Long-Run Policy Lessons from the Coronavirus Pandemic, Part II

In mid-2021, I wrote about long-run policy lessons from the coronavirus pandemic.

That column focused on insights from my five-part series (see here, here, here, here, and here) about the failure of big government.

More specifically, the CDC and FDA did a terrible job domestically and the WHO did a terrible job internationally.

By contrast, millions of lives were saved by the private sector.

But we also learned fiscal policy lessons in addition to public health lessons.

The most depressing fiscal lesson is that politicians love having any excuse to spend more money.

Though that’s hardly a surprise.

Now that we are in early-2023, are there more lessons to be learned? The answer is yes.

A new study by Professors Alex Tabarrok and Robert Tucker Omberg, published by the Oxford Review of Economic Policy, finds no relationship between supposed pandemic preparedness and health outcomes.

How effective were investments in pandemic preparation? We use a comprehensive and detailed measure of pandemic preparedness, the Global Health Security (GHS) Index produced by the Johns Hopkins Center for Health Security (JHU), to measure which investments in pandemic preparedness reduced infections, deaths, excess deaths, or otherwise ameliorated or shortened the pandemic. We also look at whether values or attitudinal factors such as individualism, willingness to sacrifice, or trust in government—which might be considered a form of cultural pandemic preparedness—influenced the course of the pandemic. Our primary finding is that almost no form of pandemic preparedness helped to ameliorate or shorten the pandemic. Compared to other countries, the United States did not perform poorly because of cultural values such as individualism, collectivism, selfishness, or lack of trust. General state capacity, as opposed to specific pandemic investments, is one of the few factors which appears to improve pandemic performance.

The study is not free to access, but Professor Tabarrok cited it at Marginal Revolution and shared this chart comparing death rates in the (allegedly) best prepared nation and the least prepared nation.

The Omberg-Tabarrok study shows us that pre-pandemic government policies were ineffective.

What about government policies once the pandemic hit?

In a column for the Washington Times, Richard Rahn points out that heavy-handed government intervention also was ineffective.

Sweden had the lowest aggregate excess mortality percentages (2.79)… Sweden was unique in that it had the fewest “lockdown” requirements, while countries like the U.S., with substantial lockdowns, had much higher excess deaths. We also know that within the U.S., states with very onerous lockdown requirements, like New York, have total age-adjusted higher death rates than states like Florida with few lockdown requirements. The big mistake the CDC people (Dr. Anthony Fauci, Dr. Francis Collins, etc.) made was to single-mindedly focus on potential deaths directly from COVID-19 while largely ignoring the potential deaths indirectly induced by the lockdowns. …Other studies support the evidence of health harm to people who have not yet died but are likely to have their lives shortened by the indirect effects of the lockdowns. …If the above-described mistakes had not been made, it is no overstatement to say that hundreds of thousands of lives and trillions of dollars could have been saved.

The information about Sweden is worth noting.

But the biggest lesson from Richard’s column is that politicians and bureaucrats failed to consider direct and indirect effects (a problem that is sadly common with government), so their cost-benefit analysis (to the extent they did any) was very flawed.

And we also need to learn that it is depressingly easy for governments to curtail liberty.

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Vaccine Mandates, Property Rights, and Libertarianism

Just like I’ve never had (until recently) any reason to define capitalism, I also have never felt any need to define libertarianism.

Some people use the non-aggression principle, but that strikes me as more of a statement about how we should behave.

What if we’re trying to define the rules for libertarian governance?

In that case, my definition is very much based on property rights. What’s mine is mine and what’s yours is yours, and we both have the right to engage (or to not engage) in voluntary exchange.

I realize that’s not the most elegant or comprehensive statement of principles, but I think it provides a useful framework for the debate over vaccine mandates.

Regarding that issue, I’m glad that private companies had the expertise and opportunity to develop vaccines against the coronavirus, and I got vaccinated as soon as possible.

That being said, I definitely don’t think government should force anyone to make that choice.

But I also think that people who opt against vaccination should accept the non-governmental consequences.

Here’s some of what I wrote about this topic back in April.

What if private businesses decide that customers are only allowed if they prove they’ve been vaccinated? From a libertarian perspective, guided by core principles such as property rights and freedom of association, that should be totally acceptable. And that’s true even if we think the owners of the businesses are making silly choices. After all, it’s their property.

The Dispatch has an article on this controversy.

Written by Andrew Egger, it starts by pointing out that there’s a political fight in South Dakota because a private company has announced that all employees must be vaccinated.

South Dakota’s largest employer is Sanford Health, a hospital and health care system that employs nearly 10,000 people in the eastern half of the state. On July 22, Sanford, which operates in both Dakotas and Minnesota, announced it would begin requiring all its employees to get vaccinated for COVID by November 1. Within weeks, two Republican members of the state House, Reps. Jon Hansen and Scott Odenbach, had introduced legislation punching back. The COVID-19 Vaccine Freedom of Conscience Act would give South Dakotans “the right to be exempt from any COVID-19 vaccination mandate, requirement, obligation, or demand on the basis that receiving a COVID-19 vaccination violates his or her conscience.” …By the end of August, state House Speaker Spencer Gosch had come aboard the mandate ban effort as well. …The only problem: Noem doesn’t support the legislation.

Why is Governor Kristi Noem against the legislation?

For a very libertarian reason. She doesn’t think the government has the right to tell a private company how to operate.

…the laissez-faire approach that made Noem a conservative folk hero in last year’s fights has gotten her crosswise with her fellow Republicans on the issue of vaccine mandate bans. “Frankly, I don’t think businesses should be mandating that their employees should be vaccinated,” she said in a video posted to Twitter last week. “And if they do mandate vaccines to their employees, they should be making religious and other exemptions available to them. But I don’t have the authority as governor to tell them what to do.”

Amen.

If you believe in private property, the owners of a business should have the right to decide whom they employ and whom they do business with.

Just as consumers can choose where to shop and workers can choose to leave jobs they don’t like.

Here’s a final excerpt from the article.

“Nobody is stopping you from making that decision [not to get vaccinated], but you don’t have a right to a particular job,” Noem spokesman Ian Fury told The Dispatch. “The business owner has the right to his business. You do not have a right to an individual job, because you don’t own that business.” …Philosophically, that puts Noem firmly in the camp of free-market Republicans past: largely content to preside passively over a state economy in which companies are free to set their own standards of conduct and employees are free to work for companies that share their values—and quit jobs if they don’t.

The bottom line is that libertarians (and small-government conservatives) should not be upset about private companies making private decisions.

Instead, we should get irked when politicians try to mandate those decisions.

In a column for the Washington Examiner, Quin Hillyer condemns Joe Biden’s recent declaration that companies either must require vaccination or conduct constant testing.

President Joe Biden’s decision to require large private employers to ensure their workers are vaccinated or tested for the coronavirus is problematic not just in terms of the Constitution, statutes, and liberty interests, but it is also highly impractical. …This is crazy. If the onus is on the businesses, what are businesses to do if employees refuse to comply? Fire them all? …This rule is a recipe for lawsuits. Will businesses be caught in a bind — penalized for unvaccinated workers but also charged with unfair labor practices if they evade the mandate by reducing payrolls below 100? …If massive new testing is required as a mere screening method, even for those feeling perfectly healthy, how will medical personnel keep up? Who will keep administrative tabs on all this? And if businesses are required to provide time off for workers to get tested, how will their own efficiency and productivity suffer?

Given the fact that Biden is a career politician with no experience in the private sector, I guess we shouldn’t be surprised by this White House proposal.

After all this is an Administration that thinks copying the failed fiscal policies of Greece, France, and Italy is how you “build back better.”

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Coronavirus: Free Market to the Rescue, Part II

As I’ve repeatedly pointed out, capitalism (oops, I mean free enterprise) is far superior than the various forms of statism.

Just last month, I shared a video with 20 example of market-friendly jurisdictions growing much faster than government-dominated nations.

But markets aren’t just superior at producing mass prosperity. Or at reducing mass poverty (the normal state of human existence).

Free enterprise also is the best option for dealing with a pandemic.

I wrote back in March about how free markets saved the day after the coronavirus struck.

In a column for the Wall Street Journal, Walter Russell Mead further elaborates on this theme.

The World Health Organization has been a shame and a disgrace, from its initial silence over China’s coverup of early data on the outbreak through its unreasoning hostility toward Taiwan and its collusion with Beijing’s efforts to discredit the lab-leak hypothesis. The premier international health agency has failed. Covax, the much-touted international program aimed at providing vaccines to citizens of countries too poor to purchase adequate supplies on the open market, has also fallen abysmally short. …What’s worked in the pandemic so far has been the dog everyone wants to kick: Big Pharma. Pfizer, Moderna, AstraZeneca and Johnson & Johnson succeeded where the internationalists failed. Scientists in free societies working with the resources that capitalism provides have given the world hope. The WHO, Covax, the Chinese and Russian vaccines, and the “global community,” not so much.

Amen. Let’s be thankful for pharmaceutical companies. Their pursuit of profit is what led to the vaccines that have saved millions of lives.

By contrast, the WHO has been very unhelpful.

And America’s domestic bureaucracies, the FDA and CDC, have arguably been harmful.

Notwithstanding this track record, the Biden Administration wants to weaken the private sector.

The Biden administration…seems to believe that the best response…is to sabotage the American pharmaceutical industry. The U.S. development bank—the International Development Finance Corp.—will provide billions of dollars to firms based in countries like Brazil, Rwanda, Senegal, South Africa and South Korea that agree to manufacture Covid-19 vaccines. Meanwhile, the State Department’s coordinator for global Covid response, Gayle Smith, said last week that she wants to push Big Pharma to share its technology with its new government-subsidized foreign competitors. …one wonders exactly how President Biden squares subsidizing cheap overseas competition for one of the most successful industries in the U.S. with promoting jobs for the American middle class.

This proposal is nuts.

Only curmudgeonly libertarians will get upset about an effort to subsidize vaccines for the developing world.

But every rational person should be horrified about a plan that would weaken one of America’s most successful industries.

P.S. Moreover, we should reject short-sighted policies such as European-style price controls on drug companies. Such an approach would undermine our ability to deal with future pandemics and also reduce the likelihood of new and improved treatments for things such as cancer, dementia, and heart disease.

P.P.S. I like pharmaceutical companies when they are being honest participants in a free market. I don’t like them when they get in bed with big government.

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Long-Run Policy Lessons from the Coronavirus Pandemic, Part I

Between March 2020 and January 2021, I authored a five-part series (see here, here, here, here, and here) on how big government hindered a quick and effective response to the coronavirus pandemic.

In this discussion with Brad Polumbo, I summarize some of my key points.

While I criticized the dismal performance of the FDA, CDC, and WHO, I also explained that there are costs and benefits to any approach.

I largely focus on the deleterious impact of government regulation and intervention, but I mentioned in the discussion that a laissez-faire approach has potential downsides.

My argument is simply that markets, on balance, will produce better outcomes.

For instance, Brad and I discussed how government regulators at the Food and Drug Administration did something good many decades ago by prohibiting thalidomide (which led to birth defects), but we also mentioned that academic research shows that our regulatory apparatus – on net – leads to bad outcomes because of lengthy delays in life-saving and live-improving drugs.

And we shouldn’t forget that the current system makes drugs far more expensive.

There are two other parts of the interview that merit special attention.

• First, I mention that private companies should be allowed to require “vaccine passports.” I’m not saying they should, but I believe in property rights so it’s not the role of politicians to interfere in that choice.
• Second, politicians should have adopted a more hands-off approach to mandatory lockdowns. This is not an argument against social distancing, masking, and other prudent behaviors, but mandates were largely unnecessary (and, in the case of what stores were allowed to operate, pointlessly discriminatory).

And I should have mentioned that politicians often didn’t follow the rules that they imposed on the rest of us.

P.S. The silver lining to the pandemic’s dark cloud is that we got some clever humor (see here, here, here, here, here, here, here, here, here, and here).

P.P.S. Actually, there’s a second silver lining. There’s been a lot of progress on school choice this year, which is partly a response to the self-serving actions of the government school monopoly during the pandemic.

P.P.P.S. There may even be a third silver lining. As mentioned in the discussion, I’m slightly hopeful that politicians and bureaucrats have learned that we need to set aside regulations and red tape, at least during emergencies. Heck, maybe they’ll even apply that lesson more broadly!

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Coronavirus and Property Rights

Looking at the dismal performance of the FDA, CDC, and WHO, the obvious takeaway from the pandemic is that big government doesn’t work very well.

Indeed, that was the point of a five-part series (see here, here, here, here, and here) on the topic.

One implication of all this analysis is that it’s almost always a good idea to let the private sector take the lead.

Which is why businesses rather than governments should decide whether to impose vaccine requirements.

Today’s column is motivated by two stories, the first of which is from ABC News. It involves a Texas hospital that is getting sued because it requires employees to be vaccinated.

Over 100 employees have joined a lawsuit against Houston Methodist hospital in Texas for requiring all employees to get the COVID-19 vaccine. The network, which oversees eight hospitals and has more than 26,000 employees, gave workers a deadline of June 7 to get the vaccine. If not, staffers risk suspension and termination, according to the lawsuit. …The complaint cited that forcing employees to get the vaccine violates Nuremberg Code, a medical ethics code which bans forced medical experiments and mandates voluntary consent. …Houston Methodist…released a statement in response to the lawsuit Friday, saying 99% of the network’s employees have been vaccinated. “It is unfortunate that the few remaining employees who refuse to get vaccinated and put our patients first are responding in this way.”

Our second story is from Florida.

Here are some excerpts from a Washington Post column about whether cruise ships operating out of Florida can exclude non-vaccinated passengers.

Cruise lines see vaccine requirements as their quickest path back to sailing from the United States. But Florida, home to the largest operators and busiest cruise ports in the world, has passed a law saying those companies are not allowed to ask passengers for proof of vaccination status. …Jim Walker, a maritime attorney..called the vaccine law “singularly the greatest impediment to the resumption of cruising in the state of Florida.” …DeSantis told reporters that he wanted cruise lines to operate and be able to make decisions about how they want to handle health and safety rules — within certain parameters. …he said even if some people were okay with the idea of having to prove that they were vaccinated to take a cruise, “it will not stop at that.”

I have the same response to both stories, which is that it’s not the government’s job to tell private businesses how to operate.

Simply stated, I believe in property rights. The hospital should have the liberty to require vaccinations as a condition of employment and cruise ship companies should have the liberty to require vaccinations as a condition of taking a cruise.

It doesn’t matter, buy the way, whether I think the hospital or the cruise ship companies are making wise choices. I’m not a shareholder, so my opinion is irrelevant.

I do have the right, of course, to decide whether to seek a job at the hospital, or to choose to be a patient there. Likewise, I also have the right to choose whether go on a cruise, or whether to seek a job on a cruise ship.

In both cases, I can make my choices based on whether I like their vaccine policy. Or for any other reason.

I’m a free person and the people running companies also have freedom. If we don’t mutually agree to a transaction, it doesn’t happen.

It’s called “freedom of association,” and it’s a principle of a free society.

The bottom line is that there should be no philosophical objection to “vaccine passports” in the private sector.

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A Limited Defense of Vaccine Passports

There’s a growing controversy about whether the various coronavirus-lockdown rules should be relaxed for people who have been vaccinated (as opposed to being relaxed for hypocritical politicians).

And if those restrictions are relaxed, vaccinated people presumably will need some sort of proof, like a “vaccine passport.”

Many people understandably are hesitant about this concept, particularly if government is involved. After all, we have many examples of seemingly innocuous ideas becoming nightmarish mistakes (such as adopting the income tax).

