The most recent EconTalk with Russ Roberts interviewing Tyler Cowen is quite good. They cover a lot of territory and Tyler has a lot of insights about culture, among other things. Tyler also, to his credit, even points out predictions and thoughts on which, he realizes in retrospect, he was wrong. There’s one issue, though, an important one, on which Tyler still has trouble admitting he’s wrong: the Great Barrington Declaration. Here’s an excerpt from the interview: Russ Roberts: Should we have followed something akin to what the Great Barrington Declaration folks are suggesting: Extreme care with people over the age of 70 and 80 and letting other people mostly go about their business? Tyler Cowen: That’s not my read of what the Great Barrington Declaration [GBD] actually called for. Russ Roberts: That may not be fair to them. That’s my read. Yeah. Tyler Cowen: A lot of the people connected with that institution [DRH note: by “that institution” Tyler means the American Institute for Economic Research] have made very dubious predictions and not backed down from them. They’ve told us that a lot of the cases are phony. It will all be over by–fill in the month. But, it’s typically some time that was a while ago. Very passive attitudes or even hostile attitudes toward vaccines. And, making lockdown the only issue. I think when you look at the overall entire framing of Great Barrington, it’s been extremely harmful. It has led libertarian and conservative movements in the wrong direction. The emphasis should have been, all along, deregulating the process of getting good vaccines out there quickly. And, if you look at what the Great Barrington people did on that it was remarkably little until very late in the process. And, you even have Jeffrey Tucker, well into fall, saying, ‘Vaccines, what vaccines? We need to let everyone get infected.’ Russ Roberts: I’m more interested– Tyler Cowen: So, I’ve been very much opposed to their program as a whole. Though some parts of it, if you present in isolation, do in fact make good sense. Russ Roberts: Yeah. I’m think of Jay Bhattacharya, who on this program I thought was quite sensible about the idea of locking down everyone seems remarkably inefficient and puts an enormous cost on people who are at relatively low risk. Yeah, I have nothing to say about the more institutional implementation of that Declaration [GBD]. But, the original Declaration [GBD] and the epidemiologists and economists who were involved, the three people, made some sense to me. But, yeah, I’m not interested actually in those other side-agendas. Tyler Cowen: It’s not independent from the other agendas. And they also systematically overestimate how many lockdowns are in operation. So, past a certain point most parts of the United States, schools aside, have been mostly open. My state of Virginia, virtually all stores have been open for really a long time. One may or may not agree with that. But, there has not been a major lockdown for a long time in most of the Southeast, and indeed many other parts of the county. Notice what happened. Russ tries as gently as he can to get Tyler to answer his question about the GBD. Russ summarizes the GBD in one sentence. And I think Russ does a great job of that. Tyler says that’s not his read of the GBD but doesn’t say how the GBD differs from what Russ has summarized. Instead, Tyler engages in classic “guilt by association.” Tyler says, “A lot of people connected with that institution have made very dubious predictions.” But the issue Russ asked about was not “that institution” but the GBD. Then Tyler names someone: “And, you even have Jeffrey Tucker, well into fall, saying, ‘Vaccines, what vaccines? We need to let everyone get infected.'” I don’t know if Jeff Tucker said exactly what Tyler said he said, but it doesn’t matter: Jeff Tucker is not one of the authors of the GBD. I had lunch with Jay Bhattacharya on Tuesday and asked him point blank: “Did Jeff Tucker write or edit any part of the GBD?” Jay’s answer: No. This is not a small issue. Had we focused on protecting the vulnerable and n0t locking down the young and healthy and keeping children out of school, we would be in a lot better shape today, with fewer COVID deaths of the elderly and less destruction of the economy. Here, by the way, is the Great Barrington Declaration. See if you think Russ did a good job of summarizing it. (0 COMMENTS)

