See Rent Control is Worse than Bombing by David Henderson. He goes on to explain why it might be worse. Excerpt:
"[Gunnar] Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.” His fellow Swedish economist (and socialist) Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”"
Socialists claim they haven’t experienced American prosperity. All you have to do is look around
By Andy Kessler. Excerpts:
"Last month’s trial results of Lilly’s one-time gene-editing therapy showed it can lower LDL, “bad cholesterol,” by almost two-thirds. Could this be a heart-attack vaccine? It’s certainly a sign of a prosperous society."
"Columbia University researchers successfully demonstrated base editing of “early human embryos” to replace specific genetic letters."
"the ability to identify and eliminate debilitating diseases—for example, hereditary blindness—is nothing short of amazing."
"GLP-1s may also help stroke, kidney and fatty liver diseases as well as sleep apnea, and research is under way to treat substance abuse, psychiatric and even neurodegenerative disorders."
"women 45 to 80 “who took GLP-1 medications were about 30 percent less likely to develop breast cancer"
"Palantir tapped AI to lower early death rates from sepsis at Tampa General Hospital by more than two-thirds."
See Musing on Miran.
"Here’s a letter to the Wall Street Journal.
Editor:
Stephen Miran attempts to justify Trump’s tariffs by insisting that these levies will shift much of Americans’ tax burden onto foreigners and thus enable significant cuts in distortionary domestic taxes (“The Low-Tax Case for Tariffs,” June 27). His case, alas, is a string of howlers.
Consider, for example, his mention of the Congressional Budget Office’s estimate that Trump’s tariffs will raise $4 trillion over the next decade (and overlook the fact that this average annual amount of revenue is a paltry 5.4 percent of current U.S. government spending). Not only does the CBO’s estimate ignore the tariffs’ negative impact on economic growth, most of those tariff revenues will be paid by Americans. Mr. Miran conveniently leaves unmentioned the overwhelming amount of empirical research showing that foreigners are paying only a tiny fraction of Trump’s tariffs – by one credible estimate only four percent.
It must also be said that the greater the burden of the tariffs that is shifted to foreigners, the lesser are the price increases that Americans pay for imports and, hence, the more muted are the tariffs’ protective effects. Yet these protective effects are ones that Mr. Trump and other tariff supporters, including Mr. Miran, routinely cite as core justifications for the tariffs.
This inconsistency in his case for tariffs is itself sufficient to discredit all that Mr. Miran says on the matter."
By Raymond J. March. He is a professor of economics at North Dakota State University.
"Risk management is the leading reason the Food and Drug Administration cites medical device makers for failing to meet quality requirements, which makes it all the more striking that when companies look to the agency for guidance on how to do it, the answer is not very helpful.
Keisha Thomas, associate director for compliance at the FDA’s Center for Devices and Radiological Health, told attendees at a recent industry conference that risk management should be “fluid, living, breathing, moving, evolving constantly” and “in a state of continuous improvement all the time.”
Talk about a non-answer.
Private companies—whether making medical goods or anything else—flourish or fail by assessing risk well. The FDA doesn’t face that discipline. The agency’s only real power is to remove products from the market or stop them from entering it. That is a blunt instrument applied to an incredibly dynamic market for medical goods.
More importantly, accepting risk is a matter of personal preference and available alternatives—circumstances that differ for every patient and cannot be aggregated into a one-size-fits-all standard without discarding what makes medical treatment effective in the first place.
The incentive structures are simply different, leading to different outcomes. Public regulatory bodies tend toward over-stringency—making compliance costly and difficult while also pushing patients toward less-safe alternatives. Private entities may set imperfect standards, but they better preserve the patient-physician relationships that make treatment work. When directly compared, private efforts often outperform their public counterparts.
The case of Accutane illustrates this well. Before the FDA intervened, Hoffman-LaRoche privately managed the drug’s serious risks—including its potential to cause birth defects—through a voluntary physician registration system and patient consent protocols. From 1989 to 1998, pregnancy rates among female Accutane users nearly halved under this private program. The FDA considered it a failure anyway and replaced it with its own program, SMART, in 2002.
SMART was so burdensome that many physicians stopped prescribing Accutane. Prescriptions fell 23 percent in a single year, while pregnancy rates went up. The FDA then replaced SMART with an even more stringent program, iPLEDGE, which produced similar results: more paperwork, more patient lock-outs, and no meaningful reduction in pregnancies. Patients responded by purchasing Accutane online without prescriptions—precisely the outcome the FDA’s intervention was meant to prevent.
