The Latest from Cafe Hayek

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David Henderson understandably is flabbergasted by the obliviousness of a university president.

John O. McGinnis argues that the recent U.S. Supreme Court decision in Carson v. Makin will further energize the movement for school choice. Here’s his conclusion:

Carson is not only important for what it does for Establishment Clause jurisprudence but what it does for the school choice movement. That movement already has political momentum. First, many public schools have been heavily criticized for closing for too long during the pandemic with substantial losses of learning, particularly for the poorest students. Second, many parents are furious with what their public schools are teaching, viewing commonly used history curricula in particular as tendentious and unpatriotic. Many also worry about an emphasis on equity over excellence. As a result, a parental rights movement is emerging as a powerful electoral force.

School choice is the logical institutional manifestation of parental rights. A parent who can choose the school his or her child attends has more influence on the child’s education. At a traditional public school, a parent can only vote in a school board election, and once the school board is elected, he or she retains no substantial leverage at all. School choice provides the invaluable right of exit.

Carson assures those who want to send their children to religious schools that religious choices can never be excluded from a choice program. Thus, it energizes parents who want a religious alternative to the traditional public school to join with parents who want alternatives for secular reasons. The ruling thus contributes even more energy to one of our most important contemporary social movements.

Chris Freiman explains that “vouchers for religious schools don’t threaten the separation of church and state.”

Wall Street Journal columnist Jason Riley reports on Betsy DeVos’s important efforts to free the hostages held by teachers’ unions. A slice:

As the teachers unions continue to throw their weight around the Democratic Party, Mrs. DeVos said their behavior during the pandemic has hurt their standing with Americans. “There’s a real tone-deafness to the kind of damage their politicized agenda and decisions have inflicted on kids, and we won’t know the full extent of it for years.” she said. “It’s the kids who could least afford to be locked out of school who were out the longest.”

Wall Street Journal columnist Holman Jenkins decries the malignant mission creep of the Securities and Exchange Commission.

Oodles upon oodles of excessive, useless government are foisted on us by enterprising appointees building résumés for an afterlife as an influence peddler “of counsel” at a D.C. law firm. Examples are legion, but consider the recent initiatives of Joe Biden’s Securities and Exchange Commission chief, Gary Gensler.

Mr. Gensler would ordain that publicly traded companies, as part of their disclosure obligations, report their financial vulnerability to climate change and climate regulation. A fatuous New York Times headline declares that investors “deserve” such information. No, investors want such information, and diligently seek it out, if it bears on the expected value of their investments. Why not require disclosures about the financial impact of every conceivable tax-law change, man-made disaster or asteroid strike? Because markets already price securities in view of all the possible calamities that could cause them to go to zero. Collectively, investors are in a better position to judge such nonproprietary matters than is management, which has a daily business to run.

Chelsea Follett talks with GMU Econ alum Rosemarie Fike about the importance for women of economic freedom.

Juliette Sellgren talks with Dan Klein about Adam Smith and justice.

Writing at The Hill, the great Bruce Yandle explains that “inflation is putting a price tag on past political actions that only sounded free at the time.”

Mark Oshinskie writes about the oppressions of forced solitude. Two slices:

Those whom I knew were sure the lockdowns were for our collective benefit and would only last for two weeks. They stridently said we should all be nice and embrace this temporary disruption. I think many of the lockdowners perversely enjoyed being part of some (overblown) historical crisis and thought it was cool that humans could be so savvy and modern as to crush a virus; though they turned out to be wrong about that second part. Others just liked the time off from work.
I was dumbfounded, not only by the numbers of people who supported locking down but also by their certainty that doing so made sense; they expressed no doubt about this approach.

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The Urban Dictionary defines a “tool” as “someone who is not smart enough to realize that he is being used.” I decided that my ex-friend, and anyone else who was going along with the “Stay home” and “We’re all in this together” was a tool. Of course, like the other lockdowners I knew, he could afford to be a tool because he could work from home and loved to watch TV.