The Biden administration may be realizing that a corporate minimum tax is inconsistent with the multitudinous tax preferences that Leviathan himself gives corporations in order that they do what he wants them to do. Here is another idea to finance the $2.3 billion of proposed “infrastructure” or whatever pleases Leviathan: tax rocks instead. The proposal is succinctly explained in my article “Joe Biden’s Economic Agenda: An Early Appraisal,” in the Spring issue of Regulation: However, corporations don’t pay taxes any more than, say, rocks do: if the government were to tax rocks, the actual incidence of the tax would fall on some flesh‐and‐blood individuals. In the case of corporations, those individuals are some combination of shareholders, employees, and consumers. If it is feared that people would just get rid of all the rocks they possess, there is a large number of other, more sticky, candidates for a tax that would not officially target individuals. The government could tax pets, cars, bees, marriage contracts, or churches. In the latter case, perhaps God will pay? Another idea: tax pension funds and 401k’s that hold corporate stocks. (An estimate puts at 30% the proportion of American corporations’ stocks that are owned by American households’ retirement accounts.) (0 COMMENTS)

Even economists who regard themselves as definitely immune to the crude materialist fallacies [i.e., thinking in terms of material wealth] constantly commit the same mistake where activities directed toward the acquisition of such practical knowledge are concerned—apparently because in their scheme of things all such knowledge is supposed to be “given.” This is from Friedrich Hayek, “The Use of Knowledge in Society,” American Economic Review, September 1945. I thought of this passage today when I took my iPhone to an independent repair shop. I pointed out to the guy, Steve, that the usual plug into my iPhone didn’t fit. I speculated that it was because the one in my car had left a little piece in there and showed him the cord from my car, which looked as if it had lost a piece. Steve told me it’s because I bought a low-quality cord. He got a little tool and took all of 10 seconds to pull a little piece out of the phone and Voila, the normal cord fit. So I bought a new 6-foot cord from him for $15. He said it was higher quality and it looked it. “How much do I owe you for fixing the phone?” I asked. “Twenty dollars,” he replied, and then quickly, “That’s the charge for my experience and wisdom.” “Sounds right to me,” I answered and handed him my MasterCard. (0 COMMENTS)

In any given period of history, there is always a battle of ideas. Thus it’s interesting to think about which ideas are gaining ground in the 21st century.  These groups seem to be winning: 1. Marijuana legalization advocates 2.  Gay marriage advocates: There is an equally dramatic increase in support for interracial marriage. 3.  The New Atheists: 4.  International trade advocates: 5.  Immigration advocates: On many other social issues, including gun control, abortion, and right to die, there has been no major shift in public opinion in the past two decades.  However, the right to die polling shows an interesting drop in support followed by a recent recovery to 2001 levels: Despite the big fall in religious observance, a large majority of Americans continue to believe in God, although the number has trended downward in recent years. Is there an overarching trend that would explain all of this polling data?  Something like secular cosmopolitanism with a libertarian streak?  Utilitarianism?  What do you think? Could the internet be driving these trends?  Perhaps having the entire world at one’s fingertips makes people more cosmopolitan. (0 COMMENTS)

The gender wage gap (GWG) has been a concern in the United States since the 1950s. Congress began enacting equal pay legislation in the 1960s. In 2019, then-Senator Kamala Harris proposed a plan requiring all companies with 100 or more employees to earn “equal pay certification” by proving that men and women are paid equally for performing the same tasks or face a 1% fine on their profits for every 1% wage gap. Members of Congress are pushing for equal pay in the private sector, an outcome they have not yet achieved. Shifting demographic and labor market conditions have reduced the GWG. According to the 2016 Joint Economic Committee Democratic Staff, the national average wage for full-time females was 79 cents for every dollar earned by a male, compared to 72 cents in 1999. But such raw data comparisons can be misleading. They do not control for many factors affecting wages, yet they continue to spark debate among policymakers attempting to remedy this disparity. The GWG in the United States remained at roughly 60% from the 1950s through the late 1970s. Studies suggest a 9% gap narrowing in the 1980s, while the 1990s witnessed only a 3.5% decline. Researchers argue that while the GWG had been converging slowly, the rate has been static since 2000. Harvard economist Claudia Goldin