Accutane is a drug, but the FDA’s record on medical devices is, if anything, worse. The agency approved a Swedish fertility app called Natural Cycles as the first FDA-cleared contraceptive app in 2018, years after the market had already produced dozens of similar apps, roughly three-quarters of which accurately predicted fertile days without any FDA involvement. Natural Cycles itself was under investigation in Europe for unintended pregnancies shortly after receiving its FDA blessing. It is not clear that the agency’s approval added anything the market hadn’t already sorted out—and the evidence suggests it may not have raised the bar at all.
Then there is the Owlet Smart Sock. After five years on the market, monitoring the pulse and oxygen levels of over 600,000 infants with 90 percent accuracy, the FDA sent Owlet a warning letter in 2021, declaring the product a medical device requiring agency approval. The sock was pulled. No FDA-approved alternative that monitored both pulse and oxygen existed.
As I noted at the time, the cost was the hundreds of thousands of infants who went without a reliable monitoring device. By 2022, with RSV sweeping the country, the cost of over-caution fell on the parents and infants the FDA aimed to protect.
There is a clear reason the FDA struggles to provide effective risk-management guidance and seems to flounder when asked to manage risk for others: it can’t.
Risk is best addressed by markets, not regulations or federal guidelines. The FDA’s incentives run toward removing products and avoiding blame, not toward preserving patient access and physician judgment. Ironically, it’s a real risk to our health and the healthcare sector to imagine otherwise."
"The Jones Act rests upon a tacit bargain: Americans pay higher costs because of the law’s prohibition on foreign-built and internationally flagged ships transporting goods within the United States, and in exchange, they receive what the Shipbuilders Council of America describes as a “robust and competitive” domestic shipyard industrial base. But new data from the United Nations Conference on Trade and Development reveal how thoroughly that bargain has been broken.
In 2025, the United States ranked 19th in commercial shipbuilding output, accounting for just 0.03 percent of global gross tonnage delivered. The shipbuilding output of the world’s second-largest manufacturing country is measured in the hundredths of a percent. The United States was not just behind the shipbuilding powerhouses of China, South Korea, and Japan, but also far smaller countries. It was outproduced by Poland, Romania, and the Iberian Peninsula (Spain and Portugal combined). It delivered only 6 percent more gross tonnage than Croatia.
This snapshot is not an anomaly. In 2024, the United States also ranked 19th, with 0.04 percent of global output. So far this decade, the figure stands at 0.08 percent. From 2020 to 2025, 16 countries have outbuilt the United States, including the Netherlands, Norway, and Singapore (the last two of which each have populations smaller than the metro Atlanta region). Such numbers underscore the Navy’s fiscal year 2025 shipbuilding plan, as cited by the Government Accountability Office, that US commercial shipbuilding has experienced a “near-total collapse.”
There is no mystery behind this performance. US shipbuilding costs are so far out of line with global prices that demand has shriveled accordingly. Energy infrastructure company Kinder Morgan estimates that a US-built medium-range tanker would cost at least $240 million — a hypothetical, since no such vessel has actually been delivered by an American shipyard since 2017 — compared to $51 million abroad. Three containerships currently under construction in Philadelphia for Matson Navigation are running over $335 million apiece, against a maximum of $75 million to build the same ships overseas.
Such staggering cost premiums mean little demand for US-built vessels, not only for export but even within the captive domestic market. Rather than purchase new ships, for example, Jones Act carrier Pasha Hawaii has dispatched both of its 1980-built containerships to China to have their engines upgraded from steam to liquefied natural gas. The company points out that its ship, George II, was the first vessel in the world to undergo such a conversion. That distinction exists only because, in any other country, the ship would have been scrapped long ago and replaced with new construction (the average age of containerships in the global fleet is around 14 years). George II’s 1980-built sister ship, Horizon Spirit, was towed from California to China last year for its own conversion.
Overseas Shipholding Group tells a similar story. Rather than building new ships, the company is pouring over $60 million into repowering its Alaska-class tankers — the newest of which dates to 2006 — to keep them running well into the future. The US Maritime Administration places the nominal service life of a tanker at 20 years, and the Wall Street Journal recently noted that 15 is the age at which tankers begin to see their parts breaking down. Yet OSG’s chief operating officer has indicated that the company intends to run its tankers until age 40.