And the last thing any of us would want (I hope!) is something that could devolve into an authoritarian, Chinese-style system for monitoring and controlling private life.

But what if government isn’t involved? What if private businesses decide that customers are only allowed if they prove they’ve been vaccinated?

From a libertarian perspective, guided by core principles such as property rights and freedom of association, that should be totally acceptable.

And that’s true even if we think the owners of the businesses are making silly choices. After all, it’s their property.

Some conservatives, however, either don’t understand libertarian principles or they’re willing to abandon those principles for political convenience.

For instance, Will Wilkinson observes that many Republicans are forgetting the libertarian principle of freedom of association.

Conservatives have been freaking out about the mere possibility of vaccine passports… The idea is that the ability to credibly prove vaccination status will speed the restoration of normal social and economic life. This works by allowing businesses, schools, sports leagues, etc. to discriminate against those who haven’t been vaccinated. …one of the bright lines dividing American liberals and conservatives concerns the limits of freedom of association. Conservatives, and especially those with a libertarian streak, are far more likely to be absolutists about the right to exclude anyone from your property, business, or private club or association for any reason. …If the Civil Rights Act is problematic because it infringes on freedom of association, the permissibility of discriminating against customers who might carry a fatal infection is a total no-brainer. Right? Ha! …there is no actual principle at work here. Conservatives are consistent only in their opportunistic incoherence.

Moreover, in his column for the Atlantic, David Frum notes that the GOP is hypocritically abandoning its support for property rights.

Whether vaccine passports ever will exist remains highly uncertain. A lot of questions remain about the technology required—and about whether the concept makes any business sense. …For now, then, the discussion about vaccine passports remains theoretical—which makes the discussion all the more impassioned and embittered. DeSantis and others are loudly advertising that with COVID-19, …their version of freedom puts greater priority on right-wing cultural folkways than on rights of property and ownership. …To appease those cultural blocs, Republican politicians must be willing to sacrifice everything, including what used to be the party’s foundational principles. …to avoid contradicting the delusions of anti-vaccine paranoiacs, property rights must give way, freedom to operate a business must yield. …with COVID-19, …the new post-Trump message from the post-Trump GOP is: Private property is socialism; state expropriation is freedom. It’s a strange doctrine for a party supposedly committed to liberty and the Constitution, but here we are.

I think it’s fair to say that neither Wilkinson nor Frum are libertarians, or even conservatives, but I also think they are correct in pointing out that there is a lot of hypocrisy and incoherence.

That being said, I am glad that there’s lots of resistance to the idea of vaccine passports. Why? Because if businesses impose such rules and there’s no pushback, that probably increases the likelihood that politicians will try something similar.

And that’s where libertarians should be drawing the line, as Professor Don Boudreaux has noted.

After all, if a business does something we don’t like, we are free to patronize competitors. But if government does something we don’t like, there’s the horrible choice of obey or go to jail (or get a fake passport on the black market).

For what it’s worth, I hope this becomes a moot point. After all, once everybody who wants to get vaccinated has been vaccinated, there’s no plausible argument for maintaining any more restrictions on normal life.

P.S. But if it does become a real issue, it will probably generate new jokes, cartoons, and memes, all of which will require me to expand my collection of coronavirus-themed humor.

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Coronavirus and Federalism

I was a big fan of federalism (to the extent it still exists) before any of us ever heard of the coronavirus.

And, given the federal government’s incompetent response to the pandemic, I’m an even bigger fan of federalism today.

Though that doesn’t mean states are paragons of efficiency and competence. Here’s a map from the New York Times showing the percent of each state’s population that has receive at least one shot of the vaccine.

Why is Oklahoma doing so much better than Kansas? Why is West Virginia so far ahead of Pennsylvania?

Part of the answer is whether the states were willing to let Washington micro-manage their delivery.

The Wall Street Journal editorialized a few days ago about lessons we should learn.

The gap continues to grow between states that are getting shots into arms, and those arguing over who gets what and when. North Dakota had administered some 84% of its supply as of Jan. 23, and West Virginia about 83%—far better than states like California (45%) or Alabama (47%). Federalism is showing what works—and what doesn’t. …The risk is that Team Biden tries to micromanage state administration of the vaccine, especially now that the media, Democrats and some public-health officials are blaming slow state rollouts on a “vacuum” of federal leadership. But vaccine administration was always intended to be state-led, and too many jurisdictions squandered the ample time they had for preparation. …the biggest state mistakes so far have been adhering too much to the federal government’s initial guidance… The states with the highest per capita vaccination rates are all rule-breakers—Alaska (12,885 per 100,000), West Virginia (11,321), and North Dakota (9,602) as of Jan. 23. Top performers also thought creatively about how best to distribute and administer the vaccine, even if that meant departing from federal advice. …Mr. Biden is under pressure from the left to infuse the vaccine rollout with “equity” politics. As California (5,568 per 100,000) and New York (5,816 per 100,000) show, such bickering is a recipe for fewer vaccines and more deaths.

George Will, opining in today’s Washington Post, adds his two cents to the discussion, citing Philip Howard’s work on inflexible bureaucracy.

The covid-19 tragedy teaches this: Government is more apt to achieve adequacy when it does not try to achieve purity. …the benefits of federalism: Among 50 governors, at least a few are apt to be wiser and nimbler than the federal bureaucracy. …there are too many lawyers and too much law, and that both surpluses are encouraged by misbegotten ideas about ideal governance. “…This is not an unavoidable side-effect of big government, but a deliberate precept of its operating philosophy. Law will not only set goals and governing principles, but it will also dictate exactly how to implement those goals correctly.” …Then the pandemic arrived. Red tape prevented public health officials from using tests they possessed or buying tests overseas. To function, hospitals had to jettison myriad dictates about restrictions on telemedicine, ambulance equipment and many other matters. …The Progressive Era project that began 120 years ago got its second wind 60 years ago. …A virulent, fast-moving and mutating virus is teaching the cost of this.

Normally, I would argue against any government involvement.

In this case, however, taxpayers financed a big chunk of the development, so I’ll begrudgingly acknowledge that this gives politicians and bureaucrats the right to make allocation decisions.

But that doesn’t mean we can’t criticize those decisions when they result in mistakes. Especially since delayed vaccine rollout literally can result in needless deaths.

There are no perfect answers in this kind of situation, but surely we would be in better shape if Washington simply distributed the vaccines to the states, with the assumption that they would immunize as many people as possible, as quickly as possible.

Yes, some states would bungle the process (as we’re seeing in poorly governed jurisdictions such as New York and California), but a big advantage of federalism is that residents might learn from the superior performance of other states that they need better-quality elected officials.

Federalism was the right way of deciding lockdown policies, and it’s the right way of determining vaccination policies.

P.S. In his column, George Will cites Philip Howard, who thinks bureaucratic rules from Washington are too rigid. I certainly agree that a prescriptive, one-size-fits-all approach is misguided, but regulatory flexibility can be a recipe for corruption and cronyism. The right approach is to end federal involvement whenever possible.

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Happy Thanksgiving from America’s Hypocritical Politicians

I’m going to break tradition.

Normally, I use Thanksgiving as an opportunity to explain how the Pilgrims almost starved to death because they initially used a socialist system for farming, but then began to prosper once the colony shifted to a property rights-based approach (the same thing happened at the Jamestown settlement in Virginia as well).

If you want to learn about the failure of socialism in the early 1600s, watch this video from Reason, or these videos from John Stossel and Prager University.

Today’s topic, though, is about Thanksgiving hypocrisy by the political elite.

In his column for the Wall Street Journal, Jason Riley excoriates do-as-I-say-not-as-I-do politicians.

…politicians have always believed that they deserve special treatment, that the ordinary rules don’t apply to them. They have pushed for limits on school choice for the poor while sending their own children to private schools. They have advocated for gun control and defunding the police while being protected by armed security guards. …there could be as many as 50 million Thanksgiving travelers this year, only 10% less than in 2019. This is a form of mass civil disobedience like nothing the country has seen since the 1960s. Some of it is born of Covid fatigue, to be sure. But the endless parade of politicians flouting their own rules surely has also played a role. It began shortly after the spring lockdowns and if anything has become more commonplace, even farcical. …There’s a widespread assumption among liberal elites that the rest of us are incapable of calculating risks and taking necessary precautions to ride out the pandemic, and it’s insulting. …The decision of so many millions of Americans to buck public-health warnings, trust their common sense, and spend Thanksgiving with loved ones is a welcome indication that people may be tiring of all this condescension.

Meanwhile, NBC News reports on the two-faced actions of Mayor Michael Hancock of Denver.

Denver’s mayor is explaining himself and offering an apology after he traveled to Mississippi for Thanksgiving, though he had urged others to stay home if possible because of the coronavirus pandemic. …The mayor’s trip comes as officials in Colorado have warned about a steep increase in Covid-19 cases that threatens to stress the hospital system, and after warnings from the governor and others to keep Thanksgiving gatherings small and safe. …The station reported he traveled to Houston for the Mississippi trip, and that his account tweeted the guidance to stay home about 30 minutes before his flight.

Last but not least, Bill McGurn of the Wall Street Journal is not impressed with the hypocritical behavior of politicians, but he focuses on the big-picture lesson to be learned.

Californians live under some of the tightest Covid-19 restrictions in the nation. So when Gov. Gavin Newsom was recently caught without a mask at a crowded table for 12 at a posh Napa Valley eatery, he instantly became the poster boy for the “Do as I Say, Not as I Do” crowd. …No doubt Thanksgiving will bring fresh examples. While many citizens dutifully inform grandma there’s no room for her at the table because of new Covid-19 restrictions, someone inevitably will be caught enjoying the holiday with dozens of friends and second cousins… And it’s easy to mock these pols for their blatant hypocrisy when they are caught. But maybe the more important lesson to be learned here is that hypocrisy is guaranteed when we impose one-size-fits-all mandates that are rigid and unworkable.

Amen.

I wrote back in May about the two-faced behavior of politicians in the coronavirus era, and nothing has changed in the past six months.

They genuinely think that they should be exempt from all the nonsensical policies that they impose on everyone else.

They’re hypocrites on coronavirus. They’re hypocrites on education. They’re hypocrites on taxes. And they’re hypocrites on global warming.

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The Sensible Choice Solution to the School Reopening Controversy

One month ago, I wrote that expanded school choice might be a silver lining to the dark cloud of corornavirus.

This issue is getting more heated, as this Reason video explains.

When I’ve written in the past about the issue of school choice, I’ve focused on the superior educational outcomes of private schools (and homeschooling as well) compared to the subpar performance of government schools.

Let’s revisit the topic, looking specifically at the debate over whether schools should reopen.

• Some people argue that children will suffer long-term harm because of diminished educational outcomes if schools are closed.
• Others argue that there may be additional infections if schools are opened, risking the lives of children or members of their families.

At the risk of sounding like a mealy-mouthed politician, both sides are right.

Simply stated, there are potential downsides regardless of which option is selected.

And it’s quite likely that the right approach for some families will be the wrong approach for other families.

This is a very powerful argument for the kind of decentralized decision-making that is only possible with school choice.

• Some parents may want a traditional in-a-classroom experience for their children.
• Some parents may want a blended in-person/online approach for their kids.
• Some parents may want education for their kids to be entirely online.
• Some parents may want to choose homeschooling for their children.
• Some parents may want to experiment with new approaches such as pod teaching.

And the only way to satisfy these disparate desires is to break the government’s monopoly on education.

Let’s look at some recent analysis.

Writing for National Review, Cathy Ruse and Tony Perkins explain why we need alternatives to a one-size-fits-all government monopoly.

…the great American entrepreneurial spirit is awakening as parents are forced to rethink education for their children. And that is to the benefit of children and the nation. …There is no better time to make a change than right now, when public education is in chaos. Parent resource groups are forming to help families make an exit strategy and find the best education option for their children. Today, there are more options than ever. …Homeschooling continues to be a growing trend… “Hybrid homeschooling” is a new option, where children are homeschooled part of the week and learn in a more traditional school setting with other students for the rest. The most exciting new parent solution is the “pandemic pod,” a return to where families in one neighborhood or social circle hire a teacher to instruct their small group of children. …The last piece of the puzzle to set families truly free to make the best education decisions for their children is for states to set free public-education funds. …Imagine the possibilities if the primary educators of children — their parents — were given the freedom to spend that money to acquire the best education for their child. ..Let’s rethink, not rotely reopen. If there ever was a time when parent power could defeat the power and monopoly of the education elites, that time is now. Let freedom ring! 

J.D. Tuccille discussed the options, including homeschooling, in a column for Reason.

Chicago Public Schools became the latest large school district to opt for online-only lessons in the fall. …it leaves a lot of Chicago families unhappy and—like their counterparts around the country—heading for the exits, in search of options that better suit their needs now and in the future. …That leaves even many families favoring online classes as dissatisfied as those preferring in-person learning—and not just in Chicago. Across the country, there has been a surge in interest in traditional alternatives such as private schools as well as homeschooling, microschools (which essentially reimagine one-room schools for the modern world), and learning pods (in which families pool kids and resources). …the lines are blurry among the various categories of DIY education. But why shouldn’t they be blurry? Families aren’t interested in imposing rigid models on their kids; they’re trying to educate their children and adopting whatever tools and techniques get the job done. …Now, “23 percent of families who had children attending traditional public schools say they currently plan to send their children to another type of school when the lockdowns are over,” according to some admittedly unscientific polling… “Notably, 15 percent of respondents said they would choose to homeschool their children when schools reopen.”

As you might expect, the unions representing teachers from government schools have a much different perspective.

As the Wall Street Journal recently explained in an editorial, they’re using the crisis as an excuse to demand more money.

…teachers unions seem to think it’s…an opportunity…to squeeze more money from taxpayers and put their private and public charter school competition out of business. …an alliance of teachers unions and progressive groups sponsored what they called a “national day of resistance” around the country listing their demands before returning to the classroom. They include…canceling rents and mortgages, a moratorium on evictions/foreclosures, providing direct cash assistance… Moratorium on new charter or voucher programs and standardized testing…federal money to support the reopening funded by taxing billionaires and Wall Street” …If there’s a silver lining here, it’s that Americans are getting a closer look at the true, self-interested character of today’s teachers unions. …The proper political response should be to give taxpayer dollars to parents to decide where and how to educate their children. If parents want to use the money for private schools that are open, or for new forms of home instruction, they should have that right.

By the way, it’s not just that teacher unions want more money.

They also deliver an inferior product.

And a politicized product as well. Read this thread to be horrified about what is being “taught” to children trapped in government schools.

1/
This is a screenshot of people saying 2+2=5. You read that right…2+2=5.

Among them are teachers, educators, and professors who plan on teaching this stuff to your children. So let's talk about what's going on here, why they're doing this, and how we can stop it.

A thread: pic.twitter.com/3CY2IcsahY

— Wokal Distance (@wokal_distance) August 4, 2020

Let’s close with a very appropriate cartoon.

P.S. School choice doesn’t automatically mean every child will be an educational success, but evidence from Sweden, Chile, Canada, and the Netherlands shows good results when competition replaces government education monopolies.

P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely won and lost on the state and local level.

 

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Coronavirus and the Government School Monopoly?

The coronavirus has been horrible news, most obviously because of death and suffering. But the disease has also wreaked havoc with the economy and given politicians an excuse to push counterproductive policies.

But if you want to find a silver lining to that dark cloud, the virus may be putting pressure on America’s government school monopoly. For instance, John Stossel explains that it may lead to more homeschooling.