argues that the education gap has closed. She contends the GWG may have more to do with labor market structures and differences in the occupational desire for flexibility, negotiating style, or job preferences between genders. Goldin contends that the GWG that remains can be explained by the substitutability of the individual and the flexibility of the job. Fields like pharmacy and technology—linear occupations—have little to no gender gap due to a flexible labor market allowing individuals to work remotely or part-time to adjust for personal choices. In contrast, non-linear occupations, e.g., finance and legal professions, have larger wage gaps and more limited flexibility. Factors considered when charting occupations using a linear scale include time pressure, personal contact, establishing and maintaining relationships, structured versus unstructured work, and decision-making freedom. Literature exploring the GWG within government agencies and branches is limited. In 1978, George Borjas found the GWG for the Department of Health and Human Services to be larger than that of the public universities it monitored for wage discrimination. After examining the office of Senator Elizabeth Warren, The Washington Free Beacon’s Bret Scher reported a GWG nearly 10% wider than the national average. With equal pay legislation pending in Congress, we might expect to see a smaller or even zero GWG for congressional employees. Many academic studies on the gender wage gap in the public and private sectors exist; only a few examine the GWG for congressional staff. In a working paper, political scientists Joshua McCrain and Maxwell Palmer focus on the GWG in the US House and Senate. They argue that the wage gap is important because staffers influence policy outcomes. My recent paper co-authored with Meg Montgomery examines the GWG in congressional offices using data from 2000 to 2016. We find that a GWG exists similar to the gap in the private sector. Our research indicates education, experience, working in the Senate, and marriage consistently explain the gap. On average the offices of Republican members of Congress exhibit a larger gap. The gap is wider in the Senate than in the House of Representatives, although wage gaps exist in both the Democratic Party and the House of Representatives. Intrestingly enough the gender of the Congress member does not seem reduce the GWG. Nor does the Congress members advocation for women’s rights or labor market issues. In other words, female Congress members do not help to reduce the GWG, nor does their claim to advocate on these issues. Why does a GWG exist for Congressional staffers when Congress can eliminate it? Public choice economics offers one potential explanation. In economic organizations, the monitoring costs of principals (voters) are too high; thus, agents (politicians) can shirk. A politician can deviate from constituents’ preferred policy positions and seek their interests. However, shirking may only explain why staffer wage gaps persist without constituents complaining. Why gaps remain might involve additional considerations. Consider the linearity of a Congressional staff position. According to a Congressional Management Foundation survey, the average congressional staff job is “high stress and high volume” with a turnover rate between 40% and 60%. Congressional staffers claim this is a way to serve their country; therefore, an attraction-selection-attrition cycle exists even for those with public service motivations. Still, the job satisfaction survey reports that 55% of staffers say work-life balance is important, but only 26% are very satisfied with that balance. Additionally, 57% claim that decision-making autonomy is important, but only 31% are very satisfied with their ability to make independent decisions. Being a congressional staffer might be more non-linear because of the job’s lack of autonomy, time pressures, and personal contact. Thus, Goldin’s non-linear explanation for the GWG of congressional staff positions may explain why the gap exists in an organization that attempts to mitigate it. The average gender wage gap from 2000 to 2016 was 77 cents to the dollar. We find a 71 cent GWG for congressional staff members- about 6 cents larger than the national average. Using a study from 1970 through 2010, they compare the congressional staff GWG to those estimates and find it is slightly smaller and slightly larger than the average of the public and private sectors. House and Senate members exercise discretion over the budgets for their staff. One would expect that Congress members who advocate equal pay legislation would pay their staff equal salaries. Evidence of a gender wage gap suggests that such advocacy is not carried into practice. Furthermore, the explanation of the congressional staff GWG is much the same as in other industries. Congress might operate as a non-linear industry offering less flexibility and substitutability among workers. Like Goldin, we argue that labor market restructuring, and not legislation, might be key in narrowing the gender wage gap. If Congress wants to close the gender wage gap, policies allowing for greater labor-market flexibility are the answer, including on Capitol Hill. One positive to the pandemic is that employers now understand how their workforce can operate flexibly and remotely which may help reduce the gender wage gap. (0 COMMENTS)

