I gave a talk on Milton and Rose Friedman today to an audience of about 60 law school professors and judges. It went well, by the way. One of my slides, labeled “Equality of Outcome,” was a quote from Milton and Rose Friedman’s Free to Choose: The ethical issues [with fairness] involved are subtle and complex. They are not to be resolved by such simplistic formulas as “fair shares for all.” Indeed, if we took that seriously, youngsters with less musical skill should be given the greatest amount of musical training in order to compensate for their inherited disadvantage, and those with greater musical aptitude should be prevented from having access to good musical training; and similarly with all other categories of inherited personal qualities. That might be “fair” to the youngsters lacking in talent, but would it be “fair” to the talented, let alone to those who had to work to pay for training the youngsters lacking talent, or to the persons deprived of the benefits that might have come from the cultivation of the talents of the gifted? At the bottom I added: “Cue: Harrison Bergeron” and told them the gist of the famous short story by Kurt Vonnegut. An enthused law professor came up afterwards and told me that before he had read that story years ago, he was a “left-wing hippy.” But that story had a profound impact on him, getting him to question his fundamental views, and led him to becoming a libertarian. Here’s Harrison Bergeron, for those of you who haven’t read it.   (0 COMMENTS)

Back in September 2002, a little girl was born into a Canadian family with a Western dad and an East Asian mom. In November 2002, another little girl was born into a Canadian family with a Western dad and an East Asian mom. Today, those two women face off in the US Open tennis finals. Boris Johnson says he’s rooting for the player who was born in Toronto in November 2002, not the player born in Montreal in September 2002. That’s because the one born in Toronto later moved to the UK. People sometimes ask me the difference between patriotism and nationalism. I’d say that in this case, Johnson is behaving more like a British patriot than an English nationalist. To Johnson, Emma Raducanu seems like one of “us”, not one of “them”. PS. Yes, with political figures one never knows what they really think. I’m taking Johnson’s comments at face value to illustrate a point. PPS. In contrast, here’s Laura Ingraham: On Wednesday, Ms Ingraham began her programme by saying: “In some parts of the country, it does seem like the America that we know and love doesn’t exist anymore. “Massive demographic changes have been foisted upon the American people and they’re changes that none of us ever voted for and most of us don’t like. (0 COMMENTS)

I live in Monterey County, where our county health officer is Dr. Ed Moreno. I have not been a fan, as I’ve mentioned on this blog before, here and here. But I believe in giving credit where credit is due. So here’s what I wrote in today’s Carmel Pine Cone, which is our best local newspaper. ‘We have his back’ Dear Editor, I have not been a fan of Monterey County health officer Dr. Ed Moreno because he has tended to follow the crowd rather than the science. But in recent weeks, there has been a sea change in his thinking: he justifies his decisions by looking at the data. He recently argued that we don’t need an indoor mask mandate because the case numbers are low, current measures seem to be working, the vaccination rate is high, and even many of the unvaccinated have natural immunity because of earlier Covid infections. But county supervisor Luis Alejo tried to override Moreno’s judgment with a new county-wide mask mandate. Alejo’s reasoning? He said, “I think we are just trying to resort back to what our public is familiar with, what we have done before.” In other words, let’s not make our decisions based on data or reasoning but, instead, on what we’re used to. That is not, to put it mildly, good reasoning. Those of us, and there are many, who have been critical of Dr. Moreno should assure him that, this time, we have his back. David R. Henderson, Pacific Grove The 5-supervisor board voted this week on whether to override him. They needed a 4-1 vote to impose an emergency 60-day indoor masking requirement. The vote was 3-2 so we’re free of that for now. My wife called me yesterday when she saw the news announcement about the vote. I couldn’t believe how happy I was about the news. (0 COMMENTS)