Given the large amount of evidence showing superior outcomes for home-schooled students, this is definitely a much-needed bit of good news.

Matthew Hennessey, in a column for the Wall Street Journal, also opined about how the coronavirus may produce a permanent expansion of home schooling.

Most students will return to traditional classrooms when the crisis passes. But some families—perhaps many—will…decide that homeschooling is not only a plausible option, but a superior one. …An economy of high-quality online educational materials has sprouted in the past decade. All you need is a laptop, headphones and a quiet corner of the house, and your kid can study everything from calculus to ancient Greek. …Education has managed to stave off innovation for a variety of reasons. Inertia is one—most people have a hard time reimagining something as basic as school. …Teachers unions are politically strong and uninterested in anything that threatens their power. But now the pandemic…can shake up the established order… If more Americans come to see the viability and value of home education, it could be a silver lining in a very dark cloud.

Private schools also provide a superior alternative to the government’s monopoly system.

That was true before the coronavirus, and it’s even more true today. This report from the New York Times has some details.

Public schools plan to open not at all or just a few days a week, while many neighboring private schools are opening full time. …the ways in which private schools are reopening show it can be done with creative ideas…reopening plans are just another way the pandemic has widened gaps in education. Private schools were able to offer much more robust online learning last spring, and research suggests that school closures have widened achievement gaps. …Independent schools don’t have all the same regulations for the curriculum or facilities that public schools have, and teachers generally aren’t unionized.

Writing for Reason, Corey DeAngelis highlights the more competent response of private schools.

A nationally representative survey conducted by Ipsos Public Affairs found that private and charter schools were substantially more likely to continue providing students with meaningful education services during the lockdown than traditional public schools. …Private and charter schools were about 20 percent more likely to introduce new content to their students during the lockdown. …Another national survey…found…students were more than twice as likely to connect with their teachers each day, and about 1.5 times as likely to attend online classes during the closures. …Parents of children in private and charter schools were at least 50 percent more likely to report being “very satisfied” with the instruction provided during the lockdown than parents of children in traditional public schools. …Private schools can adapt to change more effectively because they are less hampered down by onerous regulations than their government-run counterparts. …Private and charter schools know that their customers—families—can walk away and take their money with them if they fail to meet their needs.

Unsurprisingly, defenders of the status quo often claim that the government monopoly does a poor job because of inadequate money.

This is utter nonsense. I periodically share a chart put together by the late Andrew Coulson which shows how per-pupil spending in government schools has skyrocketed (with zero improvement in educational outcomes).

Perhaps even more relevant, it costs more, on average, for kids to attend government schools than it does for them to attend private schools.

And that assumes government schools are actually being honest about their true costs.

Yet that doesn’t seem to be the case. Researchers who have investigated the numbers have discovered pervasive under-counting (or non-counting) of big expenses such as building costs and pension obligations).

Adam Schaeffer narrated a video on this topic about ten years ago. Here’s a screenshot of the official numbers from various local governments compared to the actual costs.

What’s the bottom line? Instead of throwing good money after bad by rewarding under-performing government schools with bigger budgets, the right answer is comprehensive school choice.

P.S. School choice doesn’t automatically mean every child will be an educational success, but evidence from Sweden, Chile, Canada, and the Netherlands shows good results when competition replaces government education monopolies.

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Should Government Subsidize Unemployment?

Yesterday, I shared some research showing how misguided redistribution policies lead to high implicit marginal tax rates that discourage work.

Then I was interviewed about a very tangible example of this phenomenon – jobless benefits that give people more money than they could earn by working.

I wrote about this specific issue in late April and shared the nearby chart to show how many people can get a lot more money if they simply choose not to work. Which is the economic equivalent of a marginal tax rate of more than 100 percent.

As I noted in yesterday’s interview, creating this kind of upside-down incentive system is crazy even by the bizarre standards of Washington policy.

The federal government is – for all intents and purposes – bribing people not to work. This will be especially harmful for low-income workers since steady employment is their best route for upward mobility.

Part of the interview focused on the Keynesian argument that unemployment benefits are “stimulus” because recipients will have more money to spend. This is not satire. I mentioned that Nancy Pelosi actually asserted the economy becomes stronger when people are paid not to work.

Needless to say, this simplistic argument overlooks the fact that government can’t give people goodies without taking the money out of the private economy in the first place.

Sadly, the perpetual motion machine of Keynesian economics is still part of the Congressional Budget Office’s methodology. Here are some excerpts from the CBO’s report on the issue of super-charged benefits.

CBO has examined the economic effects of extending the temporary increase of $600 per week in the benefit amount provided by unemployment programs. …CBO estimates that extending that increase for six months through January 31, 2021, would have the following effects: …Roughly five of every six recipients would receive benefits that exceeded the weekly amounts they could expect to earn from work during those six months. …The estimated effects on output and employment are the net results of two opposing factors. An extension of the additional benefits would boost the overall demand for goods and services, which would tend to increase output and employment. That extension would also weaken incentives to work as people compared the benefits available during unemployment to their potential earnings, and those weakened incentives would in turn tend to decrease output and employment.

Since I’ve already written many times about the flaws of Keynesian theory, let’s focus on the deleterious effect of government-subsidized unemployment.

In a column two days ago for the Wall Street Journal, Congressman James Comer of Kentucky explained how super-charged benefits have hurt his state’s economy.

Employers in Kentucky are finding it difficult to persuade employees to return to work, as nearly 40% of the state’s labor force has filed for unemployment benefits… It is clear that a system of excessive unemployment benefits has run its course. More than 60 of my colleagues in Congress plan to join me in sending a letter to House and Senate leadership to express our concerns and demand that these payments expire July 31, as the Cares Act intended. …It defies logic to extend disincentives to work when businesses are beginning to reopen. …efforts to spend the nation into oblivion and discourage Americans from working…are fundamentally opposed to the American spirit of the dignity of work. …to get back on the right track, we cannot extend the $600-a-week incentive not to return to work.

I applaud Rep. Comer.

It’s not popular to remove goodies from voters. Indeed, that’s the message of my Second Theorem of Government.

But it’s necessary if we want to restore incentives to work.

I’ll close by elaborating on the point I made in the interview about this battle being a repeat of the Obama-era fight about extended unemployment benefits.

Obama and other folks on the left said extended benefits were necessary because the unemployment rate was still high, while people like me argued that the jobless rate was still high precisely because the government was paying people not to work.

Extended benefits were finally halted in 2014, meaning we had a real-world test to see who was right. So what happened? Lo and behold, the jobless rate fell as more people went back to work.

The moral of the story, as illustrated by this satirical cartoon strip, is that people are more likely to work when the benefits of having a job and greater than the benefits of not having a job.

P.S. Here are a couple of anecdotes, one from Ohio and one from Michigan, about the perverse impact of excessive unemployment benefits during the last recession.

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Coronavirus and Gun Ownership

Back in March, I explained that the coronavirus pandemic showed why it’s so valuable for people to have the right of gun ownership.

Let’s revisit the topic and we’ll start with the bad news. As illustrated by this Reason video, Senator Elizabeth Warren wants to exploit the crisis by imposing sweeping limits on our civil liberties guaranteed by the 2nd Amendment.

The good news is that the Trump Administration has been working to make it easier for people to exercise their right to gun ownership.

Licensed gun stores can do drive-thru sales of firearms or sell them out of their parking lots, the Trump administration said…in new guidance designed to facilitate purchases without forcing buyers to enter confined establishments during the coronavirus pandemic. …The only demand is that the required records from transactions still be stored safely inside the building. …Firearms sales have been one of the flashpoints of the crisis. A number of liberal jurisdictions have deemed gun stores to be “non-essential” businesses, which makes them subject to the same shutdown orders as shopping malls, theaters and hair salons. …Lawsuits have been filed against a number of those shutdown orders, arguing they violate the Second Amendment right to keep and bear arms. Gun owners say they can’t exercise that right if they can’t purchase a firearm or ammunition. Those complaints got a boost from the Homeland Security Department, which has issued guidance deeming firearms dealers essential.

And the best news is that many Americans have responded to the coronavirus by stocking up on weapons.

Here are some excerpts from a report by the U.K.-based BBC.

With the death toll climbing every day and most of the country under some form of lockdown, many Americans seem to be turning to guns as part of their response. …The FBI conducted 3.7m background checks in March 2020, the highest total since the instant background check programme began in 1998. …Gun shops across the country report that they are unable to re-stock shelves quickly enough to cope with the rush. …According to Georgia State University law school professor Timothy Lytton, …most new gun sales are being motivated by two factors that have been spurred on by the coronavirus crisis. The first is the concern that civil society – fire, police and health services – could be severely “eroded” someday, leading to a breakdown in law and order. In such a case, a gun can be viewed as a “self-help” survival tool, he says. The second reason is concerns over so-called big government infringing on American freedoms such as gun ownership, which is enshrined in the US constitution. “Many of the public health measures, such as shelter-in-place, restricting peoples’ movements, restricting what people can buy,” Mr Lytton says, “raises fears among many groups of the potential for government takeover and tyranny.”

Here’s a tweet from March showing long lines at a gun store.

A local TV station in the state of Washington reported on the surge in gun sales.

Local firearm stores have been all but emptied out. The response we got from several gun stores in numerous counties showed how overwhelmed they are with business. Many said they barely had time to take our call and compared the demand to that of toilet paper. …We heard from several employees of local gun shops who say it’s undeniable that the massive surge is attributed to people’s fear during this time. Jason Cazes, owner of Low Price Guns in Bellevue, says three weeks ago, the boom in business hit like a ton of bricks. …Cazes found himself flooded with new customers with an urgent request. “Hey I need a hand gun, I need a shot gun. All the sudden they’re interested in having something for protection,” he said. …”It’s a lot of first time buyers,” says Cazes

A newspaper in Pittsburgh reported on the same phenomenon.

After standing in line at a Pittsburgh-area sporting goods store for more than an hour, not knowing what he would say to the sales clerk, the self-described “liberal Democrat from New York City” bought a gun. …His purchase last week occurred during a nationwide rash of firearm sales to people who had never considered gun ownership until becoming rattled by concerns about COVID-19’s impact on America’s social infrastructure. …On Wednesday at Keystone Shooting Center in Mars, Butler County, owner Ty Eggemeyer said the percentage of customers buying their first gun was “extremely high.” “Most of what’s selling is for self-defense and protection,” he said. “Mostly handguns. Our home-defense shotguns, wiped out.”

Stephen Gutowski writes for the Washington Free Beacon about the potential political implications of expanded gun ownership.

Scott Kane went 38 years without ever touching a gun. That streak would have continued had it not been for the coronavirus. In March, fearful of the harassment his wife and child experienced over their Asian ancestry, Kane found himself in a California gun shop. His March 11 purchase of a 9mm would have been the end of the story, were it not for a political standoff over shutdown orders and background checks. Now Kane, a former supporter of gun-control measures and AR-15 bans, is frustrated by the arduous process that has denied his family a sense of security. The pandemic has made the soft-spoken software engineer an unlikely Second Amendment supporter. …Kane is not alone. An influx of new gun owners has the potential to permanently alter the politics surrounding guns in the United States. …Brian, a 40-year-old Floridian, used his savings to buy a Smith & Wesson M&P Shield in March after being laid off—the experience changed his entire approach to Second Amendment issues. …Andrew, a federal contractor who, along with his wife, bought a Heckler & Koch VP9 on March 21 in Virginia, said the state’s Democrat-controlled legislature pursuing a package of gun-control laws this winter in the face of unprecedented opposition directly contributed to his purchase.

And Kira Davis, in a column for Red State, also suggests that the coronavirus has led to new-found appreciation for the 2nd Amendment of the Bill of Rights.

My friend’s father owns a gun range near me and she said he’s seen a huge amount of liberals coming in to purchase weapons in recent weeks. How does he know they’re liberals? “They’re shocked to discover they can’t just walk out of the store with a gun.” …Not only are many liberals suddenly learning to love their Second Amendment rights, many of them are finding out that the gun control narrative in this country — as repeated loudly and often by Hollywood and the mainstream media — is a complete lie. …As a gun-owner who formerly abhorred the Second Amendment, …I find this whole situation fascinating. …There are a lot of people like me out there right now — first-timers and Second Amendment haters who feel like a hypocrite for wanting a gun for protection. …now they are navigating our convoluted gun laws for themselves… As these revelations begin to spread among our liberal brethren in the state of California, will we see a shift in gun laws and support for anti-Second Amendment legislators? Only time will tell

Aaron Tao, in an article published by the Foundation for Economic Education, summarizes the case for gun ownership.

In the United States, depending where you live, police response time ranges from nine minutes to over an hour. Right now, one in five New York police officers are currently out sick due to COVID-19. Police in multiple states have announced they will no longer respond to theft, burglary, and break-ins. Given the current climate, it’s not unreasonable to assume police will take much longer to arrive, if they do at all, should someone dial 911. Furthermore, Americans need to understand there is no legal obligation for the police to protect you, which is affirmed by the Supreme Court and multiple lower courts. (See Castle Rock v. Gonzales, Warren v. District of Columbia, and Lozito v. New York City). Should the police fail to arrive or protect you when needed, you can’t even sue for neglect. …Should an even deadlier natural or man-made catastrophe take place, if the authorities haven’t been incapacitated, displaced, or destroyed completely, whatever personnel and resources are left will be prioritized to protect high-ranking government officials, their inner-circle, and critical government facilities and infrastructure. …ruling elites will be evacuated to a secure bunker in some undisclosed location while John Q. Public will be left to fend for himself. …Many Americans, especially minorities, have realized the need for self-protection in times of social upheaval and breakdown. It is unfortunate that it took a tragedy as extreme as the COVID-19 pandemic to remind people that we should never take peace, prosperity, and freedom for granted. But millions have now taken the first steps to defend themselves and their loved ones.

I don’t pretend to know whether the new surge in gun ownership will change the political landscape, but I know it’s good news when more people learn about the issue. Especially folks on the left. Not only the ones mentioned in the stories above, but also these articles that I’ve shared.

• In 2012, I shared some important observations from Jeffrey Goldberg, a left-leaning writer for The Atlantic. In his column, he basically admitted his side was wrong about gun control.
• Then, in 2013, I wrote about a column by Justin Cronin in the New York Times. He self-identified as a liberal, but explained how real-world events have led him to become a supporter of private gun ownership.
• In 2015, I shared a column by Jamelle Bouie in Slate, who addressed the left’s fixation on trying to ban so-called assault weapons and explains that such policies are meaningless.
• In 2017, Leah Libresco wrote in the Washington Post that advocates of gun control are driven by emotion rather empirical research and evidence.
• Last but not least, in 2019, Alex Kingsbury confessed in the New York Times that his long-held dream of gun confiscation was utterly impractical.

P.S. If you want some humor that combines coronavirus and guns, click here (next-to-last item), here (third item), and here (first item).

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Coronavirus and the Two Americas

Earlier this month, Neil Ferguson was awarded membership in the Bureaucrat Hall of Fame after he and his mistress were caught violating lockdown rules that Ferguson – in his role as a supposed public health expert – demanded for the entire United Kingdom.

This was a stunning display of hypocrisy, perhaps even to the extent that Joe Biden or Elizabeth Warren might be shocked.

But I want to focus on a different point, which is the degree to which the coronavirus has exposed the fault line between those who are subsidized by government and those who pay for government.

In her Wall Street Journal column, Peggy Noonan opines about how the “protected” don’t have to worry about the consequences of economic shutdowns.

