack”.Here’s what I’ve never understood. Why don’t both sides try to do these things?I recently read an essay by Montaigne entitled, On the uncertainty of our judgement.  Unlike me, Montaigne does understand military history.  And he uses this essay to examine one example after another of where the same military strategy that worked in one case, failed in another.  So then in what sense can we say that reference to these strategies explain anything at all? I see the same problem in many areas of life: Politics:  When I was young, I recall George Romney’s 1968 campaign failing after a minor “blooper” about the Vietnam War.  This was frequently pointed to as an example of how running for president was a serious business and voters would not tolerate anything even slightly unconventional. And then Donald Trump came along. Sports:  We are often told that a certain strategy doesn’t work in the playoffs, until it does.  Or that a certain athlete is “clutch”, until he isn’t.  I’m told you need a big center in basketball, and then see big centers “played off the floor.”  The older I get, the less convinced I am by the conventional wisdom of sports commentators. Business:  Management classes are full of case studies showing which strategies work.  But the real world is full of both successes and failures associated with any given approach used by a CEO. Relationships:  We are told that Jack and Jill have a successful marriage because while they are very different; their personalities complement each other.  And we are told that Fred and Alice have a successful marriage because they have similar interests and personalities.  So which is it? Cinema:  A certain movie becomes a big hit.  Hollywood makes another movie in the same style and it flops.  One of the most famous sayings in Hollywood is William Goldman’s observation that, “Nobody knows anything.”  Markets:  We are told that speculative assets like Pets.com were obviously a bubble that would eventually collapse.  But then even more speculative assets like Bitcoin come along, and fail to collapse as predicted.  So do we actually know anything about bubbles? Banking:  We have a major banking crisis in 2008 because lots of commercial loans went bad.  We are told that banks need to invest in safer assets, such as government bonds.  Silicon Valley Bank does this and goes bankrupt when yields rise and bond prices fall. This is why government regulation is not well suited to solve problems such as excessive risk taking caused by moral hazard.  If commercial loans are too risky, and government bonds are also too risky, what’s left?  You could have a perfectly safe “narrow bank”, but the Fed refused to give a banking license to an entrepreneur who tried to create a bank that invests all its funds with the Fed. We (meaning pundits and regulators and politicians) think we understand the banking problem, but we don’t.  We have created a system that almost completely socializes the liability side of bank balance sheets.  Without market discipline, banks have little incentive to behave responsibly.  We then assume the solution is “regulation”.   How likely is it that regulation can solve our banking woes?  Consider the following analogy.  Give me a book on “How to be a General” and have me go up against someone like Alexander, Hannibal, Napoleon, Patton, etc.  How likely is it that I’ll succeed?  Now give a young inexperienced government bureaucrat a book on how to regulate banking and have them go up against JP Morgan. Good luck.  PS.  Matt Levine has an excellent post discussing the difficulty of regulating banks.  He points out that even the most basic questions are difficult to answer.  No one even knows whether higher interest rates are good for banks or bad for banks. PPS.  George Romney said that he had been “brainwashed” by generals he spoke with in Vietnam into believing the war was going well.  Apparently some voters didn’t understand that “brainwashed” can be a metaphor, and assumed that he had some sort of electrodes attached to his brain.  Yes, that was the “scandal” that cost him the presidency.  (Mitt Romney is his son.) PPPS.  Yesterday, a key NBA playoff game resulted in a lopsided 128-102 outcome.  When the score is that lopsided, it is often because one team doesn’t try hard enough.  So I checked the box score and saw that one team had 21 offensive rebounds while the other had just one.  And sure enough, the sports commentators almost unanimously criticized the losing team for a lack of effort.  But there’s just one problem.  It was the team with the lackluster effort that got the 21 offensive rebounds.  So what’s going on here?  I suspect that people infer effort from outcome.  Losing that badly makes it look like you didn’t even try, especially when you have the more talented team. BTW, I don’t mean to criticize the NBA commentators—that was also my impression while watching the game.  I’m increasingly of the view that all of us overestimate how well we understand the world.  But have no fear, soon all of the human commentators that are swayed by emotion will be replaced by simulated humans powered by GPT-4, who will crunch all the numbers and tell us what actually happened in the game. That’s what we all want—right? (0 COMMENTS)