In a recent review of my new book, George Selgin makes the following remark: By then Sumner’s way of thinking had grown into a movement dubbed “Market Monetarism.” The moniker has stuck; but it isn’t all that felicitous. Though Sumner was himself a University of Chicago PhD, most Chicago-school Monetarists were, and are still, convinced that inflation is the best indicator of the stance of monetary policy. If prices rise too quickly, monetary policy must be too loose. If they rise too slowly or fall, it’s too tight. I actually like the term ‘market monetarism’ (which was coined by Lars Christensen.)  Yes, market monetarism is not exactly the same as old-style monetarism, which is why it needs a new label.  But I do believe that it is closer to monetarism than to other competing schools of thought.  (As an aside, I’ll be describing my own views; I don’t claim to speak for all market monetarists.) George is right that inflation is not the best metric for evaluating the stance of monetary policy (NGDP growth is better).  At the same time, I’d strongly argue that inflation is much less bad than interest rates, which are a widely used alternative measure of the stance of monetary policy.  Many economists argue that the Fed adopted an easy money policy in 2009, whereas the sharp fall in both inflation and NGDP growth indicates that money was actually rather tight.  Conversely, money is never easier than during periods of hyperinflation, when interest rates are high. Here are some other respects in which my views are more monetarist than Keynesian: 1. Monetarists tend to blame recessions on bad monetary policy, whereas Keynesians are more likely to claim that recessions reflect the inherent instability of capitalism.  Monetarists don’t believe that central banks should “fix problems”; rather they should refrain from causing problems. 2. Milton Friedman first developed the Natural Rate Hypothesis.  However monetarists are skeptical of the view that the natural rate of unemployment can be estimated and then used as a guide to policy. 3.  Monetarists are somewhat more skeptical of the efficacy of fiscal policy (albeit not ruling out the possibility that it might have some benefit in a few cases.) 4.  Monetarists don’t believe that the zero lower bound on interest rates prevents monetary policy from being stimulative at low interest rates. Of course there are good counterarguments.  Market monetarists often found their policy views during the Great Recession to be closer to those of Keynesians than to old-style monetarists.  After Friedman died in 2006, some of the other older monetarists seemed to shift slightly in an “Austrian” direction. But overall, I feel I have more in common with Milton Friedman than with Keynes or Hayek.  For pre-WWII economists, my views are probably closest to Hawtrey and Fisher.   (0 COMMENTS)

While in my car last week, I heard a story on NPR about how climate change makes storms like Ida even worse. I am no climate expert, and I am of the belief that the climate is changing due to both natural and manmade factors; but I know when a story sounds credible or not. This one didn’t, like many others I hear or read. During the whole thing, I kept thinking of Thomas Sowell who said: “There are three questions that would destroy most of the arguments on the left: Compared to what? At what cost? What hard evidence do you have?” Actually, I think no matter what side of the climate policy debate you favor, you should ask yourself those questions. The NPR reporters clearly didn’t do so. The piece completely ignores the “compared to what” question, nor did it provide any hard evidence, which is shocking since the point of the story was about climate change making things worse now than before. See for instance: “HERSHER: What climate change does is it adds fuel to a hurricane, fuel in the form of heat. So hurricanes form over water. You can think of them like engines spinning up like a propeller on a plane. And the energy for that propeller comes from the heat in the water. As the earth gets hotter, because of climate change, the water on the surface of the ocean it also gets hotter. So there’s more energy for storms like Ida to get really big and really powerful. CORNISH: What’s the evidence for that? How do we know this happened with Ida specifically? HERSHER: So we can basically observe it in real time, which is pretty terrifying. So, for example, let’s talk about the wind. On Saturday, the day before Ida made landfall, it had top wind speeds of about 85 miles an hour, which is pretty serious. It can remove shingles from a roof or snap off the limb of a tree. But overnight, the storm got a lot more powerful. The top wind speeds jumped to about 150 miles an hour. That is fast enough to tear whole roofs off of houses, snap power poles, you know, uproot entire trees. And that extra power, it came from the water in the Gulf of Mexico.” While I listened I was thinking, “well, yes I guess this is how hurricanes operate. How is this different than in the past, though? And: How does this ‘expert’ explain the fact that sea surface temperatures have been rising since 1910, well before the sharp increase in atmospheric concentrations of greenhouse gases?” The only vague reference