There is a class divide between those who are hard-line on lockdowns and those who are pushing back. We see the professionals on one side—those James Burnham called the managerial elite, and Michael Lind, in “The New Class War,” calls “the overclass”—and regular people on the other. The overclass are highly educated and exert outsize influence as managers and leaders of important institutions—hospitals, companies, statehouses. …Since the pandemic began, the overclass has been in charge—scientists, doctors, political figures, consultants—calling the shots for the average people. But personally they have less skin in the game. The National Institutes of Health scientist won’t lose his livelihood over what’s happened. Neither will the midday anchor. I’ve called this divide the protected versus the unprotected. …Here’s a generalization based on a lifetime of experience and observation. The working-class people who are pushing back have had harder lives than those now determining their fate. They haven’t had familial or economic ease. No one sent them to Yale. …they look at these scientists and reporters making their warnings about how tough it’s going to be if we lift shutdowns and they don’t think, “Oh what informed, caring observers.” They think, “You have no idea what tough is. You don’t know what painful is.”

Fareed Zakaria’s column for the Washington Post acknowledges that it is a problem when a bunch of cossetted elites make policy for everyone else.

…there is a broader distrust that we need to understand. …Social power exists in three realms — government, the economy, and the culture. …In all three, leaders tend to be urban, college-educated professionals, often with a postgraduate degree. That makes them quite distinct from much of the rest of the country. …And yet, the top echelons everywhere are filled with this “credentialed overclass.” …many non-college-educated people…see the overclass as enacting policies that are presented as good for the whole country but really mostly benefit people from the ruling class… Let’s look at the covid-19 crisis through this prism. Imagine you are an American who works with his hands — a truck driver, a construction worker, an oil rig mechanic — and you have just lost your job… You turn on the television and hear medical experts, academics, technocrats and journalists explain that we must keep the economy closed — in other words, keep you unemployed — because public health is important. All these people making the case have jobs, have maintained their standards of living… The covid-19 divide is a class divide.

Writing for USA Today, Professor Glenn Reynolds observes that the self-anointed experts are not the ones paying the price for coronavirus policies.

…it’s hard not to notice a class divide here. As with so many of America’s conflicts, the divide is between the people in the political/managerial class on the one hand and the people in the working class on the other. And as usual, the smugness and authoritarianism are pretty much all on one side. …in Los Angeles — where less than half the county is working now — radio journalist Steve Gregory asked the L.A. County Board of Supervisors whether any of them were willing to take voluntary pay cuts during this crisis. He was told by the chair that his question was “irresponsible,” which is to say embarrassing and inconvenient. (By contrast, New Zealand’s senior officials, including the prime minister, are taking a 20% pay cut.) …There really are two Americas here: Those still getting a paycheck from government, corporations or universities, and those who are unemployed, or seeing their small businesses suffer due to shutdowns. …Then there are the hypocritical gestures, like Chicago Mayor Lori Lightfoot’s illicit haircut… People don’t appreciate being lectured and condescended to and bossed around. They especially don’t appreciate being urged to sacrifice by people who make no sacrifices themselves.

I’m tempted to focus on Glenn’s point about how American politicians should follow the lead of New Zealand lawmakers and accept a pay cut as a gesture of solidarity.

Heck, all levels of bureaucracy should take a haircut. Bureaucrats already have a significant advantage in compensation compared to the private sector, and that gap surely will grow now that so many businesses have been shuttered and so many workers have been forced into unemployment.

But I want to focus on a different point, which is the inherent unfairness of the elite having consequence-free power and authority over ordinary people.

In part, it’s the point that Thomas Sowell makes in the accompanying quote.

But it goes beyond that. The problem with the “overclass” or “protected class” is that they also don’t pay any price when they’re totally right, somewhat right, or only partly right.

In other words, the people who live off the government, either directly or indirectly, have relatively comfortable lives – all financed by the people who deal with much greater levels of hardship and uncertainty.

At the risk of understatement, that’s not right.

P.S. This gap is exacerbated when government officials display thuggery rather than empathy.

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The 10th and Final Edition of Coronavirus Humor

I started sharing politically-themed coronavirus humor back in March and that’s now been a tradition for nine consecutive weekends (see here, here, here, here, here, here, here, here, and here).

This will be the final edition.

We’ll start with a clever video from Kevin James. It could be entitled, Revenge of the Karens.

Next we have a helpful suggestion from the practitioners of coronavirus thuggery.

The clever folks at Babylon Bee have a story about disappointed governors.

Democrat governors across the nation have urged states to continue their lockdowns, saying if they end prematurely, their time in the limelight will be over. …said California Governor Gavin Newsom. “I can’t let this $500 hair cut go to waste. I spend thousands on hair gel alone every month. If I can’t give a press conference every night, it’s all for nothing!” Governor Andrew Cuomo of New York agreed. “We must continue this crisis as long as possible so that people will know who I am,”… A study confirmed the governors’ worst fears, showing that in states with no COVID-19 restrictions, people don’t think about the government much at all and just go about their daily lives. “We can’t let that happen,” said Michigan Governor Gretchen Whitmer.

The people who think that Bill and Hillary Clinton somehow had Jeffrey Epstein killed will like this bit of satire.

For what it’s worth, I always remind conspiracy-minded people that routine government incompetence is usually a better explanation for why things happen.

Next, we have a reminder that the climate alarmists must be very disappointed and jealous that they’ve been displaced by a crisis that actually does kill people.

I wrote recently about Florida’s economic success. Now, let’s look at another story from Babylon Bee, this one about how the Sunshine State is in trouble for its reaction to the virus.

Science says Florida should have seen skyrocketing deaths from COVID-19, but instead Florida — despite its large elderly population — has not seen anywhere near the number of problems faced by states like New York and New Jersey. This has been ruled to be in complete defiance of Science. …Washington Post columnist Jennifer Rubin… “Florida is undermining our trust in Science by not dying. We cannot tolerate this. More Floridians need to die. To die for Science.” California Governor and Science believer Gavin Newsom agreed. “Ron DeSantis is a witch! Burn him!” …There is now a movement by Science-believing Democrats to actively try to infect Floridians to try to get their death count to match projections.

As usual, I’ve saved my favorite for the end.

I’ve acknowledged that there’s much we don’t know about the virus and how to react. But I feel very confident in stating that the most bone-headed decision by politicians has been to endanger ordinary people by releasing criminals while at the same time arresting ordinary people and exposing them to the supposedly coronavirus-spreading justice system.

Which is the message of this Chip Bok cartoon.

If you find this cartoon amusing, I highlighted my favorite Bok creations as part of a contest to identify the best political cartoonist.

P.S. I wish some of the ways that politicians have reacted to the virus – such as this, this, this, and this – were satire rather than reality.

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Using Coronavirus as an Excuse for More E.U. Centralization and Redistribution

I wrote earlier this month about coronavirus becoming an excuse for more bad public policy.

American politicians certainly have been pushing all sorts of proposals for bigger government, showing that they have embraced the notion that you don’t want to let a “crisis go to waste.”

But nothing that’s happening in the United States is as monumentally misguided as the effort to create a new method of centralized redistribution in the European Union.

Kai Weiss of the Vienna-based Austrian Economic Center explains what is happening in a column for CapX.

…‘never let a good crisis go to waste’ seems to have become the mantra of both the European Commission a number of national leaders. The coronavirus has become a justification for…‘more Europe’ (which tends to actually mean more EU, to the detriment of Europe). The clearest sign of this renewed Euro-fervour is the plan cooked up by Angela Merkel and Emmanuel Macron earlier this week… Seasoned Brussels observers will be shocked to learn that their proposals have very little to do with the pandemic, and everything to do with deepening the centralisation of EU power and top-down policymaking. While Germany has traditionally…opposed the idea of eurobonds or similar debt collectivisation instruments, it is now advocating for precisely those policies. A €500 billion Recovery Fund… the initial plan is for the European Commission to raise the money on the financial markets. It would subsequently be paid back by the member states and through increased “own resources” – i.e., new taxes levied directly by Brussels… The good news is that none of these policy proposals are yet set in stone. There are some big legal questions, particularly on the Recovery Fund, and national parliaments would need to agree to this expansion of Brussels’ writ. Already countries like the Netherlands, Austria, Denmark, and Sweden have voiced criticism… But for all these obstacles, the direction of travel looks alarmingly clear. The consensus among the EU’s power brokers, as with pretty much any major world event, is that the answer is ‘more Europe’. ..For Macron  Merkel and their allies, this is far too good a crisis to pass up.

A story in the New York Times has additional details, including a discussion of potential obstacles.

Ms. Merkel this week agreed to break with two longstanding taboos in German policy. Along with the French president, Emmanuel Macron, Ms. Merkel proposed a 500 billion euro fund… It would allow the transfer of funds from richer countries… And it would do so with money borrowed collectively by the European Union as a whole. …Whatever emerges from the European Commission will be followed by tough negotiations… Chancellor Sebastian Kurz of Austria has raised objections to the idea of grants rather than loans, saying that he has been in contact with the leaders of Sweden, the Netherlands and Denmark. “Our position remains unchanged,’’ he said. …opposition may also come from member states in Central and Eastern Europe. …Those countries are going to be reluctant…to see so much European aid — for which they will in the end have to help pay — skewed to southern countries that are richer than they are. …in northern countries, moves for collective debt to bail out poorer southern countries may feed far-right, anti-European populists like the Alternative for Germany or the Sweden Democrats. They are angry at the idea of subsidizing southerners who, they believe, work less hard and retire much earlier.

What’s depressing about this report is that it appears the battle will revolve around whether the €500 billion will be distributed as grants or loans.

The real fight should be whether there should be any expansion of intra-E.U. redistribution.

For what it’s worth, Germany used to oppose such ideas, especially if funded by borrowing. But Angela Merkel has decided to throw German taxpayers under the bus.

Let’s close with some analysis from Matthew Lynn of the Spectator.

Die-hard European Union federalists have plotted for it for years. …The Greeks and Italians have pleaded for it. And French presidents have made no end of grand speeches, full of references to solidarity and common visions, proposing it. The Germans have finally relented and agreed, at least in part, to share debt within the EU and the euro-zone, and bail-out the weaker members of the club. …The money will be borrowed, based on income from the EU’s future budgets, but it will in effect be guaranteed by the member states, based on the EU’s ‘capital key’. …the rescue plan is completely unfair on all the EU countries outside the euro-zone. …why should they pay for it? Poland…will still be expected to pay in five per cent (or 25bn euros (£22bn)) to bail-out of far richer Italy (Polish GDP per capital is $15,000 (£12,000) compared with $34,000 (£27,000) for Italy).

Pro-centralization politicians are claiming this fund is needed to deal with the consequences of the coronavirus, but that’s largely a smokescreen. It will take many months for this proposal to get up and running – assuming, of course, that Merkel and Macron succeed in bullying nations such as Austria and the Netherlands into submission.

By that time, even the worst-hit countries already will have absorbed temporary health-related costs.

The bottom line is that this initiative is really about the long-held desire by the left to turn the E.U. into a transfer union.

The immediate losers will be taxpayers in Germany, as well as those in Austria, Sweden, the Netherlands, Finland, and a few other nations.

But all of Europe will suffer in the long run because of an increase in the continent’s overall fiscal burden.

And keep in mind that this is just the camel’s nose under the tent. It’s just a matter of time before this supposedly limited step becomes a template for further expansions in the size and scope of government.

Yet another reason why E.U. membership is increasingly an anchor for nations that want more prosperity.

P.S. As suggested by Mr. Lynn’s column, countries in Eastern Europe should fight this scheme. After all, these countries are relatively poor (a legacy of communist enslavement) and presumably don’t want to subsidize their better-off cousins in places like Spain and Italy. But that argument also implies that they should have resisted the Greek bailout about ten years ago, yet they didn’t. Sadly, Eastern European governments acquiesce to bad ideas because their politicians are bribed with “structural adjustment funds” from the European Union.

P.P.S. The luckiest Europeans are the British. They wisely opted for Brexit so they presumably won’t be on the hook for this costly new type of E.U.-wide redistribution (indeed, my main argument for Brexit, which now appears very prescient, was that the E.U. would morph into a transfer union).

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Coronavirus, Federal Spending, and Media Innumeracy

When I write enough columns with the same underlying point, I sometimes create a special page to highlight the theme, such as the “Bureaucrat Hall of Fame” and “Poverty Hucksters.”

I may have to do something similar for people who assert that America’s response to the coronavirus has been hampered because the federal government is too small.

For instance, Dana Milbank wrote in the Washington Post last month that “anti-government conservatism…caused the current debacle with a deliberate strategy to sabotage government.”

Ironically, the nations he cited for their successful approach – Singapore, South Korea, and Taiwan – all have a much smaller burden of government spending than the United States.

Which actually supports my argument that bigger governments are less effective and competent.

But evidence doesn’t seem to matter to some journalists.

One of Milbank’s colleagues, Dan Balz, has just authored a long article that regurgitates the assertion that there’s been “underinvestment” in the federal government.

The government’s halting response to the coronavirus pandemic represents the culmination of chronic structural weaknesses, years of underinvestment and political rhetoric that has undermined the public trust… The nation is reaping the effects of decades of denigration of government and also from a steady squeeze on the resources needed to shore up the domestic parts of the executive branch. This hollowing out has been going on for years as a gridlocked Congress preferred continuing resolutions and budgetary caps… The question is whether the weaknesses and vulnerabilities exposed by the current crisis will generate a newfound interest among the nation’s elected officials — and the public — in repairing the infrastructure of government. …“We don’t want to invest in the capacity of government to get the job done,” Kettl said. …said David E. Lewis, a political science professor at Vanderbilt University…“We’re seeing a government that is suffering now from a long period of neglect that began well before this administration. And that neglect has accelerated during this administration.”

What’s especially remarkable is that the article cites the government’s lack of testing capacity as evidence of “underinvestment.”

Over these years, there have been a series of major government breakdowns that helped shake confidence in government’s competence. …The pandemic has forced another critical look at government’s competence. …more tests might have helped contain the spread. It is the case now as businesses look to reopen but cannot assure safety for workers or their communities without the widespread availability of tests, which so far does not exist.

Yet the bureaucracies with responsibility for testing – the FDA and CDC – have received big budget increases.

Was that money well spent?

Hardly. Not only have they failed in their mission, their red tape and inefficiency have hindered the private sector’s ability to develop and deploy tests.

Notwithstanding all this evidence, Balz wants readers to believe that people don’t have faith in government because of hostile rhetoric from politicians.

Marc Hetherington, a professor at the University of North Carolina, said the public conversation about government began to shift with the election of Ronald Reagan in 1980. …“What changed with Reagan and the decades since is that the conversation moves away from what government ought to do to government is incompetent to do things,” he said. …Democratic politicians have engaged in some of the same kind of thing. “Every candidate has campaigned on a bureaucracy-bashing theme,” Nabatchi said. “That message has gotten through to affect people’s confidence in government.”

The alternative explanation, needless to say, is that people don’t have confidence in the public sector because government has a long track record of mistakes and incompetence.

But I guess that’s merely my opinion.

So let’s instead close today’s column with some hard data.

Here’s a chart I shared last month while debunking an article by George Packer for the Atlantic (he claimed we have “a federal government crippled by years of…steady defunding”).

It shows that federal spending has tripled since 1980. And that’s after adjusting for inflation!

Which led me to observe that, “The bottom line is that I can’t figure out whether to be more dismayed that journalists are innumerate or that major publications apparently don’t have fact checkers.”

That same sentiment obviously applies to Dan Balz and the Washington Post.