A normative extension of standard economic theory is that an individual is the best judge of what is good for himself. At least, there is no way to determine who else would be a better judge, and especially who should be entitled to impose his own preferences by force. The choice of a consumer, producer (including worker), or participant in any voluntary social interaction is thus worthy of legal protection if not of respect. Not too long ago, virtually any mainstream or Austrian economist would have agreed with this normative presumption. Children were the only hard exception. The presumption applied only to adults. It is true that blacks or women (as well as proletarians with false consciousness in Marxist theory) were often viewed as exceptions too, but economists typically rejected this sort of philosophical discrimination between human adults. The “dismal science” label was apparently stuck onto economics for this sort of reason. (See my post “Is it OK to Use the R Word?”) In the classical-liberal tradition, moreover, it went without saying that nobody should be given the power to decide at what age a specific individual becomes an adult. Thus, the rule of law established a standard age, usually 21, and more recently 18. In our (Western or Westernized) countries, there are lots of things that a child cannot freely do with his body, including accepting certain kinds of employment at certain conditions, evading any sort of schooling, escaping from home, possessing guns and explosives, and so forth. In many countries, a child (and even a young legal adult!) is prohibited from buying cigarettes and alcohol. His parents do have to sign off, at least implicitly, on most of what he does. Sometimes, even the parents’ permission is not enough. The scandal of children being allowed, with the state’s complicity if not incitement, to submit to sexual mutilations is a relatively new phenomenon (see my post “Mrs. Grundy Against Ryan Anderson’s Book”). Girls’ clitorectomy or infibulation were rightly viewed as liberticidal and barbarian practices. If we follow the standard normative economic interpretation of individual choices, of course, an adult should not be forbidden to alter his own body. Wrote John Stuart Mill, “over himself, over his own body and mind, the individual is sovereign.” Children are another matter—until they are old enough to make their own choices. Viewed from this perspective, the so-called “Let Them Grow Act” just adopted by the Nebraska legislature appears rather moderate, if not too moderate (see Sections 14-20 of Bill LB574). It prohibits sexual mutilations on non-adults by way of surgery (altering or removing sexual attributes or features), while allowing some leeway for chemical puberty blockers and hormone therapy (which may have irreversible consequences). An opponent of the bill, state senator George Dungan, a Democrat, declared: We should not be in the business of telling people what they can and can’t do with their bodies. Indeed, people who oppose such a mild ban on mutilating children appear to be part of the same crowd that wholeheartedly approves most of the restrictions imposed on adults regarding the use of their own bodies, from the right to carry instruments of self-defense to the freedom to work for less than minimum wages that exclude them from employment, to use their hands or voices to express unfashionable ideas, to put or not put some substances in their own bodies, and to generally engage in “capitalist acts between consenting adults” (to quote Robert Nozick). As Miranda said in Shakespeare’s The Tempest: “O brave new world, that has such people in it!” (0 COMMENTS)

We’ve talked a lot about data over the years here, but this episode offers a unique take on data-driven decision making. EconTalk host Russ Roberts welcomed Bill James, an American writer whose work includes baseball history and statistics, has been extremely well accepted. His application of Sabermetrics and creation of ‘Moneyball theory’ have been transformative in baseball’s landscape. James also worked as a Senior Advisor of Baseball Operations for the Boston Red Sox for 17 years, earning four World Series rings during his time there. Roberts and James talk about the shortening of baseball games to save their entertainment value with James concluding there will always be time extending trade-offs with small-scale changes, like the pitch clock. Data and different approaches to winning are always evolving, and James and Roberts provide their take on the intrigue which the universe of baseball provides. Perhaps unlike many other things in life, it may be possible for someone to figure out the closed system of baseball. James stresses the importance of connecting all the dots and favoring science over expertise when making a conclusion, which can be applied well beyond baseball. We’re glad you’ve joined us in revisiting this episode, and we’d love to hear your thoughts about it today. Share your responses to the prompts below in the Comments, or use them to start your own conversation offline. We’re always happy to continue the conversation.     