to a measurement of sorts was this: HERSHER: It was basically like a bathtub, about 85 degrees, which is a few degrees warmer than average if you look at measurements from the National Oceanic and Atmospheric Administration. So weather forecasters could watch the storm feed on that heat. And when a hurricane gains that much power that quickly, scientists call it rapid intensification. So studies have found that hurricanes are more likely to rapidly intensify because of global warming. And people who live on the Gulf Coast of the U.S., they are on the front lines of this. You know, Hurricane Harvey did this in 2017, Michael in 2018, Laura in 2020 and now Ida. They have all rapidly intensified. With respect to the assertion that “85 degrees, which is a few degrees warmer than average…” Which average? Average in the Gulf? Over what time period? I am not trying to be difficult, but this is not giving me information I can use to convince anyone who’s not already convinced. By comparison, here is what AEI’s Benjamin Zycher has to say: Extreme weather occurrences are likewise used as evidence of an ongoing climate crisis, but again, a study of the available data undercuts that assessment. U.S. tornado activity shows either no increase or a downward trend since 1954. Data on tropical storms, hurricanes, and accumulated cyclone energy (a wind-speed index measuring the overall strength of a given hurricane season) reveal little change since satellite measurements of the phenomena began in the early 1970s. The number of wildfires in the United States shows no upward trend since 1985, and global acreage burned has declined over past decades. The Palmer Drought Severity Index shows no trend since 1895. And the IPCC’s Fifth Assessment Report, published in 2014, displays substantial divergence between its discussion of the historical evidence on droughts and the projections on future droughts yielded by its climate models. Simply put, the available data do not support the ubiquitous assertions about the causal link between greenhouse-gas accumulation, temperature change, and extreme weather events and conditions. That whole piece is a must-read as he calls for climate change realism, as opposed to catastrophism. He also sent me this link to peruse with this note: “No trend over 40-50 years in the satellite data for cyclones, major cyclones, or accumulated cyclone energy.” In the same vein, the Wall Street Journal had a piece by Bjorn Lomborg also looking at this issue from a different angle but with the “compared to what?” question in mind. First, he had a chart looking the number of hurricanes making landfall over a 120 year period. Then he put some of the data in perspective for those who say that there may not be more hurricanes now, but the ones we get are stronger than they were before. He writes: And there aren’t more powerful hurricanes either. The frequency [of] Category 3 and above hurricanes making landfall since 1900 is also trending slightly down. A July Nature paper finds that the increases in strong hurricanes you’ve heard so much about are “not part of a century-scale increase, but a recovery from a deep minimum in the 1960s–1980s. He explained that point on twitter by adding this: “Satellite data starts around 1970, when Atlantic hurricanes are in a lull. Only looking from 1970s will incorrectly give an impression of an increase.” Looking at the cost of hurricane damages isn’t too useful either, except to ask if maybe some government programs have created bad incentives for the growing number of people living and building in disaster prone areas. For a good article on this issue see Ike Brannon in Regulation Magazine. I am sure people can take issue with some of this data. But the point of this post isn’t really to convince you that the evidence does not support the assertion that climate change makes strong hurricanes like Ida worse (though if you got that out of it, I would consider it a bonus). The point I am trying to get across is that if you are trying to make that argument like NPR reporters and many others often do, at the very least give us some “hard evidence”, and please, answer the question, “Compared to what?” (0 COMMENTS)

