An opportunity to subscribe
Do we all receive far too many emails?
Probably yes, and it is with some great skill that we ‘select or destroy’.
One email that I treasure, daily, is the Café Hayek email from George Mason University’s Don Boudreaux and Russ Roberts.
Each issue covers gems of wisdom to explain how economics is a way of penetrating the fog of media reporting.
A recent edition is included below, for your interest.
If you would like to subscribe (free subscription) visit Cafe Hayek’s website.
Great value to be sure, so happy hunting.
Subject: The Latest from Cafe Hayek
- Some Covid Links
- Quotation of the Day…
- No, the Burden of Deficit Financing Is Not Confined to the Present
- Some Non-Covid Links
- The Market for Scary Covid Fiction Must be Huge
Posted: 18 Jun 2021 03:44 AM PDT
GMU Econ alum Dan Mitchell supplies further evidence of the recklessness and irresponsibility of politicians – recklessness and irresponsibility that, clearly, are not necessarily tempered during times of crises.
When government explicitly admits that, “The probability of a severely bad outcome is low, but caution makes sense until we know more,” the natural response is to try to swiftly ascertain the truth. Mostly notable, if the world’s governments had responded to COVID with an earnest admission of ignorance, the impetus to apply the time-tested experimental method would have been far stronger. Voluntary Paid Human Experimentationwouldn’t merely have given us vaccines sooner; it would have allowed us to calmly cease a vast array of ineffective COVID precautions a year ago.
I’d like to assert that, “History will not be kind to the enemies of Human Challenge Trials,” but that’s wishful thinking. History is written by the victors, and the victors of COVID are unapologetic innumerates. Though we deserve a massive apology, we’ll be lucky to walk away with the freedoms we took for granted back in 2019.
The past three months have “cancelled out” more than 70% of the age-adjusted excess mortality observed in January and February. If June’s age-standardised mortality rate comes in as low as May’s, the overall level of mortality in the first five months of 2021 will be below the five-year average.
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.) But… but… perhaps in this development there is a silver lining!
Fraser Myers calls for Covid ‘models’ to be junked – for such should always be the fate of junk, which is what these ‘models’ were from the start…. Speaking of which, the atrocious Neil Ferguson simply will not quit his quest to cage humanity. (Why does anyone pay – indeed, why has anyone ever paid – attention to this quack-scientist Ferguson?)
For younger adults and children, it is a different story, as their mortality risk is extremely low. Even a slight risk of a serious vaccine adverse reaction could tip the benefit-risk calculation, making the vaccine more harmful than beneficial. We have already observed rare problems with blood clots (J&J vaccine) and myocarditis(inflammation of the heart muscle, Pfizer and Moderna) in younger people, and additional equally serious issues might still be found.
Under such uncertainty, vaccine mandates are unethical. University presidents or business leaders should not mandate a medical intervention that could have dire consequences for the health of even a few of the people in their charge.
Second, recovered COVID patients have strong long–lasting protection against severe disease if reinfected, and evidence about protective immunity after natural infection is at least as good as from the vaccines. Hence, it makes no sense to require vaccines for recovered patients. For them, it simply adds a risk, however small, without any benefit.
Universities used to be bastions of enlightenment. Now many of them ignore basic benefit-risk analyses, a staple of the toolbox of scientists; they deny immunity from natural infection; they abandon the global international perspective for narrow nationalism; and they replace trust with coercion and authoritarianism. Mandating the COVID-19 vaccine thus threatens not only public health but also the future of science.
Here’s spot-on humor from Babylon Bee. (HT Tim Townsend)
Posted: 18 Jun 2021 01:15 AM PDT
… is from page 202 of Lord Acton’s late-1890s lecture “The Influence of America,” as this lecture appears in Essays in the History of Liberty: Selected Essays of Lord Acton, Vol. 1 (J. Rufus Fears, ed., 1985; on-line access to this essay is available free of charge here):
Who are a free people? Not those over whom government is reasonably and equitably exercised; but those who live under a government so constitutionally checked and controlled that proper provision is made against its being otherwise exercised.
Posted: 17 Jun 2021 09:29 AM PDT
Here’s a letter to John Tamny:
Much of what you write in your essay “Misunderstood Deficits” is correct. But your continued insistence that the burden of government indebtedness is incurred in the current period rather than passed on to future taxpayers is incorrect. It’s simply bad economics to assert, as you do, that “Government spending is always, always, always a tax that is paid right away.”
While all resources loaned to government are indeed used by government right away, this fact emphatically does not mean that these resource uses are paid for right away.
The reason should be obvious. Creditors lend money to government today in exchange for increased purchasing power tomorrow. If these borrowed funds are used to build, say, a highway, the creditors – quite correctly – don’t think of themselves as paying for the highway. The creditors turn over resources to government to get access to more resources in the future, not to pay for access to a highway. Nor would anyone else, if asked to identify who pays for the highway, point to the creditors.
Further, precisely because the highway is funded with debt, this highway isn’t paid for by today’s taxpayers. Yet someone must pay for the highway. That someone is tomorrow’s citizens-taxpayers – the citizens-taxpayers tomorrow who, to enable the government to service the debt, must either receive less than otherwise in government programs or pay more than otherwise in taxes.