P.S. While Balz and Milbank were guilty of avoiding numbers, the Washington Post doesn’t have a great track record when its journalists try to use numbers. In other words, maybe the problem is bias rather than innumeracy.

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Coronavirus Humor

Continuing with an unfortunate tradition, here’s our eighth weekend collection of satire about the mix of public policy and coronavirus.

We’ll start with one of Remy’s Reason videos, which are always worth watching.

I wrote last year about superior education outcomes for home-schooled kids.

Apparently there are other benefits to being away from government schools.

Since we’re on the topic of education, America’s top satire site, Babylon Bee, reports that teachers in government school actually want an end to the lockdown.

Teachers at government schools have raised their concerns that the recent closure of their institutions will have a damaging effect on students. …”We must reopen as soon as possible — before they regain their ability to have independent thoughts,” said New York 4th-grade teacher Ms. Jenny Mudd. “…we have to do our part to prevent the spread of the virus, but we must also prevent the spread of unapproved ideas. There’s a balance there.” …Sure enough, studies have already shown a strong correlation between everyone being homeschooled and a concerning spike in independent thought. …a shocking increase in the ability to form thoughts and ideas not approved by the government. …said Portland kindergarten teacher Ms. Pinkerton. “Parents just don’t have the experience of stuffing kids’ heads full of a statist worldview seven hours a day like I do.”

Speaking of statist worldviews, I laughed out loud when I saw this mockery of CNN.

Another story from Babylon Bee reminds home-bound Americans that going outside makes them very bad people.

Many Americans are growing tired of the lockdown and want to once again leave their homes and go do things. As many historians note, this is similar to the attitude of genocidal maniac Adolf Hitler. …There are many photos of Hitler outside, providing ironclad proof that Hitler also liked to leave his house. It’s not certain, though, what the connection is between hateful bigotry and not wanting to be trapped in one’s own home. “We can’t know what’s motivating these people who want to get out of their houses,” said California Governor Gavin Newsom, “but is genocide next? History says yes.” In Hitler’s final days, though, he did dutifully shelter in place — living in a bunker — despite wanting to go outside, so historians note that people who actually do go outside are in fact “worse than Hitler.”

Next we have a Branco cartoon with an interesting take on the saves-lives-no-matter-the-cost argument.

Here’s some satire from our friends on the left.

Not as clever as this little collection, but still worth sharing.

The dark cloud of coronavirus does have a silver lining for fans of socialism.

As the Babylon Bee reports, fewer workers are being exploited.

The pandemic has been troublesome for many, but one group is celebrating a victory: socialists. “Capitalism is all about exploiting workers,” said Alexandria Ocasio-Cortez, a congressional representative from New York and the world’s smartest socialist. “But now there’s, like, nobody working, so they can’t exploit anyone. Take that, billionaires!” …As the capitalist engine of having people work grinds to a halt, billionaires should be hit even harder, some of them plummetting from being billionaires to being just multi-millionaires as millions and millions of Americans go unemployed. “Yay! We’re winning!” Ocasio-Cortez exclaimed. She hoped even more people would leave jobs — except for the people whose job it is to print money.

I’ve pointed out that there are inescapable real-world tradeoffs.

But here’s the one-sided algorithm that some politicians are using.

My tradition is to save the best for last.

I imagine Michigan’s governor, Gretchen Whitmer, based her approach on this very biting example of satire.

You can enjoy previous versions of coronavirus humor by clicking here, here, here, here, here, here, here, and here.

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Another Weekly Edition of Coronavirus Humor

As a policy wonk, I wish people would get excited about my columns about topics such as “tax depreciation” and “trade data” and my missives about issues such as “budget concepts” and “cost-benefit analysis.”

Instead, I notice that my humor-oriented columns generate a lot more traffic, which is somewhat humbling since I’m not contributing anything. All I’m doing is sharing items that have appeared in my inbox or that I’ve seen on social media.

With that grudging confession out of the way, time for another edition of politically-themed coronavirus satire.

And we’ll start with a repeat appearance by Bill Clinton, though I don’t think he realizes that the debate is about a different type of Swedish model.

For what it’s worth, this meme first showed up on this site back in 2012.

Next, a satire site from Ireland reminds us about the real heroes of the coronavirus.

Dublin clamper Joseph Culleton will not hear any talk of him being labeled a ‘hero’. …“Honestly, we’re just doing our bit. Actually, I’m kind of embarrassed by all the praise we’re getting, it’s the nurses and doctors who are the real heroes,” confirmed Culleton as he clamped a nurse’s car. …the eagle eyed clamper…admitted to having a tear in his eye when reading news reports that children in their thousands, inspired by the selfless work by front line workers, want to become clampers when they’re older.

Sounds like he belongs in the Bureaucrat Hall of Fame!

Let’s now travel to Sesame Street to see how the goal posts have been moved.

A very helpful message from Count von Count, but it doesn’t change my mind about eliminating his taxpayer subsidies.

Next, we have a contribution from Babylon Bee, America’s best satire site.

When the lockdowns started and stay-at-home orders were issued, the Bill of Rights was taken out of the National Archives and put somewhere for safekeeping since it wasn’t really needed at the time and no one wanted it to get damaged. Now that states are starting to open things up again, no one can seem to find it. “It’s probably under a couch or something,” said President Trump. “We’ll find it eventually.” …Now that it has been lost, many are unsure what to do, though some think we can make do without it. “I think most of us remember what was in it,” said Senator Bernie Sanders. “There was stuff about health care and not letting anyone have way more money than you.”

By the way, the quote from Crazy Bernie is only partly satirical. Some folks on the left genuinely want to create a “right” to other people’s money.

This image is real life, so truth is stranger than fiction.

This next image is satire, of course, but it makes a very real point about how safety concerns can be taken too far.

Here’s another story from the Babylon Bee, though I’ve pared down the number of steps for reasons of brevity. I think it’s satire, but it could be reality in states such as Michigan and New York.

One state governor is enjoying universal acclaim after unveiling his own innovative plan for getting his state reopened. The new plan is called ‘Our Vision for Health, Safety, Virtue, and Eternal Peace’ and is a 37-step, 10-year plan for slowly opening up sections of the state economy. It reads as follows:

• Form an exploratory committee to consult various experts on reopening things
• Create a panel of experts to explore the recommendations recommended by the exploratory committee
• Build a brand new website to post exploratory committee recommendations for public comment
• Take away all the guns
• Announce a 12-phase reopening of the economy, starting with the businesses with the best lobbyists
• Form a new committee to review the effectiveness of Phase 1 before moving on to Phase 2
• Order drones from China and post them in front of every hair salon
• Draft legislation allowing people to eat squirrels and possums
• Strengthen the security of governors mansion with sniper towers and tiger pits
• (redacted)
• (Super-secret surprise to be determined later)
• Open the rest of the economy

Other states have announced they will wait 10-15 years to judge the effectiveness of this 37 part plan before releasing their own plans. The only exception is Texas, whose governor simply said, “We’re open, y’all!”

Yes, Texas is different than other states. And other continents as well.

This tweet won’t be funny to readers who like Trump.

We'll reopen the economy and let you try to earn money again when:

w̶e̶ ̶f̶l̶a̶t̶t̶e̶n̶ ̶t̶h̶e̶ ̶c̶u̶r̶v̶e̶
w̷e̷ ̷i̷n̷c̷r̷e̷a̷s̷e̷ ̷t̷e̷s̷t̷i̷n̷g̷
w̶e̶ ̶f̶i̶n̶d̶ ̶a̶ ̶v̶a̶c̶c̶i̶n̶e̶
n̴o̴ ̴o̴n̴e̴ ̴i̴s̴ ̴s̴i̴c̴k̴
the election is over and you welcome our new green socialist utopia

— Razor (@hale_razor) April 22, 2020

Following tradition, I’ve saved the best for last.

You can enjoy previous versions of coronavirus humor by clicking here, here, here, here, here, and here, and here.

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Coronavirus Is Worsening America’s Grim Fiscal Outlook

I’ve warned that the budgetary impact of the coronavirus may trigger another fiscal crisis in Europe.

Especially Italy.

But what about the United States? Will we reach a point, as Margaret Thatcher famously warned, of running out of other people’s money?

We probably still have a couple of decades before that happens, as I speculated at the end of a recent interview, but that doesn’t mean we should continue down our current path.

The Wall Street Journal opined on this topic yesterday, citing newly released estimates from the Congressional Budget Office.

Friday’s Congressional Budget Office report on the federal fisc for April…usually a surplus month as tax payments roll in, but the Treasury postponed tax day this year until July 15. We are grateful for such small government favors. Spending more than doubled in April from the year before and revenue fell by 55%. …we are all apparently supposed to be converts to Modern Monetary Theory. This is the view that governments can spend whatever they like because the Federal Reserve can monetize it without economic harm. We may get to test this proposition. …the damage from so much spending will come in two ways. First, in resources misallocated to government rather than into private hands to invest. Second, in the tax increases that the political class will eventually impose, perhaps starting as early as 2021.

As is so often the case, the WSJ is correct in its analysis.

The fiscal crisis won’t be too much red ink. That’s merely the symptom of the real disease, which is that government is getting far too big.

As the editorial warns, this undermines prosperity because resources get diverted from the economy’s productive sector.

And as that spending burden increases, it means more and more pressure for tax increases, which further penalize growth. I’ve already noted that politicians will try to exploit the crisis by imposing a wealth tax, but I think the real prize – in the mind of statists – is a money-gobbling value-added tax.

I’ll close by sharing a chart from Brian Riedl of the Manhattan Institute, which estimates the per-capita burden of inflation-adjusted federal spending in the United States.

The red portion of the chart is coronavirus-related spending, plus future interest payments on the additional borrowing for all that spending, and the blue portion is spending in prior years plus estimates of future spending (already on an upward trajectory because of poorly designed entitlement programs).

That chart does not paint a pretty picture, but Brian’s numbers may be too optimistic. He assumes that the coronavirus-related emergency spending is just temporary and that additional interest on a bigger debt is the only long-run impact.

But if politicians make some of that spending permanent (which will be in their self-interest), then we’ll be traveling even faster in the wrong direction.

All the more reason to impose a spending cap, which is the only major fiscal reform with a track record of success.

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Recognizing the Deadly Impact of Economic Lockdowns

Last October, before coronavirus became the world’s dominant issue, I shared this clever Remy video to help make the point that policies designed to save lives can go too far. Indeed, if they do enough harm to the economy, they can actually cause additional death.

I’ve written about this tradeoff in the context of the coronavirus, pointing out that policymakers should look at total deaths, not just deaths from the virus.

In a column for the Philadelphia Inquirer, Professors Antony Davies and James Harrigan elaborate on these tradeoffs.

In times of crisis, people want someone to do something, and don’t want to hear about tradeoffs. This is the breeding ground for grand policies driven by the mantra, “if it saves just one life.” …Rational people understand this isn’t how the world works. …Unfortunately, even mentioning tradeoffs in a time of crisis brings the accusation that only heartless beasts would balance human lives against dollars. …Five-thousand Americans die each year from choking on solid food. We could save every one of those lives by mandating that all meals be pureed. Pureed food isn’t appetizing, but if it saves just one life, it must be worth doing. …Legislating…these things would be ridiculous, and most sane people know as much. How do we know? Because each of us makes choices like these every day that increase the chances of our dying. …The uncomfortable truth is that no policy can save lives; it can only trade lives. Good policies result in a net positive tradeoff. But we have no idea whether the tradeoff is a net positive until we take a sober look at the cost of saving lives. …It’s time we took a sober look at what this shutdown is costing us.

Opining for the Wall Street Journal, Joseph Sternberg warns that all options are bad, but herd immunity may be the least-worst approach.

The experts might have been right the first time. …The stated goal was not to vanquish the virus but merely to try to control its spread so as not to overwhelm health-care systems. …Those opinions now are widely derided, often in insulting terms. Yet subsequent events suggest they’re mainly correct. …The trouble started in mid-March when “herd immunity,” previously the tacit or acknowledged endgame for most of the world, became a toxic phrase. Critics pointed out that allowing the virus to spread in a controlled manner would cost lives. …But if those experts have a more plausible plan than taking a controlled path to herd immunity, the world is waiting to hear it. …A vaccine is a year or more in the future, if one ever emerges. An effective mass test-and-trace regime would require a level of competence and focus that typically eludes modern governments.

The tradeoffs are especially important in poor countries.

A new report in South Africa, largely prepared by actuaries, finds that the health costs of the lockdown could be 29 times greater than the health costs of the virus. Here are some details in a story published by the Financial Mail.

The lockdown will lead to 29 times more lives lost than the harm it seeks to prevent from Covid-19 in SA, according to…a new model developed by local actuaries. …They have sent a letter…to President Cyril Ramaphosa…they call for an end to the lockdown, a focus on isolating the elderly and allowing children to go back to school, while ensuring the economy restarts so that lives can be saved. …The actuaries used a model comparing “years of lives lost” from Covid-19, to “years of lives lost” from the lockdown. …their model translated into a minimum of 26,800 “years of lives lost” due to Covid-19, and a maximum of 473,500 years. …The actuaries then used the figures predicted by the National Treasury to model the impact on poverty. … their model showed that the number of years lost owing to the economic contraction caused by lockdown lies between 14-million and 24-million.

I have no idea, of course, whether these numbers are correct. Especially since even the world’s biggest experts are still learning about the disease.

But the underlying methodology is sensible. Policies that cause a weaker economy (and South Africa already has plenty of those) will make a country poorer and its people poorer.

And poorer people in poorer nations will die at younger ages.

Somebody sent me this image, which helps to capture the health costs of lockdowns.

P.S. Back in 2012, I pointed out that the economy’s sub-par performance under Obama would lead to almost 60,000 premature deaths. I openly acknowledged that this back-of-the-envelope calculation was very speculative, but what’s not speculation is that richer societies are healthier societies.

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English Hypocrite Joins the Bureaucrat Hall of Fame

One of the most-nauseating features of government is how politicians and bureaucrats impose lots of restrictions on ordinary people, yet then officially or unofficially create exemptions for themselves.

• Bill and Hillary advocating for higher death taxes, but then rigging the system so they could avoid that unfair levy.
• Elizabeth Warren sending her kid to private school while seeking to restrict better education for other people’s children.
• Bureaucrats at the OECD getting tax-free salaries while urging ever-higher taxes for people in the private sector.

The coronavirus pandemic has created a new opportunity for the political class to flaunt its privileged status while stepping on the rights of ordinary people.

The Wall Street Journal opined on this issue today and noted plenty of elected officials have decided to exempt themselves from lockdown rules.

A good sign that a government policy is misconceived is that its most energetic promoters can’t abide by it. The coronavirus outbreak has exposed this sort of hypocrisy more than a few times. Mayor Bill de Blasio famously visited his favorite YMCA for a workout even as his office was telling the rest of New York City to stay home. In Chicago, salons and barbershops were shut down while Mayor Lori Lightfoot allowed herself a haircut. Beaumont, Texas, Mayor Becky Ames flouted her city’s shelter-in-place order to have her nails done.

But these examples are trivial compared to the actions of Neil Ferguson, the officious British government employee who has been publicly hectoring his countrymen to follow stay-at-home orders, but decided those rules didn’t apply to his f*buddy.

Neil Ferguson, the epidemiologist at Imperial College,…led the researchers who predicted that, absent a forceful governmental response on movement and commerce, Covid-19 could cause more than 500,000 deaths. That modeling was soon scaled back, but Mr. Ferguson has since become a familiar figure in Britain for urging the government to impose strict shelter-in-place orders. It appears Mr. Ferguson wasn’t sheltering in place. Or, rather, he was but his paramour, Antonia Staats, wasn’t. …Ms. Staats had crossed London at least twice since citywide lockdowns were imposed in March—a clear violation of government rules. He has resigned from his position as government adviser.