The government of Virginia just removed the statue of Confederate general Robert E. Lee, erected in Richmond during the Jim Crow era. Contrary to today’s ruling intelligentsia and government, their precursors were not perfect. But let’s be serious: Jim Crow governments were certainly despicable. So was the federal government, which long promoted policies that favored discrimination. So would be a pure woke government who would simply discriminate against new hated groups, discrimination being the central business of the unconstrained Leviathan. (See also my post “Jim Crow: More Racist than the Railroads,” Econlog, December 18, 2020.) This being said, one should not applaud governments removing monuments that happen to go against current ideological fads. The removal of a statue, even by the same government who set it up or maintained it, looks a bit too much like burning books, which the Enlightenment and classical liberalism fought. (On this general point, see “Left-wing Activists Are Using Old Tactics in a Mew Assault on Liberalism,” in last week’s issue of The Economist.) Battles over statues erected or maintained by governments remind us that most of what the state does is not the production of public goods in the standard economic sense—even if we could perhaps consider the general remembrance of history as a public good. History is what it has been and we cannot change it. We should endeavor to learn from it, not to hide it as if the current rulers were finally the noble savages that past utopians dreamed of. If the maintenance (or, for that matter, the removal) of a historical statue costs too much, perhaps the government could simply auction it off. Woke billionaires and foundations who want to hide it could also bid, thereby learning something about free markets. (0 COMMENTS)

It’s been almost two years since COVID became a part of our lives- personally and politically. In this episode, EconTalk host Russ Roberts welcomes back Don Boudreaux to talk about the pandemic and our policy response to it. Boudreaux argues that governments overreacted badly to the threat of COVID, using the crisis a an excuse for social control. Both Roberts and Boudreaux recognize the seriousness of the virus, but this still leaves lots of room for discussion. Let’s hear what you think. Use the prompts below to continue the conversation online in the Comments, or to start your own conversation offline.     1- Roberts begins by acknowledging that he and Boudreaux have slightly different takes, with Boudreaux insisting that the political reaction to COVID was greatly overdone. What is Boudreaux’s case for this, and in what sense did COVID provide a “perfect” storm for the exercise of social control. To what extent do you agree with Boudreaux?   2- What role did the media play in prompting the sort of overreaction Boudreaux cites? Did the media scare us too much? Are we really as bad at misunderstanding risk as Roberts and Boudreaux insist? Might it be possible for the media to play a role in making us better at assessing risk, and if so, how?   3- What does Boudreaux suggest would have been a  better policy response to the virus? Why didn’t we have a “proportional” response?   4- Roberts turns the conversation to the costs of responses. Why might public choice theory predict government officials were older? Who do Roberts and Boudreaux believe have borne the highest cost throughout the pandemic? Who do you think has, and why?   5- The conversation concludes with a discussion of Ronald Coase and externalities. What does Boudreaux mean when he says, “It takes two to externalize,” and what important and oft-neglected point is he trying to make about externalities? How might a better understanding of externalities prompted better policy in the wake of COVID?     (0 COMMENTS)

The truth is somewhere between the two extremes. While Milton Friedman has not had as much effect on economic thinking and policy as many of us free market advocates would like, he has nevertheless had a huge impact. On economic thinking, the following of Friedman’s ideas have held up well: that monetary policy is potent; that a contraction in the money supply between 1929 and 1933 helped put the “Great” in “the Great Depression”; that inflation “is always and everywhere a monetary phenomenon”; and that there is no long-run tradeoff between inflation and unemployment. On economic policy, his attribution of inflation to monetary policy rather than to unions or corporate monopolies has strengthened the hand of the Federal Reserve in fighting inflation. In the early 1970s, he opposed President Nixon’s economy-wide price controls as a way to end inflation. Although he was arguably in the minority in the economics profession at the time, most economists today would oppose such controls and their opposition has so far helped dissuade the federal government from imposing them. His activism in the late 1960s and early 1970s to end military conscription bore fruit: the draft was ended on January 27, 1973. This is from David R. Henderson, “Milton Friedman’s Long-run Impact,” Defining Ideas, September 9, 2021. Another excerpt: One of Friedman’s first big victories was on the importance of monetary policy. In a 1969 Newsweek column, when the majority of economists held the Keynesian view that monetary policy was impotent and fiscal policy was potent, MIT economist Paul Samuelson wrote: [T]here is no sight in the world more awful than that of an old-time economist, foam-flecked at the mouth and