Today I turn 50, which makes little sense to me.  I can’t be 50, because that’s how old my dad is, right? Anyway, ten years ago I shared 40 things I learned in my first 40 years.  Today I’m just going to look back over the last ten.  What did I do with my decade? 1. Most importantly, I had my fourth child.  Sweetness and light, a daily joy.  I can tell that many parents’ appreciation for their children is heavily laden with Social Desirability Bias.  But not mine. 2. I published Selfish Reasons to Have More Kids: Why Being a Great Parent Is Less Work and More Fun Than You Think.  This remains my least-cited book, but will almost certainly be the one that adds the most value to the world.  Dozens of people have told me I actually convinced them to have another kid.  And according to this Twitter poll, my words have caused the births of over a hundred new souls.  Using standard value of life calculations, that’s about a billion dollars worth of value for the world. How many additional children have my arguments in *Selfish Reasons to Have More Kids* caused you to have?https://t.co/TwDBLRiADM — Bryan Caplan (@bryan_caplan) July 29, 2020 3. I wrote and published The Case Against Education: Why the Education System is a Waste of Time and Money.  While I’m unlikely to transform academic opinion on this issue, it’s already getting hundreds of citations, partly because researchers are starting to feel obliged to acknowledge that educational signaling might be important.  And perhaps it will slightly slow the policy juggernaut of educational profligacy. 4. I wrote and published Open Borders: The Science and Ethics of Immigration.  Definitely my most persuasive work.  Though given the inherent difficulty of persuading anyone of anything important, perhaps I should say “least unpersuasive.” 5. As I wrote Open Borders, I acquired a whole toolkit of visual storytelling skills.  Educational psychology notwithstanding, I successfully took what I learned as a consumer of graphic novels and transferred it to actually producing graphic novels.  Better yet, I was patiently mentored by my collaborator, the great Zach Weinersmith. 6. I homeschooled my elder sons, starting with middle school and continuing through high school.  The time commitment was modest, but I would have gladly done much more.  As I often told my favorite students, “You are not an interruption of my work.  You are my work.”  During these six years, I’ve given my sons an immense knowledge base.  Besides standard fare, they have wide-ranging knowledge of social science, speak fluent Spanish, and know human history forwards and backwards.  Their first academic publication came out yesterday.  And the college application process turned out very well indeed, though I’m not going to say much more until they show up on campus. 7. I also taught my eldest a great deal about how to win friends and influence people.  Some lectures, but mostly learning by doing.  That’s how they recruited so many eminent historians for their History Twins Podcast.  Along the way, I spent many hours teaching them how to game the corrupt boondoggle that is academia. 8. I started homeschooling my younger kids a year ago due to COVID.  Though I’m plainly less suited for teaching elementary subjects, my newest students are learning far more than they did at FCPS.  And they spend about 60% as much time on schoolwork as they used to.  Through herculean efforts, I’ve also rounded up enough playmates for my kids to have a decent childhood in our dystopian age.  All the parents who used to fret about homeschoolers “lack of socialization” really should look in the mirror.  I know quite a few kids whose parents have isolated them from other kids for over a year.  My homeschoolers, in contrast, get to play with other kids all the time. 9. I’ve made many new friends all over the world, even during COVID.  Especially the surreally awesome Steve Kuhn.  Like the painting says, Steve, thanks a million! (0 COMMENTS)