Among all of the other obvious nonsense, saying that by staying home, we’re together is perhaps the most plainly Orwellian. Plus, in clearly observable ways, we weren’t “all in this together” during the pandemic; its logistical and economic impacts varied widely across the population. And in our pluralistic society, we had never all been in anything together. Why should a respiratory virus suddenly unify everyone. I still can’t believe that people bought such cheesy Madison Avenue slogans.

K. Lloyd Billingsley accuses Fauci of “white coat supremacy.”

Harriet Sergeant reports on the “devastating toll” of lockdowns on children. (HT Toby Young)

Adam Brooks tweets: (HT Jay Bhattacharya)

When will everyone finally admit that the cost of living crisis is down to Lockdowns, the printing of money to pay for Lockdowns & the supply chain issues caused by them here and around the world?

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Here’s a letter to the Washington Post, but from it nothing should be inferred about my opinion on abortion or about the quality of the reasoning in, or the conclusion of, Dobbs.

Editor:

Your headline this morning – “Supreme Court goes against public opinion in rulings on abortion, guns” – says less about the Supreme Court than it does about the poorly informed state of today’s journalists. The very reason for having a judiciary the members of which are not elected but, instead, are appointed to lifetime terms – and whose charge is confined to settling disputes that arise under the law, including that of the Constitution – is to insulate the judiciary from fickle and often-dangerous political passions. According to Alexander Hamilton in Federalist 78, a great benefit of an independent judiciary is that it will protect the Constitution against perils that arise “whenever a momentary inclination happens to lay hold of a majority … incompatible with the provisions in the existing Constitution.”

One may legitimately criticize a court for its particular interpretation of the Constitution. But it’s never legitimate to suggest that a court errs whenever it “goes against public opinion.” As a headline, then, “Supreme Court goes against public opinion” makes no more sense than would the headline “Dog bites man.”

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
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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I understand, of course, that justices and judges are human; they often do succumb to majoritarian political pressures. But the design, of course, is for the federal judiciary to be insulated from, and hence resistant to, such pressures.

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… is from page 50 of the first edition of University of Washington economist Eugene Silberberg’s excellent 1995 textbook, Principles of Microeconomics (original emphasis):

The law of demand is the central behavioral proposition in economics. Its veracity is not really open to debate; to deny this proposition is to deny economics. The phrase economic explanation to a large extent means an explanation based on the law of demand. In Chapter 1 we outlined the idea that people respond so as to reduce the impact of changes in constraints. This proposition is given operational significance, that is, an interpretation in terms of the observable phenomena of prices and quantities, in the form of the law of demand. Consuming less of a good after its price has risen is one way in which we mitigate the deleterious effects of an increasingly severe constraint.

DBx: Indeed so.

And yet much public policy is built on the presumption that the law of demand does not apply universally. Perhaps the best example of such denial is the widespread support for minimum-wage legislation. The belief of many minimum-wage proponents is that raising the minimum wage will simply cause employers to pay workers higher wages, without any further adjustments. Employers’ incomes (profits) will fall while workers’ incomes will rise.

Disappointingly, it’s easy today to find professional economists who twist themselves into intellectual knots to lend apparent justification to this popular, fallacious belief. Yet the only theoretically possible scenario in which a rise in minimum wages will not reduce or worsen at least some low-skilled workers’ employment opportunities requires employers to possess both monopsony power in labor markets and monopoly power in output markets. (And the combination of such powers is a necessary, but not sufficient, condition for the minimum wage to work. Another necessary condition is that the legislated minimum wage not be set too high.) Of course, the likelihood in reality that there will prevail in a market-oriented economy this combination of monopsony and monopoly is so minuscule as to be ignorable.

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Below is a letter Reason. Please note that this letter is exclusively about Constitutional interpretation and implies nothing about my views on the morality of abortion, or about what I believe states should or should not do now that Dobbs has been decided. (Without implicating them, I thank Roger Meiners and Adam Pritchard for feedback on an earlier version of this letter.)