hell-bent to cure inflation by monetary discipline. God willing, we shan’t soon see his like again. God wasn’t willing. By the mid-to-late 1970s, Friedman’s view about the importance of monetary policy in affecting the inflation rate had become dominant. In fact, even Samuelson came to believe that monetary policy was potent. He never admitted that his view had changed or that Milton Friedman’s work had had any influence on him, but in his famous textbook, Economics, you can track his change in viewpoint edition by edition. Indeed, in my Wall Street Journal obituary of Samuelson, I did track it. By the 1985 edition, Samuelson and co-author William D. Nordhaus wrote that money “is the most powerful tool and useful tool that macroeconomic policy makers have.” This change in economists’ views has been long-term. It’s fair to say that the majority of economists today believe that monetary policy is the main contributor to inflation. Read the whole thing. Here’s the Friedman bio in David R. Henderson, ed. The Concise Encyclopedia of Economics. (0 COMMENTS)

Two weeks ago I posted about what I thought might be rational pricing for my MRI and I ended by saying “Stay tuned.” I don’t yet have the bill and so I can’t say more about that. But the story got more interesting. A few days after I posted, I went online with SimonMed, the local in-network (I think) MRI provider to set up an appointment. But it walked me through a whole lot of questions to which I didn’t know the answers. It was almost as if you had to be my doctor to answer them. So I stopped. It had an 866 number but I worried that I would get into the same predicament. Then I realized that, given that SimonMed is about a block from my office, I could walk over and talk to a human. And a great human she was. I explained that because I’m not a doctor I couldn’t answer some of the questions and she nodded knowingly. I couldn’t see her facial expression because she was masked, but I sensed that she was quite willing to help. She told me that there had a been a cancellation for the next day and so I could get in then. Delighted, I walked back to my office and told my wife on the phone. My wife had what she and her doctor feared was a rotator cuff tear and she was in a lot of pain. I told her that maybe I could talk to them about getting her in earlier. Her doctor had sent the referral but we didn’t know where that stood. So I walked back and gave my wife’s information. It turned out that her referral wasn’t as far along for some reason. I called my wife, who was disappointed. So she called her insurer, who then sent her to something called “eviCore.” She called them and was told that someone had canceled her referral and that it “must have been” the doctor. So she called the doctor’s office but everyone must have been in a meeting. Then I had a thought. I wondered what it would cost if we just skipped the referral and paid for it ourselves. So I went back yet again to Simon Med and asked if we could set up an appointment if we paid for it ourselves. My new friend said we could. “What would that cost us?” I asked. She looked at her computer and said “$500.” “$500, not $5,000?” I asked, “Are you sure?” “I’m sure,” she said. So I set up the appointment for the day after mine. When I came in for my appointment the next day, the same person I had been dealing with told me that because there had been a mixup about the referral and because it was possible that SimonMed had contributed to it, we would be charged only $350. The bad news was that the day of my wife’s scheduled MRI, Simon Med called and said that the appointment was postponed by 6 days because the magnets weren’t working. In that case, I joked, maybe they could do simply an RI. The good news is that last Friday, she got her MRI and I paid $350. This was better than North Dakota for Canadians! (0 COMMENTS)

I don’t think I have to convince libertarians like myself that liberty often leads to more successful societies, but I’m not sure how many understand that the reverse is also true. It’s not possible to just wave a magic wand and call forth more liberty. Disasters such as war, depression and pandemics often lead to repressive government policies. Thus one way to promote a free society is to do the hard work promoting policies such as peace, prosperity and good public health. For much of the Covid pandemic (not all), citizens of Australia had more freedom than Americans to live life as they wished (except for international travel).  That’s not because the Australian government is more committed to freedom than the US government, rather it’s because there was little or no transmission of Covid in most of Australia over the past 18 months.  