My Policy Ed video for the Hoover Institution’s PolicyEd video series is out. Here it is on YouTube. A summary of the 4-minute video: Both good and bad income inequality exist. Good inequality comes from entrepreneurial innovation that improves the lives of consumers, even if the inventor gets wealthy. On the other hand, using political muscle to get rich leads to bad inequality, as it comes at the expense of consumers. It is vital to have government policies that can distinguish between good and bad inequality to increase innovation, strengthen the economy, and ultimately give people more incentive to innovate. And notice the 2 people I use to illustrate each. One of them is in the picture above. Can you guess who it is?   (0 COMMENTS)

I’m now about halfway done with the storyboards for my new non-fiction graphic novel, Build, Baby, Build: The Science and Ethics of Housing.  This time around, I’ll be published by the Cato Institute, a think tank I’ve been working with since the summer of 1991.  If all goes well, this will be the first volume in an entire Cato library of books modelled after my Open Borders – works that combine high scholarly standards with compelling sequential art to explore underrated policy ideas.  While fan favorite Zach Weinersmith was not available to illustrate my new book, I have found another stellar artist for the job, Ady Branzei (aka “Sebastian Soric“).  Ady and I are both fans of classic Disney, so expect a lot of Disney homage. Will I be content merely popularizing other people’s research?  My official position is my non-fiction graphic novels are serious scholarship.  How so?  Because thoughtfully synthesizing interdisciplinary research is original research!  The papers aren’t going to synthesize themselves, after all.  My project is not to summarize a list of articles, but to collect research worthy of broader attention, then fuse it together to create a novel policy perspective.  Along the way, I offer many new arguments and insights.  And while arguments and insights are usually too swiftly communicated to publish as research papers, that’s because academia sadly rests on the Labor Theory of Value. I keep tweaking the Table of Contents for Build, Baby, Build, but here’s the current plan: Chapter 1: The Home that Wasn’t There. Here I explain why the supply-and-demand story for rising housing prices, though true, is deeply misleading.  Why?  Because regulation is strangling housing supply, especially in desirable locations.  In a free market, housing would be very affordable throughout the country because building up and in is easy.  We have the technology; what we lack is permission to use it. Chapter 2: The Manufacture of Scarcity.  Now I go over the empirical work that measures the effect of housing regulation on housing prices.  Standard estimates of the effect are massive.  It is very plausible that U.S. housing would be 50% cheaper under laissez-faire. Chapter 3: The Panacea Policy.  This part starts by exploring estimates of the effects of housing deregulation on GDP.  But then it explains how deregulation would help cure a long list of social ills.  Housing deregulation will reduce inequality, increase social mobility, enrich and uplift working-class males, curtail “deaths of despair,” raise birth rates, fight crime, restore the American Dream, and give an ideologically divided nation something constructive to do together.  Hence, the “panacea policy.” Chapter 4: The Tower of Terror.  Needless to say, housing deregulation is extremely unpopular.  This is where I explore all the standard externalities arguments: congestion, pollution, noise, aesthetics, and so on, with four main rebuttals.  First, these negative externalities are greatly overestimated.  Second, since gratis is not great, the prudent remedy is not restricting construction, but using tolls, fees, and taxes to address specific drawbacks of development.  Third, building has enormous and almost totally neglected positive externalities.  That’s why people currently pay a fortune to live in New York: the net value of all the good and all the bad of living in this metropolis is very good indeed.  Fourth, even when an isolated housing regulation is helpful, it puts us on a slippery slope to disaster.  Which is no hyperbole, because the disaster is here already.  A beautiful confirmation of Rizzo and Whitman’s work on slippery slopes, by the way. Chapter 5: Dr. Yes.  This is the housing analogue of the Open Borders chapter, “All Roads Lead to Open Borders.”  Utilitarians, egalitarians, libertarians, Kantians, Christians, and virtually everyone else should, on their own terms, support housing deregulation.  This shouldn’t be a liberal or conservative issue.  It should be an issue where liberals and conservatives hold hands and say “kumbaya” together.  I’ll also probably discuss keyhole solutions here. Chapter 6: Getting to YIMBY. How do we get from the world of draconian regulation, high prices, and cramped quarters to the world of freedom, low prices, and spacious living?  Tough, but every policy journey starts with a non-fiction graphic novel, right? Time to get back to work.  I leave you with one of my favorite draft pages. (0 COMMENTS)