Editor:

Long an admirer of Damon Root, I worry when I find myself disagreeing with him. But disagree I do with his conclusion that Justice Alito’s ruling in Dobbs “is an insult to the 9^th amendment” (“Alito’s Abortion Ruling Overturning Roe Is an Insult to the 9th Amendment,” June 24).

Like Damon, I hold the 9^th amendment in high regard and wish that it were used more often to safeguard Americans’ unenumerated rights. Further, I agree both with Damon’s account of the history of this sadly neglected amendment, as well as with his observation that, when the Bill of Rights was ratified, the common law recognized a right to abortion until “quickening.”

But I don’t see how a ruling – Dobbs – that returns to the states the power to restrict access to abortion runs afoul of the 9^th amendment. That amendment reads in full: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” This wording – along with the very history that Damon recounts – clearly indicates that the 9^th amendment is meant to protect unenumerated rights from being violated by the national government, which is the government that’s created and governed by the Constitution. The 9^th amendment neither applies to the states nor enlists the national government to protect unenumerated rights from being violated by state and local governments.

While the 9^th amendment would protect the right to abortion before quickening from being violated by the national government, this amendment in no way constrains state and local governments.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
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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… is from pages 135-136 of Scott Atlas’s important 2021 book, A Plague Upon Our House: My Fight at the Trump White House to Stop COVID From Destroying America:

This conclusion was inherently nonscientific – modeling that something might occur, and then because it did not occur with a given intervention, concluding that the intervention was effective. That was not proof of anything at all; it was circular reasoning. Why couldn’t the explanation be that the model’s prediction was wrong? Indeed, modelers had concocted a scenario in which [covid] cases would keep spreading as if everyone was equally susceptible, without regard for increasing immunity or seasonal effects – all known to have occurred in every respiratory virus pandemic over the past 130 years.

DBx: I say again that few academics have fueled as much destruction of life, liberty, property, and prosperity as has the reckless Imperial College modeler Neil Ferguson. Not to be excused, of course, are the legions of politicians and bureaucrats who took his and his team’s model-predictions seriously and without regard for collateral damage from lockdowns.

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Kyle Smith, writing at National Review, decries the CDC’s peddling of fake news about covid child mortality. A slice:

The CDC displayed a slide at a conference that falsely claimed Covid-19 was the fourth or fifth leading cause of death for all pediatric age groups. A writer who is publicly known only by the name Kelley immediately saw that the claim was “completely and utterly false.” Among several errors, which are so blatant as to seem like intentional massaging of the numbers, Kelley discovered that all data from a 26-month period were being crammed into one year, and that deaths were attributed to Covid, regardless of whether the death was caused by Covid, if the disease was mentioned on the death certificate. The CDC slide, which cited a pre-publication British study that is now being re-examined, also bumped up the numbers by altering the definition of pediatric (ordinarily understood to mean under 18) to include 18- and 19-year-olds.

The danger to children from Covid is very, very low. For instance, babies and toddlers are 25 times likelier to die of an accident than of Covid. And all-cause pediatric mortality in the pandemic era for young children (up to 12) is 30 percent lower than it was a generation ago, in 1999. All-cause mortality for children over 12 has spiked in the pandemic era because of accidents, drug abuse, and other factors unrelated to disease. Covid barely registers as a cause of death for teens or small children.

Wall Street Journal columnist Daniel Henninger writes that “[t]he Covid pandemic revealed how complicated the private economy is — and how easy it is to wreck it.” A slice:

The current global discontent with economic life is overwhelmingly a function of one other word: lockdown. Lockdowns are normally associated with prison riots, not the world’s economies. One may admit that the first months with the mysterious Covid-19 virus were a time of generalized panic, and governments defaulted to the epidemiologists’ standard fix of social quarantining. But then leadership essentially let the public-health bureaucracies take over their countries’ economic life.