I’m not surprised Ferguson is a hypocrite. It goes with the territory.

But I do wonder how he became a government adviser with the Conservative Party supposedly in charge? I thought Republicans were the “stupid party.”

In any event, the U.K.-based Sun is famous for its clever headlines (sort of like the New York Post), and this latest scandal is no exception.

Let’s conclude that Ferguson deserves to be the second Brit in the Bureaucrat Hall of Fame (joining the chap who worked in law enforcement while moonlighting as a jihadist).

P.S. For what it’s worth, Ms. Staats is a left-wing activist, so she’s part of a long tradition of statists who want more power for government, but conveniently don’t think they should be subject to the rules imposed on the rest of us.

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Does Sweden Have the Right Response to the Coronavirus?

Having already written several dozen columns on public policy and the coronavirus, it’s time to add my two cents to the debate over Sweden’s (comparatively) laissez-faire approach to the pandemic.

If nothing else, it’s remarkable that the nation Bernie Sanders praised for socialism (albeit incorrectly) is now the poster child for (some) libertarians.

What makes Sweden special, as depicted in this graphic from CNN, is a more lenient attitude about letting ordinary life continue.

Did Sweden make the right choice?

Let’s review several analyses, starting with Hilary Brueck’s article for Business Insider.

In Sweden, bars and restaurants are open to the public, you can go get a haircut, and primary school is in session. …life goes on. …If anyone can have success with such a low-enforcement disease-fighting strategy, it may be Sweden. …The Swedish prerogative asks citizens to act like adults, and then trusts that, left to their own devices, people will. …The Swedes are also seriously weighing concerns that have been taken as inevitable, if unfortunate, collateral damage in other countries, such as the mental health risks of being stuck inside, rising rates of abuse, and substance use disorders. …Other countries, including the UK and the Netherlands, originally toyed with the idea… Both were accused of heartlessness: sacrificing the old and vulnerable… But Sweden has persevered. …The economy has…taken a hit. …8% of the country is now unemployed, a figure that’s projected to continue to rise, possibly hitting 10% by this summer.

Writing for Reason, Johan Norberg explains his nation’s strategy.

The Swedish government has declared no state of emergency and no orders to shelter in place. …Those who want to show how great Sweden is doing have produced charts comparing us to countries like Britain, Belgium, France, Spain, and Italy. Those who want to prove the opposite replace those countries with Norway, Denmark, and Finland, all of which have fewer deaths. …Sweden has had more COVID-19 deaths per capita than our Nordic neighbors. But that is an obvious result of those countries’ decisions to postpone cases and deaths by locking down whole societies for a period of time. The thing to watch is what happens when they begin to open up again and will face a new wave of COVID-19. …A Harvard model projects that a 60 percent suppression of the disease will result in a higher peak later on and a higher number of total deaths than a mitigation strategy like the one Sweden used, where the spread is reduced by no more than 20 or 40 percent, so that the disease can pass through the population to create herd immunity during a period when the vulnerable are protected. Other models come to other conclusions, of course… We just don’t know yet, and only time will tell. Herd immunity might yet beat herd mentality. …our economy still hurts… But losing two-thirds of your revenue rather than 100 percent might mean the difference between life and death for many entrepreneurs. …Perhaps Sweden will do worse long term… Or perhaps Sweden is the one place that is succeeding in limiting long-term damage, caring for the sick, and protecting the vulnerable, all while working toward herd immunity. …What we do know is that Sweden has not cracked down on basic liberties like others have, and has not wrecked society and the economy to the same extent.

In a column for the New York Times, Ian Bremmer, Cliff Kupchan, and Scott Rosenstein cast doubt on Sweden’s approach.

In Sweden, business is not actually proceeding as usual. …But restrictions from government are considerably less severe than many other countries. …The results have been mixed. Sweden has the highest fatalities and case count per capita in Scandinavia, but is lower than some of its neighbors to the south. Economic disruption has been significant but not as debilitating as other countries. …the nation’s top infectious disease official recently estimated that approximately 25 percent of the population has developed antibodies. …But if immunity is short-lived and only present in some individuals, that already uncertain 25 percent becomes even less compelling. We also still don’t know what total population percentage would be necessary to reach the herd immunity goal. …there are huge risks with copying the strategy in a country like the United States. The American people are far less healthy than Swedes.

The Wall Street Journal opined this morning about Sweden’s strategy.

While its neighbors and the rest of Europe imposed strict lockdowns, Stockholm has taken a relatively permissive approach. It has focused on testing and building up health-care capacity while relying on voluntary social distancing, which Swedes have embraced. The country isn’t a free-for-all. Restaurants and bars remain open, though only for table service. Younger students are still attending school, but universities have moved to remote learning. …the country’s strategy…is to contain the virus enough to not overwhelm its health system. …Sweden has been clear it is aiming for a “sustainable” strategy that it can practice until there is a vaccine or cure while also being economically tolerable. The lockdown countries have held the virus in relative check for now, though probably with less broad immunity in the population. They appear to be delaying some deaths but at the risk of a larger outbreak once they open up if there is no cure. …No one knows which mitigation strategy will save the most lives while doing the least economic harm. But the rush to condemn Sweden isn’t helpful.

In a column for National Review, John Fund and Joel Hay argue for the Swedish approach.

With a death rate significantly lower than that of France, Spain, the U.K., Belgium, Italy, and other European Union countries, Swedes can enjoy the spring without panic or fears of reigniting a new epidemic as they go about their day in a largely normal fashion. …Dr. Anders Tegnell, the chief epidemiologist of Sweden, …heroically bucked the conventional wisdom of every other nation and carefully examined the insubstantial evidence that social-isolation controls would help reduce COVID-19 deaths over the full course of the virus. …Tegnell has looked at other nations that are loosening their lockdowns. “To me it looks like a lot of the exit strategies that are being discussed look very much like what Sweden is already doing,” he told Canada’s Globe & Mail. …Jan Albert, a professor in the Department of Microbiology, Tumor, and Cell Biology at Sweden’s Karolinska Institute, told CNN that strict lockdowns “only serve to flatten the curve, and flattening the curve doesn’t mean that cases disappear — they are just moved in time.” …Initially, the main justification for the global lockdowns was that they were necessary to prevent a crush of patients from overwhelming hospital intensive-care units. …Despite no lockdowns and few social-isolation controls other than proper spacing in restaurants and a ban on gatherings of more than 50 people, the Swedish hospital system never experienced anything remotely like the crush of ICU patients in Italy, Spain, and New York City. …Of course, Sweden paid a price during the pandemic. …they will tell you it was worth it. And it is easy to figure out that price. They never cratered their economy… Now many countries and U.S. states are beginning to follow Sweden’s lead.

So who is right, the optimists or the pessimists?

The honest answer is that we don’t know, though it probably depends on how quickly (if ever) someone develops either a vaccine or a cure.

Here’s my back-of-the-envelope comparison of Sweden’s laissez-faire approach and the lock-down approach in the United States.

In the short run, Sweden has more cases and less economic damage.

But what really matters is how things evolve in the long run. If no vaccine or treatment materializes, then other nations will eventually be forced to copy Sweden’s approach. That presumably will mean a similar number of cases over time, so all the additional short-run economic damage will have been pointless.

But if a vaccine or treatment appears relatively soon, then people presumably will conclude that Sweden made the wrong choice (though even that will be a matter for debate depending on the degree to which people understand the long-run relationship between health outcomes and national prosperity).

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Coronavirus and the Future of Public Policy

I spoke last week about the “Economic Consequences of the Crisis” for a webinar organized by the Estonian Business School.

My remarks focused on the severity of the downturn, the likelihood of a new fiscal crisis in Europe, and how to balance the costs and benefits of re-opening the economy.

The full program, which was part of the Digital Free Market Road Show, can be viewed by clicking here.

For today’s column, I want to focus on my final slide, which asks whether politicians will use the crisis to permanently expand the size and scope of government.

I didn’t make any sweeping predictions when discussing this slide, though my tone was somewhat pessimistic. Simply stated, I fear we’ll have a bigger burden of government when the coronavirus crisis abates.

This doesn’t necessarily have to be the outcome. As I wrote two years ago, it’s possible for a crisis to produce either more statism or more liberalization.

Robert Higgs and Don Boudreaux, writing about this topic for Reason, fear that politicians will succeed in using the crisis to move the needle in the wrong direction.

Although everyone seems to agree that these measures are to be employed only in the short run, until the incidence of the disease has been reduced either by herd immunity or by new medical treatments, no one at the start put together an exit strategy from these extraordinary increases in governments’ size, scope, and power. Everything was done on a piecemeal basis from day to day, on the assumption that when an endgame came into view the governments would terminate their crisis actions. This assumption runs counter to how crisis-borne increases in government’s size, scope, and power have played out in the past. …the growth of government that attends national emergencies is not surrendered fully when the crisis ends. Instead, a ratchet effect operates whereby much of the crisis-borne growth of government becomes institutionalized in agencies and practices and, more important, in the dominant ideology of political elites and the general public.

Higgs and Boudreaux use insights from “public choice” to describe the process that produces ever-larger government.

As crisis followed crisis—World War I, the Great Depression, World War II, the multifaceted turmoil of the Johnson-Nixon years, the 9/11 attacks, the Great Recession that began in 2008—the ratchet effect ensured that government’s growth trajectory was displaced upward, time after time. …People sometimes regretted actions taken hastily during a crisis but found that reversing them was diabolically difficult. …The ratchet effect operates because of incentives and constraints built into the political and economic structure. …To disable the ratchet effect, people must rouse themselves to think more seriously about the long-run consequences of actions taken hastily in response to national emergencies—and about whether they want to keep their remaining economic freedoms and civil liberties or be content to surrender them one crisis at a time.

It’s hard to argue with their analysis, but I’ll close with a bit of optimism.

Here’s a chart based on data from Economic Freedom of the World, including research extending estimates back to 1950. It shows that – notwithstanding various crises – there has not been a decline in liberty for the United States since World War II.

This suggests that Higgs and Boudreaux are too gloomy.

I wonder, however, when going as far back as the 1950s-1970s, if the data is good enough to produce reliable estimates of economic liberty.

How can it be true, for instance, that overall economic liberty increased during the 1970s, when we had Nixon’s awful statism?

Though maybe I have tunnel vision because of my focus on fiscal policy. A Spanish scholar who put together long-run data on non-fiscal policy (going all the way back to 1850) found that economic liberty has been increasing.

In any event, let’s hope that economic liberty doesn’t shrink in the future. Assuming, of course, we care about national prosperity and poverty reduction.

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Coronavirus Humor, Part VII

For this seventh edition of coronavirus humor (previous versions here, here, here, here, here, and here), let’s start with a clever video from Reason.

There are many reasons why the Founding Fathers are rolling in their graves.

The coronavirus is merely the most-recent example.

While law-abiding people are worried about crime and societal breakdown, it appears that criminals also have something to worry about.

Meanwhile, the Babylon Bee satirizes vapid celebrities.

No matter how they expressed their emotions, everyone agreed that the scene off the Malibu coast Monday morning was exactly what America needed to get through this pandemic. Celebrities gathered their multi-million-dollar yachts on the waters of the Pacific Ocean and spelled out “WE’RE ALL IN THIS TOGETHER.” “We’re just like you,” said Ellen DeGeneres on her Instagram as her servants sailed her yacht into position to form the apostrophe. …”Stay home, save lives — it’s not that hard,” said Patton Oswalt, whose fleet of yachts made up several of the letters. “Look, poor people, it’s not worth risking your life just to go to Fuddruckers or work a job or whatever it is you peasants do all day.” …”All of humanity is fighting this together and we’re all as one,” said Lady Gaga, who was wearing a bathing suit made out of gold bricks. “Though, I mean, don’t try to get on my yacht. My guards will literally shoot you. That’s not a metaphor.”

Since we’ve seen many examples of thuggery by local governments, this next item obviously belongs in today’s collection.

Here’s some satire for people who don’t like Trump.

And here’s one for pro-Trump readers.

Given knee-jerk libertarianism, it’s easy to understand why this is my favorite item in today’s collection

Politicians using a crisis to expand their power and control? Surely you jest.

Or, maybe not.

Though, unlike in previous crises, at least in this instance they didn’t cause the crisis in the first place (though their policies have hindered an effective response).

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Coronavirus and the States: Spending Restraint, Bailouts, Default, or Bankruptcy?

A Supreme Court Justice pointed out in 1932 that “a state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

Well, we’ve had several experiments in higher taxes and higher spending, and they don’t work.

States with heavier fiscal burdens are accumulating ever-higher levels of debt (especially unfunded liabilities) while also causing an ever-greater exodus of taxpayers to other states.

In the long run, this is a recipe for fiscal crisis since it’s hard to give away lots of money if there aren’t enough taxpayers to finance that profligacy (as illustrated by this set of cartoons).

Well, with the help of the coronavirus, the long run may have arrived.

But the pandemic only exposed a problem that already existed.

Mitch Daniels, the former governor of Indiana, wrote two years ago in the Washington Post that poorly manged states like Connecticut shouldn’t be bailed out by taxpayers in better-run states.

…several of today’s 50 states have descended into unmanageable public indebtedness. …in terms of per capita state debt, Connecticut ranks among the worst in the nation, with unfunded liabilities amounting to $22,700 per citizen. Each profligate state is facing its own budgetary perdition for different reasons, but most share common factors. The explosion of Medicaid spending, even before Obamacare, has devoured state funds… In parallel, public pensions of sometimes grotesque levels guarantee that the fiscal strangulation will soon get much worse. In California, some retired lifeguards are receiving more than $90,000 per year. A retired university president in Oregon received $76,000 per month — and no, that’s not a typo. These are the modern-day welfare queens… More and more desperate tax increases haven’t cured the problem; it’s possible that they are making it worse. When a state pursues boneheaded policies long enough, people and businesses get up and leave, taking tax dollars with them.

In a remarkably prescient passage, Daniels speculates about a future emergency that will lead to pressure for a federal bailout.

Sometime in the next few years, we are likely to go through our own version of the recent euro-zone drama with, let’s say, Connecticut in the role of Greece and maybe a larger, “too big to fail” partner such as Illinois as Italy. Adding up the number of federal legislators from the 15 or 20 fiscally weakest states, one can count something close to half the votes in the House.

Which brings us to the current situation.

The crowd in Washington has already funneled several hundred billion dollars to state and local governments.

But politicians like Governor Cuomo in New York and Governor Pritzker in Illinois view all that money as an appetizer and now they want the fiscal equivalent of an all-you-can-eat buffet.

The editors of the Wall Street Journal are not sympathetic to these fiscal pyromaniacs.

The question to ask is why taxpayers in Appleton and Sarasota should rescue politicians and unions in Albany and Springfield? …states like New York were already in trouble from their own mismanagement. …take Illinois, where Gov. J.B. Pritzker…raised taxes in 2019 and wants to make the state’s current flat tax progressive… Yet he and the unions who own the state house have blocked pension or spending reforms. They’ve long bet on a federal bailout, and they see Covid-19 as their main chance. …President Trump has signaled he’s open to a state bailout because, well, he’s open to anything these days. But Senate Majority Leader Mitch McConnell caused a stir…when he said states should consider bankruptcy rather than get a bailout. …Mr. McConnell’s larger point is that states shouldn’t get more no-strings cash. Private companies that borrow from the Fed and Treasury have to meet stiff conditions, including limits on compensation, and the same should apply to state governments. Bailout conditions should include cuts in nonessential spending, immediate and permanent reductions in public pension benefits.