In the City Journal, I have a review of Mariana Mazzucato’s new book – alas, not as brilliant as John Kay’s one. I am afraid my opinion of this new work is not necessarily better than the one I had of her previous ones. In this new book, Mazzucato uses the moonshot as an example of what “mission oriented directionality” can produce, when applied to the whole of the economy. There is not much new in Mazzucato’s new book compared to her previous ones. What always astonishes me about her (and similarly, other industrial policy advocate types’) views is how highly complex processes are sketched into very simple drawings. The processes by which things are produced and marketed are seen as the reflection of easily identifiable and relatively simple decisions by those on top. There is a little bit of that in the contemporary discussion over Covid-19 vaccines (at least in Europe). People talk about the making and producing of such vaccines as something which should be “expected”, somehow from Big Pharma, like Santa delivers presents on Christmas. That policy decisions other than pouring money at it can affect the production process is uncontemplated. It is easy to talk of “missions” and “directionality” but it is often quite controversial which mission should be undertaken – and with what kind of resources. Plus, an economy is not about one single need, picked by foresighted decision makers, in periods other than war time. The needs of people are many; not all of them can be met in the same way, let alone at the behest of some legislator who knows which ones should be privileged at the expense of others. I think a commentator had it right: “The moonshot approach, a concentrated effort to accomplish one large, specific, scientific/engineering project, with no real concern for cost, cannot be applied to an entire national economy.” (0 COMMENTS)

Megan McArdle, Washington Post columnist and previous EconTalk guest, joined host Russ Roberts in this episode to discuss the “dazzling hindsight” with which we view recent crises. Why can’t we seem to get it right in crises like the COVID-19 pandemic and the recent Texas energy crisis? And why don’t we seem to learn from our mistakes? “When an unlikely thing hasn’t happened for a while, we think it’s never going to happen again. And, when an unlikely thing just happened, we think we need to take a lot of preparation against it,” says McArdle. As a journalist, McArdle has had a unique opportunity to revisit her own predictions (and nasty reviews!), an opportunity she’s taken advantage of. In this conversation, she shares some of what she’s learned, and now we’d like to hear your thoughts. Answer our questions below in the comments, or use them to start an all new conversation offline. We love to hear from you, and we’ll always be here for the conversation.     1- Roberts and McArdle discuss the recent winter storm in Texas that left millions without power. How much insurance should we have for events like this? (You might want to think about insuring for prevention versus adaptability.) McArdle also argues that Americans have zero political taste for these sorts of expenditures, so how can this distaste be accommodated?   2- The conversation turns to our experience of the COVID pandemic. To what extent is the pandemic a black swan event? Why does McArdle draw a distinction between stockpiling supplies and stockpiling capacities? To what extent do you think we’ll be better prepared for another such event in the future, and why?   3- What were some of the missteps and lost opportunities of the Trump administration in response to COVID, according to McArdle? What would she have done differently to leverage “a huge benefit of soft power.” How well do you think her suggestions would have worked, and why?   4- How have the costs of the COVID pandemic been felt differentially by income- for example,  the costs of school closures. Roberts asks, “who plans, who takes the risk, who builds the insurance, the capacity for adaptation?” How would you answer this question? Can such planning mitigate these income effects ?   5- McArdle is critical of the politicization of public health. What does she mean when she says we would we have been better prepared for this pandemic in 1930? Is she right??? Explain.   (0 COMMENTS)