1- What’s the difference between science and expertise, according to James, and how can science protect against falsehoods brought about and by expertise? Roberts discusses people seeking reassurance and following anything derived from their trust in the credentials of an expert with the example of someone having to agree with F.A. Hayek about the validity of social security. Roberts argues that people have become blinded by the reassurance they seek in treating controversial topics, and that one’s credentials do not necessarily make their words truthful. What should be the role of expertise? How should ‘followers’ interact with the information they hear from experts in a thoughtful manner?   2- At the time this episode was recorded, Bill James proposed incentives which he believes would more effectively treat the issue of speeding up baseball than the rule changes which are present today. James identifies rule-changes like the pitch-clock as “pulling up the biggest weeds” as opposed to “mowing the lawn,” where the weeds will result in more weeds—more moments of monotony on the diamond. Is James, right? Would incentives like draft picks, additional television compensation, and home-field advantage be pressing on the team’s self-interest? Do today’s rule changes create more slow-downs, or do they function as agents not only for shorter games, but games with more appealing action?   3-James’ conception of baseball as a mini-universe is particularly striking. He argues that people are drawn to baseball because they can get a sense of figuring it out. Following James, how does the intrigue for the closed system of baseball and its intricacies relate to issues we all face each day? What other ‘closed systems’ or mini universes spark human interest?   4-James and Roberts discuss the prevalence of narrative building where people connect only the dots which serve their particular point. What kind of approach should individuals take when spreading information to protect against being ignorant of unlearned knowledge? Why are people so trusting of experts, and how can curiosity help to protect the validity and pursuit of knowledge?   5-James argues that Barry Bonds should be in the Hall of Fame because there were no specific rules against steroids at the time he was using them. Should Barry Bonds get into the baseball Hall of Fame? Can rules like the current drug policy be retroactive or should Major League Baseball recognize that players had an incentive to use steroids, and that there were no rules against them? When rules are not strictly enforced, and would you agree with Roberts and James that they are not rules, even if later they are enforced? (0 COMMENTS)

In a case that highlights the critical need for local housing and the lengths some people will undertake to profit from it, county officials say they are fining property owners Nicolas and Ana Ruvalcaba nearly $60,000 for renting out at least 62 illegal dwellings to farmworkers and their families on San Miguel Canyon Road in northern Monterey County. The county had at first estimated that about 100 people were living at the site, including women and children. Now that estimate is more than 200. Media reports indicate that the tenants were paying between $1,000 and $2,000 in rent each month. One tenant who was interviewed said she had no options beyond living at the site, but said she was treated with respect. Another woman who was interviewed echoed her comments. These are the opening paragraphs in Chris Counts, ” County busts landlord with illegal housing,” Carmel Pine Conc, May 19-25, 2023. The news story goes on to detail the ways in which the housing was substandard: The Monterey County Environmental Health Bureau reported that examples of site include units with “no heat, no smoke/ carbon monoxide sensors, no windows, the presence of “poor water quality, sewage discharge onto the ground and mold.” Point made: it’s low quality. But here’s the thing: every one of those tenants chose to live there. For them it appears to have been their best option. You don’t make people better off by preventing them from having the best of their lousy options. The person trying to take away that best option is not their friend. The news story points out that the government is requiring the owners to “demolish unpermitted units and utilities.” The fact that the government has royally screwed not just the landlords but also the tenants comes out in another paragraph: The executive director of the Coalition of Homeless Services Providers, Genevieve Lucas-Conwell told the newspaper that her group has interviewed about 30 of the former tenants, which [sic] she said mostly speak Spanish and Mixtec. Lucas-Conwell said her group is helping connect them with other groups that can provide services, such as temporary housing. But she conceded there is a bottleneck of people in need of housing. “It’s a tough situation,” she said. But it’s not tough for the government officials who are requiring that housing be destroyed.   (0 COMMENTS)

When there’s no vaccine on the market, people will look for other ways to be safe, including school closures and the handwashing of groceries. Listen as economist Casey Mulligan of the University Chicago talks with EconTalk’s Russ Roberts about the costs of delaying a vaccine, the hidden costs of FDA regulation, and what we learned […] The post Casey Mulligan on Vaccines, the Pandemic, and the FDA appeared first on Econlib.