If we rule out default, the above truth is inescapable. It holds regardless of whether tomorrow’s taxpayers are richer or poorer than are today’s taxpayers; regardless of whether the borrowed funds are used productively or unproductively; regardless of whether tomorrow’s taxpayers are pleased or angry at having to service the debt; regardless of whether the government’s fiscal position remains sound or becomes shaky; regardless of whether monetary policy is conducted prudently or recklessly – indeed, regardless of the truth or falsity of any claims you make in your essay.
On this matter I recommend strongly that you study the late Nobel-laureate economist’s Jim Buchanan’s 1958 book, Public Principles of Public Debt. Short of that, I’m sufficiently vain to suggest that this chapter – “On the Burden of Government Debt” – from my and Randy Holcombe’s new book, The Essential James Buchanan, supplies a clear and reasonably complete explanation of why the burden of deficit financing is indeed shifted to future taxpayers and how, as a result of such financing, the government spending that I join you fully in decrying is made larger and even more wasteful than it would be otherwise.
Posted: 17 Jun 2021 08:27 AM PDT
Perhaps the most widespread industrial policy obstacle is the “knowledge problem.” In “The Use of Knowledge in Society,” economist F.A. Hayek explained that the information needed to secure the best use of scarce national resources “never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.” Because this information is unique and ever-changing, central planners cannot discern it via aggregate, retrospective statistics: “The continuous flow of goods and services is maintained by constant deliberate adjustments, by new dispositions made every day in the light of circumstances not known the day before, by B stepping in at once when A fails to deliver.”
The stolen IRS data provide the story with voyeur appeal, but it turns out to be a bait-and-switch. ProPublica substitutes a magazine’s estimate of wealth appreciation, which never appears on the stolen tax returns, to falsify income. Using this deception the site calculates its “true tax rate.” ProPublica laments that taxpayers are acting “perfectly legally” in not paying a federal wealth tax, which doesn’t exist.
That wealth is taxed only when converted into income or on death may be an outrage to those in government who want to spend that wealth, but it is a purposeful, enlightened policy that lets wealth work as the nation’s seed corn, making America the richest nation in the history of the world. That wealth in turn makes it possible for the government today to provide $45,000 a year in transfer payments to the average household in the bottom 20% of American earners.
Let’s say you collect baseball cards. On paper, your collection is worth a bundle. But its real value is realized only when you sell it. Do you think the IRS should tax you every year for what your collection could be worth if you sold it? Do you want the IRS to tax you for the value of your wedding ring—not at purchase, but forever—even if you’re never going to sell it?
The same principle applies to other unrealized gains. If your stock portfolio increases in value, you get taxed on your gains when you sell.
ProPublica ignores all this. “We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period,” they explain. “We’re going to call this their true tax rate.”
Except it’s not a true tax rate.
First, this suggests that the only taxes they’ve paid are income taxes, when in reality they’ve paid a slew of other taxes: capital gains, property, sales, etc. Second, wealth is not income.
Normally, economists (and politicians) argue that competition is beneficial because it disciplines companies to provide good products to people at low prices. The exception is government, where they argue that competition is bad. They seem to like it when Wal-Mart offers customers everyday low prices, but when Ireland does the same for its taxpayers, it’s called a race to the bottom.
If low Irish corporate tax rates were harmful, shouldn’t the citizens of Ireland be the ones complaining? They seem to be happy with the results of the intergovernmental competition. Those who are complaining aren’t the Irish, they are Ireland’s competitors. Those competitors are conspiring to prevent other countries from offering taxpayers a better deal.
President Biden and Secretary Yellen are advocating the extension of a cartel of governments to limit intergovernmental competition. Private companies that conspire to limit competition are guilty of antitrust violations and governments take action against them. Meanwhile, governments are doing that exact same thing and claiming it is in the public interest.
So, there is a distinctively 2021 cultural contradiction of K-12 education: Pupils who are assumed to be unfolding flowers of spontaneous individuality are nevertheless treated as empty vessels into which government-approved political doctrines should be poured. In 2022, multitudes of parents are properly going to take their anger about all this to polling places.
Posted: 17 Jun 2021 07:01 AM PDT
Here’s a letter to the Washington Post:
Leana Wen continues to stoke excessive fear of Covid by making false claims (“Coronavirus vaccinations for young children should be an urgent priority,” June 16). An example is her assertion that “Covid-19 is now one of the leading causes of death among children.”
Is it? By her own admission a few weeks ago, the number of children in the U.S. so far who have died from Covid is “just more than 300.” Yet a quick check of data compiled by the CDC on the ten leading causes of death, in 2019, in America of people under the age of 15 reveals that the number of children whose lives were taken by these causes was 20,660. Of this figure, the number of children killed since 2019 by Covid is a mere 1.6 percent.
Drilling down into these CDC data shows that in 2019 the number of children killed by unintentional injuries alone was, at 3,907, more than ten times greater than is the number of children killed over the past 16 months by Covid. Malignant neoplasms – cancerous tumors – took the lives of another 1,060 children. An additional 630 childhood deaths were homicides, and 534 were suicides.
Slice, dice, and stir the data however you like, they simply cannot reasonably be rendered consistent with the assertion that Covid is “now one of the leading causes of death among children.” But Dr. Wen’s persistence in peddling this myth of Covid’s danger to children does render her guilty of journalistic malpractice.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
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