The pattern extends beyond cargo ships, with the offshore wind sector and ferry services likewise opting to repurpose aging vessels rather than order new ones.
The Jones Act’s protectionist logic holds that shielding the US commercial shipbuilding industry from foreign competition ensures its strength. The evidence is an unambiguous refutation. At 0.03 percent of global output, the notion that the United States would somehow fare even worse without the Jones Act requires believing that a country home to the world’s largest economy and long renowned for its dynamism and innovation would have no commercial shipbuilding at all. It is a proposition that strains credulity.
By any objective standard, the Jones Act has failed. The shipyard industrial base is neither robust nor competitive. Forbidding Americans from using vastly cheaper foreign-built vessels in domestic commerce in exchange for shipbuilding that hovers barely above zero does not make sense. The bargain is broken, and American consumers and businesses — and even the maritime industry the Jones Act ostensibly exists to promote — are paying for it."
"The latest issue of Works in Progress is superb. Every article is interesting.
Chris Gillett points out something surprising: the US has plenty of electricity generation capacity ready to go, the problem is connecting it to the grid. Grid connection is complicated because on the grid, supply must equal demand at every moment in time. Even without speeding the process, however, we could get more power connected to the grid if we rationalized the ordering of connections.
The main flaw of the interconnection process is that it uses a first-come, first-served queue. This means that high-priority requests can spend years stuck at the back of the line behind other less important ones.
In essence, we have an airport congestion problem in which small Cessnas can bump 747s. Auctions for connection rights are the solution, as pointed out for airports by Vickrey and the classic paper by Rassenti, Smith and Bulfin. Gillett also emphasizes that some loads should be allowed to connect on a flexible basis: if a data center can disconnect or use backup power during the few peak hours each year, it should not have to wait years for firm service.
Gillett also has a very nice explanation of how market prices balance electricity from different sources:
Market prices signal to power plant developers about levels of supply and demand. In the same way, prices balance different energy sources based on the strengths and weaknesses of each. For instance, as more solar panels are built, the value (and therefore price) of power during the middle of the day, when the sun is shining most, adjusts downward. From December 2020 to September 2025, maximum solar output in ERCOT increased from 4 to 29.8 gigawatts. And from 2020 to 2025, the value of power at 1pm relative to the highest-priced hour decreased from 92.9 percent to 38.7 percent. As one technology type becomes overbuilt, prices reflect that and developers react accordingly.
The evolving daily price shape in response to the abundance of solar energy was a signal that the grid needed storage capacity, and power plant developers responded. From 2020 to October 2025, ERCOT went from having almost no battery storage to a combined battery discharge of 8.6 gigawatts. The same process has played out in California and many European markets."
By David R. Henderson. Excerpts:
"Imagine a product that costs $1.80 to make and sells for $2. Imagine also that the average household in America buys one of these items per week. There are approximately 134 million households in America. That means that in a given year, US households will buy 6.968 billion units and will spend $13.936 billion on this product.
Then along comes an innovator who has figured out how to produce the item at a cost of only $1.50 per unit. The innovator would ideally like to have a patent and might well get a patent. But even if he doesn’t, it will take time for competitors to notice his innovation, figure out how it works, and implement it. Let’s say it takes a year. For products with a complicated production method, that could well be an underestimate.
What will the innovator do during that year? Cut price? Maybe a little but not much. For one year, all his competitors are using a method that costs $1.80 per unit and are charging $2.00. What the innovator could do is cut the price to, say, $1.90 per unit and take a large share of the market. Let’s say he takes half the market. Then 67 million households will buy 3.484 billion of his units and will spend $6.62 billion on his product.
On each unit, the innovator makes 40 cents, the difference between the price of $1.90 and the cost of $1.50 per unit. For that year, therefore, he will make $1.394 billion. Voila! He’s a billionaire."
"Starting a successful startup is the most common way to become a billionaire"
a 2004 study he (Nobel prize winner William D. Nordhaus) wrote for the National Bureau of Economic Research, Nordhaus wrote:
Only a minuscule fraction of the social returns from technological advances over the 1948–2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.
How minuscule? 2.2 percent. The remaining 97.8 percent of the gains from innovation go to consumers."
"Once other competitors imitate the innovator, the price falls and the unusual gains to the innovator go away. Consumers then get the benefits from the innovation year after year."