Now that Australia is being hit by the highly contagious delta variant, however, their government has imposed domestic travel restrictions that are more draconian than anything contemplated in the US. Over the past 18 months, my views have been somewhat orthogonal to the two sides debating freedom vs. public health, with the right supposed favoring freedom and the left supposedly favoring public health.  (In practice, both sides often failed to understand how to achieve those goals.) My view is better described as freedom through public health. Tyler Cowen has a very good post on the situation in Australia.  He makes some of the same points that I’ve been making: I would stress that if Covid risk has you with your back against the wall and the government is forcing extremely restrictive measures on your citizenry, you should be implementing the following in an urgent manner: a. Twice a week rapid antigen tests for everyone.  (Plenty of time to prep for this one.) b. Much stronger incentives to vaccinate people more rapidly, including with the large stock (six million or so?) of AstraZeneca vaccines.  Demand side incentives, supply side incentives, whatever can be done.  Let’s throw the kitchen sink at this one.  But as it stands, I just don’t see the urgency. c. Mobile monoclonal antibody units, as they are used in Florida (modest progress here). First a bit of context.  One can sympathize with the Australia government in one respect.  Australia has avoided the high rates of death experienced by the US, Latin America and much of Europe.  And then they were hit by the highly contagious delta variant just at the point where they were tantalizing close to the finish line with vaccination: I’ve spent considerable time in both Australia and New Zealand, and the people in those countries seem more sensible than Americans.  Thus I expect their vaccination rates to exceed ours within a very short period of time.  But if their governments had placed a higher priority on vaccination earlier on, then they might have avoided much of the delta wave.  More specifically, they would have had fewer Covid deaths and less perceived need for restrictions on personal freedom. Tyler alludes to the fact that the Australian government has been sitting on 6 million doses of highly effective AstraZeneca vaccine because of phony concerns about vaccination risk, which is a lot of doses for a country of only 25 million.  (Of course we also made many policy mistakes that led to needless deaths.)  Releasing those doses promotes both freedom and public health. While America’s right claims to favor freedom, too often they act and speak in ways that reduce our freedoms.  In Florida, Governor DeSantis took away the freedom of businesses to set their own Covid policies.  More recently he put out a very harmful message on vaccines, which is also factually incorrect: DeSantis claimed last week — as his state continued to experience a surge in the highly contagious delta variant ― that receiving the shot is “about your health and whether you want that protection or not” and “doesn’t impact me or anyone else.” If DeSantis were merely trying to say that the decision to get vaccinated is a personal choice, then he’d be correct.  But what he actually said is false; high rates of vaccination do help society by slowing the spread of Covid.  Yes, most of the gains go to the person being vaccinated, but I personally feel that my freedoms are being restricted at least a little bit due to unfortunate government policies triggered by the decision by many other people not to get vaccinated, and my health risk is slightly higher.  That’s their right, but politicians should not be putting out false propaganda that a refusal to get vaccinated doesn’t hurt other members of society.  It does.  If politicians want to speak out on the issue, then do so in a constructive fashion. (Or just stay silent.) The people that pushed us into WWI might not have believed that their action led to the loss of freedom of speech in America for a period of several years.  But in fact this foolish decision did lead directly to repressive actions by the federal government, including the imprisonment of people who spoke out against the war.  Conservative proponents of tight money in 1929 unwittingly ushered in a more statist policy regime in the 1930s.  Any government policy that creates war, economic depression, high rates of inflation, or a more severe pandemic will eventually lead to repressive government responses. You may not like to think of it this way, but liberty is endogenous.  If it’s liberty that you seek, aim for success.  And yes, if it’s success that you seek, aim for liberty.  Those two sentences probably best encapsulate what I’ve been doing with my blogging over the past decade. Call it the neoliberal creed. PS.  I’m not saying that politicians should scold people. I’m saying they should encourage people to get vaccinated by pointing out how it will help society as a whole.   (0 COMMENTS)