Kevin Williamson explains in National Review that the problem is a pre-existing penchant for over-spending and vote-buying.

Bailing out the Illinois state pension system is the worst idea from a week in which we were discussing the health benefits of mainlining Lysol. Irresponsible state and local governments are attempting to exploit the fear and disruption of the coronavirus epidemic to push off the consequences of their decades of reckless and culpably dishonest policies onto the federal government. … One of the largest problems facing state and local governments, from Illinois to Oklahoma and from Los Angeles to Dallas, is “unfunded liabilities,” meaning the differences between the promises governments have made to their employees and the money they have set aside to pay for those things. …Government workers are a powerful political constituency — they run California — and they want the same thing everybody else does: more. …If Washington were to dump a few billion dollars into the lap of the feckless cartwheeling goobers who run Illinois, the underlying problem of chronic underfunding of future pension liabilities would remain, and Illinois would be right back where it is today in a year or two. A bailout would not solve the problem — it would keep the problem from being solved.

Adam Michel of the Heritage Foundation explains how bailouts create the wrong incentives.

The prospect of federal tax dollars creates an incentive for state legislatures to both expand existing programs beyond sustainable levels, and to simultaneously underfund those programs in hopes of further federal support. …One example is how states often delay needed infrastructure projects (for which funds are locally available) in hopes of one day receiving federal funds to cover the project costs. …An unrestricted bailout of the states could be highly unequal, forcing taxpayers in well-run states to subsidize those who have systematically underfunded their pensions and rainy day funds, or those states who have particularly volatile revenue systems. …Federal aid tends to expand state budgets and make them less resilient during future crises. Simply moving state funding to the federal government does little more than redistribute local costs to federal taxpayers across all 50 states.

Senator Rick Scott of Florida opines for the Wall Street Journal that taxpayers in his state shouldn’t pick up the tab for New York’s profligate politicians.

…one thing we absolutely shouldn’t do is shield states from the consequences of their own bad budgetary decisions over the past few decades. …Democrats’ true aim: using federal taxpayer dollars to bail out poorly run states—typically, states controlled by Democrats. …Florida is well-positioned to address the coming shortfall in revenue without a bailout. The state may need to make some choices, which is what grown-ups do in tough economic times. And if we need to borrow a small amount in the short term to get us through this economic crisis, that borrowing will be cheaper thanks to our AAA bond rating and the reduction in state debt. New York Gov. Andrew Cuomo said it was “irresponsible” and “reckless” not to bail out states like his, a state with two million fewer people than Florida and a budget almost double the size of ours.

Well stated. Any comparison of Florida and New York shows the benefit of limited government.

Jonathan Williams and Lee Schalk of the American Legislative Exchange Council, opining for the Hill, argue against a bailout.

A growing chorus of governors is calling on Congress to “bail out” state governments. …Their plea comes on the heels of the $2 trillion CARES Act, which included a general $150 billion COVID-19 relief fund, a $30 billion education costs fund, a $45 billion disaster relief fund and more for state and local governments. …History suggests that federal bailouts…incentivize future fiscal irresponsibility and create a moral hazard problem. Bailouts reward fiscally reckless states at the expense of fiscally responsible ones. Academic research from the Mercatus Center at George Mason University shows that federal bailouts could even lead to higher state level taxes. According to their research, every dollar of federal aid to states drives state taxes higher by 33 to 42 cents. …State and local governments do not lack revenue. They lack spending restraint. Over the past 40 years, after fully accounting for increases in population and inflation, state and local direct general spending has grown by 88 percent.

The last sentence in the excerpt is key. State politicians have been violating fiscal policy’s Golden Rule by letting spending grow too fast.

What’s needed is TABOR-style spending restraint, as Williams pointed out in a 2015 speech.

So if a bailout is the wrong solution, what’s the right solution? There are three potential options.

Ramesh Ponnuru writes that states should have a process for declaring bankruptcy.

Some states have made exorbitant promises to their employees over the years without providing adequate funding. They made up the difference, on paper, by projecting unrealistically high returns on pension investments. The Federal Reserve, applying a better projection of returns, estimates that pensions are underfunded by $4 trillion. McConnell is right to think that it would be unfair to make Florida’s teachers and firefighters pay for benefits for their counterparts in Illinois, and unwise to create an incentive for further irresponsibility by state officials. …Federal law currently makes no provision for states to re-organize their commitments through bankruptcy proceedings. Creating one would not keep the coronavirus from crushing state budgets. It could, however, prevent, or at least limit, future federal bailouts for state mismanagement of pensions.

His colleague at National Review, Kevin Williamson, has a different perspective. His article argues that default is better than a Washington-dictated process for bankruptcy.

The several states are not administrative subdivisions of the federal government. They are powers in their own right, superseded by the U.S. government only in certain matters that involve more than one state: Washington can declare war or write immigration law, but it cannot tell Austin how to run the Texas Rangers or Sacramento how to prioritize its finances. Because bankruptcy law is federal law, putting states into bankruptcy reorganization would upend our basic constitutional arrangement, making state governments answerable to federal bankruptcy judges and, behind them, to Congress. …Sovereigns don’t go bankrupt. Sovereigns default. And that is what is likely to happen with the pension crisis, at least as far as states’ creditors are concerned. It is what should happen. …we should not use the coronavirus as an excuse to federalize the consequences of culpably irresponsible and fundamentally dishonest governance at the state and local level. …If we want debt markets to work, then investors have to pay the price for bad investments. (Lending money to an organization run by Bill de Blasio is a bad decision.) Making creditors take a painful haircut creates incentives to discourage such willy-nilly lending and profligate spending in the future. …Government debt should in this respect be treated like any other debt — and we should change the law to strip municipal bonds of their tax-free status, which creates a subsidy for debt.

And Andrew Biggs of the American Enterprise Institute argues in the Wall Street Journal that – if a bailout is offered – it should be accompanied by strict conditions.

Congress may want to offer assistance, but it should come with strict conditions: Any state looking for a pension handout must either live by the stricter accounting rules federal law imposes on private pension plans or freeze its pension and shift all employees to defined-contribution retirement plans. Private-sector plans must assume more-conservative investment returns than public-sector plans and address unfunded liabilities more rapidly. As a result, private pensions today have set aside more than twice as much funding per dollar of promised future benefits than have state and local pensions. …Freezing a pension doesn’t make its unfunded liabilities go away. But it caps existing liabilities while shifting employees to plans in which the government’s funding obligation is clearly defined and can’t be evaded using actuarial or accounting tricks.

Of these options, a conditional bailout is not a good idea, even though it is the best way of doing the wrong thing.

Either bankruptcy or default would be a much better choice, and I lean in the direction of default (the same view I have when contemplating Europe’s failing welfare states).

But the right option is to avoid getting in trouble in the first place.

And that means low taxes, spending restraint, and other market-friendly policies.

I’ll simply note that the states most anxious for bailouts are near the bottom in rankings of small government and economic liberty.

If Washington provides a bailout, that’s a reward for statism and irresponsibility (sort of like foreign aid subsidizing bad policy overseas).

P.S. One month ago, I wrote that the worst coronavirus-related proposal would be restoring the federal tax deduction for state and local tax payments.

I still think that is a terrible idea, of course, but a big bailout from Washington would be even worse.

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Government Size, Government Effectiveness, and Coronavirus

A couple of weeks ago, I debunked a remarkably anti-empirical column by Dana Milbank of the Washington Post.

He claimed that America’s response to the coronavirus was hampered because government is too small, yet the nations he cited as successful role models actually have much smaller public sectors than the United States.

I congratulated him for accidentally making a strong case for libertarianism and providing evidence for my Seventh Theorem of Government.

Unfortunately, other journalists share Mr. Milbank’s ignorance with regards to easily accessible data on fiscal policy.

Writing for the Atlantic, George Packer asserts that the U.S. response to the coronavirus has been a miserable failure because government is too small.

Every morning in the endless month of March, Americans woke up to find themselves citizens of a failed state. …a federal government crippled by years of right-wing ideological assault, politicization by both parties, and steady defunding. …tests for the virus were almost impossible to find… years of attacking government, squeezing it dry and draining its morale, inflict a heavy cost that the public has to pay in lives. All the programs defunded, stockpiles depleted, and plans scrapped meant that we had become a second-rate nation.

Michael Brendan Dougherty of National Review takes apart Packer’s column.

He points out that CDC funding has increased, while also noting that the bureaucracy has squandered the additional money it has received.

…the CDC’s funding has increased — not that it has made good use of the extra money. This is not a lean and mean virus-fighting machine, getting by on starvation-level resources. It maintains a Hollywood liaison to consult on films. In recent years, it has expanded beyond its core mission to promote motorcycle safety and sponsor programs dedicated to fostering “safe, stable, nurturing relationships” in schools. If you’re wondering why there was lots of political and social messaging larding up CDC documents on COVID-19, just realize that when Congress increases an agency’s funding, the result is likely to be more ideological make-work jobs rather than a more effective workforce. …as for public-sector health-care spending, ours is not notably low — it’s roughly equivalent to those of the developed nations of Western Europe.

And he also observes that nations with smaller governments have done a better job than countries with bigger governments.

…The East Asian states that have done best in fighting COVID-19 are not social-democratic but hyper-capitalist. Compared with them — and to America —Western Europe has done much worse at containing the spread of the coronavirus and the holding down the death toll.

Excellent points.

For my contribution to this debate, I’m going to investigate whether Mr. Packer is right about “steady defunding” of the federal government.

To see whether he is correct about “programs defunded,” I went to Table 1.3 of the Historical Tables of the Budget and created the following chart to see what happened to inflation-adjusted spending over the past 40 years.

Lo and behold, it turns out that Mr. Packer is completely wrong. There hasn’t been any defunding. Not even close.

Instead, the inflation-adjusted burden of government is almost three times greater today than it was the year Reagan was elected (and it will be more than three times greater once all the emergency spending is included).

The bottom line is that I can’t figure out whether to be more dismayed that journalists are innumerate or that major publications apparently don’t have fact checkers.

P.S. There were periods when spending grew faster than at other times. There were also times when the private sector grew faster than the government (fulfilling the Golden Rule). And we also can see the how government exploded because of TARP and Obama’s faux stimulus and then was briefly constrained during the Tea Party era (and is now climbing rapidly under Trump).

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The Sixth Edition of Coronavirus Humor

Having written about serious and depressing coronavirus-related issues during the week, it’s time for some politically-themed coronavirus humor.

Regular readers know that I’m a long-time proponent of this message for healthy thinking.

Moreover, I think it’s safe to say that coronavirus won’t come close to killing as many people as the various strains of socialism.

Here’s some humor based on Dr. Trump’s latest medical advice.

The coronavirus is bad for the nation, but it’s given the crowd in Washington a reason to engage in their favorite activity.

Which leads America’s best satire site, Babylon Bee, to report on a crime wave.

A nefarious gang of masked bandits has voted to steal another $500 billion from your grandchildren, investigators confirmed Thursday. The mysterious masked culprits…have not been apprehended yet and so are continuing to plot more heists. …”It’s the perfect crime,” said the gang’s ringleader, cackling, as she approved the plan to rob your grandchildren of their future. “We print the money, we borrow the money, then we’re gone before the bill comes due. The plan is flawless!”

Well, not quite flawless.

Here’s the latest version of a very recognizable meme.

Fortunately, I’ve never seen bats on the menu as part of my travels to China.

Here’s another jab at Trump’s medical advice.

Here are some excerpts from another report published by Babylon Bee, this one dealing with the petty tyrants in flyover country.

On Meet the Press Sunday, Michigan Governor Gretchen Whitmer reminded everyone that “revolutions and revolts are simply un-American.” Whitmer called on the protesters in her state to stop their illegal assembling, reminding them that protesting so-called tyranny is a foreign idea to the history of the United States. …”It flies in the face of every American tradition. Revolting against tyranny has no place in this great country.” Governor Whitmer then rattled off a long list of things that she also believes to be un-American: …Declaring independence from tyrants… Having a list of protected rights… Separation of powers… Freedom of religion, assembly, the press, protests, and speech… Federalism… “If you’re really Americans, you’ll stop with this dangerous revolutionary activity,” she concluded.

Here’s a clever image that applicable if you recognize there are tradeoffs.

Since I’ve written about the economic tradeoffs, I obviously want people to die.

Here’s a report from the Babylon Bee on a big increase in severe cases.

America suffered its highest one-day increase in cases of Trump Derangement Syndrome yesterday, adding 317,259 new cases. This brought the number of U.S. cases to roughly 59 million, while worldwide cases of the deadly disease increased to 110 million. The peak in cases was brought on by President Trump’s growing urgency to reopen the economy and allow people to go back to work. Scholars have noted that this is equivalent to slavery. …“Our models have been quite accurate from day one,” claimed Ron Whitley of the University of Washington.  “And we don’t see a peak here. Our data suggests a slow increase in cases through the summer, and then a big peak in cases about November 4 or so.”

Next, we have an actual photograph of a restaurant window across for the Treasury Department, but, if we believe in truth in advertising, the reflected sign may as well be a banner hanging from all government buildings.

The moral of the story, needless to say, is that big government enables big corruption.

Here’s another amusing story from Babylon Bee.

Congress has asked all non-essential businesses to limit their hours or close entirely for an undetermined amount of time. But this shutdown mistakenly shut down the most non-essential entity of all: the government. …”Oops,” said Senator Mitch McConnell. “We meant non-essential private businesses. Of course, the government is always essential, even when it’s not doing anything or is making things worse.” Senators, congresspeople, and bureaucrats frantically rewrote the ban to include only businesses that actually produced something and not government agencies that just watched other people make stuff. …they passed this revision in record speed, almost as quickly as they vote for pay raises for themselves. Speaker of the House Nancy Pelosi said she would have caught the mistake but had passed the ban in a hurry, saying, “We had to pass the ban to see what it did.”

Reminds me of some of the jokes from when we have a government shutdown.

I’ve saved my favorite image for last.

Here are the previous editions of coronavirus humor.

• 1st edition
• 2nd edition
• 3rd edition
• 4th edition
• 5th edition

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Coronavirus and Subsidized Unemployment

Remember the “jobless recovery” of the Obama years?

Part of the problem was that President Obama kept extending unemployment benefits, which subsidized joblessness, as even Paul Krugman and Larry Summers had warned.

The good news was that Congress eventually said no in 2014 (actually one of the three best things to happen that year).

After that happened, the labor market improved.

But politicians apparently didn’t learn anything. As part of emergency coronavirus legislation, they turbo-charged unemployment benefits.

The Wall Street Journal‘s editorial from yesterday has a good summary.

Much of the harm from the coronavirus is unavoidable, but it would be nice if politicians didn’t compound the damage by ignoring the laws of economics. The worst blunder so far on that score is the $600 increase in federal jobless benefits… Why would anyone take a pay cut to go back to work? …Employees say they’ll take the unemployment check for as long as they can make more money by not working. …This does not mean these workers are lazy. Workers are making rational decisions based on the economic incentives the political class has created. …The question now is whether the Trump Administration will learn from its negotiating mistake. Democrats will try to extend the $600 for another few months, and then a few more after that, as they describe anyone who disagrees as heartless.

Tim Kane, in a piece for the Hill, explains why this doesn’t make sense.