What’s impossible not to notice is how the lockdowns exposed the intricacies of the world’s market economy. We are hearing a lot now about long Covid, the physical aftermath of the virus. As debilitating is long economic Covid.

Long economic Covid is why anyone you sit next to at dinner can dilate on the arcana of interrupted global supply chains. We’re now coming to realize how the market economy’s performance and benefits are taken for granted. All those goods—made, purchased, packed and shipped—were as reliably available as turning on a light. Actually, one of the things we’ve learned during this time is that even turning on a light isn’t like turning on a light. Disrupt the always-on but complex power grid, as in Texas and California, and the lights stop coming on.

This persistent post-pandemic disruption is the result of government choices. In 2020, the public sector told the private sector simply to stand down. When the pandemic lockdowns were extended deep into 2021—in the U.S., France, U.K. and elsewhere—the global economy’s extraordinarily complex grid of relationships fractured at every level.

Layoffs were widespread, ending paychecks overnight. Trucking hasn’t recovered. Airlines are struggling with flight-canceling staff shortages. Manufacturers can’t fill orders for lack of basic parts, workers or a reliable transport system.

We have arrived at stupid.

David Stockman describes “the spasmodic chaos of the post-lockdown US economy.” Two slices:

Accordingly, the business sector is flying blind: It can’t forecast what’s coming down the pike in the normal manner based on tried and true rules of cause and effect. In many cases, the normal market signals have gone kerflooey as exemplified by the recent big box retailers’ warnings that they are loaded with the wrong inventory and will be taking painful discounts to clear the decks.

Yet it is no wonder that they stocked up on apparel and durables, among others, after a period in which the Virus Patrol shutdown the normal social congregation venues such as movies, restaurants, bars, gyms, air travel and the like. And than Washington added fuel to the fire by pilling on trillions of spending power derived from unemployment benefits that reached to a $55,000 annual rate in some cases and the repeated stimmie checks that for larger families added up to $10,000 to $20,000.

Employed workers didn’t need the multiple $2,000 stimmie checks because in its (dubious) “wisdom” the Virus Patrol forced them to save on social congregation based spending.

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When it comes to Washington-induced whipsaws, however, there are few sectors that have been as battered as the air travel system. During April 2020, for instance, passenger boardings were down a staggering 96% from the corresponding pre-pandemic month, as in dead and gone. Moreover, this deep reduction pattern prevailed well into the spring of 2021.

The airline shutdowns were not necessitated by public health considerations: Frequent cabin air exchanges probably made them safer than most indoor environments.

But between the misbegotten guidelines of the CDC and the scare-mongering of the Virus Patrol, even as late as January 2022 loadings were still down 34% from pre-pandemic levels.

The industry’s infrastructure got clobbered by these kinds of operating levels. Baggage handlers, flight attendants, pilots and every function in-between suffered huge disruptions in incomes and livelihoods—-even after Washington’s generous subsidies to the airlines and their employees.

And then, insult was added to injury when pilots and other employees were threatened with termination owing to unwillingness to take the jab. The result was an industry to turmoil and sometimes even ruin.

Jay Bhattacharya tweets:

The people who constitute “World Health Network” are repackaged zero-covid zealots, many in the discredited iSAGE group. I guess since they could not scare the world into perpetual Shanghai style lockdowns with covid, so they are trying again with monkey pox.

Here’s some good news reported by Will Jones: “South Africa Ends All Remaining Covid Restrictions Including Vaccine and Testing Entry Requirements.”

Phil Magness, writing on his Facebook page, is correct:

It turns out that the reason plagiarism is such a widespread problem in academia…is that an alarming number of academics will excuse or even defend plagiarism when one of their friends does it.

Damon Root argues that “Alito’s leaked abortion opinion misunderstands unenumerated rights.”

Jeffrey Singer laments this unfortunate reality: “The FDA is on a quest to snuff out tobacco harm‐​reduction.”

GMU Econ alum Nathan Goodman compares Austrians and Marxists on imperialism.