The UI system is a case study in perverse incentives in the best of times, but the four-month “fix” in the Coronavirus Aid, Relief, and Economic Security Act (CARES) makes it far worse. …Existing UI provides a government payment to each worker who is involuntarily laid off, in essence paying people not to work. The amount varies slightly according to state-based formulas. But UI checks are generally set to replace 50 percent of the individual’s wages until they find a new job. …Pandemic UI jacks up the replacement rate with a supplemental $600 per unemployed worker for the next four months. That’s roughly an extra $2,400 each month that will go to you only if you are unemployed. …Now that the CARES Act is the law of the land, any American with an annual salary of $62,000 has no financial incentive to work, certainly not until August. …the federal government is going to pay non-working Americans way more than working Americans.

In a column for Bloomberg, Conor Sen explores the implications.

It’s also important to be mindful of how, once the economy is growing again, a $600 weekly benefit can distort the labor market. That works out to the equivalent of $15 an hour for a 40-hour work week, a level that substantially exceeds the minimum wage in most states. When restaurants are open for business again, they are likely to complain if they can’t hire dishwashers who understand that it’s not worth giving up unemployment benefits. One step to winding down the program might be reducing the benefit over time in response to labor-market conditions and monitoring the impact that’s having on workers accepting jobs.

Sam Hammond, writing for National Review, opines on the potential human cost.

…the new Pandemic Unemployment Assistance program…will…add an extra $600 per week to the base benefit (equal to half the state’s regular unemployment benefit) for up to four months. …This $600 per week add-on — equivalent to a $15-per-hour full-time income — means that many workers will soon be eligible to receive more in unemployment compensation than they would make on the job. …It should go without saying that no government in history has ever designed an unemployment-insurance program quite like this — one that virtually anyone can qualify for, and with benefits on par with the median weekly earnings of full-time workers. …a worst-case scenario is easy to imagine…once quarantines begin to lift, a fraction of Pandemic UI recipients will choose to stay on “extended benefits”… Temporary unemployment will become structural, and a jobless recovery will drag out for decades.

Veronique de Rugy of the Mercatus Center cites some of the academic literature.

The unintended consequences and moral hazard of UI during normal times and normal recessions are well known. Put briefly, generous UI benefits create an incentive for workers to delay looking for jobs until the expiration of the benefit. In 2010, Harvard University economist Robert Barro estimated that the Great Recession expansions in UI benefits raised the US unemployment rate by about 2.7 percentage points. …In addition, economists Lawrence F. Katz and Bruce D. Meyer observe that workers receiving unemployment benefits were likely to postpone their job searches until their benefits expired. This finding was confirmed by many other studies, including one by economist Alan Krueger,  who wrote in 2008 that “job search increases sharply in the weeks prior to benefit exhaustion.”

And she points out that there is a better approach.

…an old policy proposal that should receive new attention—a proposal that by design encourages people to go back to work as quickly as they can… Personal unemployment insurance savings accounts (PISAs) are designed to maintain a financial incentive to return to work as soon as possible. These accounts are individually owned by workers who, during spells of unemployment, can make orderly withdrawals to partially compensate for the loss to their income but can keep and build the balance during their regular times of employment. …This form of UI is not a mere theoretical proposition. The experience of Chile is worth noting, but other countries such as Austria and Colombia have adopted similar plans.

Making a related point, Congressman Justin Amash points out that it would be less harmful to simply give people money rather than giving them money on the condition that they don’t work.

The law also provides robust unemployment benefits, but this money would have been better spent on monthly payments to all Americans regardless of employment status. As structured, it perversely makes employment a financial liability for many. We shouldn’t discourage employment.

— Justin Amash (@justinamash) April 2, 2020

By the way, a study from the Bank for International Settlements, published well before coronavirus became an issue, notes other negative effects of unemployment benefits.

Many countries provide unemployment insurance (UI) to reduce individuals’ income risk and to moderate fluctuations in the economy. However, to the extent that these policies are successful, they would be expected to reduce precautionary savings and hence bank deposits–households’ main saving instrument. In this paper, we study this reduced incentive to save and uncover a novel distortionary mechanism through which UI policies affect the economy. In particular, we show that, when UI benefits become more generous, bank deposits fall. Since deposits are the main stable funding source for banks, this fall in deposits squeezes bank commercial lending, which in turn reduces corporate investment.

Just another chapter in the government’s book on how to discourage savings.

Let’s close with some real world illustrations of how Washington’s approach is backfiring.

A story from National Public Radio shows how workers respond logically to perverse incentives.

…the extra money can create some awkward situations. Some businesses that want to keep their doors open say it’s hard to do so when employees can make more money by staying home. “We basically have this situation where it would be a logical choice for a lot of people to be unemployed,” said Sky Marietta, who opened a coffee shop along with her husband, Geoff, last year in Harlan, Ky. …The shop had been up and running for only a few months when the coronavirus hit. …Marietta was determined to stay open. …But even though she had customers, Marietta reluctantly decided to close the coffee shop just over a week ago. “The very people we hired have now asked us to be laid off,” Marietta wrote… “Not because they did not like their jobs or because they did not want to work, but because it would cost them literally hundreds of dollars per week to be employed.” …the $10 to $15 an hour they’d make serving coffee is no match for the new jobless benefits.

Maxim Lott also wrote about another tragic example.

An additional $600 per week in unemployment benefits…causing concern that some workers could be in a position to actually make more money by leaving their jobs. . …That angers some essential workers on the front lines on the crisis. “I can tell you as a worker who barely makes over minimum wage, at $12 an hour, the whole thing is complete BS,” Otis Mitchell Jr., who works in West Virginia transporting hospital patients to get medical tests, told Fox News. Mitchell Jr. added that he has unemployed friends who already are getting the extra $600, and that “I prefer to work, but sadly I’d make more staying home.” …generous payments are…scheduled to last for four months, ending July 31.

A report from CNBC also found perverse consequences.

Jamie Black-Lewis felt like she won the lottery after getting two forgivable loans through the Paycheck Protection Program. …When Black-Lewis convened a virtual employee meeting to explain her good fortune, she expected jubilation and relief that paychecks would resume in full even though the staff — primarily hourly employees — couldn’t work. She got a different reaction. “It was a firestorm of hatred about the situation,” Black-Lewis said. …The anger came from employees who’d determined they’d make more money by collecting unemployment benefits than their normal paychecks. …“I couldn’t believe it,” she added. “On what planet am I competing with unemployment?”

If you want to see why people are choosing unemployment, here’s a chart from the CNBC story. Using examples from three states, it shows the normal generosity of unemployment benefits on the left and the new approach on the right.

Needless to say, it’s economic malpractice to make unemployment more attractive than jobs paying $20-$30 per hour.

It’s the real-world version of this satirical Wizard-of-Id cartoon.

P.S. Speaking of satire, Nancy Pelosi actually argued that paying people not to work was a form of stimulus.

P.P.S. Here are a couple of anecdotes, one from Ohio and one from Michigan, about the perverse impact of excessive unemployment benefits during the last downturn.

P.P.P.S. If you want more academic literature on the relationship between government benefits and joblessness, click here and here.

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Coronavirus Humor

Time for the 5th edition of coronavirus humor (previous versions here, here, here, and here).

Our first item is one that may me laugh out loud, perhaps because it also reminded me on another cameo appearance by Bill Clinton.

Next, we have Bernie Sanders celebrating America’s coronavirus-inspired experiment with socialism.

My friends on the left keep insisting that there’s a difference between socialism and democratic socialism. I guess that applies to coronavirus as well.

This cartoon is worth sharing. For what it’s worth, I actually prefer it when politicians hate each other rather than when they engage in “bipartisanship.”

Since most people actually over-pay during the year (thus giving the IRS an interest-free loan) because of withholding and get an annual refund, this next image isn’t actually accurate. But it’s still amusing.

Here’s a clever cartoon strip about Trump continuing his pattern of spending other people’s money.

I wrote a few days ago about some of the senseless enforcement actions of state and local governments. This Ron White meme would have been an ideal addition to that column.

Regarding the Constitution, I’ve mostly focused on how it is supposed to protect out economic liberty. But here’s a clever reminder it applies to other freedoms as well (even if it would be smart to minimize the exercise of some of those freedoms).

Here’s a meme that almost everyone will recognize, though it’s been modified to show how Nancy Pelosi is being mocked for caring more about her ultra-expensive ice cream than about small businesses.

Since almost everyone in Washington is an out-of-touch elitist, there are plenty of opportunities to mock Republicans as well.

Ladies and gentlemen, your Treasury Secretary: Steve Mnuchin. pic.twitter.com/LSO5wNJOG0

— Paul Lidicul (@PaulLidicul) April 16, 2020

 

No collection of humor is complete without at least one item from Babylon Bee.

In a candid speech Tuesday, President Xi Jinping stated he was “pretty impressed” by Michigan Governor Gretchen Whitmer’s handling of the coronavirus outbreak, specifically praising her totalitarian policies. …”She has some pretty great ideas — stopping people from gathering together even with their families, ordering people not to buy seeds — they can’t even plant their own food now! We hadn’t even thought of some of these innovative approaches,” the Communist president said. “We’re always looking for more ways to oppress people, and we were really inspired by Whitmer’s approach.” …Other dictators across the world also chimed in with words of support and affirmation for Whitmer’s policies, from North Korean ruler Kim Jong Un to Supreme Leader of Iran Ali Khamenei.

Politicians love to get people snitching on each other (see Andrew Cuomo, Richard Daley, and David Cameron), so this bit of satire is both amusing and accurate.

I think this next image might be an actual depiction of Dana Milbank.

Needless to say, this next image is a joke. But a funny one.

Vladimir Putin is infamous for his bare-chested horse riding, so I guess we shouldn’t be surprised somebody extended that to the coronavirus.

Since politicians are releasing criminals and announcing that they’re cutting back on law enforcement, there’s a serious point to this next bit of satire.

I’ve saved the best for last. This made me laugh, both because Trump probably would do this if he could get away with it, and because some people hate Trump so much that they would tick the box that gives them nothing.

I haven’t thought of anyone in the White House as “my president” since Ronald Reagan.

That being said, I’ll still cash my check. I’ll rationalize that choice by viewing it as return of stolen funds.

P.S. If you want some Trump-specific humor, I recommend this collection of maps and this collection of videos.

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Coronavirus and Federalism

I’ve written that policy makers need to consider both the human toll of the coronavirus and the human toll of a depressed economy.

I also discussed this tradeoff with Brian Nichols, beginning about seven minutes into this podcast.

And, as you can see from this tweet, even the United Nations has acknowledged that a weak economy leads to needless death.

Hopefully this story will convince more people that economic shutdown impose a serious human toll. https://t.co/45GVuLEUOy https://t.co/hRmKEkDzCq

— Dan Mitchell (@danieljmitchell) April 17, 2020

Since I don’t have any expertise on epidemiology, I’m not arguing that the economy should be opened immediately. I’m simply stating that the people who do make such decisions should be guided by the unavoidable tradeoff that exists between lives lost from disease and lives lost from foregone prosperity.

Which then raises the question of who should make such decisions.

As reported by the New York Post, President Trump claims he has all the authority.

President Trump on Monday said the decision to reopen the country’s ailing economy ultimately rests with him, not state leaders, as he feuds with governors over when to allow Americans to return to work. …Trump is now looking at reopening the economy by May 1, putting him on a collision course with state leaders who are pushing back, saying it would be dangerous to “take our foot off of the accelerator” in the war against the virus. …Rebuffing the president’s claims Monday, constitutional experts say it is state leaders who have the power to police their citizens under the 10th Amendment.

Trump is wrong.

He’s wrong in part because the Constitution limits the powers of the central government.

But he’s also wrong because – as explained by scholars from the Austrian School of Economics – we’re far more likely to get better choices when they’re decentralized.

In some cases, that means allowing individuals to make informed choices about how much risk to take.

But, to the extent government must be involved, it makes more sense to have state and local officials make choices rather than the crowd in Washington.

Opining for the Wall Street Journal, Walter Olson explains why federalism is the right approach.

Public-health merits aside, the president can’t legally order the nation back to work. The lockdown and closure orders were issued by state governments, and the president doesn’t have the power to order them to reverse their policies. In America’s constitutional design, …the national government is confined to enumerated powers. It has no general authority to dictate to state governments. Many of the powers government holds, in particular the “police power” invoked to counter epidemics, are exercised by state governments and the cities to which states delegate power. …Modernizers have long scoffed at America’s federalist structure as inefficient and outdated, especially in handling emergencies. …Today you won’t find these critics scoffing at the states or overglamorizing Washington. One federal institution after another, including the Food and Drug Administration and Centers for Disease Control and Prevention, has been caught flat-footed by Covid-19. …State governments, by contrast, with some exceptions here and there, have responded to the emergency more skillfully and in a way that has won more public confidence. …The record of federal systems—some of the best known are in Canada, Germany and Switzerland—suggests there’s a lot of resilience packed into the model.

Michael Brendan Dougherty elaborates in an article for National Review.

Writer Molly Jong-Fast complains, “So the states are basically governing themselves because our president doesn’t know how to president at all?” Well, no. It’s simple: Our president doesn’t have dictatorial powers, even in a national emergency. The president doesn’t have authority to shut down your local gin joint. Your state governor does have this power, in extraordinary circumstances. That so many governors have done so, often responding to popular demand for shutdowns, demonstrates America’s genuine practice of federalism — a system that is allowing us to respond to this crisis even faster than the states of Europe… One of the reasons federalism can act faster is that it allows decentralization. It is less politically risky to impose measures in one state than on an entire nation. You can respond where the hotspots are, rather than imposing costs evenly across an undifferentiated mass of the nation where the overall average risk may be low.

Professor Ilya Somin wrote on this same topic for Reason. He noted limitations on federalism in a pandemic, but also pointed out the benefits of decentralization.

The US is a large and diverse nation, and it is unlikely that a single “one-size-fits-all” set of social distancing rules can work equally well everywhere. In addition, state-by-state experimentation with different approaches can increase our still dangerously limited knowledge of which policies are the most effective. Moreover, if one policymaker screws up, his or her errors are less likely to have a catastrophic effect on the whole nation. …There is, in fact, a long history of state and local governments taking the lead in battling the spread of contagious disease. During the 1918-19 flu pandemic, state and local restrictions were the primary means of inhibiting the spread of the virus, while the federal government did very little.

John Daniel Davidson of the Federalist echoes the benefits of having choices made at the state and local level.

The founders wisely chose a federal republic for our form of government, which means sovereignty is divided between states and the federal government. The powers of the federal government are limited and enumerated, while all powers not granted to the feds are reserved for the states, including emergency police powers of the kind we’re seeing states and localities use now. …Much of the media seems wholly unaware of this basic feature of our system of government. …Trump explained that many governors might have a more direct line on this equipment and if so they should go ahead and acquire it themselves, no need to wait on Washington, D.C. This is of course exactly the way federalism is supposed to work. …We should expect the government power that’s closest to affected communities to be the most active, while Washington, D.C., concern itself with larger problems.

And those “larger problems” are the ones enumerated in Article 1, Section 8.

The bottom line is that we should always remember the Third Theorem of Government, which helps to explain one of the reasons why it’s generally a bad idea to give the folks in Washington more power and authority.

Instead, we should try to be more like Switzerland, which is one of the world’s best-governed nations in large part because of a very decentralized approach.

Which may be why economists at the (normally statist) International Monetary Fund found a clear link between federalism and quality governance.

Let’s hope Donald Trump realizes that federalism is the right approach.

P.S. My favorite example of federalism came from Vermont.

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